Passive income: earn without doing anything!
If I were to tell you that it is possible to make money at any time, whether in bed, in the bathroom or in the gym (when it reopened), would you like to know how? Yes ?
So keep reading carefully, because we will be talking about passive income.
Passive income vs. active income?
3 Examples of passive income that allow you to earn quickly
1. Stock market: stocks
2. Internet: e-commerce
3. Real estate: long-term,
rent. Passive income vs. active income?
If I had to explain what passive (or residual) income is, I would ask you to imagine a locomotive pulling wagons. At first it is difficult, it goes slowly. But once the whole train is gone, nothing can stop it. Instead, active income would be like imagining pulling cars. It can move smoothly, but if it stops, it will not move.
Behind this image are two different economic systems. With passive income, money works for you and you are free to use your time as you wish. While you work for money with active income, you change your time with your salary.
3 Examples of passive income that can quickly generate
money. Now that you know the basics, you know that there are many ways to generate passive income. For this article, I have chosen to present 3 examples of passive income.
If this is your desire, I want you to generate passive income to get the best of wealth: time.
1. Stock market:
forget about Hollywood movies and Wall Street clichés. The stock market is much less glamorous than you might think. However, behind these funny names, such as mandates, contracts, there is a system that allows the generation of passive income. Like Warren Buffet, considered the largest investor in the world, the secret to getting rich in the stock market is time and patience. If your goal is to get rich quick, forget about the stock market! You risk losing your investment faster than betting on any OM to win the Champions League!
I chose to present the shares to you because they are easy to understand and offer two possibilities for generating passive income: dividends and capital appreciation. To own a share means to own a part of that company, to become a shareholder.
When I was a child, I remember on the news, every time there was a strike, a member of the union interviewed and said that he closed the factory to enrich the shareholders. I always told myself that when I grow up I will be a shareholder because I don't want to lose my job. Although the reality is more complex, I put this aside to warn you never to depend on a single source of income. Even the best job is never 100% safe, so you can diversify your risk.
Let's get back to our actions if you don't mind. A dividend is the compensation you receive based on the number of shares you hold in a company. The more shares you have, the higher the salary will be (provided the company wins, of course). This can be a real long-term strategy. By investing regularly in the same companies, you increase your dividend every year. You can also combine the 2 strategies: dividends and capital gains, receive dividends for a specified period of time, and then sell all or part of your shares to generate a capital gain that will increase your portfolio.
To determine which companies to invest in, set unique criteria for you. Of course, there is the dividend to consider, but also other criteria such as: company activity, financial strength, capitalization, debt, net income, PBR (Price Book Ratio ), PER (price / earnings ratio) etc.
Profit: allows you to generate recurring income (quarterly or annually) and significant capital gains.
Disadvantage: requires patience, knowledge and in-depth market research.
2. Internet: e-commerce
Since the birth of e-commerce, and even more so in the last 10 years, a new boom of entrepreneurs has emerged. The call for freedom with the motto "Wherever you want, whenever you want" has become a reality for millions of people. To generate passive income over the Internet, you don't need to reinvent the wheel or try to create the next Facebook. What matters is tracking money, visualizing what works, and reproducing it. Notification! It's not about copying, it's about improving what already exists.
In my turn, I am a great "lawyer" of e-commerce, because it allows you to sell your products anytime, anywhere in the world, doing little or nothing. My method is the following: I identify a need, a problem, which many people try to satisfy, to solve. I am looking for the product that will offer them a solution. Once found, I contact a manufacturer to create my improved version of the product. My goal is to create the best possible product so that people are satisfied and meet the expressed need.
Once produced, I send my products to an Amazon warehouse that will handle the logistics. At the same time, I create an online store on Shopify, I integrate my product on markets such as Amazon, Cdiscount, Fnac, Darty, etc. I publish my product through ads on Google, Facebook, Instagram and even Snapchat, to present it to the right audience. So I let the sales go, Amazon takes care of shipping (yes, even for my site and other markets).
As for me, I use one hour a day to improve my marketing campaigns, to fulfill any request, to manage my inventory. If my product is very successful, I register my trademark, protecting my product from competition.
Advantage: Passive income generated every day, every hour, with less than one hour of work per day, if everything is automated.
Disadvantage: It takes a lot of work initially to set it up.
3. Real estate: long term rentals.
No matter what is said, real estate is a safe bet. Although the real estate investment is large: for a simple, furnished, seasonal rent, or joint rent, sublease, purchase-resale, etc ..
Long-term rent. I know what you think: it's not the most profitable. But it is the easiest to administer. The long-term goal is to rent a furnished or unfurnished house to a tenant. The interest is that the rent is at least 30% higher than the loan amount. Once all your expenses are paid, the cash flow generated is yours. This method guarantees you continuous passive income, month by month, and the best part: your credit is paid by the tenant.
You can leave your property in the hands of an agency, or even an individual. The goal is to be as free as possible, without being disturbed by a broken toilet or water damage.
To make the best possible investment, pay attention to the selected property (its profitability, its location, etc.), the loan contracted (loan duration, insurance price, etc.), the tax and, finally, the choice of administrator, if you want to delegate property management Your
benefit: generate passive income every month and enjoy peace of mind if you delegate management.
Disadvantage: a lot of work before buying.
We just saw 3 examples of passive income that will allow you to have free time.