How to Create Passive Income Investing Either Time or Money?
A lot of people are asking how to create passive income investing either time or money? You will need to make a significant initial investment to create a passive income, which can be in terms of money or investment in time.
Investing Time
Most time investing, passive incomes comprise of ideas that will need energy inputs as well. Generally, you will be turning your spare time into some sort of product that will provide a steady stream of income over time.
Everyone has some unique knowledge or skill that can be converted into electronic books and sold on the internet to create passive income. The beauty of life is that each one of us has a unique experience that can be shared with others in form of blogs and books. I have written a few books. These books are working for me as passive income generators. I am simply sharing my experience with others and creating value in their lives. Each book that I write is a new source of passive income for me.
Publishing books was a problem earlier on as only few big authors were accepted by publishing houses, which is no longer the case. You can now self-publish a book with Kindle, Barnes and Noble, Nook etc. The options for self-publishing are getting better and better with each passing day.
You can also create blogs with the information you wish to share with others and monetize them. Once the blog is in place you will be required to spend some time developing links to it so that Google can find it. After that, your blog or website will keep generating a steady trickle of advertisement and referral revenue.
Investing Money
If you have money to invest then you can simply invest that money into generating passive income for you. You can consider some of the following paper assets to generate passive income:
Dividend-bearing stocks
If you buy, let us say, $20,000 worth of Coca-Cola shares then you will be entitled to receive regular dividend payments that will give you passive income. Over a period, your stock will multiply and gain in value increasing your dividend payments. You should choose a very stable company that pays out a very steady dividend, this type of approach can earn a very reliable income for you. You might also want to invest in mutual funds that are indexed to spread out your investments over a large number of stocks (less risk.) I will cover more of this strategy later in the book.
Treasury inflation-protected securities (TIPS)
Tips are bonds that you can purchase from the government whose face value adjusts according to the rate of interest, so that when the TIPS matures, you will be able to sell it for more than the initial purchase price. TIPS return is at a very low rate but they have the advantage of being rock-solid investments that will match inflation growth when you sell them.
Savings accounts and CDs
CDs are similar rock-solid investments. They are also very liquid (meaning you can cash out your money whenever you need it). The interest rates are generally on the lower side. There are, however, times when a savings account or CD is very solid.
Annuities
Annuities are investments you can purchase from an insurance company that will pay you a certain amount of residual income every year for the rest of your life. The younger you are, the smaller will be your contribution. Let’s say, for example, that you purchase a $30,000 annuity, one that the insurance house quotes at 4%. It would mean that you would receive $1200 each year for the rest of your life from that company. The risk you have here is that the insurance company may eventually become insolvent, leaving you with nothing at all. You must therefore seek out an insurance company with a long history of stability and good bond rating. You must also diversify across multiple insurance houses.
