Earning money passively means using your money to create a constant - or nearly constant - cash flow over time with minimal effort. It's about putting your money to work on your behalf, so it can create passive income without you having to make any contributions. Invest for passive income it's a smart financial decision as it can free up your time and energy to pursue other career opportunities, hobbies, or travel goals. It can also provide a sense of security, because if you lose your job or run into other financial hardships, you'll have a steady stream of automatic passive income you can count on. We tell you right away that one way to try to generate passive income is to copy the investments made by expert people and it's called copytrading (you can try it for free from here).
In general it is important distinguish between active and passive income. Active income requires you to trade your time for money, such as working for a wage or an hour's work. Conversely, passive income doesn't take up our time and allows you to earn extra money even when you're not actively working.
Another way, which we will also explain later in the article, to generate passive income is to invest in shares of companies that distribute monthly dividends. Let us cite for example LTC Properties. Founded in 1992, LTC Properties Inc. is a company that invests primarily in healthcare and retirement home properties in the United States through lease transactions. Its properties include, among others, specialized care facilities, day-to-day care communities, and memory preservation facilities. The primary objective of LTC Properties Inc. is to create and maintain a diversified portfolio that generates and preserves value for shareholders while distributing dividends to them. Find out more about this type of investment by visiting this link.
Passive earning methods
In general, two types of passive income can be distinguished: those that require investment financial, such as real estate, stocks, mutual funds, bonds, and more, e those that require the creation of digital products, such as ebooks, online courses or applications. We invite you to watch this video:
PlayThere are many ways to create passive income, but some of the more common ones include:
How to create passive income| By investing money | Not investing money |
|---|---|
| Copytrading -->TRY | Affiliation |
| Shares with dividend | Take a course on Udemy |
| Actions | Selling items |
| Bonds | Create an app |
| ETF | Dropshipping |
Examples of investments to make money passively
Luca has 10.000 euros of savings that he wants to invest to obtain a passive income. He decides to buy dividend-paying stock in a publicly traded company. Over time, as the company continues to grow and make profits, Luca's stock increases in value and he receives regular dividends. He doesn't have to spend a lot of time tracking his investments, but he gets a steady income that he uses to supplement his salary.
Gianna is a busy professional who wants to generate more income without working more hours. She uses a portion of her savings to invest in mutual funds and ETFs that track the performance of various sectors such as technology, healthcare and renewable energy. The funds are managed by professionals who make investment decisions on behalf of investors. Gianna receives regular distributions from the funds and uses the passive income to pay off her student loans and save for retirement.
Actions to generate passive income
One of the most popular savings investment vehicles for passive income is stocks. When you invest in stocks, you buy an ownership stake in a publicly traded company, which means that as the company continues to grow and make profits, so does the value of your stock. Other investment options for passive income are bonds, real estate, mutual funds and exchange-traded funds (ETFs). Here you can get more information about:
How to invest in stocks
How to invest in ETFs
How to invest in cryptocurrencies
How to invest in stock indices
How to invest in commodities
How to invest in forex.
Passive earnings online with dividends (monthly)
Dividend-paying stocks are particularly attractive because they periodically pay a portion of the company's profits into them. As for dividend paying stocks, a concrete example would be investing in a well-established telecommunications company that has a history of consistent dividend payments. These companies often have stable income streams and pay a portion of their profits as dividends, providing investors with reliable passive income.
While not all companies pay dividends, those that do often have a history of consistent growth and provide investors with a reliable source of income. Dividend payments typically occur quarterly and may vary based on the company's profitability and financial goals. On the other hand there are also companies that distribute monthly dividends like the following:
By investing in dividend stocks, investors can generate a steady stream of passive income that can continue for years to come. Instead of relying on the ups and downs of the market, dividend payments are a reliable source that can help investors cope with economic downturns or stock market volatility. Additionally, many dividend-paying companies have a history of outperforming other companies in their industry, making them a smart choice for investors looking for long-term growth potential.
Whether you're an experienced investor or just starting out, dividend stocks can be a worthy addition for even small, short-term investments.
Examples
Linda invests €10.000 in a company that pays a 3% dividend. This means that you will receive €300 per year of passive income without having to do anything but maintain your investments.
Thanks buys 100 shares of a company that pays a quarterly dividend of $0,50 per share. That means he gets $50 every three months, or $200 a year, in passive income.
Antonio invests in an exchange-traded fund (ETF) that holds a diversified portfolio of dividend-paying stocks. This way he gets passive income from multiple companies without having to pick individual stocks.
Diana builds a portfolio of dividend-paying stocks over time, reinvesting her dividend earnings to buy more stock. This compounding effect allows your passive income stream to grow and potentially earn you even more money in the long run.
Passive income with copy trading
Copytrading is an effective way to create passive income without having to spend a lot of time or effort. In essence, copy trading is the practice of copying the trades of an expert trader. This way, you can benefit from the trader's knowledge and experience, without having to do any research or analysis of the market yourself.
Trading platforms like eToro offer copytrading as an option for their users. In particular, on eToro, one can choose to copy the trades of traders who have a high success rate and who have demonstrated an effective trading strategy. See how it works in practice:
PlayThis way, you can create a passive income stream, as you will earn based on the trades of the trader you are copying. Of course, there are no guarantees of profit in trading, but copy trading it can be a relatively safe way to make passive income if you choose an experienced trader and diversify the portfolio of traders you copy. Copytrading can be a great option for those who are inexperienced in trading or don't have the time to engage in it.
Make passive money with bonds
Bond investing is another popular passive income investment opportunity. When an individual invests in bonds, he is essentially lending money to a company or government at a predetermined rate of interest. This type of investment provides regular income in the form of interest payments, making it an ideal option for those looking for a low-risk product.
A specific example of a bond investment might bepurchase of long-term government bonds. These bonds are typically low-risk and offer a steady stream of income in the form of regular interest payments, making them a safe option for those seeking passive income. If you are interested in bonds, the Capex platform could be for you.
Passive earning platforms
Now let's see some methods to try to earn passively even through apps to invest small sums. There are many online platforms that can help you make a passive income online, such as Shopify, Patreon, Udemy, and Amazon KDP. Shopify, for example, offers an easy way to build an ecommerce business and sell products passively. Patreon, on the other hand, is a platform that allows you to monetize your creative work, such as podcasts, videos, drawings and music, through monthly subscriptions from fans.
Online trading platforms, whether used for copy trading or long term investing, can be an effective way to generate passive income. Here is a table with the main ones:
On the other hand, platforms like Patreon or Udemy, where you sell products or services, do not involve investment risks but still require some effort and time to create and promote your product or service. Additionally, the demand for these products or services may be subject to market fluctuations and trends, which may impact your passive income.
Create passive income without investing
The most popular ways to earn passively are affiliate marketing, advertising, royalties, apps, blogs and many more. The most correct choice largely depends on knowledge and training. Even creating an app, while it can be a complicated process initially, but once completed, it can produce a revenue stream, especially if there is a good following. Another option is creating a blog. There are several ways to monetize a blog, such as advertising or selling digital products or your own services.
Passive earnings online
The internet offers many online passive income opportunities, such as affiliate marketing, social media advertising, and dropshipping. Affiliate marketing is all about promoting other companies' products via an affiliate link and earning a commission on the sales generated from that link. This type of activity can be done on various websites. An affiliate is a person who advertises another company's product or service and receives a commission when a user makes a conversion. Overall, this type of business can be a great source of passive income.
Social media advertising is all about promoting products on social platforms and earning a commission on the sales generated by those advertising posts. Dropshipping, on the other hand, consists of starting an e-commerce business without having to physically buy or manage the goods sold.
Have a passive income with real estate
One investment opportunity for passive income is rental properties. Investing in rental property involves buying a property and renting it out to tenants. This investment opportunity offers not only a monthly rental income but also a potential appreciation in the value of the property in time. While it requires an upfront investment, the return on investment can be significant, especially in the long run.
Example
Marco and Sara are a young couple who want to build long-term wealth by investing in real estate. They purchase a rental property that generates passive income through rent payments from tenants. They hire a property management company to take care of maintenance and tenant relations so they don't have to spend a lot of time on it. The rental income covers the mortgage payment and the property appreciates over time, providing another source of long-term passive income.
Passively earning money is possible
To create passive income, it is important to work hard in the beginning to set up the right platform and then constantly monitor the source of income. For example, to make passive income through financial investments, you need to choose the right investment options, follow market trends and adapt to economic changes.
It is also necessary to take precautions and know how to choose the right platform for online investments. It is important to remember that any investment carries risk, so make sure you are well prepared before making a decision. Furthermore, it is important to diversify your investments to minimize your risks.
FAQ
Where to invest to earn passively?
For example, one idea is to invest in stocks that pay dividends. This type of share allows the investor to receive a part of the profits that the company distributes every year or, in some cases, even every month.
What are passive earning platforms?
You could decide to invest through online trading platforms or with platforms like Udemy where you can sell your services. What is certain is that if you do not currently have services or skills for which to create a course to be sold, the simplest solution remains to invest a small amount of money.
To do this, there are different types of platforms, ranging from real estate crowdfunding to online trading, including copy trading or the ability to copy the operations of expert traders.
