The eight-hour working day was developed in the mid-to-late 19th century, based on the need for people to have eight hours for sleeping, eight hours for work and eight hours for leisure. We celebrate this “victory” for the workers on Labour Day.
These days, however, work seems to take up more than its fair share, particularly with smartphone technology. Many people are seeking ways to maintain or increase their income without increasing their working hours. Creating passive income is one way of achieving this goal.
What is ‘passive income’?
Passive income is regular and reliable income that doesn’t rely on constant active involvement. In other words, you get paid multiple times for something you only did once. Sound too good to be true? It is possible.
There are numerous opportunities of which these a just a few:
- Writing a book, a blog or make YouTube videos.
- Selling services via an online store.
- Investing in property for rental income and capital growth.
- Investing in sound, dividend-paying Australian shares.
- Peer-to-Peer lending.
Obviously some of these options require investment capital while others require time to get them established.
But there is an even simpler way to earn passive income – pay off debt. If you’re not paying interest on your outstanding credit card debt every month, that money is all yours!
There are thousands of businesses that are now only web-based and hundreds more seem to pop up daily. And it doesn’t have to be a business that sells anything – bloggers can earn mega bucks from advertising. If a site is popular enough, advertisers will gladly pay the owner for space.
Internet gurus espouse that this is the way of the future, however the reality can differ on how many of these businesses are profitable, and just as importantly, how much time is required to make them profitable.
If you don’t have the skills to start something yourself and are tempted to buy an existing online service, such as an online store, always exercise caution – particularly if these involve capital investment or expenditure. It’s frequently impossible to check on the background of the promoters or what type of security there is for your investment. Always check ASIC’s website (www.asic.gov.au) to ensure these businesses are registered and appropriately licensed.
As with any new venture, conduct solid research of existing opportunities or maybe just look around you at what others are doing, identify a need and create something brand new.
It will take time to get things set up but if done right maybe you too can be earning “money for nothing” – well, almost!
For sound advice on creating passive income, make a no-obligation, free appointment with our FP team.