How passive income can affect your financial status

You have probably rolled your eyes at some of the passive income promises, but others are legitimate.

05:41 08 January 2014

You may have heard people talking about passive income and wondered what the big deal is. The concept can sound quite gimmicky. Passive income is all about earning money, for essentially doing nothing. If you have ever wondered if passive income could be a legitimate concept, think about a few of the following passive income sources: 

 

• Rental income from properties

 

• Interest earned on money you put into a regular savings account

 

• Interest earned from money put into a Stocks & Shares ISA or a Cash ISA

 

There are many other types of income, which can be considered passive income as well. Typically with passive income you do have to either make an initial investment of sorts or produce a service or product what will continue to pay you. 

 

• If you invest money in a start-up, your partner or the business owner may draw up an agreement that provides you with a certain percentage of the profits for a number of years as a way to give you a return on your investment. 

 

• Publishing a book is one way to create an avenue for passive income. You do a considerable amount of work, but book royalties can continue for quite a while. 

 

• Website with certain advertisements, collects paid referrals, subscription services, or other similar setups can earn you quite a bit of money since it is accessible around the world on a nearly-constant basis. 

 

If you are looking for ways to create passive income to either replace or supplement income you already have, you could investigate these options or ones that are similar. Do not be fooled by promises of no investments though. Companies promising easy, no-investment opportunities are usually scams that push a mystery product or service and then encourage other people to also sign up. Plan to make some kind of investment first.