5 INCOME GENERATING ASSETS FOR PASSIVE INCOME

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5 Passive Income Generating Assets everyone needs - Investing, Dividend Investing, Ebooks, Courses, Home Rentals

Do you know there are 5 Income Generating Assets for passive income that absolutely everyone can have and you can start building in your life in 2020?

In this post, let me break them down for you and I’m excited for you to create them in your own life too.

Don’t fancy reading?  Why not watch my Youtube video instead all about it?

What is Passive income?

Are you looking to make some cash effectively whilst you sleep?

Passive income essentially is where you earn money without exchanging your time in the process, so unlike your normal day job where you are paid a set wage based on the role you perform during usually 8 hours of the working day – you end up making money in the background after you have created a product or perhaps invested.

These are my FIVE FAVOURITE passive income generating assets that I believe absolutely everyone can have in their life.

In the background you’re using some vehicle some method of actually your money making more money for you.

Passive Income 1 – Your Savings account (minimum interest)

Without us realising, we can allow our money to make more money for us in the background passively is  by selecting the best bank account that offers a high interest rate with the level of access to our money we need.

The great thing about focusing on this as our first passive income is that it offers a good level of security with our money as most accounts will confirm the exact interest yearly rate at the time of opening them and committing to them.

For example, if you have a emergency savings amount of money of a few month’s wages to cover for any changes in life, you may wish to maximise the interest growth every year passively by choosing a cash ISA account where you commit to the money being locked away for up to 5 years.

Currently the longer you leave your money locked away with your bank accounts the higher the guaranteed interest rate.

With any savings or investments, you will see they will mention the interest rate.

That interest rate means the amount of money the bank or company is giving you as a “thank you” for storing your money with them, and this is a percentage of the total amount you have saved with them.

This “Thank you” money on top of your savings therefore is money you haven’t had to earn yourself but given completely independent of that (i.e. passive income).

Banks and Building Societies at the moment offer very low interest rates (say 0.02-0.5%) on their normal everyday accounts, Cash ISAs perhaps up to 4-5% if we lock the money for a long term (5 years) and that is where if we look at finding out how to start investing in the stock market instead, we can experience higher interest growth rates on our funds purchased with our money instead.

Passive Income 2 – Investing in Index Funds (Stock Market)

The second way everyone can have a passive income source long term is really maximizing the amount of interest growth on your savings and investments every year, so that amount it grows by each year is a substantial amount that you can eventually withdraw and live off.

Investing in index funds is a way for our money to grow exponentially as it is real companies we are giving our money to in order to receive a portion back of their profits every year (a dividend) or waiting for the value of the fund we bought to increase in price.

Index funds are wonderful as instead of trying to figure out which single company or range of companies to invest in to minimise our risk, as with investing there is naturally more risks than using a bank – an index fund is a way to purchase a small piece of a whole market of companies such as the S&P500 or FTSE 100.

Normally over long term (5-10 years investing time minimum) we can look to see above 5%+ YoY growth on average, however some might be more or less due to the nature of choice of funds.

This is passive income again as we are not having to do anything in the companies to return back an increase in their fund value to us, or receive that dividend payment as a thank you for your investment.

Passive Income 3 – Dividend Paying Funds (Stock Market)

This again uses the Stock market as a way to drive another passive income source with our money, and we buy stocks or funds in certain companies that offer a dividend payment.

Dividends are where they give you a portion of the profits back every quarter or every year as a “thank you” for holding their stock.

Want to know more about Dividend Investing?  Check out my video here:

This is long-term income growth – it’s not the same as having a bank account – we’re actually giving our money to other companies so choose wisely knowing that the value of the shares in those companies will change day by day, however the company will usually confirm at least once a year the percentage dividend payment to you.

That percentage is the value you will be paid based on the current value of your shares – for example if the dividend payment is 10% and your stocks are valued at £100 currently, you will receive £10 as a dividend payment that year.

Usually at the start of any investment, the returns or potentially dividends to you will be very small – but assume over long term if you commit to buying into the funds over the years you could see that dividend payment become enough to pay your bills quite happily.

This would mean that through your investments and dividend payments you could achieve financial independence, not have to work for a living again.

Passive Income Source 4 – Create an Ebook or online content

I especially love creating courses or E-books as a (semi) passive income source.

It is so easy to write a book, to publish it and actually create it completely on Amazon Kindle and other online sites you don’t even  have to print any copies or organize a printer.

I believe everyone has a book or course within them, we are all experts in something whether we realise it or not – even our life story can be interesting to others.

Amazon and other sites will do all the physical book production for you for example, and once you have your book written out (it took me a total of 2 weeks to write my own first book) in a Word document, upload it to Amazon Kindle Store and start to SELL IT!

It is completely passive income once you created that book and uploaded it, everytime someone finds your book and purchases it Amazon will ship it out and then send you the profits once a month.

E-Courses are very much similar to an e-book but it is exclusively online.

You can use online platforms such as Thinkrific or Udemy to host your course, and away you go with driving people to it!

There will be minimum costs involved with running the costs, such as hosting costs from the site you created it on, and then will involve time to create the best product you can using text, video or audio files – but once completed using your time once, it can then be sold multiple times even when you sleep.

Hello Passive income!

Passive Income Source 5 – Rent out your home

You can even consider maximising your main asset for your family, and that is using your home as a potential income source.

Rent a room or even rent out your entire house through using Airbnb or other sites, it’s a great way to produce income that really could help pay those major bills.

Many families or individuals love to travel and so finding properties that are affordable but offer the comforts of home make this a great opportunity if you have the ability to use any free rooms in your home to generate an income.

Want more income ideas?

I hope that these ideas have inspired you to create new passive income sources, and I know when I first discovered the concept of income without working for it – it blow my mind!

In our family currently we have 6 income streams that make up our total household income with each of these growing every month.

I really encourage you to think outside the box and see what you can do with your money to create these income sources in your life too.

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