Let's be real – it's always nice to save some money and have extra cash. But you're gonna have to make bigger strides if the goal is achieve financial freedom… as opposed to pinching pennies. To be more specific, it's high time you venture into multiple income streams. Think of it like building a financial health safety net; if one stream dries up, others can still keep you going. This is how people with real financial stability manage to stay on top.
Without further ado, let's acquaint you with the best ways you can make more money. Here are several types of passive income streams you can stack on top of your current income source.
1. Earned/Active Income
This is the money made from selling a good or service for more than it costs; this is referred to as profit. Since it gauges an organization's financial performance and long-term viability, it is the primary motivator behind all businesses. The ability to turn initial investment into profit is what keeps businesses alive, regardless of whether they are producing digital or physical goods.
Profit is especially alluring because it is more flexible than earned income, which is usually based on a fixed wage or the amount of hours worked. Growth potential with profit-based revenue is not just constrained by time or effort. For example, without necessarily working longer hours, an entrepreneur or business owner might scale their profitability by expanding their product offerings, boosting sales volume, or optimizing pricing methods. Profit is a strong and alluring source of income because of its scalability, which also provides more prospects for wealth accumulation and financial independence through with any business venture.
Pro Tip: Testing the waters first is always a good idea. Start small by selling stuff you no longer use through Facebook Marketplace or ecommerce platforms or online store such as Shopee and Lazada. Either way, you're dispensing stuff that's merely collecting dust in exchange for money you can save. A total win!
2. Profit
This is the money made from selling a good or service for more than it costs; this is referred to as profit. Since it gauges an organization's financial performance and long-term viability, it is the primary motivator behind all businesses. The ability to turn initial investment into profit is what keeps businesses alive, regardless of whether they are producing digital or physical goods.
Profit is especially alluring because it is more flexible than earned income, which is usually based on a fixed wage or the amount of hours worked. Growth potential with profit-based revenue is not just constrained by time or effort. For example, without necessarily working longer hours, an entrepreneur or business owner might scale their profitability by expanding their product offerings, boosting sales volume, or optimizing pricing methods. Profit is a strong and alluring source of income because of its scalability, which also provides more prospects for wealth accumulation and financial independence through with any business venture.
Pro Tip: Testing the waters first is always a good idea. Start small by selling stuff you no longer use through Facebook Marketplace or ecommerce platforms or online store such as Shopee and Lazada. Either way, you're dispensing stuff that's merely collecting dust in exchange for money you can save. A total win!
3. Interest Income
Always consider how much you're willing to risk and be willing to accept the possibility that you may lose money during the process.
Interest income is the money you make from a time deposit or savings account. It can also come from lending your personal finance and collecting interest.
Time deposits and savings have very minimal effort and risks because you're just letting the bank do the leg work for you while you earn passive income. If you have a higher risk tolerance in pursuit of greater yields, the lending business might just be the thing you need because you set the rules – what the interest rates are and the repayment terms.
If you want to start generating passive income minimal ongoing effort to grow your money, this is the type that does that. Interest income may seem like it has the lowest return of them all, but in the long run with a good amount of money in place, in compounding interest, this will be the ultimate passive income that many of us could only dream of.
Pro Tip: Look into peer-to-peer lending if you want to step up your game. Platforms like BitBond and Blend PH connect you directly with borrowers so you can lend money. Just remember, the higher the risk, the higher the reward (and vice versa).
4. Rental Income
From the word itself – rental. You earn rental income by renting out a property or asset. This passive income idea is pretty straightforward and probably among the most dependable. The only downside is the need to own an investment property or an asset that is rentable. To obtain such high-value assets, you will need to fork out a large sum of money for initial investment.
It's worth mentioning that owning rental properties is in and of itself an already good investment opportunity. If the rental no longer serves its purpose, there's always the option to sell, especially above acquisition price. So you actually have control on how much passive income you will get.
Pro Tip: Aside from real estate, renting out vehicles is a solid alternative. With booking apps like Grab, there's no need to sign your vehicle up for expensive franchising. All you have to do is sign up and find a reliable group of licensed drivers who can take shifts in operating your vehicle for hire.
5. Dividend Income
Some of the best ways to create passive income include dividends that pay you for having shares of a company, interest from loans like bonds or saving accounts, and lastly dividends. Dividend paying stocks are portions of what companies bring home in profit and allocate as shareholder payouts or mutual funds. In summary, when you purchase a share of a company, you automatically own a share of that firm's profit.
The potential for development and compounding is what makes dividends so alluring. Many businesses gradually raise their dividend payouts, particularly those with a strong track record of financial stability. Reinvesting dividends to purchase additional shares can also boost your profits and have a snowball effect on your investment. Whether you are aiming to improve your income or develop a retirement portfolio, dividends offer a hands-off approach to generate more money while letting the money work for you. The best kind of passive income is that.
If you're new to investing in the stock market, platforms like COL Financial make it easy to start trading on the Philippine Stock Exchange (PSE). This also enables you to starting investing and earn dividends without doing much more than buying and holding stocks.
6. Capital Gains
This is the type of income rooted from buying an asset and selling at a higher price. It's akin to running a business, but instead of selling products, you're flipping assets such as stocks, real estate properties, or even collectibles. In other words, it is the business of acquiring certain commodities based on their potential to grow in value over time.
Anything that appreciates in value can be sold for capital gains. We're talking about assets like gold, stocks, cars, or even vintage action figures.
CAUTION: Keep an eye on trends and make sure that you're not run by your emotions. Avoid FOMO (fear of missing out) buying, which is usually preceded by the unwarranted hype of certain things. Most importantly, buy low and sell high!
7. Royalty Income
This is the money you earn when someone else uses what you develop, which could be an idea, brand, or product. You don't do the heavy lifting—you just lend them your intellectual property and you get substantial income for it.
A shining example of this would be the famous fast-food chains like Jollibee and McDonald's, or the convenience store 7-Eleven. The owners of these brands are paid by their franchisee for using their processes, their logo, and marketing, as well as their business name, to generate income.
Pro Tip: Royalty income isn't reserved just for big brands like McDonald's or Jollibee. You can earn royalties from creative work, like music, videos, or even photos. Sites like Shutterstock pay royalties for stock photos and videos.
8. Subscription Income
Subscription income is earned when you provide a product or service that consumers pay for on a regular basis, usually monthly or annually. This could range from a subscription box service to a membership website, or even a newsletter with premium content. Subscription models are popular because they offer a consistent and predictable source of income.
Pro Tip: If you have a one-of-a-kind product or service that offers continual value, consider using a subscription model. This technique not only helps to retain clients, but it also fosters long-term connections, which can lead to increased lifetime value.
9. Residual Income
Many people think of residual income as their ultimate financial goal—the dream of making money long after the hard work is done. This is the kind of money that keeps coming in even after you've moved on to other things or died. This kind of income is often linked to leaving a legacy because it lets you keep a steady stream of passive income without having to work.
Royalties from books or music, rental income from property, and money made from digital content and online classes that keep selling long and pay dividends after they were first made are all examples of residual income.
One of the best things about residual income is that it can provide long-term financial security. These days, it's easier than ever to make leftover income thanks to modern digital platforms. Lots of ways to build a steady stream of income, such as starting an online business, renting a product, or posting videos or blog posts on sites like YouTube or WordPress.
But it's important to remember that making residual income takes hard work, active involvement, commitment, and a big investment of time and money up front. The change doesn't happen overnight. Making content, building a product, or setting up a business model are all things that you'll need to do at first to make valuable assets.
After this first step, you'll start to see steady income coming in without having to do anything extra from ad revenue and sponsorship. Residual income can pay off big, but you need to be determined, think strategically, and be willing to stick with it for a long time.
Pro Tip: Some easy ways to start building residual income include selling a book, launching a course, or even starting a YouTube channel. Once it's out there, it can keep earning money for you indefinitely.
Final Thoughts
In an ideal world, we'd all have at least several passive revenue streams flowing at once. But let's be real—even the filthy rich often rely on just a few. Passive income refers to any money earned in a manner that does not require too much effort. The key is to find the ones that work best for you and double down on them rather than spreading yourself thin.
It's just a matter of having a diversified portfolio, picking, choosing, and getting good at the ones you decide upon. With the right moves, your financial goals will begin looking a lot more achievable. Financial freedom has never been about overnight success. It's about consistent effort and making smart choices.
