10 Passive Income Ideas To Build Wealth in 2022

  • Author: Agrima Nigam
  • 5 min read
  • April 13, 2021
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10 Passive Income Ideas To Build Wealth in 2022

Most of us have an active stream of income that we earn from our daily jobs. These jobs allow us to earn an income till the time of our retirement. Once we retire, our active stream of income stops. Nowadays, this is just one of the many ways you can earn money.

Having multiple sources of income has become quite common amongst people to achieve financial stability. It is also becoming increasingly popular amongst people to have a side hustle or provide consultancy services apart from their regular jobs to have an extra source of earning. But do these actually count as passive income? Engaging in a side hustle or providing consultancy services requires a consistent amount of time and effort and this is quite opposite to earning passive income.

Passive income on the other hand, is a common concept that has been circulating the internet. Passive income is money that you receive without spending considerably the same amount of time and effort as your active job on a regular basis. The recurring income can come in on a regular basis once it’s set up.

What is so fascinating about it is that it allows you to earn enough to retire rich and enjoy life. If you wish to make more money but do not have time to take up another job, here are 10 best ways to earn passive income in 2021.

  • Stocks

Investing into stocks, especially dividend-yielding stocks, is a good option that allows you to earn at regular intervals from the companies you invest in. Companies pay cash dividends out of their earnings on a quarterly basis, and all you have to do is buy the stock to receive them. Dividends are paid per share of stock, so the more shares you hold, the more you will receive. However, it is important to find the right stocks. Therefore you must cover your basics about the stock market before investing. Following these basics, should help you get started- find a solid business that produces a decent product or service, pays a dividend, is debt-free, and has a lot of cash on hand.

  • Bonds

Bonds are one of the most commonly included passive income options as they allow you to earn guaranteed income throughout the tenure of the bond. Since bonds are considered liabilities of the entity that issued them, buying bonds is much better than investing in stocks as they ensure guaranteed paybacks. Corporations and governments sell bonds as a form of financing. In return, the recipient receives a written and signed pledge to pay a certain amount of money on a certain date and under certain conditions.

  • REITs

REITs are basically firms that invest in and operate real estate. REITs, like any other business or dividend stock, can be purchased on the stock exchange. You’ll get whatever dividend the REIT pays out, and the best REITs have a track record of increasing their dividend on an annual basis, so you will get a steady stream of dividends over time. When you invest in a REIT, you are buying a share of the company that owns and operates rental properties. 

You’ll need to be able to pick good REITs, just as you’ll need to be able to pick good dividend stocks, which means you’ll need to research each company you’re considering buying. Since REITs stocks tend to pay a higher dividend than standard stocks, they are a common way to invest if you want to earn a passive income.

  • Online Courses

This is an excellent option for people who have expertise in a certain area and feel that they can efficiently capitalize on that knowledge by creating online courses. Creating and selling online courses is becoming widely popular these days, especially with websites such as Udemy, EdX and Coursera, people can sell their tutorials or courses to be uploaded and earn from each enrollment to the course. Once it reaches the public domain and gains considerable demand, it will bring income for several years ahead.

  • Blog/ YouTube Channel

If you have a passion or a hobby that you wish to monetize, then starting a blog or a YouTube channel is a good option to consider. If you love traveling, trying different cuisines, reading books and knack for journaling all of this, then you can create your own interesting content and share it with the world. However, unlike other forms of passive income sources, blogging and content creation requires consistent time and effort. You need to dedicate a good amount of resources and time in understanding the niche, the trending topics and create content that attracts the attention of the viewers. On the brightside, once you collaborate with sponsors/ads and build a large enough viewer base you can start monetizing your content. 

  • Social Media

Popular social media platforms such as Instagram have grown from merely photo-sharing apps to virtually sharing anything and everything online. Instagram itself has grown dynamically over the last 5 years with more than 700 million users to date. Social media platforms are committed to serving the audience. When you have content that has demand and serves the audience, money is a byproduct. Influencers earn as low as $10 per post to as much as $100 per post with less than 10,000 followers. The idea is to reach out and have an active engaged audience as opposed to having numerous passive followers. Hence, make sure that you post quality and engaging content, interact with your followers and host live to appeal to your targeted followers. It is also important to analyse the current trends and post content that is SEO (search engine optimization) friendly. 

  • Real Estate Crowdfunding

Another type of passive real estate investing other than REITs, is real estate crowdfunding. Crowdfunded properties is a great option if you are looking to invest into real estate besides buying properties or if you have a smaller amount to invest. The process of real estate crowdfunding involves collecting funds from a pool of investors to fund a large real estate project that has been growing in volume over the years. The money raised by the crowdfunding business by selling or leasing out the property is distributed to investors as dividends.

To invest through crowdfunding, explore various online real estate crowdfunding platforms and understand their products and business model. You must be convinced about the project and also conduct your due diligence on the sponsor. Assetmonk is an online real estate crowdfunding platform that allows you to spend a small amount and participate in large-scale residential and commercial real estate developments that you would not otherwise be able to participate in.

  • Fractional Ownership

Investors with small ticket sizes pool their funds and invest in real estate assets to gain returns through fractional ownership. Fractional ownership allows you to co-own a high value property with several other investors who share a common goal to earn rental income. You can earn attractive returns by investing in institutional-grade assets with as little as Rs. 5 lakh. The properties are often high-performing assets such as warehouses or high-end residential properties that deliver fractional investments. As a result, they generate a lot of money.

Moreover, it lets you earn rental income without physically owning an entire property. This saves you from the burden of maintaining and managing the property. 

  • Rental Properties

Investing into rental properties ensures a predictable return rate, Unlike, investing into volatile market instruments such as stocks and bonds, income through rental properties can be determined simply by looking at the market trends and quality of the property. There is also the scope to enhance your rental income by making upgrades to your apartment/ property. It also allows your investment to hedge against inflation, in the sense that, as the property prices increase due to increase in inflation, your rental income will also increase.

Another similar idea to pursue as a form of passive income is to rent out your vacant properties on platforms such as AirBnb. If you have a property that is vacant most of the time, you can put it up on AirBnb to attract tenants who can book the place for whatever duration they prefer. This will help you generate income from a property that is lying vacant otherwise. 

  • Peer To Peer Lending In Real Estate

Peer-to-peer lending, also known as P2P lending, is a type of passive income generation in which a developer seeks a loan from a private person. The funds are given to the developer by you, the investor. Then investors will profit from the developer’s interest payments. The developer is spared the time-consuming procedures of approaching financial institutions for loans or funds. Since the interest rates are comparatively higher due to the risk, you can make lucrative returns through the stakes. However, high returns also entail higher risks, so you may want to get in touch with your real estate advisor before investing.

With this article we have made an effort to list the most lucrative and relevant ideas to earn passive income in 2021. Investing is one of the feasible options mentioned and with the advent for many user friendly investing platforms, the stock market isn’t a confusing place anymore. In accordance with relevance and impact of the internet and social media in our lives, you can also put options like blogging and social media influencing to work. In addition to this, real estate is a great source for generating passive income that has a plethora of investment options to offer, allowing you to make money easily while sitting at home. While an extra source of income never hurts anybody, there is no one-size-fits all and the number of sources of passive income you must take depends on your current financial position and your future goals. 

Assetmonk is a one-of-a-kind online real estate investment platform that connects investors with selected high-growth commercial properties. Assetmonk follows a strict due-diligence process to narrow down the most profitable investment options for each investor’s portfolio and financial objectives.

Best Sources To Earn Passive Income In 2022 FAQ's:

It is a good idea to diversify your income stream but when it comes to producing income streams, there is no such thing as “one size fits all” guidance. The number of sources of income you have can be determined by your current financial situation and future financial goals. However, getting a few is a good start.

Passive income sources are a great aid to improve your financial situation by supplementing your active income source. However, there are many factors that come into play, such as understanding the risk involved in investing, diversifying your portfolio, amount of capital that you wish to invest etc. Taking help from financial advisors and real estate advisors can help you make the right decisions and profits from your investments.

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