But what exactly is passive income? Are these streams truly passive? What can we do to begin tapping into this hidden stream of profits? Read on to find out how you can start producing passive income today.
Passive income streams is all about money making money 24/7. You know the famous make money while you sleep idea. It’s about buying money-producing assets and investing time to build products that generate income without future effort.
Truly Passive Income Streams: Purchase and Forget It
Passive income that is always passive is usually found in the form of investments. With this type of income, you make a purchase and forget it. Therefore, you don’t have to devote time or energy to generate money from these passive income streams.
There are two main ways to make money from stocks. First, you can start investing. Purchase and forget it. Then make money when you sell the stock down the road through capital gains. That isn’t a continuous form of income, but it can come in handy when you’re ready to retire.
A bond ladder is a portfolio of multiple bonds that mature at different times. When the bonds mature, you can reinvest the returned principal in new bonds and start a new ladder or continue adding on to your current one.
You can earn passive income with interest when you loan money to someone else. For example, you can loan banks money in the form of a high yield savings account, and you can lend businesses money in the form of bonds. But you also earn interest when you loan money to peers.