How to Make Passive Income in 2022: Generate Money While You Sleep
“If you don’t find a way to make money while you sleep, you will work until you die” — Warren Buffet
Have you ever thought of earning money while you are sleeping? Generating revenues while you are in a club or partying on the beach? It seemed to be a bit strange a few decades ago and has been a dream for many of us. However, it has become a reality and can easily be witnessed in the real world around us. With passive income ideas in 2022, you can earn up to $50,000 a year or even raise your income by 6 figures per annum as well.
“Money makes money. And the money that money makes, makes money” —Benjamin Franklin
What “is” passive income:
Well, passive income is also referred to as the sum of money earned by not doing a lot of work and is quite common these days. It can be defined as receiving a consistent income from a source not from a contractor or employer and usually does not require a lot of work. An example can be in the form of a YouTube channel or selling an E-Book on Amazon. Similarly, affiliate marketing and blogging are also good examples of some of the best ways to make passive income sources.
What “is not” Passive Income:
Passive income is, sometimes, misinterpreted as the second source of income as well such as freelancing where you are paid for doing some tasks, using your car as a taxi (Careem or Uber). However, they are not passive income because these sources do not provide a consistent income once you stop working. Similarly, holding some kind of assets that do not return any revenue are also not passive income resources until you start receiving a consistent income.
Why is it important to make passive income sources in 2022:
There can be multiple several reasons for having a passive source of income. Some people do it to earn enough money to live their lives in peace, or the purpose can be to increase their wealth, while some others have retirement goals in mind. Whatever the reason is, a sure outcome will be in the form of financial stability.
But … HOW to make Passive Income in 2022:
So, now let’s talk about how to make passive income. Well, there are fundamentally three main ways for generation of passive income:
- Investment: It means to invest the money we currently have to make more money for the sake of passive income generation.
- Sharing of assets: Another way to make passive income is to share the already held assets for the sake of making more money.
- Building the assets: It means to build or acquire such assets which can make more money over the course of time.
Are There Any Requirements:
A well-known saying states that everything has a price, and so is the case with passive income. It takes time to build a source of passive income and requires patience. It requires nothing special but an active participation and you may need to remain active even throughout your day.
Another thing to remember is that passive income generation may sometimes require investing money as well. Its purpose is also the same i.e. to build a portfolio that provides consistent income in the shape of a profit. It may include things like real estate investment, dividend-paying stocks, prize bonds, interest payments and real estate funds also known as REITs.
“If your determination is fixed, I do not counsel you to despair. Few things are impossible to diligence and skill. Great works are performed not by strength, but perseverance” — Samuel Johnson
Things to remember while investing:
It seems appealing to have a passive income and there are several passive income ideas but it may have some downsides as well. One obvious question that may arise is “are there risks associated with passive income sources?”. Well, you should remember that nothing in the world is ever perfect. Everything has some kind of complexities associated with it. Especially, in this era of continuously increasing inflation, having passive income is none of your business if it is giving a consistent amount and your expenses are increasing at a rate higher than that. Similarly, another example can be the dividend-paying stocks. Some companies may decrease or entirely cut off the dividend payments in difficult times. So, one should pay attention to the profile and health of the company as well while investing funds into it.
Moreover, there is a concept of compound interest. You should also take care of it and taking the income directly into your wallet may not be a good option because it prevents you from gaining the full benefit of compound interest by not reinvesting money into the company.
Another thing to note is that when the economy falls, it is less painful to the investors who are following an income strategy. The reason behind this is that their investments include those assets which are an essential part of the economy and are shortly lifted again. So, these kinds of assets may prove to be a better choice for investments in pursuit of passive income generation.
Guidelines for passive income generation:
So, from the above discussion, it is obvious that it takes considerable time to build enough resources to provide a consistent income in future. Based upon the above facts, we have listed some guidelines which you can follow if you are also considering having a passive income:
- You should have clear goals and plans.
- You should have a focused and clear strategy before having a new startup.
- Especially beginners should be aware of the trade-offs in multiple different income sources.
- You should also be firmly aware of how much you are capable of investing whether it is your money or time.
- You should be realistic and properly assess your skills and what you are best at.
- Along with all these, you must have a focus on your dreams as well as it will keep you motivated and push you towards achieving your goal.
- According to a study, although most people consider having a source of passive income crucial to be financially stable, very few have succeeded in it, and even the earned profits are seen to be lower than expected profits. This signifies the difficulty in achieving financial stability through the use of passive income. So, active income remains a necessary pillar in building a passive income portfolio to attain financial stability.
- Similarly, another study examined the role of emotional experience in decision making and suggests that active decisions provide a higher sense of accomplishment and control giving a higher sense of achievement. Therefore, we should more focus on active decisions as compared to passive decisions while making the important decisions of our lives.
Passive income ideas in 2022:
According to experts, there are multiple different options available as part of Passive Income Generation. For the sake of simplicity, I will cover it in my next story as it is becoming a bit lengthy and I don’t want you to get bored.
Note: Well, dear medium readers, I hope you enjoyed this article. It is my first ever story on medium.com. Feel free to give your valuable feedback in the comments section. You can also send me DM, if you fell like. Thanks you.
