In the world of hustle and bustle, passive income emerges as a breath of financial fresh air. It’s that extra money you earn with minimal effort, creating a sense of financial security. According to the 2022 Deloitte Global Survey, more and more Indians are delving into passive income avenues. Passive income can be the bridge to achieving short-term goals like buying a car or a house and securing a robust retirement investment plan for the long term.
In this article, we will explore the seven most effective passive income ideas in India to boost your financial health.
7 Best Passive Income Sources in India
- Rental Income: Generating income from renting out property is a popular and relatively low-effort method. Setting the right rent and securing reliable tenants is the primary task.
- Affiliate Marketing: If you have a significant social media following or a well-received blog, use your audience to endorse products and earn a commission on clicks or purchases.
- Peer-to-Peer (P2P) Lending: Invest in creditworthy borrowers and earn interest through regular EMIs. It’s profitable but not without risk.
- Blogging and YouTube: Utilize your online presence to endorse products or brands, charging substantial fees for your services. Many Indian YouTubers are earning significant amounts through this channel.
- Social Media Influencing: Establish a channel on platforms like YouTube or Instagram. As your subscriber base grows, start accepting brand promotion requests and charge for your services.
- Real Estate Investment Trust (REIT): Invest in real estate without the time and financial commitments required for property ownership. REITs provide an indirect path to profit.
- Investment Plans like Mutual Funds and ULIPs: Invest in financial markets through mutual funds or Unit Linked Insurance Plans (ULIPs). ULIPs offer life coverage in addition to investment opportunities.
Selecting Your Passive Income Source
Your ideal passive income source should align with your interests, skills, and financial objectives. The number of passive income sources you pursue depends on your circumstances and risk tolerance. Passive income requires consideration of time, effort, and resources.
Things to Remember About Passive Income
Here are some key points for those new to passive income:
- Not a Get-Rich-Quick Scheme: Passive income requires an upfront investment of time or money. It offers long-term financial security rather than quick riches.
- Time Investment: Some passive income sources may require extra effort, like maintaining a rental property.
- Tax Implications: Passive income is subject to taxation under different sections in India, so be sure to consider the tax implications.
