Written by - What is Passive Income? Passive income refers to earnings derived from investments or assets without active involvement.
- Building Your Passive Income Portfolio:
- Dividend Stocks: Invest in companies that pay regular dividends. This provides a steady income stream.
- Real Estate Investment Trusts (REITs): REITs are companies that own, operate, or finance real estate properties, offering dividends from rental income.
- Bonds: Bonds provide fixed interest payments, which can create a stable source of passive income.
- Peer-to-Peer Lending: Lend money to individuals or businesses through online platforms and earn interest on the loans.
- Reinvesting Income: Consider reinvesting your passive income to increase future earnings. Use Dividend Reinvestment Plans (DRIPs) or reinvest rental income into more assets.
- Benefits of Passive Income:
- Financial Freedom: A well-established passive income portfolio can provide financial independence.
- Diversification: Incorporating multiple sources of passive income can provide a hedge against market volatility.
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