6 Ways to Make Money Work For You
It is a known fact that income derived from your day job will put food on your table and give you a sense of security, but it will not make you rich. One of the ways to attain financial freedom is through investment on property, business or foreign exchange.
As said by Robert Kiyosaki, a renowned American investor, businessman, and motivational speaker, “Work to learn–don’t work for money. To become successful you must learn how to manage cash flow, systems and people”. In other words, he believes in racking up income-generating assets such as real estate, stocks and bonds, and leveraging the time and talent of others to free oneself from menial tasks in business operations.
How many of us are bold enough, or have the means or know-how, to follow Kiyosaki’s advice? In fact, many of us are sceptical of the approach, being afraid to incur more debts that will add on to our existing ones. Kiyosaki believes in acquiring good debt for long-term benefits such as buying property for lease or starting a business. However, if you are cautious about accumulating any kind of debt, building up your savings with the aim of procuring capital for your business or paying for a deposit on property to secure long-term passive income is the safest bet despite its lengthy process.
Below are 6 ways to acquire passive income:
1. Accumulate savings
My advice is to start accumulating more savings — and keep your day-job — before dabbling in real estate investment or starting a business. Don’t be too impulsive in parting with money you are currently earning, or taking out a loan to use as an investment fund.
Channel your savings into a high interest savings account, and let the money grow until you have accumulated enough to pay for a deposit on a property that you can lease out to generate passive income.
2. Invest your time and money on a business or real estate
Once you have accumulated sufficient savings, you have the capacity to start a business, buy property or create an intellectual product.
Below are some types of passive income you can earn:
Residual Income
Residual income is revenue that occurs over time from work done just once, such as:
- A network marketer’s hosting service that is renewed by customers every year
- An aerobics instructor who produces a video and sells it at the gym where she teaches
- A business consultant who creates an e-book and sells it on the Internet
- A photographer who makes his photos available through a stock photography clearing house and gets paid a royalty whenever someone buys one of his images
- A person who buys property, renovates it and rents it out
Leveraged Income
Leveraged income is income derived from the work of other people. Some examples of leveraged income include:
- An e-book author selling her e-book through affiliates who promote the product
- A network marketer who employs someone to manage the website to promote the business
- Franchising your business model to other entrepreneurs
3. Forex money exchange
Trading currencies is a profitable way of making money but you have to familiarise yourself with the system, trends and current exchange rate.
4. Stock market investment
Since this type of investment involves high risk, it pays to start trading using a small amount of cash. A lot of time needs to be invested in acquiring knowledge on identifying market trends and patterns before you develop confidence in trading with more money.
5. Bank interest rates
Relying on bank interest rates for passive income may not reap high profits. However, it is the surest way to gain a small steady income on a regular basis.
6. Term deposits
Term deposits are funds deposited into an account for a fixed term with the purpose of earning interest. Putting excess money aside in a term deposit for a few years many be a better solution than relying on bank interest rates. Depending on the term and amount deposited, a substantial profit can be secured upon maturity.
Savings derived from your day job income is a conventional way of accumulating money. You will have to put in longer hours and work harder to reap more income in the form of over-time work or performance bonus. On the contrary, earning passive income is a way of obtaining money without direct effort through initial investment. Depending on the source of passive income you receive, you will be assured of a constant flow of income without much work, hence giving you the freedom to focus on activities you enjoy.
Image by Keith Ramsey
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