Passive income ideas in India are not a rage unlike the western countries. In the West, you have individuals doing more chores to accumulate that extra buck each month. Passive income is income that gets generated when you don’t have to work for it regularly.
Imagine for a moment, how nice it would be to wake up on a Monday morning and skip that day job of yours because it sucks and because you have passive income streaming in form somewhere. I personally would love that ! To get to that state, one needs to have consistent passive income coming in each month to meet daily living expenses. Does the concept make sense in India and what are the alternatives ? Let us explore.
Simple passive Income Ideas for Indian People:
Well, all the tips I’m giving here are based on my experience and reading knowledge. One tip, which I would like to give you before, you real all these income generating ideas, stick to one of them seriously. Don’t just look for various options, rather become pro in one field and add lots of money via these passive source of income.
I think this is one of the most common and favorites ones. Not because it generates the most income but because buying a property is the most common goal for a middle class investor.
Intelligently done, this can reap huge benefits. If you buy a house at rock bottom prices and put it out on rent and your rental income is substantially more than the EMI you pay each month, then you have made a killing. But seldom does that happen in today’s scenario when the real estate prices have sky rocketed. If you have no loan on the house then all the rental income can be used for either living expenses or saving for long term goals.
I hear in Mumbai and other metros, home owners even rent out their parking units at Rs 5,000 per month !
The money that you park in your savings account or fixed deposits or other fixed income instruments generate a small amount of money called interest for you. One can take this either monthly , quarterly or annually.
This is one of the passive income oppurtunities but you need a real large sum of money to generate anything substantial.
On the fixed deposits that you can make today, you can easily get 9% rate of return – so on 1 lakh of a FD, you get Rs 9,000 per annum – that is a small sum of money to make an effect to your daily living.
Then you have the dividend income from equity – stocks and mutual funds. However, unlike interests on FDs and savings account, these are not guaranteed at all. But if you hold substantial number of stocks of large chip companies, then you can make a killing just from the dividend income. I personally know a few people in Infosys Technologies who were with the giant since the first year of inception and today they laugh their way to the bank when dividends are declared.
The cumulative income from both interest and dividends might be substantial to be considered as a good passive income idea in India.
Income from the Internet
Many in India have now proved that they can beat their counter parts from the West when it comes to making money online via the Internet. However, having done blogging for 2 years now, I am led to believe that making money online is a full time job and if you look at it as a side job, it will not get the kind of money you are looking to make.
But if you can crack the discipline and rigor of doing this part time, then the extra income per month might help. I still classify this as passive income because though you need to work on this always and a lot at the beginning, it starts generating consistent income for you after a few years.
Income from royalty
Being paid from royalty can be a great source of passive income. Royalty income is all future income that gets paid to someone who has created an asset that someone else wants to use. That someone else pays a royalty fee. So if you make an effort just once, this can be a consistent source of income for your future.
Writing books is one of the avenues for royalty income. Who better can comment on this than Manish from JagoInvestor ?
The music industry also uses royalty income to share revenues from an asset created today. If you possess a skill that can fetch you royalty money, then go for it.
I cannot think of any other killing passive income ideas that can be used in our country. Of course there are other miscellaneous things one can do like sales of products by creating a multi level marketing where in you create a chain in such a way that all the future people who sign up by paying fees actually help you, the beginner in the chain, earn more and more. This was used and eventually misused in the Speak Asia episode.
One could also become a life advisor and keep selling insurance policies that will build up a source of income but again that is primarily used in India as the first source of income by agents and so does not qualify as a passive strategy – and believe me it is not worth the effort if you earn decent.
These are just few of working passive income ideas I can think of right now, but if you have more ideas for generating residual income, do let me know via comments.
Do you know of any that I am missing ?