Thanks to India’s perpetually advancing economy, you have ample passive income ideas to explore to augment your wealth. No matter who you are, starting a passive income stream is beneficial, especially if it requires minimal involvement or monitoring. For many, these income sources are the easiest ways to work toward retirement goals.
Read on to know more about these income streams and how to generate passive income today.
What is Passive Income?
When you don’t have to be continually involved or active in managing an income source, it is known as passive income. It effectively is a secondary income if your primary source requires most of your time. While passive income sources don’t guarantee wealth overnight, many of these are reliable instruments to build wealth.
Benefits of Passive Income Generation
The following are some of the reasons why it helps to have a passive income stream:
- Any additional income earned without having to break a sweat will supplement your primary earnings
- With this additional income, you can delve into other wealth-creation options and take risks
- Corpus built through additional income can also serve as a safety net in unfortunate circumstances, like a medical emergency or job loss
How to Generate Passive Income in India
Here are some of the most popular ways to make passive income in India:
Fixed and Savings Deposits
- Bank deposits are one of the most reliable avenues for earning passive income in India
- These offer guaranteed returns along with investment safety and flexibility
- Interest earnings are low and offered in set intervals
Rental Income
- You can generate passive income by renting out a real estate property
- You can also consider renting out a vacant room or area on the property
- Renting may require some involvement as you will have to maintain the property
- Alternatively, you can employ someone to do it for you, but the added cost affects your overall earnings
Invest in REITs
- You can also invest in Real Estate Investment Trusts (REITs) to earn passive income
- These trusts own real estate of different types, such as office spaces and malls
- They provide the rental income to the unitholders in the form of dividends
Also Read: How to get a ₹5 lakh loan immediately?
Investment in Dividend Stocks
- This is among the most common passive income ideas that many rely on
- You can make a one-time investment in a good stock and secure returns through dividend payouts
- Some publicly listed companies provide dividends quarterly or annually, which can serve as periodic influx for other investments
- Be sure to invest in different types of dividend stocks to diversify your portfolio
Start a Digital Business
- Online businesses have been on the rise and with technological advancements, you can start one with minimal investment and efforts
- These businesses are also scalable and can offer substantial returns in the long run
- You can upskill yourself for the skills needed through online courses as well
- You can start small with retail products, customised products, digital courses, etc
With multiple income streams, achieving your varied financial goals is a lot easier. However, before investing, do your research and assess the risks involved. Also, consider the tax implications to get the most out of your hard-earned money.
For other financial obligations that require additional support, you can get an Instant Cash Loan of up to ₹5 lakhs with competitive rates and flexible tenures. Download our Personal Loan App or log in to our website to enjoy stress-free borrowing and repayment experience.
FAQs on Passive Income Sources in India in 2024
What is the most profitable passive income?
Index and mutual funds offer an annual CAGR of around 13-14%, the highest in the category. However, investments in these passive income sources are subject to market risk. Hence, you must consider the following factors when looking for a suitable income stream:
- Your risk tolerance
- Primary investment and involvement
- Returns or the amount of fixed income accumulation
How can we generate a second source of income in India?
You can generate a passive income by starting these investments or initiatives:
- Invest in FDs, dividend-paying stocks, index funds or mutual funds
- Become an affiliate marketer or an insurance agent
- Publish a book or create online courses
- Start influencing the masses through social media or a YouTube channel
- Publish a book or sell a service
What is the easiest form of passive income?
Drop shipping is one of the easiest ways by which you can generate a secondary income. It allows you to earn revenue by setting up an online store without having to manage inventory one would in the traditional sense.