There’s been a lot of talk lately about earning money “passively.” That is, you can make money without actually doing any work. Passive income is considered additional income to what your regular job earns. Is it really possible to make money without lifting a finger. Actually yes, and it’s called investment. Here are simple ways to invest your money if you are a complete newcomer to finance:
Put Your Money in a Fixed Deposit
Investments are associated with various levels of risk, as most of us already know. If you are a risk adverse type of person who wants to watch their money grow, then the best option available is savings.
You can put your money in a savings account and let it grow. You would be earning extra money from the interest. However, as returns on savings accounts are low, there’s a better option: certificates of deposit or fixed deposits.
You can place a certain amount of money in a fixed deposit with a bank and watch is grow at a steady pace. Fixed deposits are best for long-term investing as it takes time for your money to grow.
Buy Dividend Paying Stocks and Shares
If you want better returns, then be prepared to take on some risk. One of the popular high-return investment options refers to buying stocks and shares in companies. There are plenty of Australian equities and stocks that pay dividends to customers. Equities are very similar to stocks, but don’t come with the same debt burden. Carefully pick stocks that pay dividends to earn money passively from your home.
Invest in Annuities
Right now, you may not require much passive income, but there certainly would be a time in your life that becomes necessary. That’s, of course, your retirement years when you still need money but can’t earn it. This is where annuities come in.
You can use your ordinary savings from a super to launch an annuity scheme with an insurance company. Basically, you pay the insurance company money, so that the company guarantees that you will receive a reasonable income in your retirement years. There are different types of annuities you can invest in. Like other forms of investments, annuities can grow. Therefore, start early and don’t delay retirement planning.
Rent a Room in Your House
If you own a house, then you already have everything you need to earn passive income. Remodel the garage or partition off a room and rent it out. You can become a landlord in your own property. Other than some cleaning and supervision, there won’t be much work required. This is definitely one of the best ways to earn passive income in Australia.
Put Your Savings in a Managed Fund
A managed fund is essentially an investment scheme, except that you don’t oversee it. Managed funds are overseen by professional financier, who takes a commission for doing so. If you want to considerably invest but be hands-free about it, then this is definitely the option for you.
While investing may be called “passive income,” it’s not without risk. Therefore, educate yourself well before investing your money in anything other than a savings account.