The inflation in India as of April 2023 stands at 4.70% - there are more details in this article. While 4.7% sounds reassuring, it’s important to recognise that this number is defined by the Consumer Price Index (CPI), which only takes into account the price of a handful of goods and services. And is not truly reflective of everything you and I may be spending our money on. The actual inflation rate maybe much higher than what the CPI considers. For instance, percentage increase of rents in urban areas are rising in the realm of double digits. Skyrocketing rents in Bangalore made the news earlier this year.
So unless you’re sure that your regular salary or freelance income will grow steadily year on year to beat this urban inflation, you might want to consider having other sources of income.
This article covers passive income, what it is, and some examples of passive income you can make.
Passive income is money earned without actively working a regular job. It leverages existing skills and doesn't require extensive upskilling. You make a one-time investment of money and time. Once set up, it requires low maintenance effort. It's taxed based on your income bracket. Passive income offers financial freedom and flexibility, supplementing or replacing regular income. It's important to research and choose the right opportunity. It takes time and effort, but can be rewarding financially and personally.
Here are 14 ways to make passive income:
Moonlighting made the headlines last year with many CEOs of large companies taking sides for or against it. Moonlighting is when you work a side gig or take on an extra job while keeping your regular employment. It's like having a double hustle to earn more money or pursue your passions. As long as it doesn't clash with your main job or violate any work agreements, it’s a great source of income. Tech Mahindra’s CEO took a stand for it, while Wipro’s CEO was dead-against it. So make sure to check what your company officially says about it before starting out on making money through moonlighting.
Some examples of moonlighting could be:
Ride sharing is when regular people use their own cars to provide transportation services to others. It's like giving someone a lift in exchange for a some earnings. These are generally managed by apps like Quick Ride. Ride sharing makes sense if you drive to work every day because you can earn extra money by picking up passengers on your commute route. It's like turning your empty seats into cash while helping others get to their destinations.
That said, ridesharing may not be the best option for women due to safety concerns. Being alone in a car with a stranger can be risky, so it's important to keep your personal safety in mind, and consider alternative options for earning extra income.
Starting a home business means launching and running a business right from the comfort of your own home. Examples include organic farming, where you grow fruits and vegetables in your backyard, or catering, where you prepare and deliver delicious meals from your kitchen to clients. If you’re not much of a cook, try creating handmade soaps or candles. If you’re not one to get your hands dirty at all, then freelance writing is a great way to make some income.
You can write blogs, articles, or any other content in your area of interest and expertise.
The Indian education system isn’t perfect. It has a long way to go, and until then, you can help many students get better at English, Math, Science or even Arts. If you’re more keen on leaving that stuff behind in school, you can get yourself a Yoga, general fitness, or swimming instructor certification, and become an instructor yourself.
One of the most popular avenues to draw supplemental income is rent. If you have any space to spare that you aren’t using, you can always rent it out on AirBnb. This works only if you have property of your own, or if your land-owner is okay with you sub-letting their space.
Writing a book can be a game-changer for several reasons. First off, it gives you the chance to share your wisdom and experiences with a broader audience, making a real impact and possibly helping others along the way. Plus, being a published author boosts your credibility and expertise, which can open doors to exciting opportunities and collaborations. Oh, and let's not forget the potential for passive income through book sales and royalties, giving you a sweet long-term financial benefit. So, grab that pen (or keyboard) and start unleashing your inner author!
Selling online in India through platforms like Amazon, Flipkart, or Meesho is a fantastic way to grow your business. They make it easy to showcase your products, handle payments, and manage shipping. With Amazon and Flipkart, you can reach a massive customer base and use their fulfillment services, while Meesho offers a social commerce platform for reselling. Just research their policies, fees, and support, set up your store, and voila! You'll be tapping into India's booming e-commerce market in no time.
Google AdSense is a free program that allows you to earn money by displaying ads on your website or blog. When someone visits your site and sees an ad, you earn a commission. The amount you earn depends on the type of ad, the number of clicks it receives, and the location of your visitors. To get started with AdSense, you need to create an account and add the AdSense code to your website. Once you've done that, Google will start displaying ads on your site. You can control the type of ads that are displayed, and you can even choose to hide ads on certain pages.
This of course works only if you already have a well-established website or blog up and running. This typically takes 1-2 years to grow, and is something we’ll discuss in point 11.
To become an influencer or content creator on YouTube or Instagram, follow these steps: Choose your passion as your niche, create awesome content consistently, and engage with your audience by responding to comments and feedback. Collaborate with other influencers, promote your content across platforms, and use relevant hashtags to reach more people. Build your personal brand by staying true to yourself and developing a unique style. Once you gain a following, monetize your influence through brand partnerships, sponsored posts, merchandise, or your own products. Remember, be authentic, dedicated, and connected with your audience to thrive as an influencer or content creator.
Now, read this one with a pinch of salt. Among the many side income ideas, trading on the stock markets is always an option. To learn how to read the stock market and make investments, it's important to start by educating yourself. Begin by studying the basics of investing through books, videos, and reliable financial news sources. Understand key terms and concepts such as stocks, bonds, and diversification. Once you feel comfortable, open a brokerage account to start buying and selling stocks. Start with smaller investments and gradually increase your portfolio as you gain confidence. Remember, investing carries risks, so stay informed, do your research, and be prepared for market fluctuations. To learn how to read the stock market and make investments, educate yourself, consider exploring Akshat Srivastava's course, and leverage Fi Money—a platform that enables investing in top US companies with industry-best forex rates, zero brokerage fees, and a user-friendly interface.
To create a blog that gets noticed through SEO and earns money from site traffic, here's the game plan: Pick a topic you're passionate about, do some keyword research to find popular topics, and create awesome content around those keywords. Optimize your blog with catchy titles, headings, and meta tags. Get the word out by promoting your blog on social media and engaging with your audience. To make money, consider ads, affiliate marketing, sponsored posts, or selling digital products. Keep an eye on your SEO strategy, adapt as needed, and watch your blog grow while your income rolls in.
Here are some ideas for blogs across different interest areas to get you started:
Don’t be intimidated by the amount of work to be done. You can always count on AI tools like ChatGPT or Google Bard to help you with everything from topic ideas to actual code where needed. Just make sure to keep the content original and helpful.
There are tons of cool platforms like Udemy, Coursera, and Skillshare that are all about experts sharing their skills and knowledge through awesome masterclasses. You'll find a wide range of topics covered, from legal advice and coding to analytics, copywriting, graphic design, and so much more. It's a great way for professionals to turn their expertise into passive income by creating online courses. So, if you're a pro in a specialized field or have some killer skills to share, why not give it a shot? You'll be making money while helping others level up their game.
This one’s a little different from straight-up stock trading. Easier said than done, but dividend-yielding stocks and mutual funds can earn you money through regular dividend payments. Companies distribute a portion of their profits to shareholders as dividends, and mutual funds pass on the dividends earned by the securities they hold. You can receive dividends as cash or reinvest them to buy more shares. Keep in mind that dividends are not guaranteed and can vary. Choose your investments wisely based on your goals and risk tolerance.
This could include making music and putting it up on Spotify, YouTube etc. Or making simple, but useful apps like a habit tracker, or a ChatGPT based text editing tool, that have an ads-supported free version as well as the option to upgrade to a paid subscription.
Passive income is a game-changer when it comes to securing your financial future. It's all about finding creative ways to earn money without working a regular 9-to-5 job. Imagine having a side gig or offering ridesharing services while keeping your main job. You can even start a home business, like growing fruits and veggies in your backyard or selling handmade soaps. Tutoring or renting out that extra space in your apartment is a great option too. Writing a book is not only fulfilling, but it can also bring in some sweet long-term cash through sales and royalties. Online platforms like Amazon and Flipkart make it super easy to sell products, while Google AdSense lets you earn by displaying ads on your website. Becoming an influencer on social media opens doors to brand partnerships and sponsored posts. And for those who want to dip their toes in the investment world, dividend stocks and mutual funds can bring in regular income. You can also think about monetizing your passions, like making music or developing cool apps. By diversifying your income, you're taking a big step towards financial freedom and building a more secure future.
One of the best sources of income in India is rental property. But this can really depend on the city, the location of the property, the size and amenities associated with the property.
Some side income ideas are:
Here are some of the most profitable streams of passive income -