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What is Passive Income? Earn Money While You Sleep!

Asian lady smiling while lying on bed of money and day dreaming about what passive income is all about

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Written By Robert Bagatsing

Chief Editor and Founder | Social Entrepreneur | Social Investor | Survived Strategic Marketing @ Harvard Business School | San Beda Grad | Proud Father to Lincoln Martin | Based in Manila, Dubai, Melbourne

June 22, 2022

Many Asians, Australians, and New Zealanders are asking “What is Passive Income?” How can residents from Asia and the Pacific benefit from passive earnings?

Passive income is income from rental properties, royalties, interest from savings accounts, or any other regular income that doesn’t require you to actively work for it. Residual income can be anything you can think of: dividends, pensions, Social Security benefits, alimony, child support payments, trust funds — you name it.

Unfortunately, most people don’t have many passive earning sources. The majority of Asians have a hard time generating much cash flow from their investments or savings unless they’re in their 20s or 30s with high salaries and low taxes.

Even then, the majority of people won’t make enough money from their investment portfolios to live off its dividends indefinitely. But don’t worry… Passive income is something that almost Asians can earn on their own if they put the right amount of effort into it.

If you are a Filipino, Singaporean, Malaysian, Australian, Kiwi, Indonesian, Japanese, Thai, or Vietnamese, you can earn money through residual income.

This article will help Asia Pacific residents understand what passive income is and how to get started building passive cash flow into your life.

 

What is passive income?

Passive income is any income that you don’t have to work for. In other words, passive income is any type of money that comes in regularly, automatically, and without you having to do anything in order to make it happen.

For example, if you live in the Philippines or Australia and own a rental property, your house would be considered a source of passive income. You don’t have to work for this money at all; it just comes into your pocket every month without you having to lift a finger.

Passive earnings can also come from royalties on books or movies sold or licensing rights received, interest from savings account deposits, Social Security benefits, alimony payments, child support payments… The list goes on.

 

Why Asians, Australians, and Kiwis should learn what passive income is?

Passive income is a great way to make money while you are not working. Asians, Australians, and Kiwis can earn money even while they are sleeping.

It is important to start building passive earnings streams as soon as possible so that you can have a solid financial foundation in the future. Passive income allows Asia and Pacific residents to make money without having to work for it directly.

There are many different ways to create residual income, and the best way to find out what works for you is to experiment. Passive income can be a great way to supplement the regular income of Austral-Asians, and it can also help them save money for retirement or other financial goals.

Asian executive resting while lying on bed of money and day dreaming about what passive income is all about
Earn money while you sleep

How to get started with passive income?

Passive income is a term used to describe money you make on your investments, savings, rental properties, royalties, social security benefits, and other regular sources of income that don’t require as much work for you to earn.

Many Asians are skeptical about concept because they are not yet educated about the concept. On the contrary, it’s easy to start earning passive income after you learn the basics of how it works.

To get started with passive income, you need to know what types of investments are out there.

There are two types of investments: equity and debt.

Equity invests in something that’ll give you the most profit in the long-term like stocks or property.

Debt invests in something that will pay out a specific amount over a set period of time like bonds or mortgages.

Money you’ll make from passive income sources

One of the best ways to answer the question “what is passive income” is by investing your money wisely.

You can invest in stocks and bonds, real estate, futures, commodities (such as gold), or any other interest-bearing investment vehicles.

Another way to generate passive income is by using the returns from your investments to buy rental properties.

When you rent out your properties, you’re able to maintain a constant source of cash flow that’s not tied up into maintaining the buildings themselves. Another great way to make passive income is from royalties.

If you write a book, for example, you could sell it through Amazon or iTunes. Once you earn these royalties and store them in a separate account for later use, your passive income will be added to the total amount of money earned passively each month.

 

Registered investments and mutual funds

One of the best ways to earn money while you relax at home is Registered Investments and Mutual Funds.

These types of investments are structured to pay dividends, which are defined as a periodic payments from the portfolio assets that the investor owns. The portfolio assets can be stocks, bonds, or cash equivalents.

Another type of investment that can produce passive earnings is Real Estate. Like many investments, Real Estate offers its own unique set of benefits. It’s an asset that’s always appreciating in value and has a fixed rate of return on it like other investments. Real Estate also doesn’t require you to invest large sums in order to reap the rewards as other investments do.

You might also be able to generate residual income through your savings account or retirement account. A savings account will generate interest on the money you deposit into it while a retirement account will give you payments upon reaching certain milestones such as age 65 or 70 years old with 30 years of work experience after turning 55 years old.

 

Stocks and bonds

The third way to earn money while you sleep is by investing in stocks and bonds. There are a few assets that provide passive income opportunities. Stocks and bonds are two of the most common. Both assets are bought and sold in the market, meaning they go up and down in value each day as well as month to month.

This is why it’s important to buy these securities when they’re low because if you wait too long and they increase in value, you’ll lose money on your investment because you bought it too early.

Stocks can increase or decrease in value by 5-10 percent per year depending on the underlying company stock. Bonds can also increase or decrease by 5-10 percent per year based on the yield of the bond.

In general, stocks have more risk than bonds because there’s no guarantee about what will happen with their fluctuating prices.

But both have some risks, so it is important to choose stocks or bonds that align with your personal investment strategy and time horizon for retirement.

 

Real estate investment

Another way to earn money while you sleep is via real estate investment. There are a lot of different ways to make passive income for engineers, entrepreneurs, healthcare professionals, and even retirees. The best way for professionals who have financial resources is investing in real estate.

Many Asians particularly Filipinos, Malaysians, Japanese, South Koreans, and Singaporeans invest in properties that they rent out, which can be an effective way of generating passive income.

You might not have the time or energy to manage your rental property on top of handling your day-to-day life, so the great thing about this investment is that you can hire a property manager to take care of the management and get paid for it.

Having someone else manage your properties will also keep you from making any costly mistakes that could lose you money.

In addition to investing in rental properties, you can also invest in other assets such as stocks, bonds, and mutual funds. These investments offer more flexibility than single-family rentals without being too risky.

 

Conclusion

Many Asians are skeptical about “earning money even while you sleep” because it is vaguely discussed in schools and rarely taught by Asian parents. Passive income is a great way for Asia and Pacific residents to make money without working for it. Asians, New Zealanders, and Australians can focus on your business and still earn money. To make passive income, you need to find a way to make money from different sources.

Australian lady sleeping on money while dreaming about what passive income is all about
Make money while you sleep

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