The passive income. Isn’t the bare sound of these words appealing to your ears? The high chances are your answer is positive.
Many people face the challenge these days to make their ends meet despite the fact they are working nine to five jobs. Or even worse, many are deprived of their regular sources of income because of the overall economic situation worldwide.
And that’s where the endless opportunities of passive income come into the scene. We have put together several tips for you to help you figure out what passive income is and how to earn it.
What is passive income, and how you can earn one
Making money without doing anything is a bit of a dream for everyone. Passive income has this image of being able to tan in the sun while the money keeps falling. For instance, you’re starting a dropshipping business, you’re at the beach, and you hear Shopify ringing a bell telling you you’ve made a sale. However, passive income is not 100 percent passive. It means that passive income cannot be generated by snapping your fingers and waiting for the money to come. It generally entails setting up a system or automating the processes that will help you earn extra cash.
How can you earn passive income?
Among the most appealing ways of earning passive income today is cryptocurrency long-term investment, automated currency trading, stock investment, investments in rental property.
The cryptocurrency market and bitcoin investment turned out as an ideal source of passive income in recent years. The bitcoin investors who put a couple of hundreds of dollars in bitcoin investment a couple of years ago now are the millionaires.
Besides crypto investors, currency trading is also a viable option for passive income. Once you reach a decent level of knowledge regarding trading strategies, you can automate the process of trading. Beware that only regulated brokerage services are the guarantee for success. Therefore read Forex broker review before opening an investment account.
Dropshipping businesses represent the opportunity for extra cash inflow without a lot of upfront costs. Getting started is a straightforward process. But you must be ready for some help for marketing your business and products. And if you are a complete beginner, no worries. The internet offers a bunch of eCommerce trading tutorials. You can start learning from the Youtube tutorials created by e-commerce experts.
How is passive income taxed?
Obviously, what could be better than having a passive income source without worrying about taxation, but, in most cases, you can’t avoid it. When it comes to taxation, everything depends on what passive income source you have to opt for.
As a freelancer, you will have to pay self-employment taxes. However, some sources are not subject to taxation because of the complicated regulations and general rules of the specific market in some jurisdictions.
Nevertheless, the circumstances are beginning to change. In the US, for instance, today, cryptos are treated as property. What does it mean for individual investors? Well, these assets are subject to taxation like any other capital asset that you exchange or trade.
All in all, it’s highly advisable to do due diligence regarding the specific passive income sources, especially currency, cryptocurrency trading, and real estate investments.
Also, a lot depends on your location. Some countries have a better taxation system than others. Therefore, maybe you should be prepared for digital nomadism as a new way of living for the people open to the new ways of working and earning money.