Passive income ideas for Aussies
Passive income is income that you can earn without putting in a lot of constant effort. The idea is that you set something up like an investment that takes minimal time and effort to sustain and you receive regular income.
I don't really believe that "true" passive income exists, there will always be some form of maintenance or setup activities that require your time. The concept of passive income is beneficial in setting up multiple income streams that don't require as much effort as something like a full-time job. Here are some passive income ideas for Aussies:
Dividend Stocks
Dividends are regular payments that shareholders receive from investments they hold with a company. If the company turns a profit within the quarter, it can make a decision to pay out some of those profits to shareholders. In order to earn dividends you need to hold shares within a company. There are lots of ASX-listed companies, index funds, and ETFs that you can hold to receive dividend payments. Unfortunately, due to ASIC regulations, I can't make a recommendation as to what the best investment vehicles are but do some research on low-cost, diversified investment options and you should end up with some decent advice.
Interest
Interest is a payment you receive in return for storing your money with a particular institution. As an example savings accounts will pay you interest for keeping your money with them. There are lots of ways to get more interest such as term deposits and high-interest savings accounts.
The difference between term deposits and high-interest savings accounts are as follows:
- Term Deposits
Often offer higher interest rates.
Requires you to lock up your money with the bank for a specified period of time where you can't access the funds without incurring fees.
- Savings Accounts
Pay standard interest rates.
You can access your money and transfer it in and out of the account as you please.
Do some research on the highest-interest accounts available to you and pick one that best suits your needs.
Property
Property can often have higher risk and require more time commitment than the other options. In addition to this, property typically requires a larger upfront commitment of capital than other options I've discussed.
Investing in property can take a number of forms such as buying rental properties, buying short-term rental properties like Airbnb, or through real estate investment trusts (REITs). Property has historically been a popular investment but also carries quite a lot of risk as you typically leverage (meaning borrow money) the majority of the purchase price. Property does come with a few flexibilities such as the ability to hire a property manager to reduce your time input to the purchase, but there is always a risk of things breaking or bad tenants.
Content Creation
Creating content is an exercise that takes much more work upfront as well as regular work to manage and stay consistent. The reason I include this as passive income is because once that piece of content is uploaded, the views and potential income that it generates are truly passive. Content uploaded 10 years ago will still be gaining views and potentially generating income for you. Content can be YouTube videos, courses, or even blog posts. Try and find something that excites you and share it with the world, like this blog.k
Despite content being much more of a business that requires constant input, the products you generate can work passively for you.
The Sharing Economy
The current business marketplace includes a lot of cool opportunities where you can share products or items you already own such as a car you don't use every day as an example. Lots of applications allow you to share out products or resources you have with paying customers such as Uber CarShare. Optionally, you can rent out a spare bedroom in your house if you have the extra capacity and don't need the space. There are a number of applications that let you share out products that you don't use as often, or if you can get a car cheap there might be an opportunity to buy a product specifically for the purposes of sharing out.
These are just a few ideas of "passive" or low-effort ventures you can start to earn some cash on the side. Remember that no business is truly passive and will always require some input to set up or keep operating, the important part is that you can start making extra money and keep a full-time job.
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