Traditional Forms Of Passive Income

Here is a list of traditional ways to get passive income.

The Savings Account.

This is probably the safest form of getting a passive income. The interest you get from putting your money in to a high interest saving account can over time build up.

The Saving account while risk free in the sense you will not loose money also others probably the lowest rate of return on your money. It is however useful  if you need somewhere to store money in the short term but then passive income is meant to be for live so you should not be investing for passive income using money you are going to need soon. 

That is not to say you should not use a saving account to store money. Any money you expect to need over the next few years should be stored there along with emergency money to tide you over if you loose your job.

While you will not physically loose money by putting it in a bank account because of the low interest rates you often get, it is possible that the money you have will be worth less in the future as inflation erodes your buying power.

Shares

When someone says they are buying some shares many people conjure up the idea of doing deals and trading (buying and selling) shares on a daily basis. That all sounds like work to me and the passive income investor does not want to  have to do work. 

Passive income investors want to buy some shares and get paid for having them. They want to buy a share and have it for pretty much until they die. Passive income investors should be looking for stable companies in stable industries that each year make a reaonable amount of money to pay dividends and preferably not have any debt. That is they want simple boring companies. If the company is exciting that is an indication to tread carefully.

Renting out housing

If you can afford to do so it is often possible to get a passive income from renting out a second or third house. In the past you have often seen the price of the house grow as well which is a double bonus.

While you do need to do some calculations to check the return on your investment is worth the risk it can work out to be quite a rewarding little adventure.

There are many agencies the will manage your property for you so you don't have to get involved if something goes wrong with the house. If you use one of these then it truly becomes a passive income. Of course you have to pay for these services so it reduces you return on investment.

Conculsions

These methods may sound a little bit boring but the important thing is they provide you with income without you having to do much work. The idea of a passive income is you keep your time to do fun stuff and your invested money does the hard work of earning you more money.