The COVID-19 pandemic gave rise to unprecedented financial situations. Because more people are working remotely, they tend to have some extra time on their hands that they use to open businesses just to earn extra money. Although this is not a bad idea, especially when made out of passion, there are other ways of earning income without needing to exert exhaustive efforts. This is especially useful for people who have busier schedules despite working remotely.
Clear Tax defines passive income as the “money which flows in regular intervals without the need for putting in a considerable amount of effort to create it.” In other words, it is the earnings derived from just waiting. It is usually derived from investments in the stock market and from financial instruments such as bonds and guaranteed investment certificates (GICs).
However, before considering investing, take a look at some of the benefits of earning passive income. Here are the 3 Fs of passive income benefits:
Financial stability
According to a Census Bureau data analysis of Pew Research Center, only 24% of young adults are financially literate, 45% of adults ages 18 to 29 receive financial support from their parents, and 59% of parents say they provide financial aid to their adult children.
Earning passive income can help adults of all ages in enhancing their finances. By investing, people allow themselves to earn without having to work for it. Because of that, they can still work for another job full-time, have more sources of income, and be more financially stable.
Financial literacy
Although it is true that people don’t need to work so hard to earn passive income, it is nevertheless important for them to study very hard. Earning passive income requires knowledge. With enough knowledge, people can make better financial decisions and regulate their money more effectively. Because of this, people who make investments and earn passive income tend to be more wise in the management of their earnings and debt, regardless of their status in life.
Financial freedom
According to another study conducted by the Pew Research Center based on the Census Bureau’s Annual Social Economic Supplement, 15% of 25 to 35-year old adults still live in their parents’ home. This may be due to various factors, such as the lack of earnings from wages.
With passive and multiple sources of income, adults will no longer need to worry about living from paycheck to paycheck, because they will be able to earn more than enough. They can become more free with their finances, allowing them to live whatever and however they want to.
How can Passive Income be Earned?
One of the most practical ways to earn passive income is through investment. However, investors, especially beginners, should study more about it in order to make sound financial decisions. This may sound difficult at first, but there are investment companies that help individual investors come up with wise investment plans.
Top investment companies in the UAE like the AIX Investment Group have been providing custom and personalized investment solutions for individual investors to help them preserve their capital and grow it exponentially. This will allow them to achieve their investment goals, set up funds for themselves, and eventually, plan for their retirement.
