10+ Ways to Create a Passive Income to Earn Extra Cash in India
Warren Buffet once said that unless you find a way to earn money while you are asleep, you will have to keep working till you are alive! But is it really possible to earn while you are asleep? Are there any ways to get passive income? Read on as we discuss all about passive income and how it can allow you financial freedom!
Understanding Passive Income
A passive income is a way to supplement your earrings. The salary that you get from a job is your active income. However, the interest that you earn on your FD is your passive income. You earn passively when you start a venture, and then thereafter, with little or no effort, you collect income on it.
Imagine you write a book. Once the book is written and published, people can buy it. Every time someone buys a copy, you earn a percentage of the sale price, called a royalty. You don’t have to keep rewriting the book every time someone buys it, the work is done once, and you continue earning money. This then becomes your passive income. Simply put, passive income is like planting a money tree!
Over the past few years, as people are moving more and more towards financial wellness, passive income ideas are becoming increasingly popular. Entrepreneurs, 9-5 salaried employees and self-employed people are all looking for ideas on how to generate passive income in India. But what is it that makes passive income so appealing?
- When you have multiple streams of income, including passive earning, it offers you financial independence.
- Apart from your active salary/ income, when you earn passive income, you have better chances to focus on your own growth and development.
- When you have the right passive income ideas in India,it can open the door to financial freedom. When your income is regular, you have the freedom to relocate, switch or quit your job, start a new venture or maybe retire early.
- By freeing up your time, passive income lets you focus on things you love. It could be travelling with your partner, long-lost hobbies and passions, or spending time with loved ones.
- You can enjoy lifestyle improvements since you’re no longer tied to rigid work hours, offering more flexibility and control over your day-to-day life.
- Passive earing is a powerful tool for long-term wealth building. It helps you grow your financial portfolio with consistent, reliable income over time.
Top Passive Income Ideas in India
No matter how much or how little you currently earn, passive earning can be a lucrative option for just about everyone. The sources of your passive income depend on your financial circumstances. When looking for ways how to create passive income in India, it is recommended that you explore ideas that suit your financial constraints, your needs, your risk appetite and the time horizon of the financial goal you are looking at. Keeping your circumstances in mind, here are 21 ways to generate passive income. Take a look:
1. Becoming a Financial Product Affiliate with GroMo
If you consider yourself to have a basic knowledge of financial management, then becoming a financial product affiliate with GroMo can be one of the best ways to make passive income. All you need to do is make a sale through the GroMo app, and you can earn up to ₹1 lakh a month! GroMo offers an array of products such as personal loans, demat accounts, savings accounts etc.
Take a look at the commission you can earn every time you make a successful sale:
| Products | Commissions |
|---|---|
| Credit Card | Up to ₹3500 |
| Personal Loan | Up to 4% commission |
| Savings Account | Up to ₹1300 |
| Demat Account | Up to ₹1750 |
| Credit Line | Up to ₹1400 |
| Investment Products | Up to ₹1200 |
| UPI Transactions | ₹90 per new account |
To become a GroMo Partner, download the GroMo App, fill in all the required details to create your account, complete the training and start selling!
2. Real Estate Investments
Despite the spike in the number of investment options in the market, for many Indian households, real estate is still the most popular way to invest. And why not? When done correctly, real estate can offer you active and/ or passive income. The monthly rent that you receive can be one of the easiest ways to build passive income.
Did you know that in some Delhi-NCR areas, property prices have skyrocketed by 170% over the last five years? Land prices have seen an even more dramatic increase, soaring by 450% during the same period.
3. Online Businesses and Affiliate Marketing
Another attractive way is to earn passive income online through affiliate marketing. It is a popular idea that's creating quite a buzz these days. Anyone with an internet connection and social media presence can now earn money through affiliate marketing. GroMo simplifies connecting with companies seeking affiliates, allowing influencers, YouTubers, and content creators to promote products and earn a commission on sales. Other popular options include:
- Flipkart Affiliate Scheme
- MakeMyTrip Affiliate
- Tata Cliq Affiliate Program.
4. Creating and Selling Digital Products
If you feel you have the skill and a smart business idea, create a digital course and get started. Digital products created once can be sold time after time without you having to maintain an actual inventory. While these products will need your time and effort initially, once you produce an excellent software or product, you may be able to get a scalable income stream.
5. Blogging
Blogging has proven to be a reliable source of passive income for decades. While it takes time and effort to grow a blog, consistently producing high-quality content and promoting it through channels like social media can help you build a large enough audience to generate substantial earnings. The best part here is that you can start blogging without making an investment. If you have the knowledge and the knack to write, blogging can prove to be one of the best ways to build passive income.
6. Investing in Small Businesses
With India providing a suitable ecosystem, there are 1,12,718 DPIIT-recognized startups in the country today. Home to 111 unicorns with a combined value of $349.67 billion, investing in start-ups and small businesses can indeed be a profitable opportunity. However, it's important to understand how to approach such investments. Investors can explore options like angel investing, venture capital, or crowdfunding platforms to back promising startups. While the potential returns can be high, the risks are equally significant, so evaluating each investment opportunity is crucial.
7. Selling Homemade Products
If you have a creative side, why not turn your hobby into a money-making venture? From everyday snacks to your artwork, from cakes to handmade soaps, you can sell it all online. Putting a little more hard work into your hobby may help to build passive income. With consistent brand building, you would be able to create a customer base. Popular platforms like Etsy, Amazon Handmade, and even social media sites offer great opportunities to sell homemade goods.
Pro Tip: Focus on effective marketing strategies, such as leveraging social media or influencer collaborations, while carefully considering pricing and shipping to ensure profitability without losing your competitive edge.
8. Earning with YouTube
Did you know Mr Beast, one of the highest-paid YouTubers across the globe, with an earning of over $54 million? He seems to have really cracked ways to build passive income. While it may seem easier said than done, YouTube has given a whole new dimension to communication. While for most, YouTube is a source of entertainment or education, for many, it’s a platform for generating income.
Pro Tip: Starting a YouTube channel offers diverse revenue streams, such as ad revenue, sponsorships, and affiliate marketing. Though it requires time and effort, YouTube’s global reach and creative freedom make it a great opportunity for business growth.
9. Teaching Online
Other popular ideas of passive income include online tutoring. If you have expertise in any academic or talent for explaining concepts clearly, online teaching could be a great way to share your knowledge. In-demand technical subjects include coding, digital marketing, personal development, and graphic design. Pick a subject you're passionate about, record your lessons, and make them available for download. You can offer a variety of courses, from academic topics to skill-based learning, and ensure success by incorporating interactive techniques, clear explanations, and engaging visuals.
10. Investing in the Stock Market
Investing in the stock market is a powerful way to generate passive income over time. By purchasing shares of dividend-paying companies, you can earn regular payouts without selling your stocks. Long-term investments in growth stocks can also appreciate in value, increasing your wealth. To get started, research companies with a history of solid performance, diversify your portfolio and consider low-cost index funds for steady returns. With patience and strategy, stock market investing can be a reliable source of passive income.
11. Opening Homestays
Opening a homestay is a great way to earn passive income by offering travellers an authentic, comfortable experience. To set up a homestay, prepare your space by ensuring it's clean, cosy, and equipped with basic amenities. You can list your property on popular platforms like Airbnb, Booking.com, and Homestay.com to reach a wide audience. These platforms handle bookings, making it easy to manage your homestay business.
Benefits of Passive Income
● Financial freedom and independence
● Time savings and lifestyle improvements
● Long-term wealth building
How to Choose the Right Passive Income Stream?
Relying only on your pay cheque might not be the best financial strategy, especially when you have the responsibility of your loved ones. However, at the same time, you need to keep your expectations real. Keep in mind that finding the right passive income sources in India will take time and patience. You will have to put in adequate hard work, as this is not a ‘get rich quick scheme’. Also, when you are making an investment as a way to create passive income, keep in mind that all investment products carry some kind of risk. Make sure you are aware of them so that you can make well-informed decisions while keeping your risk appetite as the base.
Frequently Asked Questions
1. Is passive income taxable in India?
Your passive income is a part of your income, and thus, it may have tax implications. It is highly recommended that you are well aware of the tax implications of the work you are doing and the income that you are receiving. Apart from tax liability, you may also be able to get some tax deductions.
2. Is passive income legal in India?
Yes, barring a few, most sources of passive income in India are legal. If you are an employee, make sure that your source of income aligns with your employer’s/ company’s policy as well.
3. Are there any risks or limitations associated with passive income in India?
While the idea of earning some passive income is alluring, keep in mind that it is not something that can happen overnight. Before you jump on to an idea, it is very important to assess your skills and interests and then choose a suitable path. Even when it comes to making an investment, evaluating your options, and analysing your goals, needs and risk-taking capacity.
4. How can I generate passive income in India?
There are numerous ways to generate passive income in India. Make sure you choose something that you have an understanding of and skills in.
5. How can you make 10k a month of passive income in India?
If you want to make passive income of 10k a month, you can start blogging, online tutoring, affiliate marketing, etc.
6. How much passive income can you earn?
There is no limit to how much you can earn through your passive earnings. It depends totally on your chosen niche, the amount of profit you can earn, your dedication and of course, the market response to your product/ service.
7. What is the easiest form of passive income?
The easiest form of passive income would be something you have a kill set for. For a lot of people selling handmade goods, online tuitions, and affiliate marketing have been a steady source of income.
8. How can I make passive income with no money?
There are options like content writing, blogging, digital designing, and developing educational courses, that require almost zero investments.
9. What is the most profitable passive income idea?
Affiliate marketing with a reliable yet popular brand is said to be a very profitable passive income idea. GroMo’s Affiliate Plan gives you the flexibility to earn as much extra income as 1 lakh by promoting valuable financial products.
