Having multiple sources of income is among the primary drivers to financial freedom. Part of being financially free is when you’re able to stand on your own, more so, if you can support those who count on you.
On the one hand, if you’re a mom, a career woman, or both, you would understand the importance of budgeting for the household depending on your income. On the other hand, if you’re more a businesswoman or female entrepreneur, running your own business either out of passion or motivation is also anchored on how you can grow it.
Growing your business can be tough but the path to growth could be much easier if you can diversify your passive income opportunities. When your business is sustained and thrives, you can potentially pass it on in the future.
While generating passive income is a means to build your wealth, it also gives a certain sense of empowerment especially if you pulled it off on your own. Having steady passive income outside your business can likewise help with potential expansion plans. The most common types of passive income include interest from investments, rents from rental properties, royalties from the sale of intellectual property, and income from a business you have set up but are not actively involved in.
With a wide range of income streams at your disposal, not only do you have the means to sustain your business, but these also make it future proof. A diversified income portfolio can benefit your business in the following ways:
• You can build a support fund. It would be a great deal of relief when you know you can pull from something in case your business hits a rough patch financially. Having this “break-in-case-of-emergency” funds source can help save your business in the event of significant losses.
• Get help in shouldering some business expenses. In case you would also need extra cash to take care of some operating costs, there’s a way with your other sources of income. While this can be an option, it is still ideal to charge these costs to the earnings generated by your business so you can properly keep track of its financial health.
• Steady income flow can help you focus on your business. You can devote more time to your business when you don’t have to worry about paying the bills. This means that you can put all your energy in making sure that your business does well.
When it comes to creating a passive income plan, there are a variety of ways to do it. Here are some of the most common types of passive income sources that you can explore today:
1. Time deposits. These are fixed-term investments in which you lend money to a bank or other financial institutions for a certain period of time. The bank then pays you interest on the loan at the end of the term. Time deposits are low-risk options and provide a steady income stream over time.
2. Dividend-paying funds. These are investments that pay out regular dividends to their investors. Dividends are usually paid out per quarter or annually.
3. Real estate.
One ideal way to generate passive income. You can purchase rental properties, which will generate rental income for you on a regular basis. You can also purchase real estate for development and resale, which can generate a large amount of passive income over time.
4. Global investments. These are investments in funds, assets, or currencies abroad. By investing globally, you can maximize your returns and minimize your exposure to market downturns through portfolio diversification.
Passive income is a great way to boost your existing income and build long-term wealth. If you’re looking for a way to achieve your financial goals and have the freedom and flexibility to pursue your passions and dreams, consider creating a passive income plan today. AXA can be your partner in this financial journey. It offers comprehensive savings and investment plans that will not only help take care of your immediate financial needs but also the wealth plan for your future.
Know you can game plan your way to building your wealth with passive income by availing of any of AXA’s savings and investment plans. Contact an AXA financial advisor for more information.