The goal of an investor should be to create enough passive income to live on comfortably and to have the ability to quit their job and retire early. From a practical point of view, passive income allows a person have an income with little physical effort, but there is a financial benefit as well in that it is taxed at a lower rate than earned income. There are many legitimate ways to create this type of income which can put a person on the path of becoming their own banker.
Dividend paying stocks, rental income from real estate investments or making an investment in a family member’s start-up business are some of the most common ways people can make a passive, or unearned, income but there are a few not-so-common ways as well. A couple of ways a person can generate an unearned income is through peer-to-peer lending and writing an ebook. There are many websites that allow investors to lend money to people who need to borrow money for everything from buying a refrigerator, making a movie, to renovating a house. The money is paid back to the investor with interest which is viewed as unearned income. A person can also write an ebook, and once the book gets published, the writer can make an unearned income with each sale of the book through royalties.… Read the rest