Passive Income

Passive Income - Home - finance

Passive income is money received on a regular basis with little effort required to maintain it.

Examples would be interest from savings, Peer-to-peer lending, adverts on websites, company shares and mini-bonds.

Savings. To earn from any normal savings account, you first must have cash to put in it. Unfortunately since the crash of 2008, the maximum interest is between 0.1% ~ 1%. Some will go as high as 3% if you are prepared to lock your money away for a few years. You also run the risk of a "haircut" where a bank runs into trouble and takes some of your money eg Cyprus. I only keep a small amount in my savings accounts for emergency bills.
Stocks, Shares and Bonds
- CrowdCube allows you to invest in start-ups. They offer three ways to do this.
  - Equity. The minimum investment is £10 and has a high risk of default.
  - Mini-Bonds are basicaslly a loan. You will typically earn 8% per year for 4 years. The minimum investment is £500 and is taken from your account by either Direct Debit (GoCardless) or credit card (Stripe). NOTE: These seem to be losing popularity and may well be stopped. Mini-Bonds are low (NOT ZERO) risk.
  - Venture Fund. The minimum investment is £2,500 - I think this has been stopped.
- WiseAlpha allows normal people to earn interest from bonds that would normally be too expensive.
  - Normal returns are between 3% ~ 8%, but there are high-yield bonds available that go as high as 11%
  - WiseAlpha was founded by Rezaah Ahmad who is responsible for driving the strategic growth.
  - They are located in Canary Wharf, London.
Websites are a good way to earn passive income. Building websites can be done anywhere you can take a laptop and there is a half-decent WiFi service. They come in three main types :-
- Static or Brochureware Many of the websites will be like this.
  - Easy to create. Many web-hosts have web-creation tools and templates.
  - Can be done for free. Weebly.com - Wix.com
  - Little interaction with visitors.
  - New content needs to be uploaded.
- Blogs
  - Easy to create and use. blogger.com - wordpress.com
  - No technical expertise required.
  - New content can be entered on-site and made visible immediately.
  - Various components (widgets) can be easily added. eg Hit-counter, guest-book
- Dynamic
  - Two main types: CMS (Content Management Systems like Drupal, Joomla and django) and bespoke (eg you build it)
  - Very hard to setup.
  - Developer is responsible for updates and security.
  - There are many free resources available to help you get started.
  - Open Source operating systems like Linux (or FreeBSD) will have these tools built-in or available as a free download.
Adverts and affiliate links
- You need to have a website or a blog for this to work.
- Adverts can be supplied by AdSense. They supply some HTML code that you copy into your website. When a visitor clicks an advert on your site, you get paid a tiny amount, typically £0.01 ~ £0.10. Don't click your own adverts !
- Affiliate Links are similar to adverts except they encourage visitors to leave your site to join another. When they do you get a percentage. At the lower end is Amazon who pay about 5%. At the top end are Gambling Sites who can pay up to £100 for referring a paying member.
Crypto Currencies Many exchanges (and wallets) have a feature called Staking. This is where they pay you interest by holding your cryptocurrency on their platform. Here are the returns for Exodus which I tried in 2022 :-
- ATOM (Cosmos) 8% ~ 18% . I started my test in September 2022 on a small amount of ATOM. I'm now un-staking to complete the test.
- SOL (Solana) 8% ~ 9%
- ALGO (Algorand) 7% ~ 8%
- ADA (Cardano) 4% ~ 5%
- XTZ (Tezos) 5% ~ 6%
- ONT (Ontology) 19% ~ 20%
- VET (VeChain) 1%
- I have written more about crypto staking here

P2P (Peer 2 Peer) Lending had it's time but many P2P lenders have closed this service for a variety of reason.

ZOPA was started in 2005 headed up by Giles Andrews.
Funding Circle
Lend Invest