Brief Summary
This video presents five practical passive income streams in India that can be started without quitting a job. It covers securities lending and borrowing (SLBM), dividend stocks, rental income (including innovative approaches), real estate investment trusts (REITs), and government-backed income streams like SGBs and RBI bonds. The video emphasizes starting small, matching strategies to one's personality, understanding the time versus money trade-off, and the importance of consistency and patience.
- Securities Lending and Borrowing Mechanism (SLBM) allows you to earn by lending your shares.
- Dividend stocks can provide a steady income stream if selected carefully using specific criteria.
- Rental income can be generated from various sources beyond traditional properties.
- REITs offer a way to invest in commercial real estate and earn rental income without the hassles of direct property ownership.
- Government-backed schemes like SGBs and RBI bonds provide stable, low-risk income options.
Passive Income Idea - 1
The first passive income idea involves Securities Lending and Borrowing Mechanism (SLBM). Instead of letting shares sit idle in a DMAT account, they can be lent out through a broker to those looking to short sell. In return, the lender receives a lending fee while retaining ownership and corporate benefits like dividends. For instance, lending 60 shares of Tata Alexi at ₹52 per share could yield ₹3,120 in a month. Returns typically range from 0.5% to 1% monthly for popular stocks, potentially reaching 6% to 12% annually. However, limited demand and liquidity can make consistent earnings challenging.
Passive Income Idea - 2
The second income stream discussed is dividends from stocks. While not all dividend stocks offer similar returns, some can provide 6% to 7% annually. To find these stocks, a screener filter can be used with criteria like a dividend yield above 3%, ROCE above 12%, profit growth over 10% for 3 years, and a market cap exceeding ₹10,000 crore to filter out risky small-cap companies. However, it's important to note that a company's dividend payout strategy can change, affecting the consistency of returns.
Passive Income Idea - 3
The third passive income stream is rental income, which extends beyond traditional property rentals. While renting out a flat can provide a steady income, innovative approaches like converting a barren land into a parking lot or renting out spare rooms on Airbnb can also generate income. Other possibilities include converting a garage into a workspace or renting out storage units. The key is to identify gaps and leverage available resources, even without owning a traditional property.
Passive Income Idea - 4
Real Estate Investment Trusts (REITs) are presented as the fourth income stream, allowing investment in commercial spaces like offices and malls without the direct responsibilities of property ownership. REITs in India typically pay quarterly dividends, ranging from 1% to 3% per year. Investing in REITs requires less capital, as one can start by buying a single unit. Traded on the stock market, REITs offer liquidity and ease of buying and selling, providing a hassle-free way to earn rental income.
Passive Income Idea - 5
The fifth income stream focuses on government-backed options, offering stable and predictable returns. Sovereign Gold Bonds (SGBs) used to pay 2.5% interest in addition to gold price gains. Other options include RBI floating rate bonds, offering 8.5% interest paid semi-annually, post office monthly income schemes with approximately 7.4% annual interest, and senior citizen savings schemes providing 8.2% return per year with quarterly payouts. These are low-risk options suitable for those seeking stability outside the stock market, but it's important to consider lock-in periods and tax implications.
Bonus Tip
The bonus tip highlights leveraging personal skills to generate long-term income. This involves creating digital courses, selling templates or tools, writing and publishing ebooks, affiliate marketing, stock photography, and building monetized newsletters. These activities can be pursued alongside a full-time job and require time, consistency, and creativity rather than significant capital. Skills like editing, voice-over, or writing jokes can be monetized in this growing space.
Things to Remember
Key takeaways include starting small, matching the income strategy to one's personality (low risk, high creativity, or a balance), understanding that asset-based strategies require money while creation-based ones require time, and recognizing the importance of consistency. It's crucial to commit to a 6 to 12-month period to see results, as building passive income is a process that requires action and effort.
Conclusion
The video concludes by emphasizing that building passive income requires starting and working on the ideas presented. Choosing strategies that align with one's personality is essential. The video encourages viewers to share which income stream they plan to start with.
