Think smart, use what you have to make extra cash

Think smart, use what you have to make extra cash

Anthony says generating passive income does require an initial investment of time and money, and you may need to acquire additional assets and skills. You can, however, start off on a small scale, he said.

He said one can apply the following tips to establish your venture as soon as they are done with the initial planning.

Learn from the best: Research your ideas thoroughly. The classic how-to book on passive income is The 4-Hour Work Week, by Timothy Ferriss.

Build up an initial lump sum: Set clear financial goals and develop a budget in order to build up an initial lump sum. Automatically transfer a portion of your pay cheque into a savings account, or join a reputable stokvel. Pooled money earns better returns because of the higher capital, and shared fees are lower.

Sublet: If you do not own property, you can sublet a room in your flat, a parking space, or even your car. Keep in mind that you will need the approval of your landlord and body corporate; and, in the case of your car, you will require your insurer’s approval. Be sure to also check for a potential increase to your excess or premium.

Invest: Rather than trying to pick individual shares, try investing in a unit trust geared at generating high dividends.

Rent out property: Pooling resources with friends could enable you to enter the property market, or to buy a larger property. Some financial services groups offer collective buying home loan schemes. Appoint a property manager and delegate the property management.

Consult a financial adviser: Finally, discuss your plans with your bank manager or a trusted financial adviser who understands your short-, medium- and long-term goals. It would be unwise to withdraw hard-earned funds from an investment to start a new venture, without being aware of the short-term tax and long-term retirement implications.

“Once you are committed to putting in some initial work, your efforts should pay off. You’ll enjoy extra flexibility and security when you are no longer solely dependent on a job income to cover your living expenses.

“Automation and other forms of technology have opened up many new avenues for generating passive income. You are unrestricted by geographical boundaries and there are enormous opportunities to scale up,” Anthony said.

*Not her real name

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