Can passive income make you more money than earned income?

Rising inflation, increased needs, and an urge to lead a better lifestyle have resulted in a conundrum for the modern Indian. They seem to be already putting in 10-hour workdays - but are still not able to meet their life goals. Sounds familiar?

Whether you are a working professional with a steady job, a businessperson, or a freelancer, there is a way to supplement your earnings. Whether you wish to travel the world, provide the best possible education to your children, or create a cushy retirement fund, this technique can help you. 

We are talking about generating passive income, which is one of the best ways to earn additional money without putting in a lot of effort. IDFC FIRST Bank’s MyFIRST Partner Program is one such opportunity to earn passive income. It is a loan referral program that requires zero investment, offers flexible hours, and you can earn well over Rs 50,000 every month.

But what exactly is passive income, and how is it different from the earned income of your regular job? Let’s take a look.

Passive income vs earned income

Passive income is quite literally the money you generate without having to do much active work for it. To set the wheel in motion, you will have to put in some initial effort or investment in the form of money, time, skill, resources – or all of these. 

Do keep in mind that passive income should not be your only source of income. It should supplement and complement your earned income. Which brings us to our next point.

Earned income, also called active income, is the money you make from the salary of your full-time job, profits of your business, or commission/consulting fees from your career as a freelancer in the gig economy. 

Essentially, the key difference between passive income and earned income is the time and effort you need to put in. The former is earned with minimal effort, whereas the latter can demand a lot of your involvement and energy.

Take for instance, the MyFIRST Partner Program by IDFC FIRST Bank. It offers an alternative career opportunity that you can build while having a full-time job. Furthermore, as your professional network grows, you can easily get referrals, thus reducing your time and efforts. 

Advantages of having a passive income stream

Passive income is your ticket to financial freedom. It gives you the disposable income to spend and save as you wish. It also gives you financial stability to handle unforeseen circumstances such as a job loss or business downturn. Generating a regular passive income means you are not reliant solely on your paycheck to pay bills or fulfil your life goals.

Passive income can also have a positive effect on your mental health. Knowing that you have the money to lead your life the way you want can successfully reduce stress levels and keep anxiety in control. It can grant you the luxury of time to pursue the things you love – travel, dancing, social service, or whatever excites you.

Lastly, but most importantly, passive income can allow you to start saving for your retirement sooner. As an IDFC FIRST Bank MyFIRST Partner, you can earn a decent amount every month through weekly payouts. You can use this money to save for your retirement, to build an emergency fund, or to simply fulfil any dream.

Opportunities to earn passive income

1. Rental income:

Real estate is the first thing that comes to mind when people think of passive income. Homes, office spaces/shops – in fact, any type of real estate – can be leased out to generate a consistent monthly income. Factors such as location, size of the unit, amenities, and market trends dictate how much rent a property can generate. 

2. Investments:

With a systematic investment plan, you can build a sound portfolio with debt and equity assets to generate long-term passive income. You ideally want to invest in high-interest bearing fixed-income instruments or dividend-paying stocks that regularly reward investors. 

3. Monetising skills:

From cookery recipes to music lessons to soft skills training or coding hacks, if you have any unique talent or know-how, it can be monetised through audio-video courses. They can be sold via your website/social media channels or through aggregator sites. Once ready, the content will earn income every time someone signs up for your course.

4. Affiliate marketing:

If you are social media savvy and have a considerable following, you can become an affiliate for a brand or an e-commerce business and promote their products to your followers. Every time someone purchases a product using your affiliate link, you earn a small commission on the sale.

5. Referral marketing:

With referral marketing, all you have to do is point someone in need of a product or service towards the right channel. You need to sign up as a referral partner and for every successful conversion, the service provider pays you either a fixed or a percentage-based payout, depending on the business value. For example, IDFC FIRST Bank’s MyFIRST Partner Program is a personal loan referral app that allows you to earn 1.5% on every successful loan disbursal made through your reference.

Can passive income exceed your earned income?

While it is possible for your supplementary income sources to outdo your active income, more often than not, it requires a lot of time and work – and then it doesn’t remain a passive stream anymore! 

Passive income should not be approached with a ‘get-rich-quick’ mindset. As we saw earlier, the idea is to supplement your primary source of income so that you can lead a better lifestyle, fulfil your life goals, and become financially free. The objective of generating a passive income stream is to be able to earn money while you sleep. Along the way, if it spirals into a significant revenue stream, that is the icing on the cake. 

Conclusion

There are hundreds of different passive income ideas that you can explore. However, most of them require money, time, and skill, one or more of which may not be available to you. IDFC FIRST Bank’s MyFIRST Partner Program is a unique loan referral program that allows you to earn money with zero investment and offer the flexibility to make referrals on the go as and when you want! 

All you have to do is download IDFC FIRST Bank’s MyFIRST Partner App, sign-up in under 5 minutes, and start earning. Help your family, friends, and acquaintances in need of financial assistance get a loan by logging a request on the partner app and an IDFC FIRST Bank representative will do the rest. You get a percentage-based fee on the disbursed amount, and this can earn you a steady income with payouts on a weekly basis. At present, 2 lakh+ users are already active and benefitting from it.

Set your dreams in motion. Join IDFC FIRST Bank’s MyFIRST Partner Program today!

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.