What is passive income to you?

What is passive income to you?

In my circle of friends, passive income has very little meaning as most of them focus on generating active income in a corporate rat race to the top. I on the other hand, have no interest in being the leader of the pack. I’m a little lazy in that sense. Instead, I focus on building passive income so that when I retire, the money would continue rolling in even when I spent the day lazing at the beach.

“Passive income is an income received on a regular basis, with little effort required to maintain it.”

Here are two passive income sources that I have today.

Stock Dividends

A hot topic this year in some of the online forum communities that I participate in is stock dividends. It’s starting to become a trend where people want to build a portfolio of stocks with only one goal – receiving dividends every year.

Receiving dividends from investments sound great but it’s also important to invest in a company that is able to grow its business. Take Singapore Reinsurance for example. If you had invested in them, you would have received a decent 5% dividend each year which is great. But on the other hand, the stock price has been stagnant growth for the last 5 years so apart from dividends, your money has not really grown.

In my tiny Income Portfolio, I own stocks of Challenger and Singapore Post and I’ve had them for many years now so I’ve made a decent capital gain on these 2 stocks on top of the regular dividends that I’ve been receiving.

Moving forward, I plan to set up an Index Fund Portfolio consisting of Equities and Bonds ETFs and they should also generate a stable dividend every year as well.

Side Income

In 2007, I started a sole proprietorship webhosting business. It all started when a friend of mine referred me to his friend who wanted to set up a website for her online store. So I paid for a reseller webhosting account and hosted her website for her.

At that time, the profits for webhosting were good and there wasn’t much startup capital needed for a reseller. Through referrals, I made good money operating this business as a side income.

Fast forward to 2014 and the webhosting industry is saturated as anyone with a computer can set up a webhosting business. Most of my top-tier clients are gone and I’ve also started transitioning my reseller webhosting business model to an affiliate webhosting business model where I help my clients set up their websites with a webhosting business and in return, I get a commission each time my clients renew their subscription.

My clients get quality service and I further reduce my operating expenses. I still keep my sole proprietorship business name for digital marketing consulting projects.

Are you generating any passive income today?