Passive Income
Imagine if you could earn money simply by sitting back and doing nothing. Believe it or not, it's something many people do every day. It's a concept known as passive income investing, and it's what allows people like you to accumulate wealth without having to do any work at all! Passive income essentially works by making an initial investment, which generally requires you to not only put up some money, but do some legwork or research. But from that point on, you sit back and enjoy an income stream without having to make any more of a substantial effort. Some common investments known to generate passive income are stocks, bonds, rental properties and peer to peer lending. All of these ideas allow you to keep generating cash flow over time.
A tax efficient way to earn income through stocks and bonds is through a stocks and shares ISA
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Peer to peer lending is a relatively new kid on the block and some people have been put off recently through some companies going under. However, from a risk perspective peer to peer lending is potentially slightly less risky than stocks and if we focus on the bigger players in the market, I believe there is room for this type of investment in most people's portfolio of passive income producing investments. These types of investments are now also available as IFISAs (Innovative Finance ISA).
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Buy to Let rental properties can require quite a lot of work and the ownership of property is less tax efficient than it used to be. However, there are now a number of companies that will manage everything for you which then will allow you to earn a passive income through their platform.
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