Five Best Ways to Earn Passive Income through Investment

How Do You Earn Passive Income Through Investments?

3 Min Read |  April 08, 2021


Most of us work like labours to be able to meet our monthly needs, still, we don’t make enough to save and have an excellent living. Well, this is where the role of passive income comes into play. 

Passive income investment is a popular concept nowadays and a lot of people seem to be inclined to it. And why not? After all, it provides you with the extra money required to make your living quite standard and better. 

Passive incomes are earned with a little or no effort at all but with a little investment. However, if you wish to earn big and want your investment to pour significant returns for you, then you must dedicate some time and effort to it. 

In this blog, we are going to discover some great ways to earn passive income through investment. So, without further ado, let’s get started.

What is Passive Income?

Passive income could be defined as an income made by putting in a lot of concentrated effort regularly over a short period of time. Nonetheless, most people in India label passive income as the income coming from businesses, partnerships, rent, etc. where not much of an effort is required. 

It is also said that passive incomes are money earned while you are sleeping, vacationing, partying, sitting, having fun, etc. So, to learn how to earn passive income, choose from the ideas described below. 

Top Passive Income Ideas for Investors in 2021

There are various ways you can earn passive income and maintain a better living. Enlisted below are some of the best passive income investment ideas:

Mutual Funds


One of the most popular and best ways to generate passive income is by investing in mutual funds. Based on your timeframe and risk appetite, you can pick up a mutual fund that suits your needs. 

Now, this implies that not only you are going to create wealth passively but you are also supposed to choose how much risk you are willing to accept. 

In case you have a finance coach or any professional or expert to guide you through this process, you can create an excellent portfolio for your financial goals. 

Investments in Stocks


The stock market could be one of the most amazing places to invest your money and earn huge passive income. Of course, investing in the stock market demand a specific level of knowledge and expertise. You should have an in-depth understanding of the entire market and how it works.

However, one must not forget that even a minor wrong step could lead to a huge loss. Hence, it is advised that you invest in stocks under the guidance of an expert advisor. 

To learn the basic concept of the stock market investment, explore our complete guide to the stock market for beginners. You can read it here.

Bank Fixed Deposit


Bank fixed deposit is one of the oldest ways of generating wealth passively. The interest earned from a bank FD is very small. However, people who are extremely risk-averse are more likely to drift towards bank FDs due to the low-risk factor. 

In case you are looking to step out of your bounds, then you can invest in a liquid fund. basically, it’s a type of mutual fund offering high liquidity. This implies that your money can be taken in when you require it. Unlike FDs, liquid funds don’t have long lock-in periods. 

Peer to Peer Lending


P2P lending, also known as peer-to-peer lending is an alternative investment approach. Essentially in P2P lending, you lend money to borrowers and earn interest on top of it. 

The best way to invest in P2P lending is through an established mediator. This will reduce the risk associated with P2P lending by a huge margin. 

Rental Income


This is also one of the most common and widely used investment strategies to earn passive income. Many people become a landlord and earn by renting their property, land, or even storage space. 

However, considering the current economic situation, it’s quite hard to own land, build properties, and rent it to others. But once you have it, your investment would be worth it. Do note that the initial cost is very high. 

Also, the liquidity in real estate is very little and hence, it isn’t the safest or easiest ways to earn passive income. 


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