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Sept 17

How to earn passive income in Malaysia

Have you ever wondered how some of your friends can keep up their lavish lifestyle despite having a regular day job or do you intend to retire early and enjoy what life has to offer? While it’s no easy feat to achieve such goals with just your regular day job, you can do so by earning some passive income to fulfil your desires and expectations.

Generating a passive income isn’t as simple as trading your skills and time for the money offered by regular day jobs. Although it doesn’t require your direct participation, it takes effort, skills, knowledge, and most importantly, money.

In order to generate extra money, you’ll need to invest some of your money to get the ball rolling. Generally, that’s how things work when you want to generate more money. But it can be quite confusing and overwhelming when you don’t understand how it works. Before you can start earning a passive income, you ought to understand the meaning of passive income.

What is passive income?

Passive income is earnings that you get without participating in the activity yourself. It’s like investing a certain amount of your money in a fixed deposit account and allowing the interest to accumulate over time

There are many other ways for you to generate a passive income – by freelancing, renting out your property, selling your intellectual properties, investing in mutual funds, stock trading, etc. While these methods may sound challenging for first-timers, these are just some of the simpler ways to earn a passive income.

You see, there are numerous reasons why some people look to earning a passive income. When you’re earning an active income, you’re required to dedicate your mind, body and soul to your job within eight hours for a five-day workweek. This is a common practice for many in order to earn a stable income.

Even if you have a stable income, anything can happen to you when you’re on the job which may affect your ability to earn an active income. Instead of relying entirely on your active income, having some passive income may back you up in the event of any emergencies. This may provide you with a leverage of sort to manage your needs and desires.

You’ve probably witnessed how the recent pandemic has caused many people to be laid off from work and how technology is slowly replacing people at factories. Many people risk losing their day jobs and thus, their active income. Having a passive income may help cushion the impact and get you back on your feet when it’s the right time.

Earning a passive income may also give you peace of mind knowing that you’re making some money while you’re sleeping. It’s one of the ways to achieve financial freedom as the money will keep coming in regardless of your participation.

Additionally, the Malaysian Statistics Department the medium household income in the urban area recorded RM6,561, while rural areas recorded RM3,828. This disparity may indicate the lack of financial knowledge, thus the low-income earnings in rural areas compared to urban areas.

While the idea of generating passive income may be difficult for some people to understand, it’s one way to earn more money and be financially secure without worrying too much about making ends meet. Besides, money doesn’t grow on trees. Ahead, we’ll be sharing six ways for you to generate passive income in Malaysia.

6 ways to generate passive income in Malaysia

1. Property rental

Investing in real estate may yield a stable passive income depending on your asset’s location, condition and upkeep. Before you make the purchase, be sure to do a thorough research on the location and demand as that’ll determine the profitability of your property. That way you can rent it out and earn a consistent income. You’ll also be able to maximise on property rental to earn some income while waiting to realise the gains from capital appreciation.

2. Intellectual property

Another way to generate passive income is through intellectual property (IP) which refers to the creations of the mind. This includes literary and artistic works such as novels, poems, photographs, drawings, paintings, films, and music. If you take good photos, you can sell them on various stock photography sites like Shutterstock or 123RF. You’ll then get the royalties when people buy or use your photos. However, you may want to put a watermark on your photos so that users can credit itback to you whilst expanding your target audience.

3. Low-risk investment

Investments often comes with a risk of losing your capital, but that’s not the case with low-risk investment. You can choose to invest in Amanah Saham Bumiputera (ASB), fixed deposits, and unit trusts. Fixed deposits yield better earnings than leaving your money in the savings account. If you open an online fixed deposit account, you can control the placements and upliftment without going to the bank. Despite the low return, it’s a safe and stable investment.

4. High-risk investment

Compared to low-risk investments, high-risk investment is known for its increased risk of losing all your initial investment. Finding a high-risk investment that doesn’t scam your money can be tricky too. One way to avoid losing your initial investment is to find a legit platform and crosscheck with the Securities Commission Malaysia for a list of unauthorised investment platforms. You may also want to keep yourself updated with news on the investment market so that you can take out your money before it’s too late.

5. Multi-level marketing

Surely you’ve seen some of your family or friends who are involved in direct-selling. It’s a legitimate but controversial business strategy which uses money from recruits to pay those at the top of the company. The recruits are then paid a certain percentage of their sales. It may be controversial but ideal for those looking to earn extra income. One example is Amway, which relies on its distributors to sell their products.

6. Collection of valuable items

Have you ever wondered why certain collector’s items are sold at a ridiculously high price? That’s because the item is either no longer in production or is deemed valuable by certain people. However, some collectables can be worthless over time. To be safe, it’s best to invest in gold as it’s resistant to crisis and the price doesn’t move with market prices. It can also be your safety net when other forms of currencies lose their values.

Every investment you make comes with a risk. Before you invest, it’s best to understand the risk level to gauge your risk acceptance level. That’s to prevent you from being shocked by any unfortunate news involving your capital investment.

Be sure to do your due diligence and invest responsibly. Diversify your investment portfolio to minimise the risks.

If you’re looking to diversify your investment, GeneApp Investment platform offers a financial plan that can multiply your wealth, manage and increase your digital assets.

You can also earn a daily income and convert your earnings to invest in property and jewellery.

Keen to invest with us?

Contact us at 011 6939 2180 or email your queries to [email protected]