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Have a passive income? Handy in times of need!

Passive income can help you build up wealth over a period of time. It is also a good idea to create sources of passive income that will generate regular income for you once you retire or are unable to work for a time period. For example, if you have purchased an apartment for investment purposes and you let it out, the rental income you earn regularly can be utilized towards your monthly expenses when you retire.

Everybody is in the race to earn as much as they can. While your job or occupation generates income and is the primary source of livelihood, you can earn extra money by means of passive income. For example, the dividend income you receive from the shares you own is passive income. This is because you are not actively working everyday to earn this income. However, you have invested in it one time and the investment earns you an income as times passes. Any income that is not related to your daily activity is passive income. Strictly speaking, passive income includes only the  income for which one does not have to work regularly.

Passive income can help you build up wealth over a period of time. It is also a good idea to create sources of passive income that will generate regular income for you once you retire or are unable to work for a time period. For example, if you have purchased an apartment for investment purposes and you let it out, the rental income you earn regularly can be utilized towards your monthly expenses when you retire.

It is important that one finds ways to make your money work for you. Create assets and investments that will work to grow your money and supplement your salary. Passive income is extremely important when you cannot work for some reason. For example, in the event of an illness or accident, when you are not able to earn your regular salary, passive income plays a crucial role in maintaining your lifestyle.

Passive income is especially important for women. Most women take a break from their employment / occupation at certain points in their life like after marriage or having a child etc. It would boost their confidence if they earn some income even if they are not able to work for some time.

Types of Passive Income

Passive income is an important source of income. Therefore, one should create avenues of generating passive income even if it is very small in value. For example, you can begin with a fixed deposit of Rs.10, 000 and add to it as and when you can. The extra income can be utilized to build more wealth or simply spent on pampering yourself!

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