Jaspreet Singh: Passive Income Secrets

Jaspreet Singh / Jaspreet Singh

In the world of financial independence, passive income is a highly sought-after goal. Financial expert Jaspreet Singh recently shared his insights on how to achieve this. Here’s a breakdown of Singh’s advice.

Understanding Passive Income

Before diving into strategies, it’s important to understand what passive income is. Unlike active income, which is earned through work like a 9-to-5 job, passive income is money earned with minimal day-to-day effort. This doesn’t mean it’s effortless, but it requires less ongoing work than a traditional job.

“You have true financial freedom because you have assets that are paying for your lifestyle instead of just you working to pay for your lifestyle,” said Singh during an episode of his show. “This is what it means to become wealthy because now it’s your assets that will fund your finances.”

According to Singh, stocks and real estate are two investments you can invest in that will generate cash flow. He discussed how to use each tool to build wealth.

Start With a Plan

Singh emphasizes the importance of having a clear plan. To start, assess your current financial situation. Know your income, expenses, and how much you can realistically invest in passive income ventures. Setting clear financial goals is the key to success.

Invest in Real Estate

Real estate is a classic passive income source. Singh suggests looking into rental properties or real estate investment trusts (REITs). While owning rental property requires some maintenance, it can provide a steady stream of income. REITs, on the other hand, offer a more hands-off approach, as they are companies that own and manage real estate.

Explore the Stock Market

Investing in stocks, especially dividend-paying ones, is another method Singh recommends. Dividends are regular payments made to shareholders, providing a passive income stream. However, it’s important to research and invest wisely, as the stock market can be volatile.

“When you go out and you invest in a company, in the stock market, what you’re doing is you’re literally buying a business,” said Singh in his video. “You’re literally buying one of the pieces of ownership in that business instead of just buying a product that this business sells.”

Singh emphasizes that some, but not all, companies pay dividends–a cash payment to shareholders from profits. He notes the risks involved in dividend investing, including potential cuts or value loss in failing companies. Singh also suggests an alternative for those hesitant to research individual stocks: investing in dividend-paying funds like ETFs, mutual funds, or index funds. These funds diversify investments across multiple companies, reducing risk while still allowing investors to receive dividends.

Create Multiple Streams of Income

Singh discusses the benefit of having more than one source of income. Multiple income streams create a financial cushion during unexpected financial emergencies such as a job loss or illness.

“The whole idea of multiple streams of income makes sense because now you’re not relying on one income,” said Singh. “For example, if you have this accounting business and you only have one client, and this client leaves you, now you have no more money coming in. But if you have five different clients or 10 different clients and that one leaves you, it’s not as big of a deal.”

The Takeaway

Singh reminds us that building a passive income stream takes time and persistence. It’s not a get-rich-quick scheme but a steady process of building and investing. His advice on earning passive income is practical and achievable.

By understanding what passive income is and planning appropriately, anyone can start their journey toward financial freedom. Remember, the key is to be patient, persistent, and willing to learn and adapt.

Editor’s note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates’ editorial team.

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