In return, you’ll receive regular interest payments (called ‘coupons’). When you invest in bonds, you’re lending money to a government or company. Bondsīonds could help you to receive a regular passive income. In addition to capital growth if the unit price increases, some managed funds also pay income (called ‘distributions’).Įxchange traded funds (ETFs) are a form of managed fund that can be bought and sold in a similar way to trading shares in individual companies. The value of the unit will rise and fall with the market value of the assets in which the fund has invested. When you invest in a managed fund, you own ‘units’ in the fund. Investors are usually charged fees for investing in a managed fund. With a managed fund, your money is pooled with other investors and a team of professional investment managers invests it in assets, such as shares, bonds, property or cash. If you’re not confident in selecting your own investments or deciding whether share investing is right for you, it could be a good idea to get some independent financial advice.Īnother potential avenue for earning passive income is to invest through a managed fund. Past performance is no guarantee of future performance. If you do invest in shares, remember the value of your investment could go down and there’s no guarantee that you’ll earn an income. You’ll typically pay a brokerage fee for buying and selling shares. The size of the dividend you may get will depend on how the company performs.Ī benefit of holding shares with the aim of earning passive income is that the ongoing costs are generally very low. If the company you’re invested in pays dividends, it’ll usually do this twice a year. With wealth there is no fast game,” she said.Īs well as the potential for capital growth if your shares increase in value, you may earn passive income through dividends. “Focus on the types of shares that are likely to offer stable, moderate growth over time, rather than high risk investments. To generate passive income through shares, Ms Oliver says it’s best to consider long-term, stable investments. If you don’t have spare cash at the moment, we’ve also included some ideas that don’t necessarily require a lot of upfront capital, but do require more effort. We’ve had a look at some popular ideas that could help you to earn passive income in Australia. “It’s going to be difficult to get off on the right foot if you don’t have a certain amount of spare cash to project yourself forward.” “When it comes to wealth, you need to have the capital to start with,” Ms Oliver told Canstar. A common thread is that you’ll generally need some cash upfront to get started. Within that, there are a range of different investments and strategies you can consider. There are two main ways to make passive income in Australia: shares and property. Leah Oliver, Director of Minnik Chartered Accountants and wealth educator, said: “Passive income is the income that you can make when you are asleep or busy doing other things and it accumulates in the background.” How to make passive income in Australia This is compared to active income, such as your salary or wages, where you receive an income in exchange for doing some kind of work. For example, you could earn dividends on shares or rental income from an investment property. Passive income is money you can earn with little or no ongoing effort. If that sounds like a good idea for you, we’ve looked at eight ideas that could help you to earn passive income in Australia. Passive income allows you to earn money without putting in much extra work.
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