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How to Earn Passive Income

The article is part of the Business Ideas Series. If you have not read the Introduction, please read it  here . Business Ideas Series will...

The article is part of the Business Ideas Series. If you have not read the Introduction, please read it here. Business Ideas Series will empower people like you to have financial freedom by establishing your own business.
In this article we will review Passive Income or Silent Investment options to make more money.

Business Idea:
Passive income / Silent Investment.

Passive income is the earning which is derived from a business without any active participation or involvement. For example, the rental income from your property is Passive Income.

Another definition is that you become a Silent Partner when you invest in a business in which all the work is carried out by someone else (your working partner) whereas you get a certain percentage from its profit. For example, you provide $10,000 to someone and he purchases something, resells it for $11,000 and then both of you share the profit.

How much Earning:
As a normal practice Silent Partner and Working Partner both get 50-50% of the profit however if you would like not to be a passive partner then the percentage may mutually be agreed depending upon your mutual understanding with your partner considering the amount of effort you would be putting in to run the business. On the contrary, you may want to agree on less than 50% of shares if the business execution effort is very high and solely being done by your partner. In such cases you may want to give higher profit share to your working partner.

Remember the fact that you are entitled to earn the money because you are taking the risk of this business activity whereas a working partner does not have the liability if business goes down unless mentioned in the contract. Whereas your partner has his profit share due to his/her efforts for making money from your investment.

Ideally speaking you can invest anywhere in the world however if you are not experienced enough in silent investment then consider investing in the towns/areas where you can reach frequently. Keeping yourself away from your partner(s) is prone to business fraud unless you are too good at managing staff remotely.

Knowledge Required:
· General understanding of business nature.
· High level understanding of competitors and their business model.
· High level stats analysis of the business (expected profit values, resources, risks, liabilities, expenses etc.)
· Major technical terms, products/services names pertaining to this business.
· Market study on whether your business has good public demand.

Initial Investment:
Always start with small amounts for up to 6 months and analyze your incomes. If appropriate, ramp up at a low pace. 

If you possess a small amount, preferably go for an existing running business instead of investing in start-ups because start-ups are very risky projects though if successful can yield massive rate of return.

Pros and cons:
- You don’t have to work at all. You get paid for taking the risk of investing your money.
- You do not control day to day operations hence you do not have visibility on what is happening on ground.

Where to invest and how to find Active Partners:
· Start socializing and search for like-minded people. Search for WhatsApp and Facebook groups but don’t get deceived by spammers and fraudulent people.
· Check with local shop owners, grocery store managers, laundry shops, taxi drivers, kids school, bakery shop, carpenter, car service station, printing shops and stationary store whether they are planning to expand their business and need investment.
· Get connected or socialize with service oriented company owners (IT services companies, office/home cleaning companies, house and office moving companies, transportation companies etc.
· Buy a vehicle and register it with Uber and Careem. I personally know people who are making more than 50% rate of return from Uber/Careem especially in Asian countries.
· Check with import/export business owners.

1- If you are not a risk taker, consider investing in real estate because there is a less likely chance of loss however remember the fact that earnings from Real Estate investments are not very high (usually 5% to 9% annually). I have written a thorough article 
19 Recommendations for Property Investment at Read it before you proceed for purchasing any property. 

2- Invest with the person you 
trust in. If you do not know the person and still considering investment, you should have a full in-depth understanding of the business and you should see the performance history (with statistics and proofs) for this person/company.

Documentation is the heart of everything you do in business. Always ensure you have legal documentation covering (profit and loss, liabilities details, resource details etc.). Even if you are doing business with your own family member, legal documentation is highly recommended.

4- Unless you are an online guru, preferably invest in your local vicinity.

5- Keeping money in the bank and earning profit is not a wise idea at all; reason being, banks are making massive amounts of money from the collective investments from its customers but returning peanuts when it comes to sharing profits.

About Author: Junaid Tahir is a telecom engineer, program manager, an analyst and author. His work has been published in several countries in magazines and websites. Junaid cares about peace-and-prosperity-for-all and economic empowerment. If you care about these causes too, please share this article via your Facebook, WhatsApp or Twitter.