The road to financial freedom is long. Being financially independent is not only a dream. It is a goal that can be reached with the right mindset, discipline and with the right strategy. Here is my way to generate passive income.
1. Full-time job and savings
The most important source of income is my job. I work as a journalist. I'm fully employed and get paid a decent monthly salary. I try to save at least 10 % of it for possible future investments. Another 10-15 % I put into my stock portfolio. Ideally I use 25 % of my salary for saving and long-term investments.
2. Stock Portfolio
It consists of several Exchange Traded Funds (e.g. MSCI World ETF) and share which I picked under certain criteria. I'm looking for value shares, companies with a relatively high market capitalization which operate in sunrise industries, with a relatively low price-to-book ratio (between 1,0 and under 3,0), with a relatively high equity ratio and with a possibly good return on investment and return on equity. I hold shares from the S&P 500 Index, German DAX Index and Japanese Nikkei 225 Index. What shares you should or should not buy, you have to find out for yourself. If you want to learn more about value investing, I recommend to read the book "The Intelligent Investor" from Benjamin Graham. I can also recommend investopedia.com
3. Buying and saving Bitcoin
Another great opportunity to generate passive income is to hold Bitcoin. Although Bitcoin remains stable around $ 10,000 these days, in my opinion it is not too expensive start with collecting BTC. My aim is to invest relatively small amounts of my savings and deposit them on Bitwala. I have opened up a Bitcoin account on Bitwala which allows me to earn 4,51 % interest on my Bitcoin per annum. I'm not afraid of the volatile Bitcoin price because I invest relatively small amounts per month (50-150 Euro). This is money which I would spend otherwise for beer, food, restaurants, cinema etc. That means it is money which can be discounted as "spent" if the Bitcoin price would decrease. But by investing it for a long period of time there will be a cost average effect which migitates the risk. I believe, the price for Bitcoin will rise significantly in the future. So saving BTC with an annual interest of 4,51 % is a very interesting way to generate passive income.
4. Other sources of income
First of all, the most reliable way to earn additional income is a side job. If you don't have time and motivation for a second or a third job, you can try to earn income with your talents like photography, writing, art, making music etc. Although it is very difficult, time consuming and you most probably won't get rich immediately, being creative can be a very good way to earn some money or some cryptocurrencies, like on steemit or on Publish0x.com. If you don't want to be creative, you can hunt crypto bounties, cash in airdrops, use crypto faucets or play games to earn some crypto. The faucets I'm using are bonusbitcoin.co, moonbit.co.in, moonliteco.in and moondash.co.in. Of course you can also try trading on the stock or cryptocurrency market, for example on Crex24.com.
5. Lending
By blogging here on Publish0x and using crypto faucets, I have earned around 30 Euro in one and a half months. It is not much, but for me a very welcome amount to experiment with DeFi platforms like Compound.finance. My aim is to collect these small amounts, transfer them into crypto so that after a while I can supply DAI, USDT, BAT etc. on DeFi lending platforms like Compound or Aave.
6. Reinvesting and Staking
However, I'm not an actively trader. I think before I'm going to join the market as an aktive trader I have to learn more and develop a better understanding of the cryptocurrency market. But in general, I believe it is necessary to rebalance one's portfolio once in a while. Sometimes you have to profit from high valuations of your shares, ETF or Bitcoin and cash in. Sometimes you need the money for an investment in your household or you want to reinvest it more profitably. Here staking on Mycointainer can be a good opportunity with annual interest rates from 6-150 % per annum. On Mycointainer I can stake for example the DASH that I collected from the moondash.co.in faucet.
Conclusion
There are several ways to generate passive income and there is a lot of potential in platforms like Compound, Aave and Uniswap. But high gas fees and high volatility make cryptocurrency investments with small amounts of money less attractive. Here, I tend to reinvest rather in ETF and shares on the stock market. Nevertheless, Cryptocurrencies can play an important role as an additional asset when you want to diversify your total portfolio of financial investments. My aim is to build up a passive income system which feeds itself by stable revenues.
Disclaimer: This article reflects my own opinion. I'm not a professional financial advisor and I recommend you to do your own research on buying shares on the stock market and dealing with cryptocurrencies.