Editor’s Note: Saving money is good but equipping yourself with the right skills on how to make money especially from a passive income is better. Though I advocate for saving money as much a we can, I’m also promoting the importance of creating multiple streams of income. With the kind of career I have, the risk of being job-less is really high. This is because there’s no such thing as absolute income security in freelancing. You may have lots of clients now but you never knew what will happen tomorrow and the day after that. It’s always better to be prepared and have back-up income sources.
I’ve been really interested to learn how to buy stocks and earn from it. A fellow blogger tried to convince me like a few years ago to attend a seminar about it but I was not in the money-making frame of mind during that time. Now, I regret what I did. I should have attended that training and by now I would have been an expert in buying stocks.
Below is a guest article submission from Eddie Miller, the Chief Editor of BinaryPedia, the world’s leading binary options website.
What is passive income? What are the advantages of passive income? And how does someone make passive income? These are some of the questions that we aim to answer through this article.
Passive Income is a type of income that you make in addition to your day job, where money flows in with very minimal efforts on your part. Some people say that a freelance job is a type of passive income but it is not so, because a passive income job makes money even when you sleep! Unless any of your investments make money through that, they are probably not passive income. The stock market is a goldmine for people looking to earn a passive income. Through this article, we hope to make you better understand the concept behind earning your passive income through the stock market.
Stock market as a means
The stock market is a very viable option to earn a passive income. More and more people have been turning to the stock market so that they can earn an extra incentive on the side. Essentially, the stocks, which are basically the public’s invite to become shareholders in the company are issued when a company goes from being private sector to public sector. Here any member of the general public can buy shares in the stocks of a company.
In return, the company will issue dividends based on the annual income of the company, after retaining expenses. Therefore, the profit earned by the company will be shared among all the stockholders of a company depending on the percentage of stocks bought by each person individually. This means that your stock will be earning a certain amount of dividend every time that the profits of a company are declared. This, as mentioned, is a truly wonderful way to earn a passive income.
Note of Caution
It is also important to note that there might be times when your stocks will not earn dividends because the company might not always be earning a high profit. Also your earning will be highly variable and unstable because of the difference in earning for the company. Make sure to register your share before the record date of any dividend paying share that you might buy, as you might miss out on you dividend for a particular period if you register too late.
Now you know all there is to know about earning a passive income by buying stocks which pay dividends. You should know that like with any other investment, a certain amount of research must be done prior to your investment. Entering any such deal with a blind eye has a heavy potential for loss. The internet will usually help you decide if the company you are investing in has a high profit margin or if they are facing any hiccups. It should also give you an idea of the dividend percentage of the issuing company.
There are many online tutorials and tips that will help you with the same.
About the Guest Author
This post is written by Eddie Miller, a blogger, technologist, trader and the Man Behind BinaryPedia.com.
Photo above is used under Creative Commons License. Credit.