Buying shares or stocks are the other option. When you own stocks or shares, you essentially own part of the company, Therefore, you are entitled to your portion of the company’s profit, which is distributed to you in the form of dividend. This is a form of passive income. But this type of passive income have risks involve. In fact in any business, risks are always there.

If you are into this type of passive income, you need to study the company financial background before making any investments. We need to look into companies with strong track records of growth and good corporate governance, as their dividend yields are more maintainable. Another good way to identify companies that pay out dividends is to look at their business models and capital expenditure. Companies with lower capital expenditures, where they spend less on fixed assets, will generally have higher level of cash flow.

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Guys, stay tune and my next post shall be on an online passive income.

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