5 ways to make passive income in Malaysia

This financial concept refers to revenue streams established through work done over time that pays you in an almost automated fashion.

The concept of passive income has gained traction in recent years. It refers to income derived through means other than those you actively carry out, such as a salary from a job. Instead, the revenue is established through work done over time that pays you in an almost automated fashion.

Rental property or earnings such as royalties are two of many examples of passive income. Getting a second job does not qualify, as you would still be required to perform the work to get paid.

As personal income is the most powerful weapon for accumulating wealth, additional cash -even if you have a full-time job – is always welcome. As such, here are five tried-and-tested ways of generating passive income in Malaysia.

1. Property

One of the most popular ways of generating passive income is through rental properties. Landlords can generate a continuous stream of cash from the rental of the property while simultaneously improving the premises and building equity.

Planning and strategising are key to a successful passive-income property venture. This entails familiarising yourself with your target location to understand local trends and values, which in turn helps you determine the development in which to invest to generate positive cash flow.

It necessitates some level of commitment, whether it’s searching for properties, screening tenants, employing a property manager, or dealing with problems. But once you get into the swing of things, you will be well on your way to allowing your property to, in essence, pay for itself.

2. Intellectual property (IP)

Intellectual creations that are associated with legally recognised rights – such as content that can be copyrighted, trademarked, or patented – are referred to as IP. Articles, books, music, movies, artwork, photography, comics, software, logos, and other materials are all included, although in most cases, mere ideas do not qualify.

IP is a solid option for establishing streams of passive income as your product will be easy to replicate, especially in digital form. It may take a lot of time and effort to create a piece of IP, but it only has to be done once before being reproduced and shared with a large number of people.

When it comes to licensing software, users have to agree to its conditions to use it. In a larger sense, you could license your IP to other businesses, who could then use it to create cash, and receive a portion of that revenue stream depending on how the transaction is structured.

3. Low-risk investments

Investing in dividend- or interest-paying assets can be a great way to generate passive income. One could look into investing in index funds, which are mutual or exchange-traded funds tied to a specific market index.

When you put money in an index fund, that cash is then used to invest in all the companies that make up the particular index, which gives you a more diverse portfolio than if you were buying individual stocks.

As the goal of index funds is to mirror the same holdings of the index they track, they are naturally diversified and, thus, contain a lower risk than individual stock holdings while promising payout in the form of returns.

4. Cashback options

Cashback credit cards are a good way to make some extra money. While this source of income is unlikely to make you wealthy, it could help you obtain returns on money you’re already spending.

Effectively, cashback credit cards offer you the chance to earn cash by paying you back a percentage of what you spend or giving you reward points. However, this only makes sense if you pay off the balance in full each month and never go over your limit; otherwise, the interest you pay will outweigh the rewards.

Perform a few online searches for the top cashback credit cards, but don’t be too hasty to sign up for the first one you see – comb through posts that outline which would be the best fit for your needs.

5. Affiliate advertising

Affiliate marketing is an efficient method of generating passive income, though it is by no means easy. In essence, if you have a large user base, you would be able to advertise products and services on a company’s behalf, thereby potentially creating profit for the organisation.

In return, you get paid, either according to a contract or by the number of clicks or engagement with the business. This is a solid way for you to effectively act as a broker while generating a steady source of passive income.

Stocks or investments that do not pay dividends, such as cryptocurrency, may be intriguing but will not provide you with steady passive income.