💸 What is passive income? Key words for financial freedom that Hong Kong residents must know!

Dear workers and readers, today I'm unveiling the mystery of passive income. You go to work every day, getting paid, but have you ever thought that "money can help you make money"? Passive income is the true core of financial freedom! Want to "have just enough to make ends meet without doing anything"? You need to understand what "passive income" is! 😎💰

🏷️ What is "passive income"?

Passive income refers to a type of income that doesn't require you to actively work daily, yet provides a steady flow of cash. In other words, "time doesn't equal income," and assets generate income automatically . Typical examples include rent, dividends, fixed deposits, and intellectual property.

The editor summarizes a few key points:

• You don’t need to spend a lot of time to maintain it, you can even charge for sleeping.

• Generally requires initial investment (capital, technology, assets or knowledge, etc.)

• Requires occasional small-scale management, but can generate cash flow in the long term

• Even if you don't work, you will still have a continuous income.

🎯 Why does everyone want passive income?

• The high cost of living in Hong Kong makes it difficult to cope with emergencies and achieve long-term goals relying solely on manual labor.

• Passive income is like building a "long-term breadwinner": you won't run out of money even if you lose your job or change jobs.

• Develop the ability to make money; it is difficult to achieve true financial freedom by working part-time.

• With a stable cash flow, you have more autonomy in career choices, life, and retirement

💡 Passive Income vs. Active Income: A Typical Example of Hong Kong Life

🧮 Common Types of Passive Income (Hong Kong Examples)

1️⃣ Bank fixed deposits, money market funds

• Open a bank fixed deposit and deposit $50,000 with 1% annual interest, which is $500/year

• Advantages: Safe and stable, with very low risk, but low returns and difficulty beating inflation

2️⃣ Bonds/Bond Funds

• Government iBond, Silver Bond, Regular Interest Payment

• The risk is higher than fixed deposits, but the dividend is stable

3️⃣ Stock or fund dividends

• Blue chip stocks such as MTR, Link REIT, HSBC, etc. pay dividends every year

• Index/ETF funds such as Tracker Fund of Hong Kong pay dividends annually

• Long-term asset appreciation and cash flow

4️⃣ Property rental

• As a landlord, you can collect monthly rent. The rental return in Hong Kong is about 2-5%, but you need a large amount of capital.

5️⃣ Copyright and Intellectual Property

• Royalties from books, App licensing fees, and income from online courses

• Requires initial effort, but income is sustainable

6️⃣ Other online platforms

• YouTube/online store profit sharing, website advertising, automatic receipt of passive profits

👑 Why is it important? Will passive income change the future of Hong Kong people?

• Reduce the pressure of relying solely on part-time work and have the freedom to choose to change jobs or semi-retire

• The earlier you start compounding, the stronger the effect. Even small amounts of money can turn into big money.

• Long-term cash flow will provide a more stable position in the face of future economic fluctuations

• Ideal life plans such as early retirement and traveling around the world are easier to achieve

⚠️ Is passive income difficult? A friendly reminder from our editor

• Most passive income requires "upfront investment" and "patience" - it is not about making big money immediately, nor is it a business without capital!

• You need to learn risk management, diversify your assets, and continue learning. Don't just go all in.

• The editor recommends: "Start with a safe and painless small deposit or mutual fund, then diversify into more channels once you've mastered the skills."

• In the age of the IKEA internet, intellectual property, online courses, and platform performance can all become sources of passive income for the new generation, no longer limited to being a landlord collecting rent.

🧡 The editor summarizes three sentences

1. "Passive income is a financial safety net. Earning money while you sleep is no longer a dream!"

2. "You don't have to ask for too much at the beginning, but you have to start having something!"

3. "You need to use both money and wisdom, and wait for time and knowledge to help you make money!"

Also, don't rely solely on manual labor to make a living. Remember to plan ahead and build your own passive income. That way, no matter what challenges you face in the future, you'll be able to weather them naturally! 🐷🚀