5 simple ways to earn passive income online with as little as 5000 Kenyan shillings.
“Making money while you sleep” has a nice ring to it, doesn’t it? After all, one of the goals of financial independence is to build wealth that doesn’t eat up your time, so you can enjoy life and do the things you choose to do. The truth is that building a passive income stream usually isn’t passive at first. It requires time, money, skills or all three. Passive income is money automatically acquired with minimal labor to earn or maintain. According to investopidia, passive income is earning from a rental property, limited partnership or other enterprise in which a person is not actively involved. But where do you start?
With the rise of inflation being at being at 8.5% according to the Central Bank of Kenya from 6.1% in 2021 compared to the inflation rate of 5.4% recorded in 2020, I know I would definitely want to make more money, more so in my sleep and with minimal effort. Here are five main avenues to earn passive income online with as little as 5000 Kenyan shillings.
- Investing in money market fund
This fund is found in unit trusts in insurance companies or asset management companies. In the money market fund the money is invested in treasury bills, short term corporate debt and bank deposits. Most Money market Funds give you 6-9% interest rate of returns. You can invest with as little as 500sh and get 5 sh without lifting a finger.
- Investing in equity fund
This fund is also found in unit trusts in insurance companies or asset management companies. In the Equity fund the money is invested in units of company of ownership. This means you own stocks or shares in the company. You do not choose the stocks invested. The fund manager in the company chooses for you because you are several investors. This fund is highly risky and the interest rate fluctuates because the underlying assets is the stock exchange.
- Investing in bond fund
A bond fund is also known as fixed income fund. The fixed income fund is invested in treasury bonds and corporate bonds. You do not have to go to the Central Bank of Kenya (CBK) individually to invest in bonds, the insurance company will invest on your behalf. The fund manager choses several bonds and invests in them. Depending on the company the minimum may be 5000ksh not as expected as the bond market that expects an individual to invest at least 50,000-100,000ksh.
- Investing in balanced fund
The balanced fund is a fund is found in unit trusts in insurance companies or asset management companies. It provides a balanced portfolio. This means, money is invested in different areas for example bonds, corporate debt, stocks and treasury bills in a ratio of for example 25%,20%, 30% and 25%. It is a balance of both low risk and high-risk investment. You can invest with as little as 5000 Kenyan Shillings into these funds depending on the company. Most of these funds in Kenya offer 8 to 10% interest rate of returns. This means that is you invest 1000 shillings in a unit trust that has 10% interest rate of return, you earn 10sh without lifting a finger.
- Investing in the stock market
The stock market is an electronic marketplace where shares are traded. This means you can buy or sell a share of a company in this marketplace. The Nairobi Securities Exchange (NSE) is where stocks and bonds are traded in Kenya. In the NSE you can buy shares in companies listed. There are two ways of making money at the NSE. This are growth investing and dividend investing. Growth investing is buying stocks at a low price and selling them at a high price. Dividend investing is where the company shares its profits by paying dividends to its shareholders. In Kenya you are expected to buy at least 100 shares. So, if a share is being sold at 25 Kenyan shillings, you will need 2500 Kenyan shillings to invest.
For you to earn money that is sustainable you will need to do these investments consistently and patiently.
