7 Ways to Make Money While You’re Asleep

It’s the ultimate dream, isn’t it? The day (or night) when you sleep away, but your bank balance keeps ticking upwards, with not a finger lifted by you.

In today’s day and age, this is no longer a pipe dream. It is also no longer the preserve of only the uber-rich to make ‘passive income’.

These seven ways can certainly lead you to prosperity even when you are sound asleep, says the author (Photos for representational purpose only)

There are myriad ways you can do it, and most of them involve nothing more than a few clicks.

So, if your fingers are itching for all the free money, let’s get started with how you can earn while you’re fast asleep!

1. Sweep FDs

Many savings accounts now offer an amazing facility called an automatic sweep facility. The facility transfers any amount above a certain minimum in your account into a fixed deposit (that gives you a higher interest rate than the money in your savings account).

If you need the money in the FD, the money is still available to you, as if it had never been transferred to a fixed deposit at all! All in all, the extra interest you can earn on the money lying in your bank account, without being bound by the terms and conditions of a usual FD, makes it an obvious choice to earn some extra money.

2. Employee Provident Fund (EPF)

Many employers offer a matching contribution if employees invest in an EPF. For example, your employer might offer to match up to Rs.5000/- per month.

In that case, if you do not invest at all, you are effectively losing out on that money. Instead, if you manage to invest the money, you will receive an additional Rs.5000/-, albeit invested for your own retirement fund, for no extra work.

3. Voluntary Provident Fund (VPF)

Over and above the matching contribution in the EPF, any amount that you invest will be considered an investment in the VPF. You will not get any money from your employer for investing in the VPF.

Activating automatic sweep facility in your bank account will earn you more interest

Then why am I counting it as free money? Because the VPF is a great scheme, that takes minimal effort. It is not a separate account; instead, it uses the same account as your EPF.

If instead of Rs.5000/- (that is your employer’s cap), you invest Rs.6000/- a month, five thousand of that will go to your EPF and one thousand to your VPF. Your investments are tax-free, and the interest rate is great for such a low-risk instrument. It is a win-win on all accounts!

4. Sovereign Gold Bond (SGB)

Gold has always been a favoured investment in India. And with (some) good reason – it has proven itself to be an excellent hedge against inflation. However, you can maximize your return if instead of buying gold, you invest in the Sovereign Gold Bond issued by the RBI.

The SGBs are exact substitutes for holding real gold, with the added advantage of giving you a 2.5% interest on your gold. So, instead of facing hassles like storing your precious gold safely and then watching it gather dust, you can watch your digital gold earning interest every day!

5. Real Estate/REITs

Like gold, real estate is also a ‘real’ investment, one you can see and touch. If done right, real estate can give you recurring cash flow in the form of rent, as well as capital appreciation over the long term, if you choose to sell your land.

However, it comes with drawbacks like requiring heavy upfront investment and the hassles of managing property and tenants.

Investing in real estate is a good option to generate passive income

A happy middle is investing in Real Estate Investment Trusts (REITs). These are funds that pool money from smaller investors and invest in real estate. They also manage the renting and distribute the receipts to all investors.

Effectively, you can partake in the cash flow as well as the scope for capital appreciation, while not dealing with the drawbacks.

6. Systematic Investment Plans (SIPs)

Sometimes the simplest ideas are the most effective. While one can spend endless hours researching and optimizing the perfect investment portfolio, all of it will come to nought if one does not actually invest.

Instead, try and set up an SIP, which will automatically transfer some amount of money from your account to a selected investment. Soon enough, you will get used to living with the money that is left behind, while the investments build up into a sizable corpus, with no intervention by you!

7. Private Equity

For those of you who like to live on the edge, there is one investment where you can pretty much win the lottery, but can also lose all you invested – private equity.

This is when you invest in companies that are not yet open to public investments. Of course, you need to have enough money in order to qualify for such investments and have the risk appetite to bear losses that are highly likely in this sector.

Investing in digital gold can save you from the hassles involved in protecting your physical gold

But if you do, and you manage to pick out even one winner, it will make up for all the risk and all the losses. And all you have to do is pick the winner, with no knowledge or work in the day-to-day business of the company, showing up only to receive your share of profits!

While hard work is certainly important, sometimes it is important to work smart. At other times, it is important to not work at all, and these seven ways can certainly lead you to prosperity even when you are sound asleep.

Priyanka Mashelkar is Dy. Commissioner of Income Tax and Author, 15 Sure-shot ways to Hit the Jackpot