Top tools for passive income in 2025

The economic situation will be extremely unstable until the end of 2024: inflation is rising and prices for basic goods and services are increasing monthly. According to Rosstat, inflation in October was 9.2%, which is why many people decided to keep or increase their savings.

Many people are wondering where to invest their money to generate passive income. This is not only a way to “escape” inflation, but also an opportunity to turn the money they earn into profitable working capital. Let’s see which investment options are most relevant at the end of 2024.

Three investment options to generate passive income by the end of 2024

In today’s economy, there are many ways to earn passive income. Let’s look at three of the most effective and relevant options that are suitable for investors with different levels of experience and capital.

1. Investments in securities: long-term stability

Securities are still one of the most popular ways to generate stable passive income. First of all, it’s about stocks and bonds. With stocks of large, reliable companies like Apple, Tesla and Gazprom, you can share in their success.

The stocks of these companies have shown steady growth for decades and the end of 2024 is no exception. For example, Apple shares have risen by 8% since the beginning of the year, confirming their resilience. Many investors are looking for ways to invest their money for passive income and choose securities because they allow them to make a profit through dividends without having to sell. The dividend yield of companies like Coca-Cola is around 3-4% per year, which is significantly higher than the interest on deposits.

Another instrument is bonds, especially government bonds. They offer a return of around 7% per year and have a high degree of reliability. For those who want to minimize their risk, bonds can be a good option. The best long-term investments are securities with stable growth and low risk. For example, Russian OFZs currently offer an annual yield of 8.1%, making them attractive to conservative investors.

2. Cryptocurrencies: Risky but Promising Investments

Cryptocurrencies will remain hugely popular in late 2024. Where can you invest your money to earn passive income if you are willing to take the risk? The answer is cryptocurrencies. Bitcoin has increased in value by more than a thousand times over the past decade. In October 2024, Bitcoin will reach a value of $35,000, indicating a recovery from the crises of recent years. Investing in Ethereum or Binance Coin can yield a nice profit if you know when to buy and sell.

Another interesting option for passive income is staking: the process of ‘freezing’ cryptocurrencies for a certain period of time to support the blockchain network, for which rewards are paid. The annual return can reach 10-15%, which is significantly higher than traditional investment methods. However, volatility remains a major risk factor: for example, the price of Ethereum has fluctuated between $1,500 and $1,800 over the past three months.

3. Real Estate: Passive Income with Minimal Investment

Real estate remains one of the most sustainable forms of investment. There will always be a need for living space, so the demand for rental apartments will remain high. Where can you invest in real estate to earn passive income? Commercial real estate in major cities such as Moscow and St. Petersburg continues to show high profitability. Commercial rental income in Moscow is expected to reach 8-12% per year by November 2024. This makes these areas attractive to investors.

Residential properties can also provide stable returns, especially in areas with growing demand. For example, if you rent in an area where business centers or educational institutions are actively being built, you can earn a higher income than in residential areas of the city. By using leverage (a mortgage loan), it is possible to earn passive income with minimal investment. By renting out your apartment, you can cover your mortgage payments and generate additional income.

How Investment Diversification Helps Build a Financial Safety Net

Investment diversification is the key to financial stability and security. Don’t put all your eggs in one basket, as the old saying goes. By allocating money intelligently across different assets, such as stocks, real estate, and cryptocurrencies, you can limit risk and protect your capital. For example, if stock markets temporarily decline, real estate rental income can offset those losses. Or conversely, if cryptocurrency shows tremendous growth, you can make significant profits even if rental income temporarily declines.

Where can you invest money to earn passive income and build a financial safety net? The answer is diversification. With a safety net, you are independent of a single source of income and can look to the future with confidence. By spreading investments across different asset classes, investors are protected from volatility and enjoy a stable income.

Principles of diversification:

1. Investing in different asset classes (stocks, cryptocurrencies, real estate).
2. Geographic diversification (investing in assets from different countries).
3. Combination of risky and conservative investments.

Conclusion

By the end of 2024, successful investments require thoughtful asset selection and a smart diversification approach. Where to invest your money to generate passive income is a question that many people are concerned about. The answer lies in putting together a balanced investment portfolio. Financial independence starts with conscious decisions. Diversification, such as investments in companies, real estate, cryptocurrencies and securities, will help you achieve this goal.

The most important thing is that you start implementing today. Create your own financial buffer, invest money to be able to work independently and generate a passive income that allows you to enjoy life without being dependent on economic fluctuations. The end of 2024 is a time of opportunities for those who want to seize them wisely.

In business, franchising, and creative industries, there is often a term that confuses even experienced professionals. Many want to know what royalties are. Its mechanism is based on the right to use someone else’s intellectual property or business model. Understanding the details makes it clear: regular payments are not an abstraction but a specific financial instrument that affects profit calculation, business model development, and the legal structure of the contract.

What Are Royalties in Simple Terms

Royalties are regular payments for the right to use intangible assets. Such assets can include a brand, trademark, patent, copyrighted work, technologies, or a business system. The rights holder, known as the licensor or franchisor, grants permission for use, and the recipient, the licensee or franchisee, pays a fixed or variable percentage.

To understand what royalties are, it is enough to consider a simple example: a writer publishes a book through a publishing house and receives a percentage for each copy sold. Or a café opens as part of a well-known franchise and pays a monthly percentage of revenue to the brand owner.

Royalties in Franchising: How Does the Mechanism Work?

In franchising relationships, regular payments play a key role. What are royalties in this context? Regular payment for the right to use a business model, brand, marketing, technical support, and other intangible assets. Payments can be monthly, quarterly, or annual.

The amount may depend on turnover, net profit, a fixed percentage, or even a mixed scheme. When a novice entrepreneur decides to open a franchise business, they face not only an initial one-time fee but also ongoing obligations. This distinguishes such models from simple brand purchases.

Many wonder: what is the difference between an initial fee and royalties? The answer is simple — the first is paid once upon entering the system, the second is paid regularly as part of ongoing obligations.

Types of Franchise Fees: By Calculation Method and Application Area

The variety of applications has led to several classifications. Below is a list to help navigate the concepts:

• licensing — payment for using a patent, software, musical work;
• copyright — percentage of sales of books, films, songs, architectural projects;
• franchise — regular payment for a business model and brand;
• extractive — payments to the state for the right to use natural resources;
• mixed — a combination of different schemes and conditions.

Each format is regulated by a contract that clearly specifies what royalties are: their amount, payment frequency, and conditions for terminating cooperation.

Calculating Royalties: What Affects the Rate?

The formula depends on the agreement’s conditions. The most common option is a percentage of gross revenue. Sometimes a percentage of profit, a fixed rate, payment per unit of product, or a conditional value expressed in basic units are used.

The calculation must be transparent for both parties. Often, adjustments are specified in the contract, such as excluding advertising or transportation expenses from the total amount.

Predictability is important for franchisees. For franchisors, it ensures a stable income. Both sides are interested in a clear algorithm. Any misunderstandings lead to disputes.

Taxation: How Are Payments Accounted For?

Any payment requires accounting. What are royalties in terms of taxes? In Russia, they are an expense that reduces the taxable base when there is a licensing agreement. The recipient must declare the income and pay personal income tax (if an individual) or corporate income tax (if a company).

Royalty taxation depends on the parties’ status, payment currency, and the existence of an international agreement on double taxation avoidance.

Companies must report, confirm the right to use, and justify the amount. Individuals should note that regular author royalties also fall under this concept and require appropriate declaration.

Franchise Fee and Copyrights: Who Pays and for What?

Musicians, writers, designers, photographers — each can earn passive income from their intellectual work. When signing a contract with a platform or publisher, the terms specify the amount and frequency of payments.

What are royalties in the context of authorship? Compensation for the use of a work. Payments often depend on sales, views, or use in advertising. Sometimes a fixed amount is paid per copy or a percentage of the platform’s revenue.

Modern technologies allow for automated calculations and tracking of statistics. Services have emerged where calculations happen automatically, such as streaming platforms.

Advantages and Disadvantages for Business

Like any mechanism, the payment system has pros and cons. Below are key aspects considered when developing a strategy:

• allows monetizing intellectual property;
• provides passive income to the author or brand owner;
• encourages franchisees to increase revenue;
• increases income stability;
• requires a clear legal basis;
• depends on revenue fluctuations;
• can be burdensome for new partners;
• requires regular accounting and reporting;
• complicates taxation in international schemes;
• requires supervision from the rights holder.

What are royalties in real practice? An instrument whose effectiveness depends on the transparency of the scheme, reliability of partners, and compliance with contract conditions by both parties.

Where Is Brand Payment Most Commonly Applied?

Payments for intellectual use agreements are found in many industries. The most common areas include:

• franchising — restaurants, salons, delivery services;
• entertainment industry — music, films, theatrical productions;
• publishing — books, magazines, digital formats;
• IT — licenses for software, algorithms, databases;
• pharmaceuticals — use of formulas and patents;
• resource extraction — oil, gas, minerals.

The question “what are royalties” inevitably arises in all industries where someone else’s intellectual or commercial model is used.

What Are Royalties: The Main Points

Payment for rights usage is not just a form of payment but a legally significant tool for monetizing knowledge, brands, and talents. It allows creators to receive compensation for their work and businesses to use proven models.

Understanding what royalties are opens the way to smart investing, effective franchising, and rights protection. Successful companies and authors use the payment system as a way to build sustainable, long-term income. The key is legal clarity, transparent calculations, and professional support.