How to Earn Passive Income?
All over the world, there is no dearth of people earning passive income back-to-back.
And, the odds are very high, that you might be feeling jealous and have an eye for the main chance.
After all, it is the dream of most persons to earn money without doing anything and enjoy a great living. Right?
Well, the truth about ‘passive income’ is somewhat different from the conception of most folks. No doubt, you can make money while you are sound asleep at night. Yet do not forget that there are lots of efforts to be made than you might think!
In this post, we are your guide to help you earn a passive income online. We will discuss each and everything that can be effective in making your initiative of earning passive income a monumental success.
We will also share some great ideas to get you started in the shortest possible time. If you are prepared body and soul to work hard and dedicatedly, you must turn your dreams of earning a passive income online into a reality
Let us get started right away.
What is Passive Income?
Passive income is a type of income that comes in without current or regular work. In this type of income, one makes an effort e.g. by making a blog with advertisements, and when it is made, the revenue comes more or less by itself.
One of the clear benefits of passive income is that you receive an income, even if you are not necessarily active. You can easily collect rent from a tenant, even if you are not active or have not been doing anything for several months. The opposite is e.g. wage work, where you have to work every month to get your income.
What it takes to earn passive income?
Before we dig deeper into the various passive income ideas, I thought it would be a good idea to get rid of some misconceptions.
Even though the word passive sounds like you should not do anything to get an income, this is not entirely true. All passive income streams require at least one, two or all the following things:
- A computer with an internet connection,
- Your dedication to work
- A start-up cost, or a startup investment of your time
You cannot get an extra income without being willing to take one of the above elements in use.
Today, I have a great list of passive income ideas (discussing below) that you can try. No matter what category you fall into, you will probably be able to find one or more ideas to get started today.
Why Build Passive Income?
Some of the salient benefits include:
- Amplifies your wealth with less effort
- Enables you to retire early
- It enables you to enjoy a good financial status even if you become jobless
- Meets the need for your extra cash
21 Best Passive Income Ideas
There are plenty of ways to unleash passive income, so let us take a look at the following great 21 ideas:
Start a blog & make affiliate sales
If you choose to start a blog, then a whole new world of possibilities opens up for you. If you choose to create a niche blog, around a particular topic, then you can do it even more passively, by writing a lot of content on your blog.
In the meantime, if there are certain products/services, you can also sell it through affiliate marketing. It is here you get money for referring visitors who choose to buy.
Make YouTube videos
This type of way to get a passive income is growing pretty fast. You can make videos about anything you found interesting. Whether it is music, guides, opinions, comedy, movie reviews – Everything you want.
Then you can post them on YouTube. And now you are actually ready to start earning your passive income.
Try out index funds
Investing in index funds is another way to generate passive income, and unlike day trading (which is buying and selling stocks on a daily basis), you do not need to do anything. You simply leave the money there and forget about its movements (regardless of whether they go up or down).
Here you invest in the market in general (not in stocks of a specific company). It means that you will not have to worry about details such as choosing specific investments, rebalancing your portfolio or knowing when to sell or buy, etc. After all, your portfolio will be on automatic pilot.
Purchase high dividend stocks
By building a portfolio of high-yield stocks, you can create a current passive income from annual returns. The returns are far higher than what you get by investing in regular banking investment opportunities.
However, just as important, you must also remember that since high-yield stocks are still stocks, there is also a possibility that they will rise. That way, you can make money in two ways – dividends and stock gains.
Write an eBook
This advice requires that you really do a lot of work to begin with. However, once the e-book is made and marketed, then it can give you a completely passive income for many years to come.
You can also choose to put your eBook up for sale on sites like Amazon.com, Selz.com, Payhip.com, Fiverr.com, etc. which handle payments and more, so you only have to market it.
Get cash-back rewards on credit cards
Credit cards that offer a rewards program based on points are a great way to generate passive income, especially if you are already spending the money.
Although this source of income is not going to make you a millionaire, it can generate some money, considering that you were going to spend it in your day-to-day life anyway.
Find which cards have the best points programs and check in which establishments these points can be used.
Sell your own products on the internet
The possibilities are endless. And if you are looking for a way to get rich, then this can easily be one of the ways where it is possible.
You can sell anything online, whether it is a physical product or a service you offer. It can be a product you have created and manufactured all by yourself, or it can be a digital product such as an online course, an e-book, instructional courses and the like.
Invest in real estate
For hundreds of years, there have been homeowners who have rented out their properties to others. They have thus created a completely passive income for themselves.
Many investors are investing in real estate. And if you too follow the suit, you will get monthly repayments on your investment, just as you would with monthly rent payments from renters.
So this is the closest you get to a completely passive income that you can use in your quest to get rich.
You can lend money directly to others outside the banking system. It is called peer-to-peer lending or crowd lending and takes place through different platforms. One of them is Upstart, Prosper, Kiva, etc.
However, you should be aware that there may be a risk that the payer goes bankrupt and cannot pay back. That risk is always there when you lend money.
I do not lend money myself via these platforms, as I can get a higher return on shares. However, it is an opportunity and many are happy about it.
Online Checking and Savings Accounts
Online checking and savings accounts are a fast and easy way to build a passive income. There are lots of online savings and checking accounts available online to people who are looking for an additional source of passive income.
Looking for a negligible risk, huge interest-generating cash account, Betterment Cash Reserve, offers a viable Annual Percentage Yield (APY). Give a boost to your rainy-day fund without incurring any fees.
Schwab and Ally are two other leading companies offering very good rates.
Robo-investing is an investing technique that branches out your portfolio and utilizes algorithms to give a boost to yields. Precisely, Robo-advising provides you with great investment initiatives that are presently very popular in trading.
Robo-investing helps in saving time – no time is wasted on painstaking research as if on which stocks for investment to be made. On the other hand, tools, such as Betterment, enable you to choose flexibility – automatically ride the market while cutting down volatile risks that come with conventional investing.
In short: maximum returns, passively.
Sell Stock Photos
Believe it or not, you can turn your photos into a passive income source. Photography websites such as shutterstock.com, can provide you with a platform where you can sell your stock photos.
They offer you either a percentage or a fixed payment for each image that is sold to a customer. There are a lot of photographers who have posted hundreds of pictures on the platform, and they make a reasonable amount of money, even while sleeping.
Sell Your Music
Similar to stock photos, you can sell your music and generate passive income when someone produces his/her interest in buying it. First, get your music licensed from YouTube Videos, commercials, etc.
Considering the number of YouTube videos and podcasts being produced, the demand for music is growing massively and people are readily geared up to pay for it. So selling your music after getting it licensed is another great way to get passive income.
Write a Guide or Online Course
Is creating a blog or selling music is not your cup of tea, yet you are looking to make a passive income? If yes, you can try writing an online guide.
By adding valuable information to your online guide or course, you can make passive income through various means. These means including advertisements through Google AdSense, affiliate links, and even memberships, you can sell from your online guide.
Alternatively, if the idea of creating an online course appeals to you, there are platforms like Udemy or Codeacademy, where you can make money by selling your own paid course. Is it this not a fantabulous idea!
Retail arbitrage is also among the most authentic and tried & true ways to build a passive income online.
If you do it the right way, then it can offer you a remarkable additional income. So if you are really fervent to make money online, look no further than online arbitrage!
This technique is a great way to build up your entrepreneurial skills and to become a creative, similar to some of the well-to-do celebrities in the world, for example, Jeff Bezos (Amazon) and Jack Ma (Alibaba).
If you have specialized knowledge in an area or have advanced skill, you can choose to teach it through audiobooks. However, you have to focus on delivering a great deal of value and making sure, you have high-quality production.
Do not try to do things where you go and hope they make money for you.
Rent a room on Airbnb
If you like meeting new people and you have a spare room in your home, this source of passive income is for you.
Offering a room on Airbnb is a great way to earn money from home and with virtually no effort. The best part is that you do not have to commit to a long-term rental so you can interrupt this passive activity at any time.
Create a print-on-demand store
Since ecommerce is one of the most popular ways to earn passive income these days, trying print-on demand can be a great passive job if you like to design.
Print-on-demand allows you to sell custom graphics on products like clothing, mugs, tarps, cell phone cases, bags, and more. The best thing about this is that you can create your own products and create a brand.
Selling informational products
Another great way to earn passive income is to start selling information products on various sources such as Amazon, Flipkart, etc. These informational products can include an e-book, an audio/video course.
As your products are sold, you can start earning money depending on the value of your product. Online courses can be syndicated and sold on various prominent online learning sources, for example, Udemy, SkillShare and Coursera.
Network marketing or multi-level marketing (MLM) has been quite popular over time. Companies like Amway, Herbalife and Tupperware are all network marketing companies.
You can earn a passive income through network marketing, by building a team under you. When you have a large team under you, you earn a commission without having to do much.
Create an App
Apps can easily be completely passive. Once it is made, you often do not have to think about it anymore.
Developing an app requires certain knowledge. However, if you can acquire this skill or form a work team that can create an interesting and quality application, it is good.
To be precise, long-term passive income can be generated through downloads and the income of advertising within it.
Frequently Asked Questions
How much passive income can you earn?
To earn not only passive income but also any income back-to-back, one has to be full of knowledge. Passive income never means that you can earn money without doing anytime—this type of income does require efforts although not very hard yet fine efforts.
So if you have the diligence, knowledge and are passionate about earning passive income, you can earn a very great amount of it on a continuous basis.
Will passive income bring financial freedom?
Some say that passive income can bring financial freedom. In the meantime, this is both a myth and a reality. You can live only on passive income because it allows you to build such financial freedom that you can spend years doing nothing and you will continue to have money.
The problem is that there are very few examples of recurring passive income that later do not require your attention.