The Ultimate Guide to Passive Income | Everything You Need to Know
Passive Income Definition
If we said you could make money whilst you were asleep, I’m sure you’d think we’d lost the plot!
Sounds too good to be true right?
Well, this article may surprise you, as making money at all times of the day and night is possible thanks to passive income streams.
I’m sure one of the goals of most people seeking financial independence is to build wealth that doesn’t eat up too much of your time, so you can enjoy life and focus on the things you choose to do. This is the beauty of having passive income!
The harsh truth is though that building a passive income stream usually isn’t passive at first. It requires time, money, skills or all three but once you set things in motion, you can sit back and reap the benefits.
So, where do you start?
Basically, passive income is money earned with minimal activity through any venture that requires little daily effort or upkeep on the individual’s part.
Let’s break that down a bit more:
- Passive Income— requiring little or none of your most precious resource, your time
- Regular Income — generating cash inflow to you that either represents income you use in the course of daily life or that you re-invest.
Passive income is more about time than anything else. You could do a lot of things to make money, but for the income stream to truly be passive, it must require less and less effort to produce income, eventually requiring no effort (or very little to maintain).
Here’s a list of 10 passive income ideas, so it’s likely that you’ll be able to find at least two or three that will work in your situation.
This is a passive income technique that is better suited to people who have blogs and active websites. You can sign up to promote certain products or services on your site, for which you will be paid either a flat fee or a percentage of the amount of the sale completed.
This isn’t as hard to do as you might think, since there are thousands of companies in the world who want to sell their products in as many places as they can.
Put Your Photography Skills to Work.
Do you like photography? If you do, you may be able to convert it into a passive income source. Photography websites such as Shutterstock can provide you with platforms to sell your photos. They may offer either a percentage or a flat fee of each photo that is sold to a site client.
In this way, a single photo could represent a cash flow source since it can be sold again and again. You simply need to create your photo portfolio, put it on one or more photo platforms, and then the activity becomes completely passive. All the technicalities of the photo sales are handled through the web platform.
Purchase High Dividend Stocks.
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.
In that way, you can earn passive income from two sources — dividends and capital gains.
Make sure you do your research and take professional advice before dabbling in stocks and shares though to ensure your investments have the best chance of success.
Write an eBook.
This can be a lot of work upfront, but once the eBook is created and marketed it can provide you with a passive revenue stream for years. You can either sell the eBook on your own website or offer it as an affiliate arrangement with other websites that provide content related to your eBook.
Get Cash-back Rewards on Your Spending
There are credit cards that provide cash-back rewards ranging anywhere from 1% to 5% of the amount purchased. You’re going to be out shopping and buying anyway, right?
Also, sign up to sites like Quidco and Topcashback to get money back when you spend online.
Sell Your Own Products on the Internet.
The possibilities here are endless — you can sell just about any product or service that you like. It could be a product you have created and can manufacture on your own or it could be digital in nature (such as software, DVDs, or even instructional videos).
If you make a lot of money in your current job and you’re not sure that you can make a similar amount by selling products online, think again…!
Write a Book and Collect Royalties.
Much like writing an eBook, there’s a lot of work upfront. But once that’s done, and the book goes into the sales stage, it becomes a completely passive venture.
This is especially true if you can sell the book to a publisher who will pay you royalties for the distribution and sale of the book. You’ll get a percentage of each sale made, and if the book is fairly popular, the royalties could be substantial. Just as important, the royalties can continue flowing for many years
Become a Silent Partner in a Business
Do you know of a successful business that needs capital for expansion? If so, you can become something of a small-time angel investor and provide that much needed capital.
Rather than offering a loan to a business owner, you instead take an equity position in the business. In this way, the business owner will handle the day-to-day operations, while you will act as a silent partner who also participates in the profits of the business.
Rent Out Unused Space with Airbnb.
Airbnb is a concept that has only been around for a few years, but it has exploded around the globe.
Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels. They do this by staying with participating Airbnb members who rent out part of their homes to travellers. By participating in Airbnb, you can use your residence to accommodate guests and earn extra money just for renting out space in your home.
How much you will make will depend upon the size and condition of your home and your location. Naturally, if your home is located in a high-cost city, or close to a popular resort, your income will be much higher. It’s a way of earning money on space in your home that might just be sitting empty otherwise.
Create an Online Course.
Everyone is an expert at something right? So, why not create an online course about your passion?
What do you put in your online course? Good question. You can add video lessons, checklists for completing steps you recommend in your video lessons, small eBooks to supplement the lessons, audio files for people listening while traveling, informative interviews with like-minded experts, and a whole bunch more!
Once you create an online course, it can work for you while you sleep!
Hopefully there is something on this list for everyone, and if you have any more passive income suggestions or advice, please feel free to share them in comments section below.
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