Does the thought of earning passive income conjure up images of kicking back on a beach somewhere, watching money flow into your bank account as you lounge in the sun? Well, if it does, you may want to learn a bit more about what passive income is and how it works.
The truth is, implementing passive income strategies generally requires an initial investment of either your money, your time, or both, and they take some work to set up. But if you have the right plan laid out and you’re willing to make the investment, there may be a substantial payoff in the long run.
But what is this payoff exactly on your streams of passive income, and how do you go about setting it up? Well, there are a number of different passive income ideas out there that may suit your particular talents or interests, and we’re going to walk you through some of those today. But before we do that, we’re going to clarify the meaning of passive income, how it may benefit you, and then dive into some potential avenues to explore if you’re looking to set up a passive income stream. Keep in mind that regardless of whether your personal passive income ideas are on this list or not, the key takeaway is to build streams of income that revolve around your talents and interests.
Defining Passive Income
Broadly speaking, a passive income stream is income that comes from somewhere other than your primary employer or source of income. Once it’s up and running, it’ll generally come in without you having to constantly work to maintain the flow of money.
Some people may have the belief that passive income strategies are some sort of get-rich-quick method of making money that require minimal effort, but the truth is, earning money through this avenue still involves a lot of work. Generally, a big portion of the investment and work will come upfront, and then you’ll need to follow through with some upkeeping along the way depending on what type of passive income it is. Maybe you have to make updates to your product, or maybe you’ve invested in a rental property that you need to maintain. Whatever it is, it’ll take some work at the beginning of the process, and likely throughout.
Rationale for Building Passive Income
So, if setting up passive income strategies requires work, how is it any different than your regular job and why would it be worth setting up? Well, while your main job is likely your biggest source of income, it’s something that you need to actively participate in for long hours most days of the week. And even if you have a job that you enjoy, there’s a good chance that earning some extra income without having to invest the same amount of time as your normal job requires would be a welcomed bonus. This is the role that passive income may be able to serve in your life.
Passive income can be a welcomed source of supplementary money that can prove valuable in a number of different situations. It can be a lifeline during difficult times, like during a recession, or if you find yourself without a job. Getting another source of income up and running could also help you put some funds towards paying off your line of credit or any other debt you may have.
Some of the potential benefits include things like:
- Financial protection against job loss.
- Helping you to increase your wealth.
- Helping you to make contributions to your emergency fund.
- Giving you a potential source of income that may supplement your retirement fund if it runs dry.
How Much Money Can You Expect to Make?
As we’ve mentioned, passive income strategies aren’t designed to make you rich overnight, so it’ll likely be a slow burn to start. When money does start rolling in, the amount will be dependent on all sorts of different factors, like what this extra stream of income is, how much time or money you invest in it, and much more. While it’s hard to give a specific amount, if approached the right way, you may be able to have a steady additional stream of passive income that gives you a healthy financial cushion in the long run. This cushion can be an important financial fail-safe to have in place in case you run into any unexpected expenses that need to be dealt with right away.
4 Passive Income Ideas
Now that we’ve defined passive income and outlined how it may be helpful, it’s time to look at some specific areas you may want to target. We should point out that these are just a few examples on a long list of potential options, but they may be some of the more popular ones. Now, let’s dive into these four examples of passive income ideas.
1. Display Your Passion on YouTube
Do you have a hobby you’re crazy about? Maybe expertise in a specific subject? If so, YouTube is a great place to showcase that talent or interest, and potentially create an extra source of passive income while doing the things you love to do.
The world is your oyster when it comes to what you want your videos to be about. Whether you have a talent for music, want to show off your video editing skills, or want to start a tutorial to help people learn about a particular subject, there’ll likely be an audience for that. Once you’ve uploaded your video, you can then attach Google AdSense™ to them which will add advertisements. If people start to click on these ads, you’ll earn money.
Keep in mind that like all the examples of passive income ideas on this list, you’ll need to invest some time and effort into these videos before they start to pay off. You’ll need to create videos that people find appealing, you’ll then likely need to do some promotion for these videos on social media, and you’ll need to keep up a steady flow of content. However, if one of your videos – or your entire channel – becomes popular, it may keep a flow of income coming in for some time without much continued effort on your part.
2. Affiliate Marketing
Affiliate marketing is a relatively simple concept that can potentially make for a great source of passive income depending on a few factors – more on that later. Companies have products that they’re looking to sell, and this is where you come in. You’ll partner with a company that has an affiliate program, like Amazon or Target, and if you sell a product of theirs or direct traffic to certain product pages on their site as outlined by the company, you’ll receive a commission.
While the concept is simple, this method of earning passive income will be better suited to certain people; namely for people with blogs, their own active website, or established social media accounts. In short, this method of making passive income is best suited for those with some kind of audience or close network of people. You can try to sell the products of companies that have an affiliate program on any of the previously mentioned platforms and earn some percentage of the sale you make.
While it can take time to build up enough of a following to have an audience to sell to, finding products to sell won’t necessarily be difficult. There are thousands of companies, or even individual people with a product to sell that would be happy to pay you a commission to sell their goods. You may be able to go through a company’s site directly to be an affiliate for them, or you can visit intermediary sites like ClickBank.com that act as a marketplace for you to browse different products to potentially sell. If you’ve got a site, blog, or social media account dedicated to a specific topic, make sure you pick products to sell that are aligned with this topic to better cater to your audience and garner more attention. This way, you may be able to increase the flow of income from this particular passive income stream.
3. Sell Your Photography
As we’ve mentioned, if you have a particular talent or skill, there may be a market for you to sell it! If this talent is photography, there can be a path to a passive income stream for you.
If you’ve ever sifted through a magazine or scrolled through a blog article, you may have noticed the glossy photos of a smiling couple, a well-staged house, or any sort of image with a seemingly high production value. These photos are often purchased from stock photo sites like iStockphoto or Shuttershock. Platforms like these can offer you a space to sell the photos that you’ve taken, and could offer you a flat rate or percentage of every photo you upload that’s sold to another site or publication.
Through this method, you could post a photo that could bring in money for a long period of time as it continues to be sold. You’ll have to assemble a portfolio, post these images on multiple platforms, and that’s basically the extent of it. The specifics of the sales process should be dealt with by the website.
4. Sell an Ebook
It might sound like a lofty goal, but virtually anyone has the capacity to become a published author these days. While you may not see your book on the shelves of a bookstore, you can still sell a self-published ebook on various platforms like Amazon.
The beginning of this process requires many of the same steps an author goes through, namely starting with writing the book itself. You’ll then need to design a cover (or commission someone to do it for you) and upload it to an ebook marketplace. You can also sell your book on your own blog or website, or post it on a platform like ClickBank that will allow other people to be an affiliate for your product and sell it for you.
Leverage Passive Income Strategies but Don’t Fall for Get-Rich-Quick Schemes
Like we’ve already mentioned, there are plenty of passive income ideas out there, and we’ve only covered a fraction of the potential opportunities. On your search for a passive income stream that you’re suited to, look for things that have shown proven results in the past. Do your research and make sure that it’s a well-trodden path that people have been able to leverage before you. Just remember that if something promises an easy path that’ll take minimal effort and get you immediate results, it’s probably best for you to stay away from it.
Passive income strategies can be a great way to add to your primary income, but they do require some sort of investment upfront. While it may take time and effort, in the long run, it could prove to be a worthy and fruitful venture!