Before we go into passive income ideas, we first have to define what passive income is. It’s in the name! To be passive means you are not active, which means you are either sleeping or you are doing something that doesn’t require much energy or input.
So, what is passive income?
Passive income is income that you earn without doing much to make it. Some passive income ideas take hard work to start with but can later bring in the money with less or no effort at all. We will look at the examples of passive income ideas since it’s our focus in this post today.
There are other types of income and it’s important that we define them all so that we will well know the difference between them. Being financially knowledgeable puts you at a greater advantage. A lot of poor financial decisions are made out of a lack of accurate knowledge about money. That’s why you will need to subscribe to this blog so that we keep you updated and taught about money.
What is active income?
Active income is income that you earn with an effort. It’s the opposite of passive income. One good example is the traditional 9-5 Job where you trade your time and effort for payment from your boss.
Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also revenue that comes from real estate investments or business investments where you don’t have to be present to earn it.
Portfolio income is generated by selling an investment at a higher price than you paid for it. Some people refer to portfolio income as “capital gains,” because that’s how the money is taxed by the federal government.
Examples include income from;
· Trading (buying/selling) Paper Assets. These include; stocks, bonds, mutual funds, ETFs, CDs, T-bills, currencies or other types of futures/derivatives. Buying and Selling Real Estate
· Buying and Selling of any other Assets like Antiques or cars, for example, or other types of collectibles that have appreciated in value
Why Are Passive income ideas the best choice to make money with little or no effort?
Even if you have a very high paying job today, it’s never good enough to put all your eggs in one basket. Today lots of jobs are being replaced by machines. For example, most supermarkets now have self check-outs, no more need for tellers. The same applies to banks; we now have machines that where you can manage your own account, you can deposit money, withdraw and make a transfer. You might say that your own job is not yet automated – Are you going to wait till its automated? No one has 100% job security today, so you cannot afford to put all your eggs in one basket.
Reasons you need to choose passive income.
- It gives you extra time. In other words, it will save you time.
- It will help you get rid of fear for what the future will be like.
- Helps you do what you love to do rather than do anything just for a payment.
- You can determine how much you want to earn.
- Gives you the freedom to live and work anywhere in the world.
How Much Can You Earn?
If you read a few stories about passive income ideas, you might be under the impression that you can wake up to a get rich quick strategy. Its never like that! You will have to put in the work to start with. For example, after reading this blog today, you will have to make a choice. Either to wake up and start doing something about the life that you dream about or to continue dreaming of the day you will win the lottery. One day you will notice you are 90 years old and will realize that you never actually lived your life but lived someone else’s life, working for them day and night, only for peanuts!
So, how much you are going to earn depends on how much you are willing to put in especially at the start. You will always determine how much you earn by how much you put in. Good thing is that since its passive income, you may not need to put in any effort later (between 1 and 3 years depending on the niche).
Now, let’s go to the passive income ideas that can make you money with little effort.
1. Writing books.
Writing books can create serious passive income. Even though it will require effort in the beginning, the book that you have written and completed will be yours and will sell all your life depending on how you do your marketing. The internet has made things easy today- you can create your own website and have your books selling on there.
To start with, you can start with e-books. With these, you don’t have to write 150 pages to be successful. You can write as few as 20 pages, as long as the content is sound. Amazon has an amazing way to sell e-books if you go down this lane.
The most cost-effective and efficient way to do Amazon self-publishing is through e-books, which allows people to download your work directly to their devices, like the Kindle e-book. It also has print on demand service so you will not need a publishing company to start with. This means you can write a book and have it sell in e-format and in a printed format easily but with passive income potential before long.
2. Drop Shipping with Shopify
Drop shipping is a way to sell products online without having to keep inventory yourself, having no physical business address. One of the most common platforms used most commonly used is Shopify. With shopify, you can easily create an online store and add products to it using Oberlo. You can always get products from places like Aliexpress. This is a great way to make passive income but has a lot of work that goes into starting up. If you choose the product rightly, you will have crazy sales and fulfill the orders with oberlo with in just a few clicks.
The key to this mode of earning passive income is choosing the right product to sell. How much you will get from drop shipping will depend on the type of product you sell. You don’t have to like the product but if it’s what is trending then you might have to go for it. Its also very important to spend some time doing product research before you spend money on advertising a difficult product. You can start an online store easily with Shopify here. You will also take advantage of their 14 days free trial period.
3. Starting a blog.
Starting a blog is one of the easiest amongst all passive income ideas because it doesn’t need a lot of money to start. This will however not blossom overnight but it’s a worthwhile investment. You will have to create content that users or readers like. The more people you have visiting your website, the more money you will be able to earn.
The key here is choosing the right niche. Any niche can really make you money if the readers like the content, but I must emphasize that some niches are easier to monetize than others.
Blogging, however, requires consistency. For example; If you decide to write a post every week, then you will have to keep up the habit of posting every week and if possible at a particular time.
You can start a blog with these easy to follow steps. I recommend using Bluehost for your hosting, I have used it for many years and its one of the most reliable hosts.
Start your journey to earning passive income by starting your blog. Join our Free 12-day email course by subscribing to my list.
Ways to monetize your blog
- Attracting adverts from top corporate organizations which they will place on your website and in turn pay you for it.
- You can also earn money from your blog using Google AdSense, whereby they will place advertising on your blog which in turn will be paid for.
- Offering subscription services to members.
- You can sell your own products on your blog.
4. Become an affiliate marketer.
This is one of the most sustainable among all the passive income ideas. It is probably one of the easiest ways as long as you have the right guidance and are willing to take immediate action. Most of the lessons you will learn as an affiliate are from being active rather than doing so much research. You can sell products that you don’t even own through referral links where people click and purchase. In turn, you are paid a commission by the owner of the product. If you have a website already, you can start your journey as an affiliate marketer. If you don’t have a website you can start one here.
Affiliate marketing is rather easy. The problem is that starters mostly look at this as a one-time way to earn money. They often get discouraged instead. You can earn recurring commissions from affiliate marketing if you recommend good products using the right content. I will give you an example;
If you have a blog (you can start one here) and your readers like the content you put out, if you recommend a product, they are most likely going to take the product. All the visitors that will visit your website in the future are all potential customers.
5. Rent out your house or just a room in your house
This is another way in which you can earn passive income to get you out of the rat race. There are so many ways in which this is possible and one of the most common is through AIRBNB. Airbnb is a website where people list the available space in their house when it is available and for how long. Since so many people travel for many different reasons, they are able to rent cheaper accommodation in the locations of their choice depending on whether they are available.
I have traveled a number of times and didn’t have to use an expensive hotel, I stayed at a home where they had extra an extra room. If you always treat your visitors right and get good reviews, you will always get more visitors because most people consider reviews before booking accommodation.
Why do i call this passive income?
I call this passive income because you do not have to cook for the guests unless you offer to do so in your listing description. All you have to do is create your listing, welcome your guests and get paid.
“Accidents are rare on Airbnb, but just in case, we’ve got your back. Our Host Guarantee provides up to £600,000 of coverage in case property damage occurs, and our Host Protection Insurance provides liability coverage for up to £600,000, for every listing. We also offer 24/7 host support—because your peace of mind is priceless.” – Says Airbnb website.
6. Buy an Existing Business.
This can be another way of earning passive income as you will be buying an established system. I recommend that you buy a business in a niche you fully understand. You will need to put time and effort into finding the business that’s right for you. Buying a company that’s already established may be quicker and easier than starting from scratch. You also have to consider the fact that the costs involved in buying an existing business can be substantial.
Other advantages to going in this line of passive income include;
- Some of the groundwork to get the business up and running will have been done.
- If the business has a proven track record, you will always find it easier to obtain funding.
- Market for the product or service will have already been demonstrated.
7. Rent it out.
You can make passive income by renting out lots of things in your house. For example, you can rent out items like; step ladders, extension ladders, party tents, tables and chairs, utility trailers, log splitters, chainsaws, and so many others.
Thousands of people every day are looking to rent a variety of items. Websites like Craigslist and gum tree can be a great place to advertise your items for rent. You can even rent out your car when you are not using it with a company like Turo. This is a great way of earning passive income because you don’t even need a website to do it. You will, however, have to put some measures in place to ensure your items are always returned in time and that they come back in good shape. One of the ways is allowing borrowers to leave a deposit so that damage is automatically catered for.
8. Start a rental business.
I have separated this idea of earning passive income from the one above because in this case, you can decide to be more specific. You will also be buying equipment specifically for renting out. For example; Party equipment like tents, chairs, foldable tables. To do this you will be better off with your own website so that you can take payments for bookings and also be able to advertise your business.This can be a very serious venture as you will not need a lot of staff to manage it.
It’s advisable that you buy quality equipment so that you minimize breakage. You can always order for samples before purchasing in bulk. Orders can be made from Alibaba-China online or you can always travel and ship the items yourself. If you don’t want to get into the whole process of shipping then you could buy from an importer. You will also consider renting a store where these goods will be stored. You could always hire a van whenever you have an order or the customers can always pick up the equipment themselves. Insurance in case of damage is worth considering since you may never monitor your equipment 24/7 while they have been rented out.
9. Create online courses.
Online courses can be a great source of passive income. Even though this way of earning passive income involves hard work at the start, you will enjoy the benefits for so long as long as you keep updating your courses. All you will need is to create content that has value, in other words, it should help meet a need or solve a problem.
If you know how to create a website with word press, you can create step by step content that helps people start their own websites. This could be in video, in writing such as a blog or an email course. Another good example could be videos on attaining a stable body weight or a particular type of work-out. As long as you put in effort and creativity, people will be willing to buy your courses.
Creating online courses can even make you more passive income if you have your own website or blog.
10. Buy an existing online business.
The most popular option is using websites like Shopify exchange marketplace and Flippa. These are great places to search for available opportunities, as you are able to see what is available in the industry or niche of your choice. It’s important that you buy a business in a niche you have good knowledge in.
Yes, even an existing online business will take you some time to grow, probably not as long as starting from scratch. When you use an online marketplace, you also get accurate data to analyze which will help you reduce the research you have to do. For example, Exchange by Shopify pulls the listing information straight from their data so you know, without a doubt, that the revenue and traffic data being presented is 100% accurate.