Passive income ideas can become so lucrative that people wind up their full-time 9 to 5 job just to focus on their passive income stream, converting it from passive into active. Setting up a passive income stream can help people achieve stable finances and acquire a retirement plan.
But first, let’s talk about what passive income is.
What Is Passive Income?
Passive income is basically money emanated from rental properties, investments, stakes, or royalties that do not call for active involvement from the earner daily. This income stream is opposite to the earned income, or active income, and it is also different from a “side hustle,” which typically demands a consistent effort.
Let us make it clear— there is no such thing as a completely passive income. There is no way to make money without doing anything at all.
Income streams that are considered “passive” are those that require a lot of work upfront to get started and light maintenance once they begin to pay off. Passive income is essentially the money that isn’t tied directly to your time.
Individuals usually set up a source of passive income alongside their full-time job with the hopes of achieving financial independence. Having a residual income enables people from different backgrounds to create wealth with little to no effort. This permits earners to spend more time on other areas of interest.
For instance, you have published a book that has made it into different bookstores. Every time the book sells, you would be able to earn money from royalties— this is passive income.
Because you have created something that can generate money on its own, you can earn money while you sleep. However, it typically takes a very long time for passive income to succeed.
In this article, we are going to talk about the six best income ideas, how hard to get started, and how hard it is to maintain them. Here are the passive income ideas that could make you thousands of dollars per year:
1. Invest in stocks and shares
Investing is a way of giving money value. If you have extra funds that you can afford to lose, one of the most common and easiest approaches is to invest funds where you may see increases in the market.
When you give your money to a company in the form of buying stocks, it only makes sense that you would get some sort of return for that kind of investment.
A lot of people tend to avoid investing since they want to go for something that can guarantee that they will not lose their money— most of the time, in a savings account. If you have savings that comfortably rests in your account, it won’t actually do much for you because banks would only give you less than 1% interest.
You could potentially earn a larger amount of money in the amount that’s just otherwise sitting in your bank account. One of the best options you have is to invest your money in index funds like S&P 500, which is a stock market index that tracks the top 500 biggest companies in the United States.
2. Build a community
This passive income idea is some sort of community model or what’s known as paid membership. Although things sound a bit sophisticated, this could actually be a bad idea, especially if you don’t have an existing audience.
If you are interested in making money out of community building, you should first acquire an audience by creating content that has been valuable over a long period of time. Your audience must have must like and trust you, so when you endorse something, there’s a big chance that they would go for it.
Another approach to this passive income idea is to create a value proposition that is so irresistible that people would be willing to pay for community-like service for it.
3. Start a podcast
Podcasting is generally way easier than starting a YouTube channel, but it’s also more complicated to grow compared to YouTube since it does not have its own algorithm that helps them grow.
Kicking off your journey to podcasting won’t be very difficult. You can just literally go to a Podcast site, sign-up, and then literally use just your phone to start a podcast.
However, you should keep in mind that podcasting isn’t completely a passive income stream since it mostly relies on brand deals. Those who do podcast depends on sponsorship or bran deals since there’s no Google AdSense that would that they could profit from.
You can make around $18 for a 30-second ad in a podcast and $25 per thousand audiences.
4. Sell digital products
Another passive income idea you could dive into is selling digital products. These products are those that you could create one time— for instance, an e-book, a download, an app, etc., which you could sell multiple times.
Since digital products do not require much capital to venture in, you kick off your journey without troubling yourself too much about your finances. The most challenging problem you might face in this passive income idea is that the market is already highly competitive, and you need to be a real marketing badass to overtake them.
5. Become an affiliate marketer
The latter point is not far from affiliate marketing, but this one is just simpler and less complicated since you won’t need to make your own product and inventory while selling. A third-party entity would be the one responsible for processing and shipping out the product a customer ordered from you.
If you want to try out affiliating marketing, many online platforms accept affiliates to grow their business while also giving you a chance to grow your pocket. There’s ClickBank, Amazon Associates, and a lot more.
The most important tool you possess to make money in affiliate marketing is your hop link or the referral tracking URL. Fetching an affiliate program isn’t that challenging, but building an audience to promote your chosen products requires the utmost effort.
