Passive income is money that you earn and don’t have to work for continuously. This means you may do all the work upfront and then spend some extra effort to maintain it.
The goal is for your business to generate a steady stream of revenue. For example, if you offer discounts on your courses you may continue to drive income. All you have to do is monitor and update the course information when appropriate.
You may have heard the phrase “earn money while you sleep” and that’s what pulls people to create passive income.
Setting up a passive income can be as easy as turning your hobby into something marketable (blog, course, ebook, video series, online store). If this is not something that appeals, it’s also possible to invest in income-generating opportunities (property, shares etc.).
What Is Best Active Income or Passive Income?
All income streams can be considered of equal importance. However, passive income is the strongest form of income stream to work with when working towards financial independence. Active revenue, on the other hand, is weaker at providing financial security because you are restricted to job roles and hours worked.
Active income is the salary you earn as you work, in whatever role that may be. To continue to receive an income, you need to continue to work in your role. If you quit your job, you won’t get paid. Your time is your key resource here, as that is what you are being paid for.
Passive income doesn’t have to be continuously worked for and there is the potential for the money to keep coming in for a long time. If you aim for financial independence, focusing on passive income may be your best way to do this.
Consider the caveat that, while an initial outlay might allow you to create a passive revenue stream, you’re not making less of a commitment than someone who puts their time into their work. It is not any easier to earn a passive income comparable to active income.
7 Top Passive Income Ideas
Start a Dropshipping Store
A dropshipping store is different to a traditional shop as it does not keep its goods in stock in its warehouse and there is no physical store. Customer orders are taken online and may be fulfilled by either another retailer, manufacturer or wholesaler. The orders are then sent straight to the customer.
Dropshipping, allows you to sell popular items to customers all over the world. You may offer a variety of goods of your choosing. You can use companies such as Shopify to start your store and have total control.
Dropshipping is a great way to start your own business and set your pricing. With dropshipping, you have the most control over your earnings out of all passive income options listed.
Run a Blog
This is one of the more common types of passive income that you might be aware of. It’s made many businesses money by providing people with great information, while also linking them to merchants & courses, sponsored posts & goods, book deals, and other methods.
Building a blog is not an easy task, but it can become one of the most powerful tools to connect with your target audience. You can build organic traffic, use social media or generate an email list.
One of the biggest advantages of starting a blog is that you can convert one small business into many different streams of stable passive income. Blogging is a reliable way to make money through a side hustle or a full-time venture.
Income from a blog may include the use of sponsored posts, link selling, adverts, affiliate links, content writing or instant downloads.
Create a Digital Course
If you have in-depth skills and knowledge in a certain area, you may be able to create an online course. You’ll want to make sure you offer your students and customers access to some of your secrets & tips, whether you create a course all on your website or through platforms like Udemy.
It’s possible to earn a lot of money by selling a course on your website if you’ve followed the blogging tip above and grown your audience.
Instagram Sponsored Posts
If you enjoy Instagram, you may be inspired to produce your content to generate some passive income.
The greatest thing about Instagram is its huge audience. Your account could be a lifestyle account or a specific niche such as parenting, or side hustles, or gaming etc. Whatever the focus of your account you’ll discover like-minded people and followers.
The key to growing a large number of Instagram followers is to be authentic and consistent in the type of material you put out there. Stick to one area so that people know what they can expect from you and they’ll keep coming back for more.
Include your email address in the Instagram bio or a ‘DM for collaborations’ comment. As your account and number of followers grow, sponsored post requests will come in. The more engagement you have from your audience, the more companies will reach out to you, so be sure to create interesting and relevant content.
Affiliate Marketing
The most cost-effective method of earning recurring affiliate commissions without having to spend money on advertising is through blogging.
Affiliate marketing is an in-demand form of revenue in the new age. Every big company has affiliate programs, so you don’t have to worry about selling anything that no one knows about or want to purchase. The great news is that you will get commissions for selling some well-known products and get paid!
One downside is that you only get a commission on each sale. Shopify has a referral program but other companies give small bonuses for referrals.
Create YouTube Videos
YouTube is a perfect money maker, with dozens of ways to generate revenue through ad income and collaborations. You can also make earnings from sponsorships and product placements on your videos.
Building a successful YouTube channel is a long-term commitment. There’s not much more to it than that. Once you consistently and continuously produce content for an extended period, you’ll start to see passive earnings.
Sell Digital Products
If you have a creative side and you want to develop products instead of reselling someone else’s, you could make digital items.
You may be thinking of opening a Shopify store to sell your digital products online. This would mean taking an e-book, video course, PDF, graphic design or stock photo you’ve created and turned into digital goods that people can purchase.
Selling these items can be truly passive, as they can be automated with instant downloads through different companies online.