What Is Passive Income?
I’m sure this isn’t the first time you’ve come across the term passive income. But, like many people, you may be confused as to what passive income actually is.
Passive Income is money your earn on a recurring basis, which requires you very little or no effort to actually make. In other words, the money you make is passive.
For example, if you keep money in a bank account that earns interest, providing you leave the money in the account, you’ll be paid interest without you actively doing anything. Although the interest earned may be only 1% in this example; this is still a form of passive income.
How Much Passive Income Can You Earn?
The truthful answer to that is…it depends.
I’m sure, at some point, you’ve come across an advertisement promising to show you a secret way to make $10,000+ passive income by next week. Although this can happen, it’s important to know that this is extremely rare; and won’t be the case for most people.
In my experience, how much passive income comes down to 3 things: how much, how long and what you invested in.
How To Start Building Passive Income
Streams of Income
Most millionaires have 7 streams of income – most of which will be passive. Now, I’m not saying to start with 7 different streams, but it’s good to understand where you need to work towards. If you’re completely new to this, 1 stream of passive income is always a good place to start.
There’s tons of passive income opportunities, some are easy to start, some require more capital and some require initial effort. You’ll need to figure out which passive income streams are best for you; based on your budget, time and interest.
If you don’t have any money to invest in building passive income, you can relax; there’s many ideas that require extremely little money to get started. If you’re broke or in debt, it’s always wise to get a job, and pay off any outstanding debts, before you focus on building passive income.
Passive Income Ideas & Opportunities
Below I have a list of ways to generate passive income. Some require more effort to get started than others. Some require more money. I’ll supply the list of ideas; the rest is up to you.
This is one of the easiest and least-effort-needed ways to generate passive income. Investing is well established and people have been investing in years.
Yes, its true – You can make a fortune through investing. Just look at Warren Buffet; one of the richest men on earth, who made his fortune through investing. HOWEVER, unless you have Buffet’s balls, and you’re prepared to put in the same work, time and dedication as him, the chance of you earning the same is slim.
That being said, in my opinion, investing is a relatively low-risk way to make passive income…
What kind of investment you make and how much you invested will determine how much interest (passive income) you’ll earn. It’s important to know, some investments will earn you a higher interest, but will come with higher risk. Some investments will be safer, but the interest may be a lot lower.
Rent Rent Rent!
You don’t have to have an entire property to make some extra cash! There loads of passive income opportunities from renting things you already own. Here’s a few ideas:
Rent Your Spare Room
Hotel prices aren’t always cheap; especially for demanding locations and cities. If you live in a big city or desirable location, theres a good chance are someone will pay to rent your spare room. It’s a great way to make some extra income; and, with services like AirBnB, it couldn’t be any easier.
AirBnB connects people in seek of an affordable place to stay with those who have a spare room to rent.
Rent Your Entire Home
Not every online business is a passive income opportunity; however there are some that can be hugely profitable, scalable and PASSIVE.
E-commerce & Dropshipping
With the advanced technology and online platforms available today, setting-up your own e-commerce site is easier than ever before. How passive things become with e-commerce all depends on what you’re selling.
Selling your own products means you’ll have to manage inventory, production and expenses. Although this can increase your profit margins, I wouldn’t necessarily call this passive income; as it will require a fair bit of attention and effort.
HOWEVER, you don’t have to sell your own products You can re-sell someone else’s products. This is call dropshipping – something that has become quite popular recently.
Shopify: Whether you decided to sell your own products or someones else’s, you’ll need an online store. Shopify has made that easier than ever!
Their provide ready-made professionally designed templates; which means your e-store could be up and running in a matter on minutes.
They also can provide tools such as shopping carts, coupon codes and various payment processes. It’s no surprise why so many “professional e-commerce sites” are currently using the Shopify platform.
Start a Blog
Agreed, it’s not the quickest way to start earning passive income; and it does require a bit of upfront work. However, creating blog that drives niche-specific traffic can turn out to be an automatic money-making machine!
They key to starting a successful blog is to create blog posts that are rich with value and knowledge. In return you’ll build an audience that trusts you and will follow your blog.
Successful blogs who have managed to generate traffic can make a fortune through placing advertisement and relevant affiliate links across their blog. The awesome part about a blog is the fact you can still generate traffic and earn money from a blog post you wrote years ago. This is what makes a blog so passive – over time.
Want to start a blog? Check out my step-by-step guide
Start a YouTube Channel
Think of a YouTube channel as a visual version of a blog. The principle ins the same. Create a YouTube channel, make videos around a specific niche and drive traffic (views). Just like a blog, a successful YouTube channel has the opportunity to earn ad revenue. Plus, you can promote or review affiliate products.
Again, starting a YouTube channel will require effort in the beginning, as you will need to create the video. However, once a video is published, you can potentially receive views and earn money from those videos for years to come.
Lifestyle & Shopping
Claim That Cash Back
Okay, so you’re not going to get rich from this and is does require you to purchase something first. The reason I’ve included it is because it’s a 100% effort-free way to make money (not a-lot of money, but still money). Cashback cards give you a small percentage of your purchase back as an incentive for using their card or service. Some cashback cards will give you money back on all purchases, others will give you money back on specific categories; such as gas, groceries etc.
Reward Credit Cards
Similar to cashback, reward credit cards allow you to earn from your purchases; without lifting a finger. The main difference between cashback and rewards is that fact rewards are usually given in the form of a points, which is determined by the credit card company.
Now I know what you’re thinking…why would I want reward points. Well, these points can be traded for products and services such as iPads, clothes, shopping, vacations & flights. So, it may not be money, but in some cases it can be as good as money.
The types of reward points you earn, how many you can collect, and what you can spend them on, all depends on the type of credit card you have. Some credit cards will give you bonus points just for signing up.
Make Money While You Eat
Eat out often? This may possibly be the best idea on this list for you!
Seated: This amazing app for iOS & android sounds too good to be true…but it’s 100% real! Discover the best restaurants in your city. Use the seated app to book your reservations; and each time you complete a reservation, you’ll receive $10-$50 credit for Amazon, Starbucks or Lyft. Awesome right? Minimum effort required.