What is Passive Income?
Passive income can be defined as income that you make that requires little effort. Your primary job (or jobs) that you work would be considered active income, and passive income is a great supplement to your active income. Passive income is also a good thing to have in the event that you become unemployed, as the COVID-19 pandemic has shown us how unpredictable life can be. Passive income can also be enough money to allow you to take some time off from your day job or to quit your day job altogether. So what are some of the best ways that you can start earning passive income?
#1: Sell Informational Products
If you have extensive knowledge of a particular topic, you can write an ebook detailing your knowledge in a “how-to” or informational form. You can also sell online courses in video form or on websites such as Udemy or Skillshare. When it comes to selling an ebook, odds are you’ll see more success through direct selling, but there are platforms that will promote and sell your ebook for you. Another selling tactic is to offer a small portion of your information to the public for free but then have them pay to access all of the information.
#2: Start a Blog
You may wonder how it is possible to make money with a blog, but there are many successful bloggers earning passive income. It’s actually a lot simpler than many people realize. Most independent bloggers make their money through companies running ads on their blogs, sponsored posts, and other monetization techniques. There’s no set income rate for independent bloggers, as they can make as little as $200 a month to $15,000 a month— it all depends on the quality of the blog and how much time you put into making it successful. If you have a knack for writing engaging content, then consider starting a blog on a blog-hosting site such as WordPress or Blogger.
#3: Start a YouTube Channel
It may seem like these days, everyone is starting a YouTube channel, but it can actually be a good way to earn some passive income. Similar to a blog, it’ll take some time to get started, and you’ll be able to earn some money through advertising and sponsored content. Similarly, you can also earn some of your money from affiliate marketing, where you’ll get paid to promote another company’s products on your channel and other social media platforms. Many YouTubers also promote products and monetize their other social media platforms, such as Instagram and TikTok.
#4: Invest in REITs
If you’re more of the business type and less of the creative type, then investing in REITs (real estate investment trusts) may be a better option for you. This isn’t as risky as investing in stocks because a company owns or finances income-producing properties, so they assume more of the investment risk. However, like with any type of investment, there is still some level of risk when it comes to REITs. There’s still a possibility of losing money, but if you do your research in order to invest in the best REITs, you’ll likely see a profit. You can also look for alternative investments that have a high potential for growth with low risk.
#5: Invest in Rental Property
With housing prices being historically low due to the COVID-19 pandemic, now is a good time to invest in rental property. You can choose to purchase a single-family home, duplex, or even a quadruplex. In order to ensure that you’ll see a return on your investment and earn passive income, make sure that the property you choose is located in an area that is seeing a lot of growth, so you’ll know that people will be willing to move there. You can finance the property on your own if you’re able, but you can also partner with a lender who specializes in rental property loans.
There are ways for everyone to earn passive income, depending on their interests and abilities. You can even turn your hobby into a way to earn you extra money on the side.