We are all granted the same 24 hours in life. The great difference maker is how we decide to capitalize on the opportunities given to use within this finite amount of time. When it comes to making the most of the time you’re given, generating passive income takes the cake.
There are three broad categories of income. First is active income, which is your primary source of income derived from wages or salaries paid for direct labor. Second is portfolio income which is generated through investments and long-term instruments. Last is passive income, which is derived from business activities which the earner is not directly involved in.
In this guide, we will be focusing on the latter of the three forms of income: passive income. Passive income is a fantastic way to make money because it can be generated without incurring opportunity costs. In other words, you can make passive income without having to sacrifice anything in return (such as your time or labor).
Do you want to start earning a passive income or embark on your journey toward financial freedom? If so, read on to discover the top passive income ideas for generating legit new revenue streams. With these great passive income ideas in mind, you can become financial free in no time.
What is Passive Income?
Passive income is income that is earned with little to no effort. Rather than active income, passive income does not require physical labor or effort to generate it. Passive income does not usually require the income earner to remain active to continue generating it. In most cases, passive income is taxable and needs to be claimed on one’s income taxes.
It may be more helpful to define passive income in relation to what it is not. For instance, passive income is not dividends received through the profits on a real estate investment (which would be considered a portfolio income). Rather, an example of passive income is the money generated by a business one owns but does not provide labor or oversight for.
Today, passive income is considered a luxury to many. This is because a passive income allows income earners to literally earn money while they sleep, vacation, or watch television. When one has a full passive income, they have achieved financial freedom in the truest sense.
The Top Passive Income Ideas
Now that we are all familiar with what passive income is, and what it is so sought after, let’s go over the best passive income ideas so you can start earning passive income. Note that this list is far from exhaustive, as there are new ways to generate passive income that pop up every day in the digital economy. The key, however, is to get creative and not be afraid to take risks.
If you spend several hours a day reading content on the Internet, you probably have at least blog that you follow. Today, a huge percentage of the written content online is part of someone’s personal or professional blog. Thanks to monetized websites like WordPress and Wix, you too can earn money by writing a blog.
However, you cannot simply start a blog as a casual hobby and expect it to generate real revenue. Rather, you need to select a niche topic that you enjoy and are willing to spend dozens of hours on every week. This is inarguably the most important aspect of starting a successful blog: choosing a niche that can lead to a large and devoted audience base.
Once you have your niche selected, you need to be confident that you can produce content every day (or at least close to once per day). After several years of writing content and advertising it appropriately, you should develop a loyal fanbase. This fanbase will allow you to collect serious income through Google AdSense and other pay-per-click ad programs.
Another great passive income idea is to write an ebook and publish it online. Today, Amazon’s Kindle Direct Publishing (KDP) program is the most popular form of ebook publishing since they allow you to set your own price and take in a high royalty percentage on every sale. If you manage to write several ebooks, you can earn even more money.
While writing a full-length book may sound daunting at first, it is likely far easier than you imagine. Many bestselling ebooks on Amazon’s KDP program are under 10,000 words in length. If you write one thousand words per day, you can easily finish a draft version of an ebook in less than two weeks!
Like any craft, writing takes time to perfect. Do not be discouraged if your first ebook does not sell. Rather, do research on topics that people like to spend money on (i.e. How to Retire Early, How to Achieve Financial Freedom, etc.). If at first you fail to generate book sales, try writing about a new topic.
Online Course Creation
Do you have an important skill that can be taught through audiovisual aids? If so, you should consider creating an online course for learning and teaching websites like Udemy. This is an especially lucrative passive income option is you have a strong grasp of finance, web design, graphic design, accounting, mathematics, or coding.
There was once a time when you could create a website and generate a strong passive revenue stream even with a small following. However, those days are long gone and have now been replaced by the economy of mobile apps. Even without a massive cult following, a well-built mobile app can generate thousands of dollars in sales every month.
Although it will take some time to learn the coding languages required to build an app, the learning process is worth it. Once listed the iTunes App Store and the Google Play store, you can earn lots of money even if offered for free. This is because ads can be run, as well as in-game purchase options, that provide alternate revenue possibilities.
Have you always wanted to become a television personality? Finally, you can! All you must do is start your own YouTube channel. Although once reserved for the Hollywood elite, you can start broadcasting to millions of people around the world with the use of a regular smartphone camera and some basic video editing skills.
The key to creating a successful YouTube channel is to capitalize on a niche genre. In our experience, many of our readers have seen success by creating video tutorial series on how to do everyday tasks from make-up applications to driving tips. With enough content posted on YouTube, you can start a partnership and earn money on ad revenue.
One of the best ways to earn a passive income is to rent out a room in your house. If your house or apartment has a spare bedroom that is not being used, consider using popular short-term rental apps like AirBnB to earn some extra income on the side. In high-value real estate markets, you can make enough to live simply by listing an extra room in your house.
These days, affiliate marketing partnerships are among the best passive income ideas if you want to make big money without putting in big effort. Affiliate marketing partnerships are fantastic if you have a large social media following and won’t mind promoting products or services to them.
Today, Instagram is the most common platform for generating a strong affiliate marketing partnership. The best way to break into this space is by building a large follower base through “hashtagging” and zeroing in on a viable niche theme for your channel. Those with followers of other 100,000 can enjoy thousands of dollars in affiliate marketing revenues per month.
The eCommerce market is booming faster than ever before. The days of brick and mortar dominance are behind us, as Internet-based shops and outlets are thriving on Amazon and other major shopping platforms.
To maximize returns, you can operate a dropshipping system in which products that are bought and sold on your store are never kept physically in your possession. Rather, they are shipped to your customers door from their original supplier. As the middleman, you turn a profit on the added premium you charge your customer for the product.
Open an Etsy Shop
Selling digital-only products on Etsy is a fantastic passive income option for those who want to turn large profits in short order. If you have graphic design or visual art skills, consider selling digitized prints of your artwork on an Etsy store and automate your sales processes. In doing so, you can earn thousands of dollars a week if your art attracts a large enough audience.