WHAT EXACTLY IS PASSIVE INCOME?
Passive income is money you make without having to put in a lot of (or any) recurring effort to keep it going. Typically, most activities or ventures that generate passive income require an initial investment of time, money, and energy to set up and can sustain themselves without much additional work.
For those with an entrepreneurial bent, as well as those who enjoy a flexible lifestyle, passive income is something of a holy grail. It frees you up to pursue your passions, knowing that you have a bit of cash coming in no matter what. Here are a few ways you can set up a passive income stream.
BUILD A BLOG OR YOUTUBE CHANNEL
Running a blog or a YouTube channel is one of the most popular contemporary ways to generate passive income. Food and travel blogs are typical examples, but you can set up a blog to discuss anything under the sun, as long as there’s a market for that kind of content. Bloggers make money off their websites by placing ads on their web pages. AdSense by Google is one of the most popular platforms for bloggers, but there are numerous other ad networks you can explore to monetize your platform. This option will require a bit of effort to set up and build an audience, but once you’ve built some momentum, you’ll keep seeing some money come in as newer audiences discover your older pages.
A similar option, and a more engaging one, is to be a YouTuber or even a Twitch streamer. The initial YouTube channels were set up either as vlogs or as a creative outlet, but as it’s become more mainstream, the level of production quality and the professionalism that goes into maintaining a channel have improved dramatically. It far outstrips even streaming platforms like Netflix and Hulu when it comes to viewer eyeballs. And similar to blogs, new viewers on older videos will keep generating ad income for you over time. Quality content often has significant rewatch value as well for returning viewers.
Affiliate marketing is a method used by brands to sell their products by roping in influencers or partners as sales channels. As a sales agent, you receive a commission or a profit for every product you sell. In many cases, affiliate partners even set up their own online or physical stores to sell other brands’ products. The brands get more sales, you open up an income stream, and the consumers can find relevant products more easily; it’s a win-win for everyone. And the best part? Nearly every large brand has an affiliate marketing program in place.
An interesting option for you to explore is the beauty space. Demand for beauty products tends to remain consistent regardless of economic upheavals, including during the pandemic. If you’re interested in the industry, beauty can be a great option for you to maintain a steady income.
If you’re worried about initial investment, you’ll find many payment plans available to you, as well as personal loans for those with a low credit score.
Rental income is a great way to make extra cash on the side. Indeed, people even do it full-time as property investors. We do advise thorough research before embarking on this venture, as property values fluctuate over time, and there is a lot to learn about this field. However, if you do your homework, you can zero in on properties that consistently generate good income for you.
The old cliche — location, location, location — holds just as true today as it did a hundred years ago. Find properties in areas that won’t become irrelevant with time. Cities that depend heavily on any one sector — like Detroit was on automotive manufacturing — are a cautionary tale. Also, work out your financing. How much do you want to make a year in rental income? Next, work out how much it’ll cost to acquire the properties in the first place. If you’re buying the property, calculate the cost of a mortgage per year, or if you want to sub-let, ensure you’re able to charge more rent than you pay in the first place so that you will turn a profit.
If you have a spare room in your home, you can always register as an Airbnb host. It’s a great way to make money off space that doesn’t cost you anything anymore.
CREATE AN ONLINE COURSE
Since the advent of the pandemic, learning from home to upskill or just explore an interest has become incredibly popular. All signs suggest that it’s a trend that’s here to stay. To capitalize on this trend, many people have begun to offer an online course for the knowledge-thirsty masses. It’s a good way to leverage your own experience or reputation in a particular field and set up a parallel income stream. There are several platforms out there that let you offer and advertise a course you’ve created. Setting up your own e-learning platform, if you’ve found an interesting untapped niche, is of course an option too. This does require some upfront investment, but don’t worry, startup capital isn’t hard to come by. It’s quite straightforward to enroll in an accelerator or investor program. And the best part? You can do it all from the comfort of your own home. Sourcing funding online is not at all difficult.
IS PASSIVE INCOME WORTH IT?
It’s not uncommon to feel overwhelmed by the amount of work required to get your passive income venture up and running. But it’s important to remember that this is a one-off. By definition, passive income doesn’t need active effort. People even have full-fledged day jobs they attend to while benefiting from extra money. It’s also a great way to avoid burnout at work if you’re paid hourly at your job. If you have an entrepreneurial venture in mind that you want to build capital for, without relying on external investment, passive income lets you do that as well. And, it’s of course perfect to keep adding to your nest egg and set up an early retirement.
COVID-19, more than anything, has really brought into focus the fragility of mainstream jobs. Having multiple income streams can be a huge support during lay-offs or if you just need to take some time off for yourself. Besides, more money, minus the effort is never a bad thing.