Do you want to make money in your sleep? Do you want to achieve financial freedom and location freedom? Then you need to start earning passive income. How to do it? Keep reading until the end and find the best 10 ways to make passive income this year
There are a number of ways to earn passive income, but some are better than others. In this article, we will go over the 10 best ways to earn passive income. By the end, you will have a good idea of what options are available to you and how you can start earning money without having to work a 9-5 job.
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Why is passive income the best type of income?
Passive income is income you earn without actively working for it. It is the holy grail of earning money and something everyone should strive for. Picture this, you work for a few weeks to set up a system that makes money for you without the need for your presence. With passive income, you will go from spending sleepless nights worrying about money to making money in your sleep.
The greatest thing about creating a passive income is that you can do it on a side of your 9-to-5 job. Whether creating a safety net of assets, putting away savings, exploring a career change, or looking for an early retirement, passive income can give you all that while working a few hours a day, a few days a week if necessary.
What is passive income?
Passive income is income that you earn without having to actively work for it. Wouldn’t it be great to be on holiday and still make money? Passive income it doesn’t mean that you do nothing, it means that you do some upfront work to establish a workflow that functions without you and makes you money without you having to do anything. Passive income is not totally passive. You still have the set up and maintenance to do, but if you do it right, you don’t have to spend much time on it, and you are set for life.
Passive income can come from a number of sources such as affiliate marketing, property rentals, digital products, and more. It is the holy grail of earning money and something everyone should strive for. The key to earning passive income is to build a portfolio of income streams that cost you little to no time and money to maintain. There are several ways to earn passive income, and it is important to understand your options before deciding which one is best for you. Some income streams require a small upfront investment, while others require only a bit of your time.
Why is it important to earn passive income?
The biggest benefit of passive income is that it gives you the freedom to pursue the things in life that you are truly passionate about, without feeling like you have to work for the money. It is the best way to achieve financial freedom and location freedom – allowing you to live wherever you wish and do whatever you want without having to worry about a steady job. It is also a great way to supplement your income and save money for the future. Even if you don’t think you can replace your primary income with passive income right away, building up smaller streams of income can help you supplement your income and give you more financial stability.
The best 10 ways to make passive income
1. Real estate rentals – This is another great option for earning passive income. You can purchase a property and then rent it out to tenants for a steady stream of income. The downside is that there is a bit of upfront cost, but if done right, it can be a great way to invest your money and generate passive income.
Pros: you can deduct much more in taxes and have a regular monthly income
Cons: you need to put down a lot of money upfront
2. Rent out a room in your house – If you have a room or a space in your home that you can rent out, it can be a great way to earn passive income. You can make a listing on a platform like Homestay and start earning money almost instantly.
Pros: very little upfront cost and easy to set up
Cons: not for the introverted people
3. Affiliate marketing – My all time favorite. Affiliate marketing is a great way to make money online, definitely my favorite and the one that makes me money in my sleep. You can create a blog or a website and then promote products or services and earn a commission if someone makes a purchase.
Pros: potential of massive earning as you can repeat the process for every brand and escalate your earnings week by week. The sky is the limit with affiliate marketing
Cons: Requires upfront work to set up the system up and running right
4. Creating and selling digital products – Digital products are a great way to make money on the internet. You can create your own, products such as an Ebook, (I have an Ebook template in my shop ready to be transformed into your masterpiece), an online course, printable planners or educational material, an app, or a piece of software and then sell it for a profit. For printables, you can even avoid taking in all the work and use platforms like Etsy if you don’t want to start your own website in the early stage of your business. Learn more here.
Pros: you make it once, you sell it forever. No storage space, no shipping, no inventory, no running out of stock
Cons: the work is all upfront and can be repetitive
5. Start a blog – Starting a blog is a great way to build an audience and generate passive income. You can monetize your blog by placing advertisements, selling products that you create, through affiliate marketing, and reviewing products
Pros: a blog can be monetized in many different ways creating several income streams
Cons: it is not only about writing articles. It takes time, effort, dedication, consistency and patience.
6. Start an online business – Starting an online business can be a great way to generate passive income. There are many different ways to do this, memberships, subscriptions, digital products, online courses, blogging, podcasts, and more. It can take some time to build up, but once you’ve established a successful business you can start to earn passive income.
Pros: depending on the business, usually the upfront cost is low
Cons: you may enter a saturated market and need to work the extra mile to compete and stand out
7. Investing in the stock market – Investing in the stock market is one of the most tried-and-true ways to earn passive income. It takes a bit of research and understanding of the market, but once you have an understanding of the basics it can be relatively low-risk and a great way to make money.
Pros: if you know how to do it, it is low maintenance
Cons: you need upfront money, the stock market is volatile and returns are not guaranteed
8. Investing in high yielding dividend stocks – This is similar to investing in the stock market, but with a focus on stocks that pay out a high dividend.
Pros: you can earn income from the stocks and from the dividends that the stocks pay out.
Cons: less potential of massive gains
9. Invest in ETFs and mutual funds – ETFs and mutual funds are a great way to diversify your portfolio and earn passive income in the stock market. You can invest in a variety of funds, and then receive dividends or capital gains from the funds.
Pros: diversification and low maintenance
Cons: trading costs can be high
10. Invest in peer-to-peer lending – Peer-to-peer lending is a great way to lend money to others and earn money from interest payments. It is a great way to make money without having to do much work and is becoming increasingly popular among investors.
Pros: little to no upfront work
Cons: not covered by the Financial Services Compensation Scheme, which means that you may lose the full amount you put in.
So, how do you get started on earning passive income?
The best way to start is to figure out what type of income streams you are interested in pursuing. Once you have an idea of the type of passive income that you would like to pursue, it is important to do your research and figure out what you need to do to get started. It is also a good idea to educate yourself on the different aspects of passive income. Whether that’s learning the basics of investing, how to create digital products or understanding how to start a successful blog, it is important to have an understanding of the process before you take the plunge. Most importantly, it is important to be patient. Passive income doesn’t happen overnight and it can take some time and effort to start earning money. But if you persist and are consistent in your efforts, you can start to slowly build up a steady stream of passive income.
As you can see, there are many ways to start earning passive income. It is important to do your research and choose the option that best fits your lifestyle. With a bit of time and effort, you can start building up a portfolio of income streams that will give you the freedom to pursue the things that you are truly passionate about.
Are you ready to make money while you sleep?