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8 passive income strategies you should seriously consider
Most people would love to develop some kind of side or passive income. After all, who would say no to money rolling in with little effort involved? This kind of income stream is highly desireable, but it’s often misunderstood by people who are more dreamers than doers.
The fact is, it takes some actual work to start earning a passive income. Rarely can you find something that’s 100% passive and generates great returns, unless you stockpile a vast amount of money in an investment account that gives you 5% returns for no effort.
However, there are easier (and more entertaining) ways to generate a passive income without having a quarter of a million dollars upfront. Just know that nearly every legitimate passive income strategy will require an initial investment of time and/or money to eventually see any results.
Your dream might be to rake in money while all you do is sit in the shade of a palm tree, sipping a margarita on the beach, but it’s more realistic to build a moderate, passive income stream to supplement your primary source of income.
Usually you can accomplish this by working a few hours per week or maybe even less, once you’re established. The possibilities are endless, from earning money by completing surveys to trying out one of the great ideas we’ve listed here.
Check out some passive income strategies you should look into if you want to generate a regular income that doesn’t require much effort on your end.
1. Rent Property
Some people swear by property flipping, where you purchase a home, fix it up, and sell it as quickly as possible to make a profit. That’s not a bad option for some people, but flipping homes requires a lot of planning, time, and labor (not to mention the down payment required to buy the property). Unless you want to pay contractors, you’ll end up doing all the work by yourself. It’s a great idea for folks who love handywork and home design, but property flipping is an intense process and not really passive, so it might not be your first choice.
Also remember that your income is limited to what you can make on the sale of the property, which can vary widely based on current market conditions.
Instead, consider purchasing foreclosed properties to use as rental units. Sure, this will still require time and money to fix up the property for new tenants, but it’s a long-term income generating strategy that lets you build equity in a property and brings in a modest monthly income (whatever amount you charge renters above your mortgage payment).
When you eventually decide to sell, you’ll have a sizeable chunk of the sale’s proceeds to draw money from based on the equity you accrued over the years.
2. Affiliate Marketing
Affiliate marketing is by no means a new income strategy, but there are a lot of people who have been so successful at it that they could quit their jobs and start tackling their bucket list goals right now thanks to revenue earned from affiliate marketing.
Realistically, you probably won’t get super rich from affiliate marketing without a ton of work upfront (and even then, there are no guarantees). The people who make six figures or more this way still spend a fair amount of time each week keeping that money rolling in.
However, it’s pretty easy to get started in affiliate marketing. If you start a blog in a specific industry or niche (virtual reality equipment, for instance), you can start writing product reviews and creating content that’s relevant to the industry. When you mention products in your content, link to the company’s online store with an affiliate link. You can incorporate Amazon affiliate links, or even negotiate an affiliate payout directly with a manufacturer or supplier.
As you grow traffic from posting content regularly, your revenue stream will also grow. Add in other content channels, like images with Instagram or videos to boost traffic to your articles containing affiliate links.
3. Referral Rewards
A lot of companies rely on referral programs to reward customers for bringing them new business and orders. You can build up some serious credit with your favorite brands, and even generate income, depending on the program, by encouraging people to visit those online stores with your referral links.
Spending a little time every day building your reputation with online groups and communities can go a long way, and once you recommend a product and drop your referral link or send an invite to someone, they won’t feel like you’re just spamming them.
This is a great passive income stream if you’re already talking with people in social channels, blogging, and sharing product recommendations. Why not get rewarded for that activity?
4. Create a Dropshipping Business
If you’ve always wanted to open an online store but you lack the funds or space to maintain your own inventory, then dropshipping is a great alternative for generating a passive income stream. A major advantage to dropshipping is that it requires very little administration and maintenance on your part once you get the business up and running.
There’s quite a bit of legwork upfront, though. You need to choose a niche or industry (preferably one that isn’t overcrowded with competition yet) and find one or more products to sell in your online store. You’ll then have to find a manufacturer or supplier that’s willing to ship the product directly to the consumer after an order is placed.
Once you find a good supplier, you could get an online store up and running within a few days.
You’d be surprised at how many online stores don’t actually stock their own products, and instead rely on dropship companies to ship products directly to consumers. It can cost less than $100 to set up if you factor in the costs for domain names, website hosting, a logo design, subscriptions to e-commerce platforms like Shopify, and webpage templates.
Throwing in a little extra cash for Facebook advertising once you’re live could bring in orders in as little as 24 hours after launching your store.
Check out the guide on opening a dropship business from A Better Lemonade Stand.
5. Flip Garage Sale Goods
It can be pretty relaxing and even exciting to wake up early on a Saturday or Sunday and explore garage sales and estate sales in your area. Sometimes you might even find big-ticket or high-value items sold at incredibly cheap prices. When you find items like these, you’re stumbling onto new opportunities to make money online.
This tactic requires an eye for value and an understanding of the potential profits to be made, but bringing along a smartphone can help you determine the value of certain items, as well as product demand. As you get better at spotting deals, you can profit off of those products by reselling them on eBay and on other online marketplaces.
Just list the item at a price guided by your market research and wait for it to sell.
6. Launch a YouTube Channel
If you own a camera and have some basic video editing skills (or you’re willing to learn a few tricks), then you can set up your own YouTube channel in minutes. There are thousands of people around the world making money from their YouTube channels with a variety of videos. Their money-making videos include:
- Product reviews
- Comedy bits
- Talk-show style formats and opinion videos
- Family videos and playtime with their kids
- How-to and instructional videos
The possibilities are endless, and you can bet there are people out there willing to watch what you want to share. Once you have some videos, set up your YouTube channel and monetize each video with ads. You’ll earn money based on ad views and clicks, and once you hit the minimum payment threshold, you’ll receive a payment from Google.
7. Create an App
Creating an app doesn’t cost as much as it used to, so don’t assume you need to shell out thousands of dollars to design one. In fact, if you’re willing to learn the process yourself, you could eventually code your own application.
The key is examining different markets, or thinking about different areas of your life, and finding a problem. More specifically, you want to find a problem that doesn’t currently have a suitable solution. Research what kind of mobile application you could create to fill a need or a gap in the market. This is the same approach inventors take when developing new products.
Your app doesn’t need to be flashy or offer a ton of features. It just needs to solve a problem or act as a solution for one important thing.
Consider what Wired co-founder Kevin Kelly wrote in an article about achieving 1,000 True Fans: if you have 1,000 people paying you $100 per year, that’s $100,000 per year. You don’t have to serve everyone, you just need to make an app that a select group of people need and are willing to pay for.
8. Sell Your Talents
Selling your talent, either as a craftsperson or a freelancer, is a great way to generate money on the side. It may not be as passive as other income possibilities, but it depends on how much you charge for your masterpieces and how much work is really involved.
If it’s something you’re passionate about that you’re already doing in your free time, then it’s a win-win situation if you can start making money from a hobby. Every day, millions of people earn money from their talents and skills by:
- Selling craft goods and cottage foods on Etsy
- Selling their digital photography
- Offering graphic design skills to entrepreneurs and businesses
- Freelance writing for companies, marketers, and publications on Upwork
The only limit to this income stream option is your creativity, imagination, and the time you want to devote to these projects. Keep your options open and research your niche market to see if there’s demand for what you have to offer.
Are you currently doing anything to generate income on the side or have you built more than one passive income stream? Share your success stories with us in the comments below:
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