In a country where 1 in 3 middle-class adults would have to borrow money for a surprise £500 expense, it makes sense that everyone wants to earn more money. But time is also an important factor. If you work 40 hours a week, finding time to earn more money isn’t always feasible.
What if you were told that there’s another way? Say hello to passive income. It’s a way to create income where you invest some time upfront but can then generate returns over longer periods of time without putting in extra hours of work. It lets people make money without being physically present, decoupling your time from your income. Read on to see how passive income actually works and why it’s a real way to make money.
What is passive income?
Active income refers to a traditional job where you show up, do work and get paid. Passive income means creating a system with some initial set-up work that then brings in money with much less effort.
Working as a property manager at an apartment counts as active income while being a landlord is an example of passive income. Passive income doesn’t mean not working at all. It just means putting in a few hours for a high hourly rate.
A side hustle like driving for a cab service or delivering food is also an example of active income because you only get paid when you work. However, a side-hustle like selling digital wedding invitations that people customize themselves is an example of passive income.
Now that you know what it means, let me guide you through the four best ideas to start making passive income:
Starting a blog or website:
A website that’s able to generate income off the traffic it receives is a prime example of passive income. While podcasts and video platforms like YouTube are becoming more and more popular, blogging is still an excellent way to make money.
The idea here is to create pages that rank highly for popular keywords. Once enough of your pages start generating traffic you can monetize the site through advertising or affiliate marketing. You can even develop your own products and promote them on your site.
The key to making this work is building your site around the right search terms. Use keyword research tools to find a group of related terms that:
- Receive a lot of traffic. At least 100 searches a month, and ideally you have a few that get over 1000 searches a month.
- Are easy to rank for and don’t have a lot of competition. If there aren’t many sites creating quality articles on these topics it will be easier for you to rank for them.
Creating a website isn’t difficult these days. There are a number of services that hardly require you to have any tech skills. It’s also fairly affordable.
Once you have your keywords write articles that focus on them, then promote your articles through social media, networking, and link building. Ranking pages on Google takes time though, so don’t expect a quick turnaround or to see results immediately.
You only need a few pages to rank to generate a good income, although it’s recommended to continue to post new articles at least semi-regularly to keep getting traffic.
Starting an E-commerce store:
Starting an eCommerce store is a great way to earn money, as more and more people are beginning to shop online. But it’s also a lot of work. Luckily, I have a few steps that will make it just a little easier:
- Find a unique product to sell. Use available research tools when evaluating which product is unique enough and missing in the market
- Source your product from retail stores, other online marketplaces, wholesalers, or manufacturers.
- Create product listing and optimise them by using SEOs
- Start selling and shipping your product
This type of small business has proven to be very profitable, with a number of entrepreneurs quitting their full-time jobs to pursue this as their career.
Writing an E-book:
It used to be that in order to make money from a book you’d have to get signed by a large publisher. But that’s no longer the case.
The rise of the internet means self-publishing has become a legitimate way to earn an income. Sites like Amazon allow you to easily distribute and promote your books without the need for a large publisher to back you.
The first step to writing an ebook is to decide what type of book you’re going to write. At a high level, you have two choices:
- Non-Fiction: These books are generally easier to write and promote, however, they don’t have the same profit potential as fiction. That being said, a good non-fiction book can still generate a very good income.
- Fiction: A popular fiction book can make you a lot of money. However, writing quality fiction takes practice and it’s much more difficult to find an audience. If you’re not a good creative writer stick to non-fiction.
There are some costs involved, including paying people to help with editing, formatting, and cover design, but overall this is one of the more low-cost forms of passive income. And if you write a book that becomes popular it can be very profitable.
Creating an online course:
Online courses have exploded in popularity, with lots of people searching the web to learn new skills. Like other entries in this list, the internet has made it easier than ever to create and publish online courses, making this a great passive income opportunity.
To start, you’ll need to choose a topic. This should be something that:
- You have experience with and know a lot about.
- Has a lot of demand. There need to be enough people interested in it in order for you to make money.
Next, you’ll need to create your course. This could be in the form of a PDF, audio file, or videos. While all of these formats work, video is by far the most popular and is seen as having the most value by consumers. Plus, with virtually everyone owning a smartphone that has a video camera, filming video has never been easier.
Finally, you’ll need to publish your course somewhere. If you have a large following you could promote it on your own website. You could also post it on YouTube. Or you can use one of the many online course sites, like Udemy and Coursera to distribute your material.
While creating a course does take time, for the most part, it costs very little money and you should easily be able to keep your costs under $500.
Making money while you sleep:
Now that you are equipped with the knowledge and with a set of great ideas, you can start making money while you are resting! Remember, the secret is not always working harder, but smarter.
If you would like to see more content like this, you can look through the blog section and follow me on social media. If you are interested in learning all things money, visit my website and I will guide you through it.