Earning more while working less sounds like an unobtainable dream to some people. It’s very possible though, as long as you establish some passive income. Passive income is great because it doesn’t require your direct involvement. You can earn money when you’re doing something else with your time or even when you’re sleeping.
It really is the best type of income because it allows you to have a better life balance and reach financial freedom quicker. On the flip side, people who are confused about how to create passive income opt out of giving it a chance and continue to pursue active income by trading their time for money.
While active income isn’t bad, it’s limiting. There are only so many hours in a day thus limiting how many things you can do even if you manage your time carefully. Often times, when you don’t work, you don’t get paid.
As much as I love freelancing, if I take time off for any reason, I won’t get paid until I produce some work. It’s best to diversify your income sources by mixing active and passive income strategies. This is why I freelance AND take the time out to build up my blog and my brand in the hopes that one day it can become a source of passive income for me.
Blogging does not allow you to get rich quick, but over time, you can build a stable semi-passive income from it.
The secret is, establishing passive income isn’t rocket science. We all can do it and get started early. Here are a few ways that you can start to build a source of passive income.
Start Investing, Like Yesterday
Investing is not for older people or rich people who are well off. It’s for me and you. Anyone can invest at any stage of their live but it’s best to start early so you can reap the benefits of compound interest. With investing, time is the key to success and every little bit counts. The small $100 sacrifice you make each month can yield big results later down the line.
Last year I started investing small amounts with Betterment, and I love it because it’s so easy to use especially for investing noobs like me. With Betterment, you fill out your profile and choose your investing goals, then start making monthly deposits of your choice to your investment account.
Betterment then distributes your funds into ETFs based on your portfolio allocation whether it’s stocks, bonds, or both. You can even open a Roth IRA with Betterment which was perfect for me because I’ve never worked for an employer who offered any retirement benefits.
Talk to a financial advisor about your goal to establish a diversified portfolio that can yield some passive income for you to try investing in stocks, bonds, and ETFs on your own.
Create a Product
While investing is a slower route to earning passive income, creating a product that you can sell immediately will help create passive income quicker. Think about something useful you can create or sell again and again. Whether it’s a book or helpful tool, you’ll need to put in a lot of time and effort initially to launch the product, but once you release it and start promoting, income will flow in with minimal effort on your part.
The only thing about selling a product is that your income may fluctuate a lot because it’s hard to predict how sales will be each month. Nevertheless, it’s a great way to earn money on the side of the active income you earn.
Invest in Real Estate
Specifically speaking, become a landlord. This is one of my goals later down the road. While some people argue that investing in real estate and having tenants isn’t passive income because of the effort you will put in to maintain the property, I don’t agree.
Unless you’re spending time at your tenant’s house every day or putting in enough hours each week to justify making it a part-time or full-time job, I don’t think it compares to active income and leans more toward the passive side. Of course, you’ll have to do some work here and there and properly manage the property, but you’ll still be receiving a nice chunk of money consistently each month just for letting someone reside in a property you own. Sounds passive enough to me.
If you own a blog or website, you’re already well on your way to earning some passive income. Affiliate marketing involves a website owner or blogger promoting a third party product through a review, ad or link in order to earn a commission if their links lead to any sales.
Michelle, who owns the blog Making Sense of Cents is an excellent affiliate marketer and earns an average of $50,000 per month from affiliate sales. That’s NOT a typo. I recently took Michelle’s new course called Making Sense of Affiliate Marketing where she shares all her tips and strategies for affiliate marketing success.
The course is pretty affordable and a great investment. I’m already starting to see good results after implementing some of the things I learned in the course. There’s nothing better than making money in your sleep 🙂
If you have a good amount of traffic on your website and share information about a product or service that’s helpful to your readers, affiliate marketing can be very profitable for you.
To me, it’s passive income because once you post your review or ad, you don’t need to do much else to generate sales. If people are interested and like what you’re talking about, they will consider purchasing it. An older post has the ability to generate consistent affiliate sales.
The important thing to remember about affiliate marketing is staying true to yourself and keeping your audience’s best interest in mind. It’s best to only talk about products and services that you’ve actually used and could benefit someone else.
Pursuing every random opportunity out there won’t help you earn any money or help your readers and you may have to turn down some opportunities that don’t seem right. A few months back I had someone contact me about promoting some type of eye glasses. I declined because I don’t even wear glasses, so I don’t have much to say about what the best brand would be.
When done correct, affiliate marketing can become a solid source of passive income.
Have you tried to establish any sources of passive income yet? Why or why not?
How Confident Are You With Your Finances?
44% of Americans don't expect their financial situation to improve this year. Don't be one of these people! Download my free guide, 10 Ways To Feel Financially Confident Today and get access to steps you can implement ASAP for results