Have you ever wondered why most of the richest people never seem to work so hard? Comparatively, the most hardworking ones are not relatively wealthy. The difference between the two lies in how they make money. If anything, the idea of ‘work smart, not hard’ is justifiable by statistics. However, the life of millionaires and billionaires are proof that working smart rather than hard pays.
In 2020, even the strongest of world economies such as the US was shaken by the COVID-19 pandemic. As a result of that, many people lost their jobs. This forced people to be creative in their efforts to sustain their livelihood. The ‘lucky’ ones were those with skills that could bring them income from remote locations. However, those who lacked relevant skills had to learn how to earn a living. Then there are those who have been ’employing’ their money to work for them and generate a passive income. Here are some tips of how you can do the same.
What is Passive Income
Simply put, passive income is making money on autopilot. To put it into perspective, let’s compare it with its counterpart, active income, using two scenarios. As a freelance writer, you sit down for four hours and produce a 2000-words article for your client and get paid the agreed amount—that’s active income. You are exchanging your time and expertise for money. However, you only have so many hours in a day (24 to be exact) that you can offer so the only ways to scale your income when exchanging your time for money is either by increasing the amount of money you charge for you time OR put in more hours.
Passive income, however, allows you to make money without directly exchanging your time for money. For example, f you spend a week creating an e-book and put it on sale, the money you get from it is passive income. This is because the money keeps rolling in long after the initial effort. The amount of money you can make is not limited by the amount of time you have available.
How To Make Passive Income in 2023
Making passive income is like farming. You don’t expect to plant today and harvest tomorrow, do you? But when done right, it can help you to close some financial gaps and get well on your path to financial freedom.
Have a Strategy
Be clear about what you want and create a strategy on how to achieve it. The reason this is important is your involvement in passive income control needs to be minimal. Additionally, having a strategy helps you with fast and seamless execution of your plan.
Leverage Your Skills
Perhaps, there is something you are extrinsically or inherently good at. Can you commercialize it? Good. You need to leverage your skills for passive income because your efforts have to be as slight as possible.
Understand That it Takes Time
Here’s where most people fail. Sadly, some people think passive income is a get-rich-quick scheme. It’s not. In most cases, you might have to wait for years to make a significant passive income. After all, you will not have to do much apart from waiting during this period.
Diversify Income Streams
The beauty of passive income is that you can have multiple streams. It all boils down to the fact that you don’t need to put in extra effort for you to earn. Your money works for you to make more money. More so, having multiple income streams gives you financial security.
Don’t Abandon Your Investment
Investment here refers to your initial effort. Even though we have seen that passive income doesn’t require much action after the initial work, your effort is somehow needed. Therefore, depending on the type of income-generating activity you are into, updates, follow-ups, or maintenances may be necessary.
Best Passive Income Ideas In 2023
#1 – Making passive income with eCommerce
eCommerce is booming right now. Tap into business models such as drop shipping, affiliate marketing, selling digital products, and make money while you sleep. eCommerce has the potential to bring you a steady passive income with the right strategy. The secret to thriving at eCommerce is learning the business model and customizing it to your plan. For all the tips and tricks of dropshipping, click here.
#2 – Start a profitable blogging business
Notice how this subheading is direct? Blogging motives are many. For instance, someone will blog for fun, to educate, inspire, or generally air views. For a blog to bring in passive income, it has to share value, convert readers, and have traffic. Then, monetizing your blog.
#3 – Create an online course
Maybe you are good at making art, graphic design, or something else. In fact, if you are a passionate teacher, you can create subscription-based courses and sell them through funnels, or partner with sites such as Skillshare and Udemy. Either way, you will be making money for years to come from a single effort.
#4 – Invest in dividend earning securities
Investing in securities that generate dividends can become a good passive income stream. However, not all investments are good. If you are not certain where to start, consider buying REITs. REITs are companies that own or finance real estate projects and property with great income potentials. They handle all the messy work of purchasing, managing and maintaining the properties and share the gains with investors. Choose from the top REIT companies in the US and get started.
The nice thing about dividends is that they do compound. Success stories like this here and that of the parking lot attendant who retired with a net worth of over $500k should inspire you to consider making some investments of your own.
#5 – List property with Airbnb
Airbnb has a lucrative business model that can make you earn passive money from anywhere. Airbnb is basically like Uber for accommodation. All you do is list an apartment with Airbnb, receive guests, and get compensated. Look at these Airbnb fees.
#6 – Peer-2-peer lending (P2P)
The idea here is to pool funds as a group. This money is loaned to those in need and they pay with interest. This interest is what you share as a group. Peer-2-peer lending works well; if you have extra money, you can lend others. Ultimately, P2P can make you extra income over time, depending on your investment value. For more insights on P2P, click here.
#7 – Make money with YouTube videos
YouTube Partner Program has continued to create income opportunities for people globally. You can also use YouTube to develop your business leads, promote brands, and allow Google Ads. Assess your skills and find something that you can make videos about, or even walkthroughs and upload to YouTube. Do this repetitively, and eventually, you will earn passive income with YouTube. See the guide to monetizing your YouTube channel here.
#8 – Start a podcast
A great alternative to making videos is recording podcasts. Podcasting can earn you money through brand partnerships, leads, and collaborations. What’s more interesting is that you don’t need much equipment to start. Find a topic, get a recording set up, and hit record. Slowly but surely, your podcast will grow and eventually make money. See all the ways you can make money through podcasts.
#9 – Open a vending machine business
Strategically positioning vending machines in urban centers has the potential of bringing in passive income. For this to work, you will have to seek approval to install the vending machines first. When granted, conduct some research on what will sell, then stock it. This business has the potential to make money in a short period. Here is a great resource on how to make vending machines profitable.
#10 – Sell printable products online
Printable products include stickers, planners, designs, artwork, et cetera. If you are good at designing such products, you can create and sell them via sites like Redbubble and others. It might take time even to sell, but as you hone your skills and learn the business, passive income will start flowing.
#11 – Sell stock photos
Slightly different but similar to selling printables is selling stock photos. If you have photography skills or willing to learn, you can capture good pictures and sell them online. An advantage here is that minimal initial effort is required. Using your phone, you can capture photos and sell them through these apps.
#12 – Become a social media influencer
This is like the brand partnership we saw with video and podcasts but on social media. For you to make passive income from posting on social media, you need a few things; a large following, good post engagement, consistency in posting, and creativity. When you check all the boxes, you can approach brands, or they will approach you for deals. We found a resource that will walk you through the entire process. Click here.
#13 – Invest in certificate of deposits (CDs)
CDs are similar to locked savings accounts but stricter. When you open a CD account, you can’t access the money before maturity without a penalty. With CDs, your money gets locked in with the current interest rate, unlike normal savings, which are subject to changes. This can be a good source of passive income for you. Click here for a cool resource that will tell you all you need to do.
#14 – Generate leads for businesses
Businesses are always looking to outsource some tedious operations. You, on the other end, can take on the challenge and earn some money. The best approach here is to start a website and convert visitors using referrals. In this case, you will have to be more creative and innovative for a successful transition. Here is a cool resource on how to generate leads for businesses.
#15 – Rent out your belongings
Do you have stuff that you don’t use that often? You can make money off them using sites like Craigslist. Moreover, you can buy essentials like tools or party tents and list them for rental. This is purely passive income since the one-off fee you incur in purchasing the items is all the investment you need.
Passive Income is Not a Myth
Contrary to popular belief, generating passive income is not a myth. The common misinformation has been that only the ‘rich’ make passive income. From our list, you can see that some passive income ideas can be executed with zero dollars. What you need is a disciplined mind, the determination to succeed, and a willingness to keep going. At last, you will enjoy the fruits of your labor. If you found this very useful, feel free to share it with all your friends.