“Making money while you sleep” sounds good, doesn’t it? After all, one of the objectives of financial autonomy is to create wealth that doesn’t take your time, so you can do the things you want to do while enjoying life.
The truth is that creating passive income is usually not passive to begin with. It requires skills, money, time or all three. But where do you start? The first step is to set up a small nest egg savings account that you can use later.
Creating multiple passive income streams has another short-term advantage: it can make you more resilient and able to sustain economic shocks.
Passive income is a long-term choice that requires short-term tradeoffs. If you are willing to commit your resources to the steps and ideas below, you could be earning effortlessly for years to come.
Invest in High-Yield Savings
Savings accounts may be one of the most uninteresting investments ever invented, but they are also the most secure.
With interest rates of 0.15% or lower, you’d have to exceed the FDIC-insured $250,000 account limit to see real action.
Online savings accounts, on the other hand, offer interest rates that are much higher than those offered by conventional banks. Even better, these rates are competitive with Certificates of Deposit (CD) rates without locking up your money for several years.
Invest in the Markets, Passively
Investing in bonds and public stocks is the primary way people build long-term wealth and income through retirement plans or brokerage accounts.
There are two ways to do this:
Set It and Forget It
By letting the algorithm manage your investments, it is as passive as it can be. Robo-advisors allow you to set your risk tolerance, then sit back and let the returns flow. The fees are much lower than what you would pay a human account manager.
Pick Your ETFs or Own Dividend Stocks With an Online Brokerage
By constructing a portfolio of high yielding stocks, you can generate regular passive income at a much higher annual rate than bank investments.
First of all, high dividend stocks being stocks, there is always capital growth potential. So you can earn passive income from two sources – capital gains and dividends.
Online brokers give you a little more flexibility to choose which individual stocks and ETFs you want to invest in.
Buy a Blog or Website
You can make several good investments by purchasing blogs that other people created then “monetizing” them. While it’s not so easy to get a screaming deal anymore, there are very healthy marketplaces for online businesses that do a good job of connecting buyers and sellers.
Thousands of blogs are left behind by their owners every year. This can be an ideal passive source of income if you can buy blogs with demonstrated cash flow and reasonable web traffic.
Most blogs use Google AdSense, which provides a monthly revenue stream based on ads placed on your site by Google. There may also be affiliate programs that provide extra income.
Create an Online Course or Guide
Online learning is an exponentially growing business opportunity. You can create a course on almost anything. How to look after a cat, tie a fishing knot, how to talk to boys (or girls) – it’s all there.
What do you put into your course? Good question. Feel free to add:
- video tutorials
- checklists for the steps suggested in your video tutorials
- audio files for people listening while travelling
- informative interviews with like-minded experts
Create several packages for different price classes. Some people want everything, so you can add “all the works” for the highest price point and two lower price points to get as many orders as possible.
By offering specific information in a guide-like format, you can earn money through some tools like Google AdSense, affiliates, and even your own online guide.
Sell Stock Photos
Are you someone who enjoys taking pictures or a photographer? Use that talent. If you want to make extra money from your photos, you could consider selling your travel photos as stock photos. The easiest way to sell your photos as stock images is to use a third-party site such as Shutterstock, Alamy, Adobe Stock, etc.
Let us know in the comment section if you already have passive income in your portfolio.