Passive income is becoming somewhat of a buzzword. Increasingly people across the globe are fixating on earning more money while working fewer hours. But how exactly do you do that?
Anyone with one or more passive income streams will likely tell you it’s easy, which always appears evident in hindsight. Modern culture and technology have created passive income channels and micro niches galore, meaning anybody can carve a few streams of residual income with a bit of elbow grease.
In this post, we will explore how to build passive income and discuss some common and effective passive income ideas to build your financial future and live your best life.
Why We Love Passive Income
Earning a passive revenue is not exactly getting money for nothing since setting up passive income streams requires an initial input of time, energy, and, in some cases, money. The encompassing idea around increasing your cash flow streams is putting in the effort now so you can facilitate easy income down the road. Once the ball gets rolling, you will see how sweet it is to make money while you sleep!
There are two ways to earn a passive income: either invest some money or invest some effort. An automated workflow is central to collecting passive income and working fewer hours via the latter method. As a rule of thumb, automation is about creating profitable and replicable systems that you can iterate without being consistently actively involved.
Generate Passive Income By Putting Your Skills To Work
We all have a unique set of skills and experiences that we can leverage to create a passive income in the future. The modern information economy makes it possible to gross millions by sharing your skills with the masses. Honing your passions, communicating your unique expertise, and helping others to learn and grow are becoming increasingly profitable. Additionally, new technological advances are making it easier and faster than ever!
Build a Business
Building a business can be a great way to earn a passive income. There are many different ways to do it, so be sure to choose one that suits your skills and interests. Successful businesses always draw from a solid business plan. It’s common for entrepreneurs to consult with a business mentor or coach to receive invaluable guidance as they navigate the challenges of starting a business.
Make sure you can clearly envision your business model and how it will earn you a passive income. For example, if you have a passion for photography, you could sell stock photos online or offer a print-on-demand service for customers around the world with your current inventory.
Once you discover an attractive business model, research and analyze the market to ensure that your product or service has a profitable and sustainable market niche. Consider who you’re trying to reach with your product or service, and create a marketing plan that will help you attract your target audience with your product or service.
Keep in mind, most businesses fail in the first year. 90% fail in the first 5, and that doesn’t mean the other 10% are profitable. Do you homework and know the odds before you pour your time, energy and cash into a new venture. And always remember the ‘opportunity cost’.
Open an Online Store
For the ultimate way to earn a passive income with a new business, why not open an online store? For example, dropshipping is an online passive income business model where the seller accepts orders on behalf of a third-party company. This means systems are easily automated, and the seller is not obligated to keep stock records. Simplicity at its finest!
Leverage Your Career
If you’ve built up a career, chances are you have a wealth of valuable experience and skills to share. Why not leverage these in a way that can create passive income effortlessly? One way to achieve this is by seeking a company that implements an employee-centric business model that can earn you more income flexibility or additional revenue streams.
For example, a real estate agent working for a traditional brokerage could leverage their career selling real estate by joining a brokerage that offers additional perks, like revenue share opportunities. An interesting case to explore in the passive revenue discussion is eXp realty, a cloud-based brokerage offering employees the flexibility to choose when and where they work from a virtual office. eXp also provides revenue share opportunities to all agents.
Earning passive profits as a real estate agent has never been more accessible! If you’re interested in exploding your career and earning passive revenue easily, get in touch with Traci Gagnon today. Traci is a high-level coach who supports real estate agents to leverage their careers and build the passive-income life of their dreams.
Leveraging your career is not exclusive to the real estate industry. Regardless of where you’ve built up your career/s, you can explore the options for alternative business models that carry you towards your passive income goals.
Write A Book
Writing a book can be an effective and efficient passive income idea to secure a new revenue stream! To be clear, this method will take a significant amount of time and energy to implement, and it relies on being successful once published. Here are a few tips to get you started.
- Choose a topic of interest and relevance to your target audience.
- Conduct some market and subject research to ensure there is a market for your book and that market is not saturated.
- As you write, try to cover as much information about your chosen niche that provides value to your readers.
- Adopting a clear, concise, and simple tone is a popular and proven way to communicate well-written and informative texts.
- Find a professional editor to help you polish your manuscript, then choose a printing company that offers high-quality printing and binding options.
- Market your book through social media, online advertising, and other channels.
The risk involved with this passive income idea is that you invest a huge amount of money into writing a book that doesn’t get published or it doesn’t sell. Simply ensure you have a viable niche before you start writing!
You can download a FREE copy of Traci Gagnon’s most recent book at ExplodeYourCareer.com/Book
Audiobooks and EBooks
If writing a 400-page book off the bat feels a little daunting, you’re certainly not alone. Writing books is a big project and can open opportunities to establish yourself as a thought leader and authority in your field. But for many of us living in a modern fast-paced society, finding the time and initial capital expenditure can be simply out of reach.
Creating audiobooks and self-published e-books can be another effective way to earn a passive income while keeping your workload manageable. Self-publishing Ebooks on Kindle or Amazon can easily see you monetizing fiction and non-fiction writing fast. Then all you need to do is sit back and make sales for the years to come!
Create A Course
Are you an interior DIY expert or have professional skills that could support others to advance through their careers? Why not teach it to someone else to make passive income? Creating and selling a course online is an attractive, varied, and popular way to make additional cash flow.
Making a course out of something you love and are good at will make the process more enjoyable and likely more successful. You can pick from various websites to create your course that will guide you through the planning phase right through to completion. Moreover, you get to choose whether you use an audio, video, or text-based format to deliver your content.
Try to make your course as relevant to the target audience as possible. By finding a niche within your topic that you can focus on, your course will become more unique and valuable to potential students. If people find value and can easily connect with the content you create, your course may be a lucrative source of passive income for you for years.
Start A Blog Or A Vlog
Starting a blog or a youtube channel vlog is yet another place to begin when you want to build passive revenue streams. While making money from them is not immediate, affiliate sales and ad revenue has made bloggers millions once they capture an engaged following.
The best part is that you can start a blog without any special skills or training. All you need is a computer and an internet connection. Bloggers write about whatever they want, so consider your hobbies, interests, expertise, and even experiences. Knowing where you can help people and provide value is the key to making great content.
To attract a strong following to your blog, ensure that you produce content consistently. Many bloggers generate a lot of content in the first months. This approach populates the blog with interesting articles early. After a while, a blogger will settle into a routine that better suits their schedule. There is no secret sauce for how often you need to post – simply find a plan that works for you, and do it consistently.
Using keywords throughout your blog or vlog will help others find it more easily when they search for the topic online. You could also promote it through social media to find audiences who may derive value from your content. Once you have a decent following on your blog, you can monetize it with affiliate marketing and advertising space.
Earn Passive Income By Investing
If you’ve recently come into some money, there are a wealth of innovative approaches to make your capital work for you in the long run. The idea of investing is putting it into a channel where your money works hard for you, rather than you working hard for it. Further, the best part about these passive income ideas is they require no effort on your behalf!
Real Estate Investment Trusts
REITs are a type of investment that allows you to earn income from real estate without having to actually own or manage any property. To invest in a REIT, open a brokerage account and purchase your shares.
There are many different types of REITs, including equity REITs that own and manage real estate projects and earn income from the rental yield, and debt REITs that own real estate mortgages and debt, making profits from the mortgage interest. Research the options available, and choose one that fits your risk tolerance and investment goals.
REITs can be a great way to diversify your investments (reducing the risk) and earn a consistent income stream. Additionally, to retain its status as an investment trust, a REIT must distribute 90% of its profit. This means you could get up to a 9.5% return on your investment.
No matter how you choose to invest in REITs, be sure to do your research and understand the risks involved. REITs can be volatile and are subject to changes in interest rates, economic conditions, and government regulations.
Mutual Funds and Exchange-Traded Funds
Investing in mutual funds and EFTs are two passive income ideas that involve making an initial investment and earning residual income from the returns. Effectively both of them work in the same way: you open a brokerage account, select the fund you want to invest in, and deposit your capital to start earning money.
However, there are a few fundamental differences between the two. Let’s explore them below.
Mutual Funds
A mutual fund is a collection of stocks, bonds, and other securities that gets managed by a professional money manager. When you invest in a mutual fund, you are pooling your money with other investors and giving the money manager the ability to buy and sell securities on your behalf.
There are many types of mutual funds, including index funds, growth funds, value funds, international funds, and sector-specific funds. Each type of fund has its own investment objectives and risks. Be sure to conduct research and select a fund that aligns with your investment goals.
ETFs
An ETF, or exchange-traded fund, is similar to a mutual fund in that it is a collection of securities that get managed by a professional. However, unlike mutual funds, ETFs trade on the stock exchange, meaning you can buy and sell ETFs throughout the day, just like you would with a stock.
ETFs also have different types, including index funds, growth funds, value funds, international funds, and sector-specific funds. As with mutual funds, it’s necessary to choose an ETF that aligns with your passive income goals.
Real Estate Syndications
When it comes to passive income, real estate syndication is a great way to go. Not only can you invest in high-quality, profitable properties, but you also get the benefit of tax breaks, which can be substantial.
Online platforms pool your money together with other people to invest in large apartments and commercial real estate assets. Then investors earn money off the rental income generated by the properties. The investment is effectively passive since the professional investors manage operations, repairs, and maintenance of the building. This means you can sit back, relax, and earn a quarterly or monthly income stream.
Certain online platforms enforce minimum investment amounts, while in others, you can start investing with as little as $5k. Returns are usually between 12% and 20%.
Real estate syndications are a great way to earn passive income, but there are risks involved. Be sure to research and understand the terms of the investment before you commit.
Final Thoughts
Building a passive income stream can support your lifestyle, help you reach financial freedom faster, and it can be a lot of fun. We are fortunate with the broad range of options and support available to achieve our creative and financial goals.
It takes some time and energy to set up a passive income stream, but when you discover an effective passive income strategy that supplements your lifestyle and goals, you’ll be able to start truly embracing the life you desire.
Traci Gagnon is a passive income expert, real estate coach, and eXp agent passionate about empowering real estate agents to achieve financial freedom and live the passive income life of their dreams through the eXp platform. If you’re a real estate agent looking to leverage your career, automate your income, and contribute to the education and success of fellow agents, speak to Traci Gagnon at 210.465.5275 to learn how to build passive income today.
