More and more of us are seeking secondary sources of income outside our primary careers. While side hustles, freelancing, and even taking on a second job are all safe and secure ways to boost your earnings, they require both time and energy. But what if there was a way to earn money while you sleep? This is the basic idea of passive income, which we’re discussing today.
What Is Passive Income?
Passive income refers to income earned with little or no labor. While earning money this way doesn’t require a large amount of effort, it still involves risk and, in many cases, skill.
It’s also worth noting that some forms of passive income can still involve effort or labor at some point in the process. For example, consider an author who has released an ebook and continues to earn from sales years after the initial release. While this income would be regarded as passive, writing a best-selling book requires significant effort and talent.
Types Of Passive Income
It’s easy to see why the prospect of earning passive income appeals to people. But the trickiest aspect can often be knowing where to start. The good news is that there are so many different ways to earn passive income, it’s easy to find a strategy that works for you and your financial goals. Below are some of the most popular ways to earn passive income.
Real Estate
The most obvious way to earn passive income is through real estate. However, while this is widely regarded as one of the easiest and safest ways to earn passive income, it usually requires a significant upfront capital investment. As a result, it’s often the passive income strategy of choice for people who have already acquired a high net worth, but it can be hard for those with limited funds.
Strategies include buying property and then renting it out, which is obviously the most expensive option, and investing in a real estate investment trust (REIT), which can be a more cost-effective solution.
Stocks and Shares
Arguably, the most traditional way to invest money is through stocks and shares. It’s worth pointing out that if you want to manage a portfolio of different shares, this could be considered active rather than passive.
If you are looking for a completely passive approach to investing in stocks and shares, it’s recommended that you invest in an index fund. An index fund tracks the performance of a specific market rather than a single company.
Online Courses
If you have a particular skill that can be monetized, this may be the best option for earning passive income. Platforms like Udemy allow instructors to sign up and upload digital teachings; this could be anything from crypto investing to SEO. Ultimately, if you have experience or expertise in a certain area, you can create content on a certain subject can in the form of video tutorials/workshops, which you can then charge to be downloaded.
Physical Goods
Many see collecting or investing in physical goods as the most interesting way to earn passive income. While physical goods can sit there and appreciate, they can also be used and/or displayed. Items like a bottle of fine wine could increase in value, for example, but it can also be proudly displayed in your home while it does.
Similarly, a floating diamond necklace could appreciate over time, but it could also be worn on very special occasions.
How To Learn More About Passive Income
Earning money while you sleep sounds excellent, but it’s not as easy as it sounds, although this is a common misconception. If you are genuinely interested in passive income, it can be worthwhile to research the different courses available.
Udemy
We’ve already touched on Udemy as a tool for earning passive income, but this is an excellent platform if you want to learn more about passive income, too. Many online gurus offer advice on all different types of investing on Udemy, so if you wish to learn more about passive income or another form of investing, Udemy is a great starting point.
Smart Passive Income
Smartpassiveincome.com is a website set up by Pat Flynn that provides advice around investing, business, and entrepreneurship. The website offers tiered memberships with different benefits. It’s also a great way to join a community of like-minded people that you can learn from.
Mentor
Another great way to expand your knowledge of passive income is to get in touch with a mentor or guru who can offer bespoke one-to-one advice tailored to your current situation and goals. Various online platforms connect mentors with those seeking mentors, which is arguably the best way to expand your knowledge if you have a bigger budget.
