Passive income can mean different things to different people. How I see passive income is a way to earn money with minimum investment of your time. You create something and then it sits there giving you a steady income stream. This is without you having to give up lots of your free time to manage it. What could be better than that?
If your business relies solely on you being present to make money, you’ll eventually hit a ceiling. You won’t be able to make any extra income because you won’t have any more time available. So then you’ll need to look at either employing someone or outsourcing the work. But what if you could have a stream of income without having to give up your time? And without having to hire someone?
It’s also a very good idea to diversify your income. When your income is tied to one avenue, if that avenue fails, your income is gone. For example, if you’re just doing 1:1 work, and then you get ill, you can’t earn any money. If you’ve got multiple sources of income you can have regular earnings coming in from lots of different places. Sound good? Read on to find out more.
There are a number of different forms of income that can be classed as passive. These can range from ones that don’t have a lot of work upfront (like affiliate income) to those where you’ve spent time creating a course that’s then delivered automatically. Whichever way you go, the end financial goal is to have income with minimal involvement from you.
The main benefit of passive income is you can literally be earning money while you sleep. Or go to the loo. Or do your weekly shop. There’s nothing stopping when you generate income.
Another benefit is that you can leverage your time to keep the money coming in. Once the passive income source is set up, it should take you little or no effort to keep it going. So you can focus your time on other areas that need it such as to promote products.
A big benefit is not having your income limited to your time. You can make money without having to make sacrifices in your business or your personal life. No more 1:1s. No more having to choose whether to play with your kids or put an extra hour in at work.
The most obvious benefit is that you can make more money!
Traditional income typically requires you to give up your time for money. Whereas passive income can be a great way to get your time back whilst still earning money. What you do with that new found freedom is up to you!
The first step is to consider what works for you. Are you looking to put in as little time and effort as possible? Or are you happy to do a lot of upfront work? Do you have a lot of money to invest initially? Or does it need to have little to no upfront costs? All of these decisions will affect what stream of passive income you decide to go with. So take stock of your life as it stands now before you start looking for passive income ideas.
And you don’t just have to choose one idea. In fact, I’d recommend that you have several different options in case there are economic downturns. But start with one and get that up and running first. Especially if you’re starting your own business from scratch rather than adding passive activity into a current one. Your primary job needs to be focused on getting one working well before you look for others.
I could have given you 25 passive income ideas but after a while they all start to sound very similar. So I’ve tried to pick some that are actually different from each other. Here is a list of 10 ideas you could look at to earn you passive income:
Let’s take a look at these passive income opportunities in more detail:
There are two main options to earn income through affiliate marketing. One is promoting other people’s courses to your audience. Usually you’ll be given a link that’s specific to you to share with people. The course creator can then track how many people purchase through your link. You earn income through a percentage of the sales that come via your link.
The other option is using your own affiliates to promote your course. This works as above but in reverse. So you would pay your affiliates a percentage of your earnings that come from their link. Before you start with “but passive income isn’t about costing me money” let me explain. Passive income is money that comes into your business without you having to do much work for it. Your affiliates would be doing the promoting for you. So yes it would cost you a little bit of money. But the sales they bring in are coming in without you doing the work for them. So it is not active income, it is passive.
If you’re going with the second route, then you need to create a good course to start with. Your affiliates are not going to want to promote rubbish to their audience. Using affiliates for your passive income isn’t about getting people to do all the work for you. It’s about creating something so good that being an affiliate is just the cherry on the top for them. They want their audience to know about this course. They’re positive that this course will help them.
It can be better if your affiliates have actually taken the course themselves. They will have first-hand experience of it. They can speak from actual knowledge of what’s involved and not just what you’ve told them. They’ll have a more confident approach to selling, which will bring the sales in more easily.
And make sure you pick affiliates that have the right audience for your course. They won’t be bringing in sales if they’re not promoting it to the right people.
If you’re going with the first option, you need to pick the right course to be an affiliate for. Make sure you choose one that’s relevant to your audience. There’s no point picking something that your audience won’t care about. No one will use your link and you won’t get paid.
See if you can speak to anyone who was an affiliate before. How successful was their experience? How quickly did they get paid? Would they do it again? If you’re sharing someone’s course with your audience, you want it to be a positive experience.
Unfortunately, I don’t believe that getting something for nothing actually exists. If you want to achieve your financial goals, then you are going to need to put at least some work in to create passive income. How much work depends on what route you choose to go. But once you’ve got one option up and running, you can look at adding others.
You can also look at increasing your audience to sell to more people. Being more present on social media is one way. You could also look at advertising. Collaborating with other creators to share their audience can also be good.
Once you’ve got a positive cash flow there’s a couple of options you can do. You could either put that money into a savings account and earn interest on it. That’s a simple passive income right there! Or you could reinvest it into your business. If you put it back into the business, make sure you spend it wisely. Look at exactly what is working best to make you the most money. Can you expand that? Look at what isn’t working. Should you ditch that? Or would some more money, spent in the right way, improve it? There are lots of strategies based on your figures that you could try. So take a close look before you decide where to spend your money.
Ell Evan Bookkeeping are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice.
