What is passive income, how to create it from scratch. The most reliable ways of passive income offline and online.
What is passive income
According to Wikepidia, passive income refers to earnings that are independent of daily activities. However, this definition is not quite complete.
Passive income is income that a person receives even while he is not working. The simplest example is renting a property. You can work at the main job, receiving a salary, and at the same time to lease real estate, receiving passive income.
There are a lot of types and sources of passive income, below we will consider the most reliable of them.
But it's worth it, because 6 – 18 months of work can provide you for many years, even when you do not work.
What is the difference between active and passive income
The principle of active earnings – worked hard – got paid. Wanted more money – did extra work. For example, a taxi driver receives money while driving customers. If he stopped driving, he stopped getting paid for his services.
The principle of passive income – created a source of income once, you get money all the time.
There are a lot of options for passive income, below we will talk about the most reliable ideas and try to analyze how much profit you can get from each option.
Sources of passive income
What can make a profit? An asset to either create or buy. Most sources of passive income require some investment, and absolutely all sources require effort, at least in the beginning.
Passive income without investment: intellectual property
Such options are a great variety and each of them will suit a certain circle of people.
By writing a book once, you can earn income for years. It is not necessary to write detective stories or novels, educational books are also very popular.
On the Internet there are many services for novice writers. For example, writing a book online. With the help of such services after the publication of the book you will receive instant feedback. If your idea is successful – you will be offered to sign a contract for publication.
E-book can bring from $100 to $200 per month. The higher the interest, the higher the profit.
Do you think this way of earning no one uses? Mike Piper wrote the book "Investing in plain language" and began selling it on Amazon. The interest was so great that the author released a series of books. Now he gets six figures.
Author's photos, videos
If you like to take pictures, create interesting pictures or edit photos in Photoshop, you can make good money on it, just selling your images. To do this, there are special services – microstocks, allowing you to buy and sell unique photos and images.
The bottom line is that you exhibit your work, the buyer buys the opportunity to download them in high quality. Thus, one photo can be sold an infinite number of times.
Photos and images are bought by magazines, advertising agencies, books, designers and other businesses that need images.
The most famous and profitable microstocks:
- DepositPhotos – the largest microstock with excellent sales.
- Shutterstock – leader in microstock.
Videos on Youtube
This kind of passive income can bring good money. For example, the famous children's Youtube channel Mister Max earns about 2-7 thousand dollars a day.
However, to make your channel profitable, you need to create a series of useful and relevant videos. This can be, for example, instructions on "How to make ...", "Recipes" that people will look for constantly.
To videos you can connect contextual advertising from Google, as well as advertising from Youtube.
Master classes and online courses
If you have knowledge that others do not have, you can run a series of training courses. The format of training classes can be different: videos, instructions on the website, audiobooks, offline school. The main thing is that your students are satisfied with the quality of services and receive knowledge.
This source of passive income can bring $20-50 daily. An example is drawing lessons, learning foreign languages, learning to play the guitar and others.
Highly specialized knowledge can be sold at a higher price. For example, trading rates on the NYSE can cost from $500.
Not only photos and videos bring passive income, but also music.
To create music you need to learn how to work with programs such as Abode Audition or Fruit Loop, etc.
Tracks are bought for videos, presentations, etc. Microstocks sell not only images, but also music. The most famous audio-Audiojungle.
Passive income on the Internet
Anyone can create a website. To do this, you will have to spend a little money on a domain name (from 150 rubles per year) and hosting (from 900 rubles per year).
The main difficulty is to find information that will be interesting and useful to readers. It is not necessary to write articles, some resources are gaining popularity due to convenient services (for example, online calorie calculator, compound interest, parsing currency quotes, etc.).
This method of passive income on average brings $50 - $1000 per month, depending on the number of visitors, citation index, the popularity of the resource, etc. For the promotion of the site will take from 6 months to 3 years.
Ways to make money on your own website will be discussed below.
Banners and contextual advertising
Almost all sites can see the blocks of contextual ads from Google or Yandex. Each click on such blocks brings the site owner from a few cents to a few dollars. The more visitors you have, the more clicks on ad units and the higher income.
If you have an article site, and you do not publish new articles on it for some time, you will still continue to receive income from it, since the site will remain on the Internet and will continue to work around the clock.
Sites and some companies buy perpetual links on other sites so that search engines can see what many people are saying about their company or their site. Thus, they increase the ranking in search results. Customers buy laudatory articles, reviews or simply place links in a certain place on the site.
Sale of reviews on the website can give the owner $100 – 300 per month. However, this site must have a large number of visitors and good performance.
This method of earnings is suitable for the site, which is more than a year or two years.
Social media and SMM
The next way to earn money is to maintain the group in social networks. To create your own group, just register on the website and create a group.
In this case, as with the site, it is important to find interesting and unique information that people will need. Finding such information is difficult: be prepared that your content will be stolen. But if you manage to attract 100 thousand subscribers, your earnings will be in the thousands of dollars.
Groups with a large number of subscribers attract advertisers who themselves offer to place their ads in such groups on a daily basis. For example, a well-known bloggers advertising post in Instagram costs from 500 thousand rubles. Even if you have 30 thousand subscribers, you can start making money on advertising through special services.
Where to invest for passive income
The creation of a business
This is a promising way to earn money, because in this case you have full control over investments. In this case, we are not talking about an active business, where you need to work yourself. You can organize or purchase a company with an established structure of work, where there is a reliable Director, Manager of the company.
A great idea is to create a service, such as automatic washing, where almost no employees are needed.
If you look at the Internet, the space is even wider. You can, for example, hire developers and create a program, service or service that will generate passive income in the future. For example, a service for creating logos, checking the uniqueness of texts, analyzing websites, etc.
Rental of real estate
At first glance, everything is simple: buy an apartment or a house, put it or him on Booking or Airbnb and get income.
This source of passive income can bring from 5 000 to 30 000 rubles per month, which will cover the cost of utilities and bring profit.
A more profitable way to obtain passive income from the delivery of real estate is the leasing of garages and commercial real estate. Garages are cheaper than apartments 5-6 times, while the cost of rent is lower only 2-3 times.
But the apartment the apartment strife. If together with the apartment you offer a range of services: cleaning, Internet, satellite TV, linen, food, etc., the rental price will be higher.
Renting a car, equipment or other asset
By analogy with real estate, there are different options for earning. If you are the owner of a property that is not used, you can rent it out. After all, if a thing is a dead weight – it is a liability, but if it brings income, it turns into an asset.
An example of assets can be: PlayStation, car and more.
Thus, investing money in an asset, you can rent it out, thereby returning the money invested, and begin to receive passive income.
You can buy shares of the company and receive passive income in the form of dividends, or trade securities and receive active-passive income. Many people believe that this method is not able to bring a lot of money. However, this is not entirely true. If you competently approach the choice of companies and do not take the shoulders unnecessarily, you can increase your Deposit and ensure a comfortable old age, as well as leave the funds to the next generations.
ETFs and indices
If we analyze stock indices, we can see that their profitability is not particularly high, but there are ETF-funds – shares of companies buying shares included in stock indices. By purchasing 1 share of the ETF Fund, you buy all the shares included in the index.
At the moment, ETF funds are very popular in the US and Europe, as they are portfolio investments protected from crises and various risks.
In addition to the stock there are industry, balanced and unusual ETF-funds. For example, the Whisky ETF is a Fund that includes shares of all major whiskey producers.
Usually this means PAMM accounts, which can bring from 60 to 120% per annum.
An example of trust management is also investment funds and copying transactions of managers.
Other types of passive income
Creation of passive income in the main job
Many people think that it is impossible to create a source of passive income, working at the main job. But it's not.
Perhaps your work can provide other people with some kind of bonuses. This may be additional services and knowledge that would be useful to people.
For example, if you work as a cook, many would come in handy your tips on cooking, such tips can be sold – to conduct a column on the website or publish a book. If you work in the tax office, many would come in handy your advice on taxes and fees, as well as on filling out declarations.
Earn on what you love to do. For example, if you like to play games, you can also earn money. There are services where you can sell for real money characters, rare items from the games. In addition, there are various tournaments that provide rewards for winning.
Government programs and benefits
Review the current legislation or consult with a lawyer, you may be eligible for any benefits or have the right to participate in the state program. For example, the state programme for the support of young families, which operates throughout the country, helps young families to buy an apartment. Maternity capital and programs to support large families – help in the upbringing of children.
How to create passive income: step-by-step instructions and tips
From all the above it is clear that the sources of additional income weight. But they are always associated with the use of available resources or the creation of a new product. Before you create a source of income, ask yourself a few questions:
- Do you have capital that you can invest? Free cash will facilitate the search for sources of passive income.
- What you love? Are you a creative person (like to write music, draw, shoot video)? You of mathematics (like the calculations, formulas)? Perhaps you have a craving for the financial sector? Or are you an entrepreneur? The answers to these questions will help determine the area in which you should develop.
Choosing a source of passive income depends only on you, you should not shift this responsibility to others. In addition to the known ways, you can come up with something of your own, it will be even better.
- Constantly look for new sources of passive income, do not stop there. If you find a stable source of passive income, move some of the funds there and continue to look for new sources of income.
- Diversify your sources of income. Strive to create the largest possible sources of income. In no case do not put "all eggs in one basket". This will protect you from crises and various risks.
- Not spray. It is better to develop one source of income and then switch to another. Working on several projects is not prohibited, but it can affect the quality of each product individually.
- Constantly improve and increase financial literacy. Learn more about investments, test new sources of income, experiment with creating options for investment.
Passive income is what most normal people aspire to. Above we have listed a dozen ways to create sources of additional income, but this list is not complete, it can be continued.
The fact that you are thinking about creating a source of passive income, already distinguishes you from the majority. Each of us has a lot of options to improve their financial condition, but each option needs to work.
We wish you good luck in achieving financial independence and organization of passive income sources. For our part, we will try to help you with this.