How to Make Passive Income
Millionaires typically have 7 income streams. Since no one can work 7 jobs, you need to look at other options. It’s about working smarter, not harder. Be smart with your time, find ways to generate income with little or no effort and you’ll find your net worth increases much easier.
Passive income is income you generate with little or no effort. Often you need to spend some time and money upfront but once it’s ready, it can make money easily for you, even in your sleep!
How I Make Passive Income
Personally, I’ve been working on passive income for years and it is something we are now working on as a family. Our current passive income includes:
Book royalties, blogs which don’t require me to work on them to make money, shares, business, eBooks, rental properties, stock photos and peer to peer lending.
That said, while we technically get an income from these, most of them get reinvested. For example, dividends from shares/stocks get reinvested. Rental income is being saved to develop our property portfolio further.
In the future, we will be focused mainly on business, real estate and shares.
1. Digital Products
Anyone can be an eBook author on Amazon or similar now. If you have your own site, you can sell your books on there too. I have eBooks listed in a variety of places so get royalties each month from Amazon, direct payments from my site and royalty payments from my publisher too.
Digital products are great because you can make them once and sell them for years. Two of my eBooks are over a decade old.
Two other digital products include printables which you can sell on your own site or sites such as Etsy and courses which is another option popular among bloggers and influencers.
2. Book Royalties
In 2010, a large business publisher saw an article I wrote and wanted to turn it into a book. We did this and there was an extra eBook created from one of the chapters. For years I collected royalties on the print book then I negotiated the rights back.
However, I still collect royalty payments for the eBook AND since you get payments as an author in Australia for anyone borrowing the book from the library, I get paid for that too. I forget about it until I get the email every few months.
It’s a nice surprise which I can invest immediately into shares or crypto.
Being a landlord is not always as passive as it is made out to be. Repairs, dealing with tenants or property managers, late rent or similar issues can chew a lot of your time.
However, if you are fortunate enough to have one managed well by someone for you, all repairs etc taken care of and the money simply put in your account, it is a great passive option. This is where we are at.
Our properties are overseas and taken care of by family there. The money is split, they get some and some is saved for us to develop the property. Since they live in Vanuatu, the income they have is pretty low and the rental income helps put family members through school, ensuring a brighter future for them.
Airbnb is a popular option for many as well. Since people can self check-in, you have rules and can have a cleaner for between bookings, for many, it is pretty passive. I (Ms Aspiring Millionaire) have previously done quite well with Airbnb.
Renting a room in your home can be fairly passive. Whenever we’ve done it, we were usually lucky enough to get people we know. Rent/board was set up to be paid automatically and since we come from big families, it didn’t bother us to have extra people in the home.
As a single mother (previously), having a boarder reduced my workload as they also helped clean at times.
Lastly, renting out the garage. Other than handing over the keys, this has always been a passive option. The garage has been used by people to store items, run a business or store a car. Each time, payments were automatic and I barely saw the person using it.
Invest in index funds, learn and invest in specific shares you want or look at micro-investing to get started. Before investing, take some time to learn. Too many people invest blindly then lose money.
The sharemarket goes up and down but if you have a longterm view, reinvest and don’t plan to use the income (dividends) until retirement, your portfolio can continue to grow nicely.
Spaceship is one microinvesting option which you can get a bonus $10 with. Use the code S801FV0EE2 when you sign up and invest a minimum of $5 within 14 days.
Raiz is another option which offers a $5 bonus. Be aware both have monthly fees now though.
5. Advertising on Your Car or Fence
With a newer car, you can be moving advertising for any business. They pay for a car wrap or magnet to be placed on your car. This works best in cities and if you drive a fair bit or your car is parked somewhere with a lot of traffic.
If you live on a busy street, some businesses will pay you to have signage on your fence as well.
Both of these don’t require effort after the initial set up. But be aware it can damage paint.
6. Affiliate Marketing
We do this through our websites and it forms a significant part of the website income. It’s easy enough o set up a website, market it well then outsource it to make money without your input.
Affiliate marketing is where you get paid when someone buys something through your link. Many sites are set up as Amazon affiliate sites or similar. It’s a way to sell or promote items without having to have them in stock.
Some of our best affiliates involve food and finance items.
Build a website (The Thrifty Issue has a simple guide on it) and either sell your own products, do dropshipping or do affiliate marketing as mentioned above.
Dropshipping is a hugely popular option as you can design and create products but not have to stock them. They are sold through your site and shipped directly to the customer without needing a warehouse.
8. Silent Business Partner
Partner in a business without being one to make all the decisions. You can either set up a business and be a financial partner or buy into a business. The businesses we own are split between us being active partners and one where we are silent partners.
9. Stock Photos
Sell your photos on sites such as iStock. Since we travel and take numerous photos for the marketing work we do through our travel, selling stock photos is a great side option. Once uploaded, we make commissions when they sell.
We do not upload our best, only generic style ones we don’t care about.
10. Peer to Peer Lending
We’ve mainly done this as a charity option but if you have a decent amount of money, you can start doing peer to peer lending through various websites. We have just started with Plenti and will share our experience with that soon.