What is Passive Income?
This is a type of income that is commonly misunderstood. Too many think that it is income you don’t have to work for. That is not exactly true. Passive income is revenue that is derived from activity you are not active in on a daily basis. You don’t have to put in so many hours to get revenue from it. Technically, you could hardly lift a finger and still bring in money.
Pros and Cons
The great thing about passive income is that overall it is easy. You don’t have to work eight to twelve hours to earn money. It can be earned while you sleep, go to the zoo with the kids, or take a long vacation. You technically only work once to earn unlimited amounts. You can earn today what you worked on five years ago.
Despite it being so “easy”, passive income has to be maintained. This is where the con comes into play. Passive income isn’t the type to be ignored. It has to be worked but never strictly. Each type of passive income requires different amounts of maintenance. Some require periodic attention while others require daily attention but not the eight hour shift to earn money.
There are various types of passive income. Some require more attention while some require more hands on compared to others. A few require only a periodic monitoring while others need your attention at least once a day. This is not a comprehensive list. There are many different types with new ones coming up all the time.
You might think that this is far from passive activity, but it is the concept of how it generates income that puts it as passive. You write something only once while it can generate money indefinitely. I am not talking about a job where someone hires you to write a piece and that is all you get for it. I am referring to writing books and articles online.
When you write a book, you are essentially done with it once it is published. You don’t have to write any more. People can theoretically buy it for decades and you get royalties on it. The same goes for some articles you publish online. I write on this site and several years later, I’m still earning revenue on that one article.
Remember what I said about maintenance? Here is where the active part of the passive income appears. Your book needs to be marketed. You will not make any money on it if you just write, publish, and move on. You have to share the news of your writing and get people to read it. Only then does the passive income actually work.
Have you thought of creating pictures or videos for people to use? Many people buy these images or watch the videos. You can get paid for them.
Look at stock photos. People buy them from other people who took the pictures and posted them online. They took the picture once and then waited on someone to buy them. Sometimes more than one person and purchase the rights to use the picture.
When you make videos, you can earn money from sharing them online simply by allowing ads to be placed on the videos. You make the video once and earn money from it.
Have you noticed lately how online articles and blogs are stating that there are associate links on their page? These are links to sites that relate to the topics at hand. These links could provide money to the site where you clicked on the links. It could be just by clicking on it or if you happen to purchase anything on the site after you clicked on the link.
Let’s look at Amazon associate links. You click on the link. If you purchase that item or any other item on Amazon after clicking on the link, the person gets a small percentage of the sale. You put them on your site or in your article and get money whenever anyone clicks and buys something.
This is one of the oldest passive income methods around. You purchase stock in a company. The idea is for it to increase in value for future payout. This is one type of passive income that does not show immediate results. Most investments are expected to exist for several years.
Active investors will buy and sell often over the course of a year as they evaluate the stock market and the economy. It is a science within its own sphere and can be interesting.
This is probably older than investments in the terms of popularity as a source of passive income. Real estate is purchased with the idea that as time goes by, the value of the real estate will increase. This type of passive income is for the long haul.
Some buy land and wait until commerce needs it. Some purchase houses to resell after fixing them up to improve their value. No matter what the real estate is used for, the idea is for its value to increase.
Yes, making videos can bring you money as more and more people view the viedos. In the early years, quite a bit of money was made this way. Lately, it has gotten harder with new restrictions, but there is still the ability to make money this way.
Popular videos make money. They provide entertainment or have knowledge to share. Make videos about your topics and make money as people view them.
This real estate passive income tends to expect a little more work from you to keep it making money. Rental property can be a house, an apartment complex, or even a business site. The only work you need to do is keep it up. Make sure everything works properly and fix anything that gets broken.
Some people have made their fortunes from rental property. You buy the property, fix it up, market it, and then only address needs as they arise.
Build an App
Apps are used by everyone in today’s world. We use them to track the weather, read books, and socialize. In fact, many of us live by apps. Why not create a new app to fill a need?
People will pay for apps if they fill a need in their lives. Even if only a dollar or two, it adds up as hundreds or thousands purchase it. Even free apps have purcahsing options that can send money your way. Create the app once and let it bring the money in.
Learning new things online is increasing by leaps and bounds. These courses help people expand their knowledge or pad their resumes. Create a course once and allow it to bring in money months and years after it is made.
Do you know how to decorate cakes? Create a course to help others. Some courses can cost as little as $5 or as much as $500. It all depends on the subject matter. Hobbies, professional topics, and even educational topics make money through courses.
Do you have a website? Does it bring money in for you? That is where ad revenue does. You offer ad space on your site for a fee, typically monthly.
Ads can be placed at the top of your pages, on the sides, or at the bottom. The only work you have to do is keep traffic coming to your site.
The Work Behind the Passive Income
While the idea of passive income is not to do direct work to bring it in, passive income does require work to some degree. Marketing to get people to come to your passive income sources, traffic to your website, writing articles, creating photos, creating a course. You have to create the source for your passible income and maintain it.