Passive income has long been the holy grail for entrepreneurs looking to free up their time, untethering the cord of daily duties and responsibilities from the potential to generate healthy monthly revenues. While the importance of passive income isn’t often doubted, the monumental hurdle often required to achieve a respectable amount of cash flow from automatically-recurring revenue streams is often too great for most to bear.
Clearly, it’s hard to generate passive income. It requires the upfront investment of a significant amount of our time, usually with little to no returns for extended periods. We can go months and even years without a single dollar produced from passive income activities, making even the most astute entrepreneur shake their head in sheer and utter frustration.
The truth of the matter is that time is far more valuable than money. While money can be spent and earned, time can only be spent once, then it’s gone forever. As we age and grow older, we understand the importance of time and being able to freely choose what we do with those precious moments that we do have in life.
What is passive income?
Before covering some of the best passive income ideas that you can use to automate your revenue, it’s important to understand specifically what the concept means and what it doesn’t. You’ll likely find countless posts on the web covering dozens of passive income ideas, whether online or in the real world.
When an income stream is passive, it means it requires little to no maintenance to keep the money flowing. Now, that doesn’t mean it can simply be completely ignored or forgotten about. No. Quite the contrary. It’s important to track every passive income stream and watch it like a hawk, no matter how automated it might be.
Start a blog
The most important method for generating passive income is to start a blog. Blogs can generate a tremendous amount of income, but not quickly. If you plan to start a blog, understand that it’s going to take a vast amount of work and time to succeed.
Regardless of your niche, as long as you have a clear understanding of things like searching engine optimization, social media marketingand the ability to write high-value content, then you will succeed with a blog. Once your blog becomes popular, it provides you with the platform and audience to generate multiple streams of revenue by marketing relevant products and services to your visitors.
Write and publish an ebook
Another great method for generating a respectable amount of passive income is to write and publish an ebook. Non-fiction ebooks that help to educate your audience on topics such as online marketing, business or other self-development areas, are going to sell far better than fiction books at the outset.
Clearly, fiction can make tremendous amounts of money, but it’s also highly competitive if you’re not an already-established writer with an existing following. Utilize the Amazon Kindle Direct Publishing platform and publish ebooks that will fill an existing need in popular niches where you have some level of expertise
Create an online course
Have a technical skill? Want to convey that skill to others out there while generating a healthy passive income stream? Creating an online course on Udemy is a great way to automate some of your cash flow. However, like any other income stream that’s passive, it takes a significant amount of effort on the front end.
There are so many things that can be taught through an online course. I opt to teach technical skills in my courses such as how you can become a web developer or learn search engine optimization, but you can also opt to teach other skills such as playing an instrument, learning a new language, becoming a photographer and so on and so forth.
Produce an audiobook
I’ve been in the audiobook business for some time now and it’s an incredible stream of passive income if you do things the right way. Leverage Audible’s ACX platform to push out your audiobooks to the world’s most robust platforms such as Audible and iTunes.
If you have specialized knowledge or advanced skill sets in some area, you could opt to teach them through audiobooks. However, you have to focus on delivering an enormous amount of value and ensure that you have a high-quality production. Don’t try to slap things together and expect to earn any money online.
Become an affiliate marketer
Affiliate marketing is likely one of the most powerful ways that you can produce multiple passive income streams. However, this isn’t easy by any measure. To succeed at affiliate marketing, you need a large following of users. In other words, you need a big platform and audience.
When you don’t have a platform or audience, you need to run ads, which can get costly. If you know what you’re doing and you’re a seasoned internet marketer (IM), you’ll succeed. But it takes time to learn the ropes. Still, this is a great way to sell products and services that you don’t own, effectively becoming like a broker while earning a healthy passive income stream.
Build a sales funnel
Anyone in the marketing business understands the concept of sales funnels. Sales funnels conceptualize the process of taking prospective customers from browsers to buyers. However, building the proper sales funnel is no easy task. It requires a serious amount of upfront investment of your time, and it also requires lots of browsers to drop into the top of the funnel.
In order to build your sales funnel, you need to offer something in exchange for an email address, effectively creating a free offer. Sign up to a system like Aweber or Mail Chimp and work on building out your sales funnel. Create a free offer and build an automated email series that will move your leads up the value ladder of products that you’re selling.
Okay. Okay. I know it’s not easy to develop a smartphone app. You either need a lot of skill or a bit of money to get someone to make your vision into a reality, but it is still possible. While the overnight gold rush to app riches might be over, you can still earn a respectable income if you develop the right app.
If you can create the next Uber, then great. If not, you can opt for some niche app that will help to solve a problem or fill a need that might not have yet been properly covered. Think you can do something better? Why not give it a shot? If you’re at all technical and understand the dynamics of business and smartphone applications, this is definitely worth your while.
Sell digital products on Etsy
Etsy is a massive resource for people wanting to sell all types of handcrafted goods. But, did you also know that you can sell digital products on Etsy? These digital products require little to no maintenance once they’re up and running. All you need to do is put the time into creating the digital products and setup quality listings
Clearly, this will require some maintenance on your part and ensuring that the right traffic hits your listings. However, digital products require virtually no overhead and will sell automatically as long as they are high in quality and are appealing to the relevant audience that you’re targeting.
Generate royalties from jingles or audio tracks
If you’re musically inclined, one idea for generating some passive income could be to create jingles or audio tracks that you can then license out through popular websites such as Audio Socket, Sound Cloud or Song Freedom, just to name a few. Clearly, this isn’t easy. But it is well worth your time if you can come up with something great.
Do your research and due diligence to create audio tracks that are appealing to a large audience. Search for other popular tracks that are being heavily licensed and see what they’re doing that you could try to replicate in some format, while not outright duplicating.
Make YouTube video tutorials
YouTube is a great resource for earning a large stream of passive income. While it’s not easy, and it will effectively take millions upon millions of views to earn some semblance of a real income from this stream, YouTube does offer a very cost-effective avenue to market.
Research what the most popular YouTubers are doing. For example, Blippi, which is a kid’s series created by creative entrepreneur, Stevin John, helps to teach children about all types of subjects and has become one of the most popular YouTube series in its niche with over 500 million views in the past couple of years alone. Seek out successful people and try to replicate their formulas while being unique.
Sell professional photos online
Another avenue for passive income is to leverage photo-selling websites such as iStockPhoto and Shutter Stock to earn money while you sleep. Clearly, you need to understand photography and things like Photoshop if you’re serious about succeeding in the photo-selling business.
There’s a lot of competition when engaged in this line of work. However, if you have a knack for photography, then selling your photos online should come almost naturally to you. Get really good with photo-editing software and find your niche. Whether it’s portraits, landscape photography, business photography, or something else, find it and stick to it.
Invest through peer-to-peer lending platforms
Peer-to-peer lending platforms such as the Lending Club and the Funding Circle make it easy and straightforward to invest in people and businesses to generate a passive income stream from interest payments. Many of these sites have accurate algorithms that will predict risk, taking much of the guesswork out of the equation for you.
Clearly, this will require some upfront investment. If you have some money stashed away, this might be a good avenue for investment without having to rely on low-interest-producing CDs at banks or high-risk stocks. Do the research and judge for yourself on whether this passive income idea works for you.
Build niche or “guide” websites for lead or referral income
If you have an understanding of SEO and online marketing, you might want to build niche or guide websites to help generate leads and referral income. Popular industries include insurance, credit cards, the make money niche, diets and weight loss, amongst many others.
Find something that you know and ensure that you source the right relationships with the right companies to sell your leads, or make sure that people are referred to the right products or services that will allow you to earn a commission with each subsequent sale.