Passive Income: Top Ideas To Build Your Wealth
In this article, titled “passive income: top ideas to build your wealth”, we will break down the top ways to generate multiple income streams and build an extra income.
Having extra money never hurts someone. And one of the best ways to make that extra money is through passive income! The idea of “making money while you sleep” is one that we all dream of achieving one day. I can’t be alone in this, right?
After all, if you are here, you likely want to attain a certain level of financial freedom. So, one of the goals of financial independence is to create wealth that doesn’t eat up your time. To be honest, building a passive income stream isn’t passive in the beginning. You do have to put in the time and effort. But where do you start?
In this article, I will help you understand what passive earning truly is and how you can start making it.
Before we begin, it’s important to remember that passive income is a long-term choice that requires short-term tradeoffs from you. If you are willing to commit to those tradeoffs i.e., the steps I mention below, then you’ll be well on your way to earning effortlessly.
All you need is a place to start and some resources that you are willing to expend for your passive income ideas.
Table of Contents
So, What is Passive Income?
Passive income means making money from a source other than your employer or contractor.
This type of income can come from two sources:
- Rental property
- A business in which you do not actively participate
The point of passive income is to protect your time. For instance, if it takes you 4 hours to make $200 today, and it takes you the same amount of time to generate the same $200 a year from now, then your income is not passive.
Many people mistake passive income with the idea that you get something for nothing. They feel it’s a get-rich-quick scheme. But the idea of making money through passive sources involves work. You just provide the work upfront. Along the way, you might need some additional work too to maintain your income stream. As time passes by, though, the work gets less and less.
But if you are committed, your hard work and strategy will take off. As a result, you will create ways to build some extra financial security for yourself.
How Much Money Can You Make from Passive Income Ideas
I’m not saying you’ll become an overnight millionaire from passive income. It simply won’t happen. Therefore, you shouldn’t have unrealistic expectations.
If you are wondering whether you can make $5,000 to $10,000 per month from your passive income ideas, that may be possible. It is, however, best to shoot a little lower in the beginning.
Your focus should be on maintaining a steady flow of money along with creating more opportunities to amass income over the long term. Once you have achieved that, you can earn a few thousand dollars every month with your passive sources of money.
Different Ways to Build Your Wealth Through Passive Income
1. Start Investing
The reason why I started with investing is that a lot of people get confused about whether to consider investing a passive or active income.
The answer to this is: it depends.
Many people think investing is a good form of passive income because it allows you to earn money quickly and with little effort. However, that’s not the reason why I have made investing a part of this list.
The type of investment you make is what determines whether your income is active or passive.
For instance, stock appreciation is not income. On the other hand, if you invest in stable companies that give cash in the form of dividends, then that is a passive income strategy.
The difference here is figuring out whether you are getting a cash-on-cash return, or will you only see a profit if you sell the investment.
While we’re here, I should also mention that cryptocurrencies and commodities are not passive income strategies. They are subject to constant price speculation.
Further reading: Should You Trade Or Invest? Know the Difference
2. Dip Your Toes in Real Estate
One of the oldest and most profitable ways to generate income is real estate!
It’s not as simple as buying a house or land. However, it has been made significantly easier nowadays through real estate investing apps.
Perform a little research on apps that are specific to where you live. See how you can take advantage of the real estate market. These apps are a great way of figuring out whether or not real estate is your cup of tea.
If it’s not, I totally get it. We can still move on to the next idea on this list and see if that fits in with your skillset and resources.
3. Rent Out Any Available Space
You can rent out spare rooms in your house – sort of like an Airbnb. This may sound intimidating but is pretty easy.
All you have to do is take a few nice pictures, put them on a price tag, add a catchy description, and voila! Your free space is ready to be rented!
You can also rent out your house if you are traveling. This is often great as movie productions can rent the space for advertising and films and pay big bucks for a single day.
4. Rent Out Handy Items
In today’s world of rising prices, borrowing – rather than buying – is the name of the game. And guess what? You can be the person that people borrow from!
You can rent out things that you no longer need or use regularly to people. These things can include a small boat, a truck, or even your yard.
Other people can borrow these things from you for a small fee. This is a great way to generate passive income.
5. Sell Digital Products
Digital products can include anything from e-books to online courses and even NFTs. Digital products are one of the most popular ways of making passive money.
The reason behind that is that you put in the effort once. Then these resources can generate money again and again on their own. You can take a passive approach to your digital products, or you can spend some money and market them as well.
If you are thinking of creating an online course, you can create several packages at different price points. Some people want everything, so you can include the highest price point for them.
You can include the following as part of your online offerings:
- Video guides and lessons
- Supplemental material in the form of e-books
- Informative podcasts or interviews with experts
- Audio files for people to conveniently listen to while traveling
Furthermore, if you have a knack for photography and enjoy snapping pictures, put that talent to use! You can sell your images as stock photos. You can use third-party platforms like Shutterstock and Alamy to earn some extra money.
6. Custom Designed Products
Print-on-demand websites like Teespring, Zazzle, and CafePress are great platforms for the creatives out there.
If you are great at coming up with creative concepts, you can put your original designs on these platforms. Every time your design is used on a product – such as a tee or a mug – you will earn money.
What makes this income idea extra awesome is that you don’t have to go through the frustration or hassle of storage or shipping the product yourself.
How Can I Make Passive Income with No Money?
This is a question that many people ask. If you have little or no money, you will have to rely on time investment to push you through until you build up a little money.
It helps if you are trying to make an income in your area of expertise. Another way is to put in a lot of work upfront. That means putting a significant amount of time into creating something good and helpful, such as starting a blog or creating a course.
This way, you substitute your time for a lack of capital. Once you start earning money and get some capital, you can then expand your opportunities.
Which Passive Income Source is the Best?
The question of which passive income source is the best depends on multiple factors. Some of the most important ones include:
- Your initial capital
- Your expertise in the area
- The total size of the opportunity
- The potential to succeed
- The amount of time you need to put in
Usually, the lower the barrier to entry, the more competitive it is to make money in that niche. Consequently, the likelihood of success is less too.
However, if it’s an area where you are truly an expert, then you can make your mark.
In the end, you will have to weigh the opportunity against the above factors and see which strategy fits your situation best.
To make it easier for you, I suggest doing something that you have an interest in or natural ability in. This can be extremely helpful in motivating you to put things together, especially during the beginning of your passive income journey.
If you enjoyed this article on Passive Income: Top Ideas To Build Your Wealth or have any questions for me, please feel free to leave them in the comment section below!
Recommended Resources: If you’re interested in learning more about online trading, check out my book “Trading for Success; 8 secrets why women are better forex traders” and take a deep dive into my blog.
And if you’re concerned about improving your finances, I have developed the best money tools based on my expertise and extensive experiences such as educational books on personal finance and trading basics, and a range of digital and audio products. All of these are to help you achieve towards getting you your desired outcome most efficiently and enjoyably, enhancing the learning process.