Earning money while you are sleeping is THE dream and what’s more, some big famous person said it as well. But the question is, Is it possible? and if it is possible then how?
A STEADY and PASSIVE income has become one of the primary requirements in 2023. With inflation rising in every part of the world, having one job is just not enough and in some cases, people working more than 40hrs a week, there is not a lot that you can do in the remaining time. So having a passive income is a great idea to supplement your earnings.
WHAT IS PASSIVE INCOME?
A Passive income is any income apart from your primary earnings which can be earned without disturbing your primary income or schedule. Passive income can also be earned by someone who is not working full time, a student, a homemaker, or anyone who does not want to have a tag of “job” and yet have consistent earnings.
What Passive income is NOT?
– A second job or a part-time is not a passive income. It’s a second job!
– A business or an entrepreneurial venture is not a passive income.
Usually, a passive income does not require you to devote a lot of time consistently. In most cases, it is a one-time thing with occasional upkeep. The earnings from passive income can be a fraction of your regular income or it can also be twice or ten times your primary job. (Ask The Rock who charges about $1 million for a single social media post)
STEPS TO BUILD A PASSIVE INCOME:
There are a lot of sources and ideas when it comes to passive income and you may have heard about that friend or that relative or that colleague earning a big load of money from his/her/their passive incomes. In most cases, it is possible to replicate that result – unless someone is exaggerating to you.
Before you start narrowing down to options of passive income, you must follow these steps so that you won’t have to manage or do something in which you don’t have experience or interest. These steps will help you to narrow down the choice of your passive income.
1. ASSESS YOUR SKILLS (REALISTICALLY)
You want to earn money? What is it that you CAN do? You need to have a skill that you can sell or which you can leverage. Each one of us has a unique talent and in most cases, that talent cannot be molded in a conventional box but unfortunately, that’s not how the world works. You need to have a skill which you can use. Having multiple skills is okay but your superiority in at least one of them should be great.
The above graph is a representation of average skills. We all have a few skills like photography skills, decent communication, some technical skills as well but you need to dial up at least one of the skills near to “above average” so that you can start leveraging on it. In other words, the jack of all trades needs to select one trade so that he can start becoming an ace of one.
Some examples of skills are Negotiation, Communication, Writing, Bi-lingual or tri-lingual skills, Technical skills such as computer coding, Photography, Social Media (Yes, this is a skill in 2022).
2. CALCULATE
A passive income does not consistent time but it does have some requirements of the time. You may also have to invest in a few things you start and that is why you need to calculate realistically how much time, money, and effort you are willing to spend. Remember, this is a passive income that should not disturb your primary occupation or disrupt your schedule. Unrealistic commitments to passive income would result in disappointment and so would unrealistic expectations. Commitments and expectations go hand-in-hand. If you are going to spare only 1hr every week, then you should not expect thousands. It’s brutal but it’s the truth.
One of the ways to go about this is:
1. have a fixed timetable of your daily activities
2. Narrow down those free times that you have when you are not working, studying, or spending time with family (Spending non-productive time on the phone is free time as well)
3. Check for repetitions – how much of such free time occurs in a week
and then you have the time you can commit.
PASSIVE INCOME STRATEGIES
While there are many sources of passive income, the ones that are mentioned over here are doable and work with what you have rather than doing something just because it is lucrative and very complicated. Here are five passive income strategies:
1. CREATE A COURSE
So now that you know your skills, use that to create a course. Since the pandemic started, online education and courses have gone up drastically and people are willing to learn on the go. Use your skill to teach them. It could be anything from communication to gardening – the only important thing is you should know about that skill, and you should be slightly above average in those skills. These courses can be uploaded to popular online academies like Udemy, Coursera, or EdX.
You can also upload them on youtube and promote them yourself. The income from ads can be a good enough passive income. You can also create a website for less than USD 100 and distribute the course yourself. Most of the courses these days offer the first 20% of the course for free and the later part is paid. Of course, if you are hosting it yourself, you have to do the marketing to pull the traffic towards it but the good thing is you get to keep the entire earnings.
2. AFFILIATE MARKETING
Affiliate marketing is when you promote a certain product to your friends and they buy from your referral link. Amazon offers one of the best affiliate marketing processes and a moderate commission. Instagram has also recently picked up as a form of affiliate marketing.
Users tag products and their brands in their status which is shared by brands. If you have a decent number of followers, you can get paid to share the products.
Many brands prefer to work with Instagram influencers since it’s a win-win situation for both brands and the influencer. The company saves money on promotion and influencer promotes the product at a fraction of the cost. Affiliate marketing is a passive income and not a permanent income source because if you are not able to pull viewers and readers to your status or posts, then the brands will not pay you for promoting their products. On the other hand, if you can get a few million followers, then you will be able to attract a substantial source of income.
3. INVESTING IN PRECIOUS METALS
Buying Gold and Silver to invest is an age-old technique to grow your money. In 2003, the gold price was about 9 USD per gram and in 2022, the price is about 60 USD for 1 gram of gold. So technically, if you would have invested 500 USD in Gold, now that amount would be about 560 times more which is about 280.500 USD.
Of course, some would say that stocks pay out better but the amount of energy and focus required to invest in the stock market is a lot. We are talking about passive income here so investing in precious metals although has a low yield but consistent and assured returns. I personally take this approach to develop some passive income. These metals have stood the test of time and have been precious for many millennia.
4. STOCK MARKET
This brings us to the Stock market. I do not consider investing in the stock market as a passive income but for the sake of discussion have included it here. The stock market has made people millionaires or beggars. You need to stay focused, alert and knowledgeable to know when to invest and when to sell stocks. Since this is a topic of passive income, look for stocks that you can purchase and forget for the next 5 – 10 years. If you have to look at it every day, it becomes a chore and would not be considered as passive income. Cryptocurrency and NFT’s are the latest money grabbers and have made people millionaires as well. Although crypto looks promising, I would strongly advise you to do your homework before investing in either stocks or cryptocurrency.
5. PHOTOGRAPHY
If you have a decent phone and an eye for good photography, then it can be a good source of passive income. You can sell your images to Getty Images, Shutterstock, and other companies. You may have to do some research to see what kind of photos are in demand and sell those pictures to the companies. The downside is you lose the copyright to your photos so you may see some of them turning out on a popular site but that’s where you have to know to ask the right price for those images. There is some effort involved in this but it could turn your hobby into a good source of passive income.