A source of income can be called a passive income, only if it involves little to no consistent effort, to generate a money stream. It is mainly self-sustaining. The concept being, the running of an “automated” company.
But why would you need a passive income? Is your primary income source not enough? Shouldn’t you give your 100% on your main income source?
According to financial advisors, the answer is – No!
Apart from the primary income source, you always need to keep other options open, so that during a contingency, like the period of Covid, you don’t encounter a hard time financially.
Passive income frequently entails some form of initial investment that yields constant long-term returns.
Two passive activities are officially defined by the Internal Revenue Service (IRS) which are —
- Activities in trade or commerce that doesn’t involve material investment.
2. Rental business.
They define passive income as earnings from owning investments such as stocks, mutual funds, royalties, or rental property.
What do we mean by Passive Income?
The opposite of active income is passive income. So, when you get paid for the ongoing job you undertake’ that is called your active income.
Most full-time occupations and side hustles count as active income. With passive income, you make an initial investment of money and or time, and then, gradually accrue income over time, without making any additional effort.
Although the idea of earning passive income can be enticing, it’s important to remember that your investments may not grow immediately.
Building a passive income stream can be extremely profitable, provided you have the leisure to see your investment grow and are prepared to put in a little effort to nurture that growth.
Now, what’s the secret behind generating passive income?
Passive income is commonly defined as “making money in your sleep.” Traditionally, financial investments would be used to accomplish this. These days, you can see many artists or media personalities begin a passive income stream by developing a digital product or cosmetic product that they can resell time and time again.
If you want to begin generating passive income, we have some pro tips from financial advisors —-
Thoroughly check out what sort of upfront investments you can make, considering time, money, and effort.
Ask yourself whether you possess any abilities or expertise that others would find useful. If so, what is it?
Finally, how can you make the whole process automatic?
The first step in developing a consistent income stream is choosing the passive source of income that makes the most sense for you. Let’s check out 7 such passive income approaches that can enable you to earn $1000 or more monthly:
1. Print On-Demand Business
By starting a print-on-demand store, you can sell your original designs for t-shirts, hats, mugs, posters, and other goods without having to worry about inventory or fulfillment. All that is required is that you choose your provider—companies like Printful, Printify, or Gelato—upload your file, choose the products you want to sell, and promote them on your website.
To do this, there are zero requirements for inventory or fulfillment. Just make sure you produce items that are appealing, unique and niche orientated.
But that’s not all. In this case, marketing, customer service and self-promotion may be necessary. However, you can look at outsourcing these tasks.
2. Put Money into Investments.
Financial investments come in many forms, including buying stocks, bonds, mutual funds, and peer-to-peer lending; they require little follow-up labor while interest is accrued.
Through mutual funds, small or individual investors can access professionally managed portfolios of stocks, bonds, and other securities.
The portfolio of a mutual fund is set up and kept up to date by the specified investment goals in the prospectus. Performance is typically measured as the change in the fund’s total market capitalization, which is generated from the performance of the fund’s underlying investments combined.
The advantages are you get a high potential for expansion over time with very little maintenance. But you should also consider that you may have short-term access to a limited amount of money, depending on tax requirements.
3. Rental Property.
Regardless of whether you rent to long-term residents or transient visitors, rental income still necessitates all the usual home maintenance.
Rent can be a very profitable long-term investment as well as you can start making money whenever the first tenant moves in. But also, you should keep track of maintenance, advertising and all expenses.
You can write a book and sell it online if you have a wealth of knowledge or a great story idea. A service like Kindle Direct Publishing, which enables you to convert your words into an eBook or print edition and sell it on Amazon, is used by many people.
So, you can write something you’re glad to publish. You oversee your creative process. But sometimes, it can be quite time-consuming to get a book ready for publishing. Marketing and self-promotion are also necessary.
5. Promote Worksheets and Sell Templates.
Online worksheets can be purchased and uploaded in several locations. Typically, this is accomplished by producing a printable worksheet with a user friendly tool such as Canva and uploading it to a website like Etsy or Teachers Pay Teachers where users can pay to download and utilize your work.
This job is simple and affordable to produce. However, it may take some time to see the cumulative financial rewards.
The concept of this is similar to the forementioned print on demand suggestion. In that you can open a store to sell products, on a ecommerce platform such as Shopify.
You do not need to hold the stock or inventory, instead your supplier would ship it direct to your customers.
7. Content Creation
If you prefer using video as your medium, you can make money by submitting your original works to YouTube and setting up your account for monetization through the YouTube Partner Program.
You can make any kind of video you like, including instructional, short films, ones with original music, and even ones with ambient noise, but there are some prerequisites to joining the YouTube Partner Program, such as having a certain quantity of subscribers and views.
This way, you can do something you’re passionate about and as long as you’re enrolled in the YouTube Partner Program, you can keep making money from the same videos.
So, these are the most trending and happening passive income ideas for generating a decent passive income.
Which one interested you the most? Share your thoughts with us in the comment section below.