Imagine being able to make money while you are sleeping? That’s the opportunity that passive income provides. And passive income is one of the best ways of building your wealth. Passive income is what separates the very wealthy from the middle class or the poor in society. Passive income is about making your money work for you.
Most people know that they should work to earn their salaries. For some, the harder they work, the more money they can potentially make. For example, many people will choose to work overtime in order to make extra money. By devoting more time to your work to make more money, you are working harder. There is a better option which passive income offers; you can make money while you sleep without applying any effort. This post will share some ways you can generate more money through passive income.
Passive income is income that requires little to no effort to earn and maintain. Passive income is an income received on a regular basis that may not require any direct application of further efforts, after some initial input. Examples of passive income include rental income, dividends from share ownership, royalties from book publishing, interest from banks, etc.
Most people believe that passive income requires no effort. That’s not true; it requires minimum efforts to maintain it. Passive income requires an upfront effort. Let’s say you write a book, you put effort during the phase of your research and writing the book, but you will continue to earn money without any further effort in the future. The minimum effort required is to ensure that you market the book so that you can continue to make money from your book.
Let’s contrast that with active income.
Active income is also called earned income. Most people make money in the form of earned income. They have to keep working to continue to earn their income. If they stop working, the income stops. Active income is a form of income that you receive through direct application of efforts; you need to show up, get up, and be involved directly to get paid for your services. This income includes tips, wages, salaries, commission, and profit from businesses. Most employees are active income earners. Active income earners commit a significant amount of time to get paid for their services.
What are the sources of passive income?
1. Become a Digital Creators:
You can create courses, training, or make YouTube videos and make money as people listen to or watch your content. The more people that subscribe to your content, the more money you can potentially make. Here is a breakdown of how you can make $500 from your digital course.
· By selling the course to 5 people at $100 per student.
· By selling your course to 100 people at $50 per student.
· By selling the course to 200 people at $25 per student.
2. Membership Website through blogging
There are lots of membership websites out there that you subscribe to get useful information. In return, you pay the owner of the site some amount of money so that you can continue to have access to the information. If you can create a website that will provide helpful information to people, you will be able to attract and retain paying customers on your website. The way you make money here is to get people to subscribe to your services on the platform. Here is how you can make $500 with your membership website.
- By having 500 subscribers that pay $1 per month.
- By having 200 subscribers that pay $2.50 per month.
- By having 100 subscribers that pay $5 per month.
3. Write ebooks.
You make royalty from writing a book. Of course, the more copies you can sell, the more the money you will get. The well-known authors often get an upfront payment from publishers. For the up and coming authors, you need to build your followership and sell to them. You must actively promote your book in order to get more sales. On average, depending on the type of book, you can make anything from as low as $1 to as high as $5 on each copy of the book that you sell. Here is how to make $500 from your ebooks.
- By selling 500 copies of your book at $1 each.
- By selling 200 copies of your book at $2.50 each.
- By selling 100 copies of your book at $5 each.
4. Invest in Dividend-paying companies:
There are many ways to generate income through dividends by investing in the stock market. Many companies keep increasing their dividends as they become more profitable. Some REITS provide dividends as high as 10% per annum. So if you invest $60K in a REIT that provides a 10% dividend rate, you will be able to generate $500/month.
5. Buy investment real estate — Rent — Real Estate, Airbnb.
You can also invest in real estate by buying rental properties and generate passive income as a result. On average, you can make about $200/month on a rental property after paying all your associated expenses. You can rent your home through Airbnb as well.
Obstacles to starting
Why are more people not generating Passive income?
- Not sure how to start
- Don’t know what to do.
- Not sure that they can do it.
2. Fear & doubt
- What if I fail?
- What if I lose my money?
- What if I create a course or write a book that no one buys?
Still do it. Start small. Be a learner and grow.
What do you need to do?
- Focus: Take your time, focus on your strengths and skills, and you will discover what you can do.
- Determination: It’s not going to be easy, but if you are determined, and you continue to learn, you will find success.
- Commitment: Failure is guaranteed without commitment. Many people started writing a book, but they couldn’t finish it.
I want you to set a goal of building your own passive income portfolio. Identify one source you are comfortable with, start learning about it, and make efforts to build your passive income portfolio.