Importance of passive income has been highlighted by Warren Buffet, who says, “If you don’t find a way to make money while you sleep, you will work until you die.”
How about doing a job that’s not defined by fixed office hours but your choice of time and place? A job where you pay fewer taxes, make extra money and get an opportunity to do something you love. Sounds like a win-win, right? Say hello to passive income, which can boost your financial growth, and improve your financial IQ.
To many experts, passive income is the secret to being financially stable. While that sounds appealing, it is still not a very common idea. One, because many opt for earning only through jobs and businesses, and two, because not all ideas of passive income are successful. But with countless ways to earn passive income especially in the digital era, truth is that it is a great way to make some extra money.
What is passive income?
As per Robert Kiyosaki, American businessman and author, there are active/earned incomes from jobs/businesses, portfolio income (stocks/mutual funds’ capital gains), and passive income, which you earn when you use your free time to generate revenue. Whether you make YouTube videos, rent your property on Airbnb, or publish a book, all these can be your ways to generate side income. While the term ‘passive’ may indicate non-involvement, it is not the case. You have to put in time and effort.
There are many benefits of passive income. For starters, there is the choice to work at your own ease, anytime and anywhere. Passive income also helps in building capital and provides financial independence, not to mention that it acts as a cushion in times of joblessness, business setbacks, and other financial adversities.
What are some of the ways to earn passive income?
There are limitless options when it comes to how you can earn passive income. We are going to list down some of the most popular five ways in 2020 that you can do while sitting at the comfort of your house:
Starting a YouTube channel
Right from review videos to how-tos/DIYs to vlogs, tutorials, etc, YouTube is a place that embraces these and much more. Once you garner a 1000 subscribers, you can opt for payment through ads on YouTube. Make sure though that your content is unique — having something different to offer is key. Many famous YouTubers have made it their full-time profession but for beginners, it is best to keep it a part-time thing.
If you have a passion for writing, you can start a blog site and earn through Google Ads on your page for views/clicks. Also, brands may collaborate with you and ask to write a review/mention them in your blogs. Brand collaboration depends on the relevance of your content to their product. If blogs seem like an option that’s not up your alley, influencers is an extension of the same, albeit on social media. The past five years have seen an influencer boom, with many now considering it a legitimate profession. Budding lifestyle blogger Rosme Chaube says that for her blogging started as fun before she learnt that she could monetise it. “It’s one of the easiest ways to earn a passive income and that too, without leaving the confines of my house if I wish and without muddling my daily schedule.”
Bloggers/influencers can generate income through sponsored posts with brands approaching them on the basis of followers, reach, and target audience. Other revenue sources through blogging and social media are affiliate marketing, which is a win-win for both blogger and brand as the results show in sales and through backlinks that result in hits to other websites. “These days a lot of brands are also launching products online and tapping into influencers for eyeballs instead of conventional media, which rings as extra income,” says Chaube.
If you have an idle property lying around, rent it. If you can make real estate investments on a part-time basis, then buy properties when it costs low, sell it when prices are high, and it can ensure a continuous stream of cash flow. Otherwise, you can always have a regular income through monthly rents.
One of the many things that 2020 has done is breed digital nomads. Which is to say work from anywhere and making the most of your skills while you are are it. Many offices can’t afford full-time employee for certain jobs — you can make use of your skills in your free time to get paid and provide what they want. Whether you are a software developer, UI/UX designer, content creator, or graphic designer, there are a whole lot of freelance opportunities in the market.
Online educational courses
This has been quite a trend, but ever since the pandemic struck, education technology is on the rise. Online courses at channels like Udemy (also you can launch your own) can serve as alternative income sources. Educate about anything you love or are good at. YouTuber Saloni Srivastava launched her online course HustlePost, and claims on her YouTube Channel that she made about 10 million in three months.
All in all, financial advisors always suggest establishing more passive income streams to multiply and diversify income.
All images: Courtesy Getty