Here’s the thing, there’s no such thing as purely passive income and anyone who tells you any differently is, well, lying to you. But wait, in this article we’ll show how is that it is possible to create streams of income that continue to pay you back over time with just a little work upfront and some ongoing maintenance.
Now, is it totally passive? Well, no, but these options can be a whole lot better than continuing to trade your time for money forever.
If you have the patience, creating sources of passive income is an amazing way of investing in your future freedom. In this article article, I’m going to be sharing the 10 most accessible forms of passive income that you could start building today. Let’s take a look at these 10 strategies that I think could work for anyone. And if 10 options aren’t quite enough for you, head on over to our blog post to see other ideas for growing your wealth by building passive income streams.
If you want that money to be passively earned, you need to make sure you’re providing
enough value in exchange. Okay, so with all of that out of the way, here are my 10 favorite ways to generate passive income in your business.
1) Sell digital products
The easiest and most accessible way to generate passive income in your business
is to turn your existing knowledge and skillset into an asset that people can pay you for,
especially if that asset is digital and evergreen, meaning that the content will be relevant and useful for years to come.
Now, this asset could be anything, an ebook full of delicious plant-based recipes or a spreadsheet template for tracking your daily habits, or a workshop recording about website design best practices. It’s pretty easy to get started with this income stream. You can create a store on a platform like Shopify, you can quickly add a digital product to a service like Gumroad or Sendowl, both of which are pretty affordable if you’re just starting out.
With a little financial investment, you can easily create beautiful digital eBooks and templates using simple free tools like Canva or Pages.
The time investment is not that much because it’s very possible you’ve already created this asset either to use with your existing clients or because you use it yourself. But even if you haven’t created it yet, since you already have all the skills, it’s usually pretty straightforward to turn your information into an attractive product.
And this is actually a great option for generating passive income because once you’ve created the product, all the income you earn from it is almost entirely passive. So depending on what you’re selling, this could mean a solid income stream for years to come.
2) Create and sell online courses
If you have an awesome digital product but want to take things up a notch, the next step is to look into creating an online course that teaches your own framework or skills through video, audio, or written content. I love this strategy because the barrier to entry is pretty low. These days, you can film a quality video on your phone, and course hosting sites like Teachable, Podia, or Teachery all offer relatively affordable monthly plans, or you always have the option to sell your own course platform by putting your content onto a private password-protected website or sending it out by email.
So in terms of an upfront cost, it’s cheap to start because there are definitely ways to do it cheaply. Unfortunately, the upfront time investment here is high because figuring out your curriculum and then creating quality content, and then packaging it all up into a genuinely helpful course is going to take a lot of effort if you want it to be good. But luckily, all that effort is worth it because when it comes to its potential for generating income over time.
All you need to get started is your own expertise and a little creativity and with the right marketing, or an existing audience, or really good SEO, it can turn into a very lucrative income stream for you as it has for so many business owners around the world.
3) Create a dropshipping store
Moving into the world of physical products, let’s start with an option that is pretty accessible for the beginner entrepreneur, dropshipping.
With this kind of store, you are curating interesting products from third-party sellers
who are then responsible for manufacturing and delivering them to your end customer.
Since you don’t have to pay upfront for your products or store your inventory or ship anything out yourself, this can be a low financial investment.
The time investment here comes mostly from doing your research so that you fully understand your ideal customer and the products that will most appeal to their needs and desires. You’ll also need to devote some time to creating a compelling and attractive online store on a platform like Shopify, and then integrating it to play nicely with your chosen drop shipping app, not to mention it’s probably a good idea to do a bit of quality control on your chosen products.
The passive income potential here is pretty low because the truth is that it is pretty hard to stand out with this kind of store. Since the upfront costs are so minimal, anyone can hang up their shingle and get started so the market is pretty saturated, unless you have a clearly targeted niche with well-chosen products and really good branding, there’s actually no guarantee that you’re gonna make much money.
The risk is low, but you should expect to put in some sweat equity upfront to make this income stream truly passive.
4) Create a print on demand store
In this type of business, you’re developing interesting product designs that will appeal to your ideal customer but you don’t have to handle the sale itself. Similar to dropshipping,
you won’t be responsible for the manufacturing or shipping of your products since a printing company will take care of all of that for you.
The biggest time investment here is going to be designing your products, if you want to find success, you’ll need to create beautiful designs or catchy slogans that customers will want to purchase, and that involves a lot of good market research to make sure you understand your customer inside and out.
You’ll also need to set up your store and make sure it’s attractive and easy to use and choose your print on demand supplier carefully.
Two that we like are Printful and Teespring. Financially, the investment is low because the beauty of these kinds of businesses is that you only pay for the inventory after you make the sale.
So while you will need to pay a little to host your online store and you might want to invest in things like branding or marketing materials, the actual upfront cost of a print on demand store is pretty minimal.
That you should be aware that the passive income potential is also relatively low, because unless you have really creative print on demand products or an existing large audience, it can be difficult to generate sales. If you find a formula that works, it can be very lucrative and is very passive, but getting to that point can be tricky for some beginner entrepreneurs.
5) Start a YouTube channel
There are lots of ways to make money on YouTube including brand partnerships and sponsorship but if we’re talking about passive income, then it’s going to be based on YouTube’s partner program which works with AdSense to give creators money based on their number of video views.
YouTube can be a great income stream but it is important to know that the upfront time
investment here is steep. To qualify for the partner program, you’ll need a thousand subscribers and 4,000 hours of watch time, which means that you’ll need tons of high quality content that people want to watch.
For most people, that’s going to be between 50 to 100 videos, and it often takes up to two years to qualify for the program.
Financially, though, it is a prettier picture because similar to creating an online course, these days, it’s very possible to film high quality video content using only your smartphone and of course, hosting your videos on YouTube itself is totally free.
Plus there is also good potential for passive income here. If you’re able to attract enough of an audience to your channel to qualify for the program, it probably means that your content
is pretty good and interesting, which means that people will continue watching your older videos and earning you money with each new view.
Theoretically, this means that even if you stopped making new videos, your older videos could still generate income for you for years to come.
6) Sell your photos or creative designs
If you’re a photographer, illustrator, or designer, you always have the option to put your creations up for sale on an online marketplace and generate some passive income for your work. If you’re already a working photographer or designer, the upfront time and financial investments here would be pretty low, since you would already have all the equipment you need, and in many cases, you might have already taken these photos or created these designs.
But, if you’re just getting started, these investments would be higher, maybe more like a three out of five since you’d have to buy or borrow a camera or get your hands on some
tools for digital design.
But in either case, it’s super simple and inexpensive to actually list your work on a site
like Shutterstock for photographers or Creative Market for designers and illustrators.
The income potential here is modest since these kinds of marketplaces are already pretty saturated with high quality work which can make it kind of hard for you to stand out. But that being said, it is a great option to combine with one of the previous income streams I mentioned and create print on demand products, but using your own designs or photography. This could lead to a lot more passive income depending on your audience size and your marketing. Either way, this is another option where there is really very little risk to trying it out for yourself.
And out of all the strategies on this list, it is probably one of the most passive, once you’ve uploaded your beautiful font or your collection of photos, the process of earning income from there on out is almost totally hands off.
7) Become an affiliate marketer
Just like with print on demand and dropshipping, the beauty of affiliate marketing is that you don’t need to hold onto any expensive inventory of your own. Instead, you’ll promote products you believe in and if your audience makes a purchase, you get a commission for referring that sale.
Financially, this is a great option. You aren’t buying, storing, or shipping inventory and most of these programs are totally free to join.
The time investment is another story. While technically you could sign up for an affiliate marketing program in less than a minute, the truth is that in order to have any kind of success as an affiliate marketer, you’re going to need to invest a good amount of time.
Affiliate marketing is totally based on trust and it takes a while to build that connection
with an engaged audience by creating high quality content that provides value over time.
Lastly, there is a good amount of passive income potential here. Statista estimated that the affiliate marketing industry will reach $8.2 billion collectively by 2022.
Still though, the earnings is modest because affiliate commissions on individual sales are generally pretty small, meaning that it takes a lot of successful referrals to generate a decent profit. But if you can build up a large audience and create a lot of great evergreen content, you could definitely be earning passive income for potentially years to come. Investopedia reported that 9% of affiliate marketers make over $50,000 American per year so there’s really no reason not to try out this income stream for yourself and see what you can build.
8) Create a rental business for your assets
We’ve all heard of Airbnb, but there are so many other great marketplaces popping up to help you generate passive income for other assets too.
This includes sites like Turo for renting out your car, Neighbor for renting out
your extra storage space, or even Sniffspot for offering your backyard to local doggies.
Now obviously, the upfront financial investment here is high because you need to first invest
in the asset itself, which if we’re talking about a car or a home can be really expensive, but you might be surprised at the market that exists for other items too like BabyQuip for baby equipment, KitSplit for camera rentals, or even Style Lend for your clothing.
The time investment here is pretty low, because by creating a profile and uploading a few photos, you can be up and running in just a few minutes.
That being said, if you want to stand out on these platforms, it’s a good idea to invest a bit more time in making sure that you create quality listings, that answer frequently asked questions, respond quickly to any inquiries you get, and keep the assets you’re lending clean
and in good shape. Still, there is a lot of passive income potential here because, after that initial investment, you’re not really that involved in the use of the item.
Think of someone renting out construction equipment or owning a laundromat, once they establish the business and buy their inventory, the rest is up to their customers so this can be a relatively efficient and low effort way for you to generate income for assets that you already own.
9) Record audiobooks
One surprising option for generating passive income is to become an audiobook narrator. Typically, narrators are paid based on royalties when the book sells or is selected on a platform like Audible.
And the more successful a book is, the more money you can be paid for narrating it.
The upfront time investment here is obviously pretty intense because not only is the process of reading and recording an audiobook fairly time intensive, but you also have to factor in all the time that you spend searching for titles on a platform like ACX and auditioning for book contracts that you might not even receive, this is a really high barrier to entry and might be a lot of work to even land a single contract.
The upfront financial investment is low, All you’ll really need to get started is a good quality microphone, a quiet closet in your house to record in, and a computer for editing the book you record. If you can borrow any of this equipment, even better. And the passive income potential here is pretty decent, once you’ve finished recording the book, any income you generate will be completely passive and hands off, which is really convenient. If you pick good book projects that are likely to become good sellers, that could turn into good income because as a narrator, you can charge 50% of an author’s royalties for their audiobook sales. And once you’re in the industry, the time investment goes way down so this could turn into a great career if you have the right combination of skills for it.
10) Invest in real estate or the stock market
Okay, I know what you’re thinking, I do not have enough money to invest in the stock
market or buy real estate, and I hear you, but the fact is that you actually can invest
in both the stock market and the real estate market with whatever capital you currently have,
and it’s one of the best ways to generate truly passive income. Even if you can’t afford to buy a property all on your own, you can use the money you do have to invest in real estate investment trusts which are companies that manage real estate properties owned by multiple investors. And it’s actually easier than ever to do so nowadays thanks to new platforms like Willow in Canada and Fundrise in the United States.
Whether we’re talking about the stock market or real estate, I’m going to rate the upfront financial investment a three out of five, because while yes, you do need some money to get started, the capital that you choose to invest can be totally customized to your budget
and your circumstances. These days, you can easily start investing for less than $100.
The upfront time investment is going to be the same, a three out of five. You will want to devote some time to do your research into the best stock market portfolio or which properties you want to invest in. But actually getting set up on these kinds of platforms
is not that hard, especially if you’re using a Robo-advisor like Wealthsimple, you could be investing in the stock market in just a few clicks and the onboarding process at a platform like Willow is similarly super easy and intuitive. But the passive income potential here is really good.
The income you earn is almost completely passive since many of these investment options
are as close to set it and forget it as you can get. And both the stock market and the real estate market have good rates of return over time. The more you can invest, the more passive income you can make, and the sooner you can start, the better.
Final advice
The last thing that I’ll say on this topic is that it’s so important to be patient as you’re building these businesses.
Nothing good happens overnight, and that’s even more true when it comes to creating truly passive income. The good news is that the best passive income strategies will grow and compound over time.So stick with it, and you might be surprised at how much success you can find if you keep on going.
