Whether you’re holding down a separate full-time job or want to simplify your main gig, the ideal way to earn money is by developing a steady passive income stream. But how do you make money without putting in the accompanying work? In truth, it all depends on your skills and interests. With a smart strategy, you can turn almost any project into a passive income source.
Among the most popular passive income sources are blogs, investments, and rental properties, but it takes time to get all the mechanisms in place. Here’s how to make it work so you don’t have to.
Traditional investments are among the easiest ways to generate passive income, whether you opt for stocks, securities, annuities, or a combination of sources; once you put your money in, you can generally count on a consistent payout. This is particularly true of Treasury Inflation-Protected Securities (TIPS), bonds that always offer an increased return on the initial investment and annuities, which you purchase from insurance companies – these pay the same amount annually.
Traditional stocks are among the least reliable of passive income streams because they are very volatile and require more monitoring. Unless you’re going to invest in diversified funds, which are much more stable, or you’re willing to sit and wait out major market movement, stocks don’t convert to passive income as well as other investments.
Rent Real Estate
As a real estate investor, you can choose from many different types of properties – apartments, commercial spaces, even vacation homes – and each comes with different demands, establishment costs, and commitments. It’s also a big financial commitment. Still, turning rental properties into a passive income source is the kind of investment that can carry you straight into early retirement.
The trick to making rental properties into a passive income source is hiring a property manager. Without one, you have a huge set of responsibilities on your hands from maintenance calls to collecting rent and carrying out evictions, but with the help of an experienced property manager, those tasks fall to a trained employee. You just need to check in occasionally and make sure things are running smoothly.
With those responsibilities unloaded, you’re free to travel, you can choose to live far from your properties, or you can invest in cities around the country, stationing a manager at each site. Rents pay for maintenance and upgrades, pay the salary of the manager, and there’s a hefty sum left over for you each month – all the while, you’re living life on your terms.
Finally, you can earn passive income using a website, which is one of the most popular methods. There are several ways you can approach this. First, you can have a static site with core, informative posts and advertisers. The advertisements typically generate income based on the number of visitors your site gets, so this can vary widely from month to month. It also takes some experimentation to establish an effective advertising strategy.
Another option for generating passive income is affiliate marketing. In essence, affiliate marketing is a process by which other companies link their products through your site. You receive a portion of affiliate link sales income. The difficulty with affiliate marketing programs is that you need to pick products that fit within your site’s brand but that don’t compete with any of your own products, if you offer any direct sales.
Earning passive income means setting yourself free from the traditional work environment – or at least earning enough to add a little buffer to your budget. Whether you just want to make some spending money or you want to retire to the beach while your bank account fills itself, developing smart, passive income sources might be the business strategy for you.