fbpx

Ways to Create a Passive Income

Creating a passive income stream can often be seen as the basis of financial success since it effectively makes time and money two very different things. To make a passive income, you do not have to work 24/7 – the stream makes you money when you aren’t looking.

In this post, we’re analyzing several types of passive income streams that you can set up with minimal financial investments, but we’ll also delve into some more ‘serious ones’ such as passive income from real estate. 

Passive income vs nonpassive income

Nonpassive income includes a variety of types of income such as a business, a wage, or money coming from investments. 

By contrast, passive income consists of earnings that are derived from enterprises where a person doesn’t actively participate in the activity producing the money. It requires very little effort to maintain, especially when compared to active (nonpassive) income. 

In some countries, depending on the kind of income you make, you can be taxed differently. For instance, in the United States, most passive income sources are taxed, but some of them aren’t, but all types of nonpassive income are taxed. 

Examples of passive income

  1. Niche review sites

Affiliate marketing is one of the most effective types of passive income for college students or people who don’t have a huge budget, in any case. You don’t need to invest a lot of money in building a website, especially if you read a little about it beforehand.

Some of the easiest to join affiliate programs are Amazon Associates, the Target affiliate program, or Walmart’s affiliate program, but there are many others depending on the topics you want to address on your site or blog. 

The income varies a lot depending on the traffic you can get and how many conversions you can make. But the best thing about this kind of passive income stream is that you aren’t in charge of creating the products, shipping them to the customers, and providing customer service. You are merely intermediating a sale. 

  1. Kindle eBooks

While this might call for some serious writing skills, the truth is that you can hire ghostwriters for the task if you’re not up for it or you don’t have enough time. You can publish pretty much anything on Amazon’s eBook platform, but one of the most popular genres is romance. 

So, if you write several short romance stories and you sell each for $3-4, and you market them properly, you’ll be able to make a pretty decent income. Fiction doesn’t call for frequent updates, either, unless you’ve made the mistake of publishing your eBook before being properly edited. 

Non-fiction is another popular genre, so if you have experience in any part of this field, it might be another option for you. For all we know, you could write passive income books and make a decent passive income from them! 

  1. Information products

Information products can be ebooks, but they can also be courses. For example, if you’re an expert in programming or web development of any kind, you could create a course and post it on Udemy or Skillshare or any other such platform. 

The course will make you money while you aren’t looking. So, while it will call for some effort, in the beginning, it’s still worth it in the long run. 

  1. Stock photos, stock music, stock footage

This is another excellent way of making some money, even through the years. Granted, it does require the right kind of equipment, but once you upload your digital media to any of the websites that can sell it, you will be able to get commissions on it even if you created it years and years ago. 

Here are some examples of stock video sites:

  • iStock
  • Videvo
  • Shutterstock

And some that sell stock photos:

  • Depositphotos
  • Alamy.com
  • Fotolia

How about some paid stock music websites?

  • TunePocket
  • MixDown Music
  • Foximusic
  1. Designing clothes

This is a great type of passive income for designers. If you have a bit of creativity besides great design skills, you can make your own T-shirt line. Best of all, you don’t even have to be involved in the manufacturing process as there are many T-shirt companies nowadays that will take your design and do the rest without anything on your part. 

You aren’t going to have any headaches with the printing or shipping, either. The money’s going to be sent straight to your bank account without you having to do much about it. 

One thing we’d like to note, though, is that this method works best if you’re already an influencer, so you could promote your products through social media. 

  1. Passive income through real estate 

Out of all of the types that we have showcased here, this one is by far the riskiest one. Very few people have all the money they need to buy a house without at least getting a loan.

So, if you have an active income source that you want to use to pay off your loan, investing in real estate property might be risky. After all, passive income loss is something that you might have to deal with at one point or another, especially if the world is hit by a recession. 

seo profile image

Craig Campbell

I am a Glasgow based SEO expert who has been doing SEO for 18 years.

  • social media icon
  • social media icon
  • social media icon

Online Courses