The world market is almost unpredictable nowadays. Sometimes, you never know when the prices of essential commodities will skyrocket to unreasonable heights. Hence, it’s good to have extra cash on standby just in case.
But what if you’re only living from paycheck to paycheck while on minimum wage? It’s not always enough to keep you or your family standing. You can cut back on luxuries to save money or take a part-time job to earn more. However, you can’t ensure that your mind and body can withstand the pressure. You’ll feel fatigued and stressed out eventually. So, what else can you do?
The best answer to that is to earn through a passive income. With one, you can still receive decent pay on the side even after you’ve clocked out of work. You may even have multiple streams to help you cover the high cost of living.
If you’re still looking for a reason, keep reading to learn the advantages of earning money passively and how to achieve it. This article will begin with the benefits followed by the different methods tried and tested by many people.
Financial Stability And Freedom
Working on a salary ensures you receive money during a particular period. However, your wage is already fixed the day you start your new job. Requesting a pay raise is challenging, especially when you lack experience. But if you’re earning through online income sources or anything similar, you may not have to worry about payment delays on your bills.
If you're spending all of your regular income on essentials, a passive income can help you supplement your budget. It's possible to build up substantial savings in a financial emergency because you don't rely on your salary.
Passive income is an excellent financial safety net since paychecks tend to decrease due to absences or fewer work hours. You’ll also have more freedom to use your earnings from other sources for anything other than daily needs, such as your passions or projects you’d like to pursue.
As mentioned before, having a passive income allows you a moment to divert your attention to other things. If you have a specific goal, you want to start but don’t have the financial resources to aid you, earning money through a passive source could help you achieve it faster.
When you’re relying on your salary, you might not have enough at your disposal since you’re focusing on basic needs. But with extra money, you can save up more for significant purchases. So, getting that new car, house, or anything you want is just at an arm’s reach.
Saving up for your eventual retirement is challenging and nearly impossible when you’re only doing a regular day job. But if you’re earning money passively while also working, you can start saving much sooner. You may even retire earlier than usual if you receive and save a considerable amount from living comfortably for the rest of your days.
Having a passive income is beneficial, so now it's time to find ways to get it. You can do this in a variety of ways. You may choose one and stick with it until you retire, or you can diversify and rely on the others as a safety net.
1. Renting Out Properties
There have been rental properties since the Middle Ages, and they still exist. A small group of individuals and some capital investment is frequently required to make this strategy work well. The cost of building a rental property is far higher than purchasing an existing one. Do this only if you are confident that the project's budget will cover it, and any additional costs that may arise.
You may earn a steady income from real estate investments, but it requires a lot of time and effort to succeed. But the most important thing to remember is that you need a place to rent out. House-and-lot, condo, or holiday property are all possibilities. It's also crucial to weigh the overall financial implications of buying and maintaining a home. Finally, it would be best if you had a clear idea of the expected return on your investment (ROI).
Investing in a rental property is a genuine and reliable way to earn money passively as long as the market has enough interested renters. Though, if it’s your first time renting out a space for others long-term, you can try a short-term deal like an Airbnb place. But you have to ensure the spot has a consistent flow of visitors looking for somewhere to stay temporarily, or you could risk a financial loss.
2. Renting Supplies Or Equipment
If you don’t have the budget to buy a property yet, you may have something else other people in your neighborhood might need. Tents, power tools, and coolers are items some homeowners have but others don’t. Neighbors looking for these things to use temporarily can rent them from you for a reasonable fee. You can also rent out a family vehicle if you’re willing to do that.
There are a couple of risks to watch out for when renting out valuable objects. Some people with bad intentions may steal your rental supplies, and sometimes, the items could encounter damage, intentional or not. When this happens, you’ll have to find a way to repair or replace them as soon as possible, especially if someone else has scheduled to rent them afterward. Make sure you have contracts between you and the renters so you can mitigate these issues if they happen.
3. Engaging In E-Commerce
Most people have a couple of things they no longer use but see no need to rent them to others. So, they sell them through online platforms, which is what you could also do to earn some cash on the side. Think of it as a digital garage sale where customers can sit back and relax in their homes while browsing the items you’re selling. Many people from different places may find your old items still desirable, especially if you’ve kept them in excellent condition.
One of the downsides of this method is when you run out of things to sell. You could wait until you find something you don’t use anymore. Or, you could sell brand new products like surplus or wholesale items you can’t find anywhere else. You’ll need a budget for the latter since you no longer rely on things you already own. Find a supplier that provides affordable products in bulk and then sell them at the suggested retail price.
If you have talent in art, you could also turn your sketches into prints or designs on shirts, mugs, and tote bags. You’ll find a market full of relatively young customers looking for these unique pieces. When doing this method, you may have to team up with a printing partner who’ll apply your designs to the items you plan to sell. Their services have a cost, though. So, you have to prepare for that, too.
4. Writing E-Books
Working in a job unrelated to your college major can be unsatisfying. If you want to impart your expertise and knowledge to others and earn from it, you could write an informational e-book. Publishing an e-book won’t cost much, but it can have high payoffs when you know what you’re doing. You can sell it on Amazon, where you can find other self-published e-books.
Of course, you need to be a specialist in the topic you want to write about or have enough knowledge or skills to help others looking for the correct information. If you include false info in your e-book, you could risk a drop in customer trust, leading to zero potential buyers if you intend to release another e-book.
This passive income method works if you have a decent following and excellent marketing skills. You may need to promote your e-book on social media or your website if you have one to inform others about. If everything goes well, you may notice an increase in profit from your books and readers clamoring for more. Maybe someday, you could end up like the authors of these passive income books that have helped hundreds achieve their own goals.
5. Creating An Online Course
Not everyone has the confidence to write a whole book. But some are great talkers and find it easier to teach others through speaking. If you’re the latter, why not try making an online course?
You have an option to create an audio or video course and share these on popular online teaching platforms such as Skillshare or Udemy. Like writing e-books, the information you teach must be factual for you to gain the trust of students and customers who may want to purchase your courses.
If you're just getting started, consider offering free courses that everyone can access, and premium content that provides in-depth coverage of your subject and extra information you won't find in a free course. It's a good idea to keep creating new material for your audience if you use this strategy. That way, you can make money from teaching without putting forth much effort.
6. Invest In A High-Interest Savings Account
Unlike the previous methods mentioned, one of the best ways to earn passive income without putting in the work is to open a high-interest savings account. You should have one even if you don’t intend to make money passively since it could be an excellent addition to your emergency fund. All you need to do is open an account, deposit the required principal, and let the passing months and years work in your favor.
Interest gained from a savings account is usually higher than the national average. So, when looking for a bank, check for online banks instead of a local one. Online banks may have more options and the best rates for you to choose from. An online bank backed by the Federal Deposit Insurance Corporation (FDIC) will also ensure that your principal deposit is safe and guaranteed return on principal should you request it.
Your day job doesn’t have to be your only source of income. If you have extra time off from work, invest in a passive income method that best fits your skills and interests. It’s always great to have backup funds in case something goes wrong. Some ways may take a little more effort and money to begin, but they can ultimately help you when things start to kick off.