10 Ways to Earn Passive Income
94What is Passive Income?
Passive income is basically what you earn even without actively participating in the earning process. Based on a local financial guru in my country, passive income is the income that we all should strive for during our retirement years as they don't require much effort but still enables us to obtain money for our day-to-day expenses. There are various ways to make passive income. The following are just some of these ways (you are free to think up more ways, just don't forget to leave me a note if you have thought of one):
Rental from Real Property
According to Robert Kiyosaki, this is one way to ensure big earnings and early retirement. From renting out a room in your home, to renting out apartments, or a building complex or even a condominium, this is one sure way to earn passive income. However, one has to take note that, prior and even during the time you are getting income from this, setting up the property to be rented and maintaining it in good condition are some of the things you will have to contend to.
Time Deposits
One of the basic ways to earn passive income (or interest income) is through placing your savings in time deposits. Although they have holding periods (30 days to 1 year or even 5 years), they earn higher interest than ordinary savings account. Plus, if you don't withdraw your interest, it also earns interest. There are, however, restrictions in terms of withdrawals and minimum balances.
Treasury Bonds / Treasury Bills
Another way to earn passive (interest) income is through investing in treasury bonds (T-bonds) or treasury bills (T-bills). These are long-term investment vehicles where you earn interest income up to their maturity dates. If you are into trading bonds or T-bills, you can also get income from selling them at a gain. They, however, require higher minimum investments than ordinary bank accounts. But, if you invest in government bonds or bills, these are virtually risk-free (unless the government itself is not stable) so you don't have to worry that the value of the bonds will go down or that you will not get paid by their issuer.
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Invest in the Stock Market
Okay, investing in the stock market is not really something anybody can do. For sure, the stock market is not for the faint of heart, especially during these trying times. But, hey, if you have the guts (not to mention the money) and the time to wait everything out, then this is one of the ways where you can get passive income. You can buy low then wait for the prices to go up and sell high. Or you can wait for the company to declare dividends so that you can get some returns from your investment (while you wait for the price to go up). Some financial experts have said, that in the long run, stock market outperforms other investment vehicles (such as bonds). Not sure though if this case is still true with the credit crunch we are experiencing right now. However, please take note that once you actively participate in investing in the stock market (read: you don't depend on your broker, you're the one who does the legwork all the time in terms of studying your investment portfolio), it ceases to be a passive income. It becomes a trading investment income.
Investing in Mutual Funds or Trust Funds
If you cannot stomach directly investing in the stock market or even in bonds, then mutual funds or other trust funds may be for you. These funds basically combine various investments (stock A plus stock B plus stock C) or investment vehicles (stock plus bonds). Of course, the returns depend on how well these investments perform but then, there are advantages to investing in these funds. The amount of start-up investment is quite low (here you can invest with just 10,000 pesos or $200), the holding period can be short (30 days), the risks are spread over various investments and you can add on to the fund anytime you want. Plus, you have available at your disposal fund managers who should know about the products you are investing in.
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Investing in Real Property
This can be a very lucrative passive income (gain from sale of the property) but at the same time, it can also make one lose a lot of money. One must know how to go about investing in real properties to earn the highest amount of income possible. Learning the ins and outs of the real estate industry is also a must for this type of investment.
Sell Online eBooks or Software Products
Got an idea for an e-Book or a software product? Then write it or develop it and then sell it online.There are already hundreds or even thousands of e-books that are sold online and yours may become one of it.
Websites
If you have an idea or a concept that you think will sell well online, then put up a website featuring this concept. You can fill up the website with your chosen content plus items for sale and watch the traffic (and the sales) come in. Or you can create a website that will target viewers who will pay a certain amount of money just to access your website.
Advertisement
If you have a really great idea for a website and it gets lots of hits, you can attract advertisers who will want to advertise on your website for a fee. You can also advertise your e-books or software product on your website (free advertising!) so that you'll hit two birds (or two income streams) with one stone.
Affiliate Programs
Honestly, I don't really know how this one works. According to some sources, this can be done by linking your website to companies that sell products that are in line with your website's theme. Anyway, the passive income here are the commissions that you earn from the sale of these products.
So there you have it. My "10 ways to earn passive income". But really when you think about it and when you look at the list, there's is no "real" passive passive income. You still have to do a lot of things (put up a website, write an e-book, develop a software, earn / save lots of money, scout around for a bank or a broker, study the company you are going to invest in, etc. etc.) before you finally hit paydirt and earn that passive income. But then, if you are successful in the end, the returns are quite high and, if I believe the books that I read about personal finances, will enable you to live the rest of your life in comfort. To sum it up "NO PAIN, NO GAIN!"
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Comments
Hey thanks.
You have some really good tidbits in your hub. I enjoyed reading it. Best wishes.
Thanks Marketing Truth.
Those are all good ways. I think real estate is especially lucrative right now because you can buy so cheap.
Yup down them all - and they all work- the online stuff is by far the hardest work to setup but costs a lot less than shares or properties!
Danton Young, yes it is. I wish I have money to pay for a property though.
Thanks Lissie. About the online stuff, it maybe the hardest but it can be the most enjoyable too, especially if its hubpages =).
Danton Young, yes it is. I wish I have money to pay for a property though.
Thanks Lissie. About the online stuff, it maybe the hardest but it can be the most enjoyable too, especially if its hubpages =).
Very good post, I am involved in real estate management anyone interested in starting up should visit mortgageprofessor.com. A great website for beginners and to understand how to become cash flow positive from the beginning.
Thanks voicedup.com. I saw your website. Looks good. I'll check it more later after a good night's sleep =).
i wish i have money to pay ma fees
i wish i have money to pay ma fees
Anyone who says that you do not have to work for the money that comes from rental property has never done it before. It never fails, renters do not own it so they tear up several things in the home so you spend a lot of time repairing damage.
I really enjoyed reading your page. Those all seem like good ways to generate some extra money. Oh, and your puppy is adorable!
Hi Camping Dan. I can't deny that repairing damage done on your rented property by the renter or the lessee is part of the things that the owner has to do. But you can always choose who to rent to (if you think he/she is not capable of taking care of the property then you can turn him/her down). My previous landlord has a way to discourage damages, he asks for a 2 - month deposit which he will only return in full (when the renter leaves) after he sees that there is no damage to the property. It's a way of getting reimbursed for the damages plus it will discourage the renter from damaging the property (2-month deposit here is no joke and not getting it back after your lease is not a joke either).
Thanks Nikki Nelson!
really good infromation thanx
The stocks market sounds kind of risky. There's even people who has commited suicide after a price drop. I don't really think it is a *passive* income source, but a very stressing and demanding way of being a slave of capitalism.
Thanks Christopher.
Prefix, hmmm, that's a new perspective. Although I have heard about those who committed suicide. That's why I put in there "not for the faint of heart". I guess it's just a matter of balancing one's perspective and asking one self if he/she can handle the stress, the money loss, the risk and the headache that goes with trading stocks.
Stock market is too shaky and un-reliable these days. Although investing into the websites, advertisement and affiliate marketing will be good.
thanks for sharing
This will come in handy since I just lost my job.
Interesting & helpful. Thanks.
UH, I agree on the stock market. But then again, the risks are high but the returns are also high (if you get lucky).
Just84 and Dorrene, thanks for the comments.
Glare, good luck. I hope my hub will be of real help to you.
Uh very good.how can i get this Affiliate Programs
Ozoemena Mark, sorry can't help you there. But you can try other hubs like this one - http://hubpages.com/hub/Top-Paying-Affiliate-Marke Or just search through the hubs. There are a lot of experienced hubbers who know about affiliate programs.
Hmm, not sure about stocks and other financial markets right now. Other options sound better.
GOod tips, thanks! We can always use more funds for golfing - -and other fun habits :)
my vote for affiliate programs
my vote for affiliate programs
Geedom I agree. But some investors like the market right now because they can purchase stocks at low prices.
Banana Putting, thanks!
CreativeMind, hmmmm, maybe I should research affiliate programs more. Thanks for the comment.
It's always nice to read all the options we have. I know I want passive income too hehehe It is very important to learn all the ways and start working towards that goal. Thanks for this post!
Thanks for the comment ripplemaker.
hi
thanks for those
making money online isrelatively easy, but most people never even get started.
THe key I have found with online stuff ie affiliates and property is you need to start.
I had been looking at different prgs for ages I then thought oh well jump in!!
I lost some money on a few scams - but hey that's part of learning I now have a few things running online that are earning me money.
not loads but it is a start
thanks for post
danny
ok this is not a scam and you do get paid just for clicking on Google site links it is free you dont buy anything you get paid for clicks $25 every click and you dont need to sign up for anything the only down side is you wait to get a check and you have to be on the internet alot but the more you click the more you get paid and you can e-mail me at gooogleadminrick@gmail.com and this is real this site link will tell you how http://sites.google.com/site/paidtoclickadsnow/
Very exaustive list.
My favorite is affiliate marketing because when someone learns how to do it right the residual income has no ceiling & can be automated,systematized & scaled up.
This one vehichle transformed my entire life from dumb, sick & broke to smart, healthy & rich.
Now I get to teach others how to maximize this tremendous opportunity.
Giving back is what it's all about . . . empowering others.
Warren Little
Internet Network Marketing Consultant/Trainer
Danny, thanks for the comment. I agree, you need to start somewhere and learn along the way. I've already started with some of them and I've also learned a few hundred bucks. Good luck in your endeavors. Hope I can go to your online sites.
Mastermind and Warren, thanks for your comments and for the sites.
great tips. thanks , I get new knowledge from here. and of course how to get passive income.
Rental properties can be a passive activity in some cases. If you are spending time chasing down renters and constantly repairing the property.
Nice one. I shared it @ one of my blogs
prasetio30, thanks for the comment.
EarthWarrior, if you're spending time chasing down renters and repairing the property, I'd say you're in the wrong location and the wrong business =). Thanks for the comment.
Me Hubber, thanks for sharing my hub.
Even though there is such a thing as "passive" income, it still takes quite a bit of work to get it so that it becomes a "passive" income stream. The ones who work the smartest and hardest win, bottom line.
It's true that you have to work hard for passive income - which sounds like a contradiction in terms. The key is to do the work once and continue to earn a passive income on it for years to come. Many of these things fall into this category, for sure, but as you point out, there's no way to get round doing the work in the first place.
Good advice.
Tere are several good ideas here, but you always need skills to work with them.
Yes, it has never been: "There is nothing like a free meal."
But do a proper job with your idea, and you might harvest from it later.
Good luck. aabert.
The money is on the list.
Bigger the list, more and more income, and less work.
After some time, all you have to do is to config your autoresponder to send automatically to all subscribers.
Thanks and regards
Very useful Hub. I saw this on the front/home page of Hubpages and thought "Wow". The Hub has done really well, it's one of your best. I think if one doesn't have a Pension and carries out some of the above, it will help a great deal in creating an income for them in future. Lovely Hub. :)
I enjoyed reading about 10 ways to create passive income. You have some good suggestions here.
I was never interested in stocks and investing until somebody introduced me to silver and gold, not just bullion but mining stocks and ETF's, I have already made money and I figure when inflation hits high gear I will make more. I have been a talk show host for years so I have heard about every get rich quick scheme out there. I just did a lot of research, subscribe to numerous newsletters to get varying points and read everything related to the economy.
I don't think anybody can just be passive and put money under the mattress, not with inflation looming, after the deflation factors dry up and go away.
To all, thanks for dropping by and for your comments! Hope those who read this hub will not really think that passive income comes for free. A lot of these passive income sources are actually results of hard work and perseverance. But in the end, if you keep at it, everything just pays off.
Emievil, I have to disagree with your definition of passive income.
For instance, I own rental properties. If you hire an agent to look after them for you, they're passive income, otherwise they're not. You need to collect rent and other bills, organize repairs, and keep an eye on the property.
The share market is also definitely not a passive income. You need to actively manage stocks these days, not just buy them and forget them.
I'm not clear on the difference between real property and rental property - buying property and leaving it empty is a sure way to lose money!
Selling online products - I see you specify ebooks, so maybe you should modify this section to make it "selling online ebooks". Selling actual products online is very labor intensive because you have to receive orders, process payments and package and post goods. It never becomes passive income, unless you can afford to pay someone else to do all the work!
I'm pleased that you mention it takes work to set things up before you can expect passive income, but it would be really good to see you go into more detail in each section on the setup involved.
Marisa, thanks for the very interesting comment. I did say that these passive income sources do not require much effort, not as much as an 8-to-5 job that is. Perhaps the difference lies on our belief of the degree of "passiveness" on the passive income source. That's why I put the caveat on the last paragraph because I also think there is no such thing as an honest-to-goodness passive income, not in its real, literal meaning (i.e., no effort involved at all, just receive the money as they come in).
Anyway, I like your idea on going into more details for each setup. I'll do more research on the set-up involved. Thanks again!
Interesting hub. Thanks for sharing.
Thanks for stopping by laswi.
nice always looking for ways of making extra money
Nice hub! I liked some points in it, they are really wise. I personally think that it's better to invest in different areas of passive income and I usually do in such a way.
Thanks hunmble african and gennifer
affiliate marketing is one of my main sources of passive residual income, websites like stated above, google adwords, taking surveys companies will pay you. Chacha not passive basically a job for people who like answering peoples questions online won't get rich but can make some extra money! Affiliate programs are the best way to make some major money I also teach people how to get started with affiliate marketing! Good hub!!!
One day I hope to earn a passive income from my websites, but for now they require a significant amount of work and don't earn very much. Maybe by the time I retire they'll actually be worth something. Thanks for the great information.
Thanks for providing such useful information, and explaining it so clearly.
Thanks for the comment Jayorban, I don't know much about affiliate marketing but it would seem a lot of people are making a lot of money from this. Maybe I should try it one of these days.
Your welcome RN 4081 and Sexy Jonty and thanks for stopping by.
Nice to see someone else writing about passive income and Robert Kiyosaki! Thanks for sharing.
See my other ideas of having good online income
Actually you forgot one thing : Forex
That can be passive using an EA some other automated method of trading.
Hi Emie, Very information hub! I'm a fellow CPA like you and I enjoy investing in real estate and stocks. I'm only starting to consider affiliate marketing although I'm still quite new and trying to learn it's concepts. My brother seems to be very good at it if you are interested.
Thanks for the comments Matt and min18.
Paul, forgot about forex. But then again, that's the topic I know least about so I didn't want to put it in without further research. But thanks for the input.
Awsydney, I am also interested in affiliate marketing. Can you refer me to your brother's site? Will really appreciate it and thanks for the comment!
Thanks for sharing this. One can also earn passive income through Holidays and Cash. Apart from the Dollars, you stand to gain special discount in some hotels and flights. http://www.holidaysandcash.com/onyemerekwe
Thanks for the info Albert.
Philipo, thanks for the info. Already checked it out. =)
Great hub, thanks for the information.
A good overview,as with all things, the devil is in the detail.
Thanks Naomi and Dennis.
Great Hub. Definitely the Rich Dad, Poor Dad way. I use covered call options as another great way to generate passive income. Be sure you use a covered call strategy that will protect your capital in this volatile market. Traditional covered call strategies often fail in this environment.
An useful hub for earn money...thanks for providing good ideas.......
Thanks dnrkrishnan.
Thanks for writing this hub! The only thing better that making money is having in generated with little or no effort. Then you can concentrate on enjoying life and not as much on working your butt off!
Thanks Jeremiah
kalrocking says:
4 months ago
good hub i willl share it on my blog