Having a steady job with which you can earn a monthly salary is fantastic, but after all, you don’t stop trading your time (your most valuable resource) for money. And the only way to break this routine is passive income.
In this article, I will tell you what passive income is and what are the best methods to obtain it.
What is passive income?
Passive income is the one that does not need our time or work to continue working, but once launched, it continues to provide benefits indefinitely.
Be careful, the fact that passive income can generate money “automatically” does not mean that you do not have to work in these businesses, because until they reach said state of “autopilot” they will require time, and in some cases, investment.
Best ways to earn passive income
Today there are many methods to earn passive income, although the most important are:
1 Create a blog or website and put ads
One of the most widespread ways to generate passive income, and also one of the most interesting, is to create a blog or website and place advertising.
In this way, every time a user clicks on any of the ads that appear on your website, you will earn a little money.
This amount varies depending on many factors, although we could say that it ranges from a few cents to amounts greater than €1 or $.
In addition, this is currently an option available to everyone, since you only need: a domain and a hosting plan, that is, you will spend less than €/$100 per year (at least at first).
And you don’t have to worry about not knowing how to program, because, with tools like WordPress, you can create professional, optimized, and scalable websites in a matter of hours.
Of course, to create a successful blog you will have to work very hard.
2 Create video channels and monetize them with ads
If the previous option does not convince you at all, you can always go a step further and jump to the video format.
Having one or several YouTube channels will help you create a very interesting source of passive income, although if you want to succeed in this, you will have to be constant.
In addition, you will generate a certain connection with your followers, something that can be very useful to you in the future, if you ever develop your product, because there is no better channel to sell than audiovisual. This is so because showing our faces in public builds a lot of trust.
But how much money are we talking about?
Of course, YouTube does not have you on the payroll, but your income depends on your results, that is, how many views you get.
To give you an idea, on YouTube, you can get, for every 1,000 visits, between €/$0.50 and €/$10.
This difference is due to the type of ads that appear on your videos. If you talk about the economy, insurance, investments… The companies that appear in your videos will pay more than if you talk about cleaning or do craft tutorials.
It will also depend on where your audience is. Guatemala is not the same as Spain or the United States.
Finally, it is worth mentioning that having a YouTube channel is completely free since you only need a mobile phone.
In addition, this opens the doors to other business channels, such as paid collaborations or affiliate marketing.
3 Affiliate Marketing
Affiliate marketing is one of the methods to earn money passively that has grown the most in recent years, and it is one of the most appreciated.
If you don’t know what I mean, affiliate marketing consists of promoting a company’s products in exchange for a commission for each sale generated thanks to you.
There are many companies out there that do this, though one I’m sure you’re familiar with is Amazon.
So, you can create a website where you talk about technology and link to various Amazon phones, TVs, or speakers and if a person decides to buy them, you will get your commission.
Another way to earn money in this way is with your YouTube channel, either by direct advertising some products that you find interesting or, if you have a good audience, simply by showing what products you use in your day-to-day.
The income expectations that you can expect from affiliation are very varied since you can generate from a few cents a month to thousands of euros or dollars.
This business model has a very high potential, although you should know that more and more people are entering the business, and it can be difficult to gain a foothold, especially if you want to do it with a website.
4 Create digital art with NFTs
NFTs are, most likely, one of the most promising business opportunities in the coming years.
If you don’t know what they are, NFTs are Non-Fungible Tokens, which simply means that they are tokens (crypto-active) that cannot be replicated.
This makes them perfect for creating digital art and giving it ownership. That is, you can create a piece of art (even if you’re not good at it) and sell it online, so the person who buys it gets the original.
Thus, NFTs function as “property verifiers”. In the same way that you or I can have a painting of La Gioconda at home, the original will continue to be in the Louvre, and it is the only one that has value.
And in case you’re wondering, yes, that’s how you make money. There are NFTs on the market that cost millions of dollars, and best of all, with tools like OpenSea you can create your collection.
And this is where passive income comes in: every time someone resells the NFT, you will earn a commission.
This is a very interesting way of generating income, especially for the coming years, although to carry it out you need some knowledge about cryptocurrencies.
5 Running an Airbnb business
One of the companies that has grown the most in recent years is Airbnb, a platform that connects hosts with guests.
If you don’t know it, it is used to find accommodation online, not to establish a home, but to be “rented” for a short period, from one day to several weeks.
If you have an empty home, or you have extra rooms in your usual home, you can register it on Airbnb and get guests to stay in it, getting a very interesting extra income.
The profit that this business model can generate is so high that many investors buy and renovate homes solely for this platform.
Of course, these incomes are highly variable and depend on factors such as the location of the home, its condition, if you live in a tourist city, and if you are in high or low season…
6 Rent your car
In line with the leasing business, platforms to rent your car became fashionable years ago.
It may seem shocking at first, but it’s a great way to earn extra income while you’re not using it.
For example, imagine that you only use the car on weekends, what prevents you from renting it from Monday to Thursday?
Of course, it is not about looking for people on the street who need a vehicle, but there are platforms like Amovens that allow you to rent your vehicle legally and safely.
They will charge you a commission on your benefits and will take care of customer service, take out comprehensive insurance, and get in touch with potential tenants…
The income you can get depends on what your vehicle is, the city you live in, and the time you want to rent it for, and even if it doesn’t give you a salary, it will be an additional income to take into account.
7 Create digital courses
If you know a specific subject, one of the ways to generate passive income can be by selling this knowledge to other people.
And the best way to do it is by creating your online courses. Plus, with platforms like Udemy, Hotmart, or Teachable, you don’t even need to create your website.
In this way, you only have to worry about creating a good table of contents, turning on the camera, and explaining the subject in the best possible way.
Again, the income that can be obtained in this way depends on many factors, such as the competition within your sector, the interest that people may have in what you have to teach, and the price of your courses.
Thus, there are online courses that generate a few euros per month, while others far exceed the barrier of €/$1,000 per month.
If this idea appeals to you, I recommend that you start by creating a YouTube channel and upload free content, as this will make you known and generate the necessary feeling of trust in people to end up buying your course.
8 Get paid as a social media influencer
Although it is not passive income itself, becoming an influencer will open up a lot of interesting income opportunities.
The most typical are paid publications, and even if you have to take care of making a publication, these usually pay quite well.
However, many influencers take advantage of their ability to “move” people to generate affiliate income, with their YouTube channel, selling their online courses…
In this way, being an influencer in your field, be it DIY, cryptocurrencies, or fashion, will allow you to earn income both actively and passively.
9 Crowdlending
Crowdlending is a type of investment with which you can finance projects, either companies or individuals, together with a group of investors.
In other words, we could understand it as a joint loan in which each investor gives up a small percentage of the necessary money, obtaining the same relative benefit and dissipating the risk of default.
Later, when the loan ends, the borrower returns the capital received along with their interest, reporting a benefit for you and the rest of the investors.
The possibilities of profit depend on the risk you want to assume since a riskier loan will have higher interest rates.
However, the vast majority of crowdlending platforms such as Mintos, Urbanite, or Bondora offer annual returns of close to 10%.
10 Real Estate Investments
Without a doubt, one of the most widely used sources of passive income in the world is real estate income.
And it is that renting an apartment is a way to obtain a fairly safe and stable monthly income.
This business model is especially interesting for you if you already own a flat and can rent it.
However, you can also apply for a mortgage to buy a home and rent it out so that the tenant’s rent will cover the costs of the home, and the costs associated with the home, and even generate a small profit for you.
It is no secret that this is a method of earning income that works, although the expected profit can vary greatly from one home to another.
11 Invest in dividends
Along with renting out real estate, one of the most used passive income methods over time is earning dividend income.
To earn income this way, you need to own shares. And more specifically, shares that distribute dividends, as this is something optional.
And to acquire these shares, you will have to use an online broker that allows you to invest in the stock market safely.
The income that you can obtain in this way can go from a few cents to as far as the imagination reaches since everything depends on 2 factors: your capital and the number of dividends.
For example, McDonald’s pays out a dividend of 2.16% per year. Thus, if you held $5,000 in shares of this company, you would earn an income of $108.
However, some companies exceed these figures, even distributing 15% per year. Thus, the same $5,000 would generate an income of $750.
Conclusion What is the ideal method of passive income?
In short, there are currently a large number of different methods to obtain passive income, and the “ideal” method for you will depend, of course, on your situation.
However, after analyzing the methods mentioned here, creating a blog and placing ads is, from my point of view, the ideal method to generate passive income.
The reason? It is a business model in which the barriers to entry are quite low since you only need a computer, an Internet connection, and a budget of around €70/$ per year for hosting and the domain.
Also, we all have some topic or area of knowledge that we can talk about for hours, and if you don’t have it, you can always look for information on the Internet to complete or create your articles.
And the last reason why it seems to me the best method is because, with a tool like WordPress, you don’t need to know how to program to create a functional, attractive, and optimized website.
Now, just because this is the ideal method, it does not mean that you should only focus on it, but rather that you should ideally combine passive income from several different sources.
To be idealistic, many people’s passive income dream would be to have a portfolio of $1 million in 3% dividend stocks, plus a few rented apartments or houses. That is the annuitant’s dream and that is what all passive income seekers ultimately desire.
