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Earning money without needing to continuously work for it—known as earning passive income—is a goal for many entrepreneurs. But, coming up with ways to earn passive income isn’t always easy. Nevertheless, thanks to the simplicity, low cost, and high quality of digital technology, it’s now easier to start a potential passive income stream.
Read on to learn about the different ways to earn passive income, its benefits, and a few ways you could experiment with passive income streams. Take some time to consider all the options and see if any work for you.
What is passive income?
When you get paid for an activity or project that you’re not actively working on, this is known as passive income. Passive income doesn’t mean earning money without doing anything; it’s just that most of the work is done up front.
Examples of passive income sources include:
Renting out property
Royalties from copyrighted material
Stocks and shares
Selling stock photography
Selling online courses and classes
Earning passive income is a way of becoming more financially independent, so that you can have a better work/life balance or continue to earn money while focusing on other projects. Many passive income streams start out as side projects while entrepreneurs work to establish a reliable stream of income.
Many different types of people have the opportunity to make passive income. Stay-at-home parents, students, workers who want to increase their annual income, and entrepreneurs alike can all find opportunities to earn passive income, thanks to the possibilities opened up by affordable, professional, user-friendly digital technology.
Learn more about passive income
What are the benefits of passive income?
There are four key benefits to making a passive income:
1. The chance to earn more money
You earn passive income even when you’re not actively working for it, which means you can focus on other work, such as your full-time job. Unless you make it your main source of income, any money you earn passively is extra.
2. The chance to do what you love for a living
Most people have careers doing things that use their skills and qualifications. Many people who make passive income, however, also have the chance to explore the passions and hobbies they always wanted to do for a living. Whether you become, for example, a sports blogger, online yoga instructor, or amateur photographer licensing your photos to companies, setting up a side project based on your hobbies means you can make money doing what you love.
3. More free time to spend as you please
As your passive income stream or streams start to bring in more money, you might find that you can spend less time working. This will free you up to pursue other activities, including those you just do for fun, not to earn money.
4. The chance to develop business skills
Setting up your own passive income stream will teach you a lot about business. Because much passive income is generated online, you’ll probably learn how to design your own website. Other skills you’ll learn could include building a brand for your side project, developing a customer service model, and budgeting and forecasting as you grow your passive income.
The better you become at running a business, the more passive income you’re likely to earn, too, so it’s a win-win situation.
Passive income idea #1: Develop online classes or courses
A logical way to make passive income is to tap into the things you’re known for being good at and teach others about them in pre-recorded classes or online courses. Classes are one-off lessons, whereas courses are a series of lessons and chapters that often build your knowledge sequentially.
Think about the sector you work in and some of the solutions you’ve discovered for any challenges you’ve faced in your job. If no one else is writing about these solutions, this could be an excellent opportunity to share them with others. Maybe, for instance, you’re a project manager who’s discovered some simple work hacks for getting team members to take more accountability for their tasks. By creating a course around those work hacks, you can sell your expertise to others who’d benefit from it in their own jobs.
Or, consider your hobbies. You may not be able to pursue them for a living immediately, but you can get started. For example, you may be a classically trained pianist who never pursued music as a career. A few isolated classes around how to play particular pieces could be a fun way to make some money out of what you love to do in your spare time. You could even create whole programs of study exploring different modes and scales.
You only have to host a class once via video or podcast, or write a single e-book or other type of downloadable material, for it to be useful to learners now and long into the future. By scheduling regular social media posts to promote your learning content, it can become a valuable source of ongoing passive income.
Plan your online classes based on:
Your own skill level (i.e., only teach what you’re capable of doing)
Your audience (i.e., what level of skill they currently have and how far your classes or courses will take them)
Then, break your teaching plan down into bite-sized chunks that won’t overwhelm your audience and help them focus on the details.
This careful approach will not only make your classes more appealing because they will be pitched just right for the audience, but it will also help you to create more classes, giving you more to sell and greater passive income potential.
Learn more about starting your own online classes and courses
Passive income idea #2: Start a stock photography library
Whether you’re a budding amateur or a professional photographer, you can potentially make a healthy passive income from licensing usage of your photos to companies and media agencies.
Stock photography is used by organizations who don’t wish to pay for custom photography, or when it doesn’t make financial sense to do so. This way, companies can still illustrate their news stories, product packaging, and anything else that might need photography. But, more organizations are now competing for the same stock photography, so it’s harder to find off-the-shelf photos that haven’t been overused.
For photographers, this is a great problem to solve. Setting up an ecommerce website to license (effectively, rent out) your photography for limited use has never been easier. All you need to do is conduct a little bit of research into which types of photography are most popular and start building a library of shots that target popular searches. Take a look at a few of the biggest stock libraries and the best photo selling websites for inspiration and get snapping.
Learn more about selling stock photography
Passive income idea #3: Start a commercially focused blog
Blogging is a fun way for people to explore their passions in an online forum, and it’s a popular one, too. What many bloggers either aren’t aware of or aren’t practicing is how to monetize their blogs. When a blog reaches a certain level of popularity, it becomes a viable way to make passive income.
The ways blogs make passive income are mainly through:
These are the options you can explore to start generating an income from your blog. You can also make money from a blog by putting some of its contents behind a paywall, like a Member Site. However, this option isn’t always passive, since you may need to create new gated posts somewhat regularly so people feel the membership fee is worth it.
A blog with a clearly identified niche will appeal to a specific target audience. For example, a blog about furniture fabric patterns is more likely to attract an affluent audience interested in interior design. That target audience will have many of the same characteristics sought by companies looking to sell a variety of products: not just textile companies, but producers of furniture, paint, and other interior products, too.
This makes tapping into such a blog’s audience highly appealing for certain companies, but only once audience numbers are high enough to drive sales. So, you’ll need high traffic before you can start to monetize your blog.
To start attracting the high traffic needed to tap into your blog’s passive income potential, make sure you post:
Regularly: At least twice a week, but ideally more
Consistently: Schedule posts when you’re on vacation, and don’t take long breaks
High-quality content: Original content that relates to your niche and signals your expertise, authority, and trustworthiness on the topic
Internal hyperlinks to related blog posts: This builds your authority with search engines by telling them that you’re an expert in your particular niche and a valued source of content, so they’ll rank your posts higher in results
The amount you earn per ad click depends on many factors, like the industry being advertised, but you usually earn less than $1 per ad click or view. If you have a dedicated following, you could charge for membership access to gated content on your blog and potentially earn more. This will help you gauge how many views you need to get to make what you consider to be a healthy passive income. You’ll also learn how many daily views you’ll need to start blogging full-time.
Whichever passive income idea you decide to try out, it can be a liberating, educational, and exciting endeavor. It also has the potential to make a significant income.