What is Passive Income?
This is the Income generated from a venture in which an individual does not directly participate in. The person continues to make income out of the venture with no effort on the person’s part, it does not need or require fresh input of money to sustain such a venture.
It can also be defined as income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
An outstanding feature of passive income is its scalability. Passive income is scalable on that you can make more sales without more work on your end. You have an infinite depth of inventory, and more sales does not mean more work
As far as history goes, people actively engaged in Passive income. There are several examples of passive income as far back as the term ‘passive income’ came into being.
Several examples of Passive Income abound. They are as follows:
1. Automated Process of sales, with the growing Internet of the mid-1990’s, marketers made web pages to advertise the product they wanted to get advertised. They need not be there to meet people to talk about the goods and product, the customer simply browsed through the catalogues (online) and buys the goods from the seller and this is done without the marketer doing anything. Thereby, the revenue just kept coming in with no outward effort on their part.
2. There is also the Associates and Affiliates programs – this was done in 1996 by Amazon, which was basically referral in which a customer would introduce people to their company and get some bonus. With such scheme, it has become a multi-billion dollar industry giant.
Whether you earn passive revenue as an affiliate – or you are the business owner with affiliates sending you business, it’s often a no-effort method for earning revenue.
An interesting case is Autoresponders – in which email is used by marketers in the 1990’s to send automatic messages to basically inform the recipients about goods they have and are selling.
Not leaving out Adsense, a major online passive income generator. This was a service from Google in 2003. This made people to be able to put ads on their websites and earn revenue when someone clicked on them – with no effort on their part, money was made automatically.
Often in passive income, you have to commit the time and energy up front, it is like a machine; you need to build the machinery before the machine can work without your assistance.
How to create passive income
There are limitless methods and ways to make passive income ranging from online to offline. When I say offline, I mean this is the passive income that is derived physically not electronically.
Methods of creating passive income include:
1. Make Money Off Your Extra Space: Investing in rental properties is an effective way to earn passive income. You buy a house and there are a free rooms which you can make passive income from. This can be done by renting out these rooms for some money. Due to renewal of rent, this is an ideal way to generate passive income offline.
2. Use of Cash-Back Apps While Shopping: This lets shoppers earn cash back from stores. When you shop at an online retailer. The app also allows you to use in-store coupons and gives price comparisons when you scan an item. Phone apps like Ebates, Swagbucks, Ibotta, Snap by Groupon, Receipt Hog, Slidejoy render such services. When an online store provides such service, they gain some income even while not actively selling anything.
3. Sell Your Photos: People make passive income by selling their photos online to websites where the users can vote for and buy such pictures. Selling one’s photos on such websites cab provide an endless stream of income. You can upload a lot of pictures. The one that is bought is paid for and thereby resulting to a stream of revenue.
Websites like http://www.alamy.com/ has over 60 million images and videos for sale on its website. It’s because it offers persons a huge 50% royalty payment on each photo sold. Another website is http://submit.shutterstock.com. Here, you upload a photo to the marketplace, and can you still keep copyright, and earn up to 30% of the sale price of your photos depending on the size of your image.
4. Design Greeting Cards: By designing greeting cards, you can make money from websites who need and sell them.
5. Selling information products: Information products are one of the best ways to earn passive income online. This is one popular strategy for passive income. One creates some kind of information product — an e-book, audio course, DVD — then kicking back while cash from the sales of these products rolls in. You’ve no doubt purchased info products in the past – such as the one you’re reading right now, but with a price tag attached. Now you can be on the other side of things. Info products are simply informative products that people usually purchase in a digital format.
While information products can eventually yield an excellent income stream, it is hardly a passive activity. It takes a massive amount of effort to create the product. Take a look at the top Digital Products you are considering. Do some digging into the info products that are already successful, along with investigating the marketers that are behind those info products there are a couple of concepts I want you to latch onto.
First, as an info product creator, you’re going to want to get affiliates on your side. That means networking with other marketers in the niche. You’re going to want to get to know the top marketers in your niche and show them that you have high quality products and know what you’re talking about, so they will promote your product for you. You can list your info product on affiliate networks like clickbank.com, JVZoo.com, and warriorplus.com
The other concept is that you don’t want to just sell your info product once and be done with that customer. You want to get people on to your list. You want to collect the email address of every person who buys your book or product. That means signing up for an autoresponder company, such as GetResponse or aWeber. When you use something like JVzoo.com or warriorplus.com, you can set it up so that each buyer automatically gets added to your email list.
Just one more thing – you should really consider having a product to upsell your buyers to. Maybe create an offer for personal help, a slightly more advanced method, or something else that’s presented to them after they buy the front end product – your initial info product. Offering upsells is slightly more advanced for you as an info product creator, so this may be something you want to hold off on until you are more comfortable.
How do you create a product? That’s easy. You can use something as simple as Microsoft Word, Libre Office, Google Docs, or whatever word processing program
6. Affiliate marketing: Website owners or bloggers promote a third party’s product by including a link to the product on their site. When a visitor clicks on the link and makes a purchase from the third party, the site owner earns a commission.
Affiliate marketing is passive because, you can earn money just by adding the link to your site. In reality, you won’t earn anything if you can’t attract readers to your site, click on the link and buy something. So if you’re just starting out, you’ll have to spend time creating content and building traffic.
7. Sell Random Stuff on Sites like Zazzle: By random, we mean very random. If you have art, designs or photos, you can publish them on any kind of product you can think of; invitations, T-shirts, mugs, pillows, phone cases, the list is endless. After that, you can set your own royalty rate (that’s the percentage you’ll rake in from 5% to 99%, and you’re done. You won’t have an inventory to handle (no production, no shipping).
8. Get Cash-Back with Credit Cards: A passive way to earn income is to sign up for credit cards that offer cash, or points, back. There are lists of cash-back cards that offer sign-up bonuses — and are free of fees. An important point to remember is that for this to truly be passive, you’re not spending money for the sake of earning points or cash back; you’re spending it like you normally do while earning income. Cards like Chase Freedom Unlimited, Blue Cash Everyday Card from American Express, Wells Fargo Cash Wise Visa Card, TD Cash Credit Card are examples of such cards that can be used to get cash-back.
9. Stick an Ad on Your Car: You could earn as much as $100 a month from a platform like Carvertise with no upfront costs. You’ll have to answer questions about your driving habits though. This brings passive income for the individual that gets registered by the company.
10. Make YouTube Videos: Make a YouTube video, and establish a passive income. By monetizing your YouTube videos with Google AdSense, this can be an unlimited stream of passive income.
11. Renting Out Things You Don’t Use: A good way of making passive income is to rent things in your house that you do not use. Doing this ensures that it continues to generate income for you.
Earning Passive Income with an Authority Blog
It is recommended that you build a website and write some articles, giving people information and promoting products. Hence the main focus is to create an authority blog.
Before we go any further, think about the blogs you visit every day. If you’re a parent, then you may visit parenting blogs. If you’re a marketer, then you may visit marketing blogs. If you’re interested in social media, then you probably visit social media blogs. If you’re interested in video games, then you probably visit video game blogs.
Whatever it is, consider what the blogs you visit most often have in common. I’ll venture to guess that they have high quality content that you enjoy reading. They probably also allow for some reader participation in the form of comments, voting, and more. There’s probably somewhat of a community feel there – a lot of other people are regulars at that blog as well.
You’ve probably come to really enjoy the work of the blogger, or group of bloggers, on that site. When you want to know what’s happening, you visit their blog first.
That is an authority blog.
An authority blog is what people think of when they think of the very top blogs in a particular niche. These blogs have frequent content, a lot of visitors, and are really thought leaders in the niche. These blogs are not something people set up and pay attention to for a little while and then give up on.
It can be really invigorating to own one of these blogs yourself. It can also be very rewarding because of the income that comes in. You can write a blog post now that can earn for you five years from now, simply because your blog is a constant authority.
I have to reiterate that if your notion of “passive income” is that you never touch the project again, you’re certainly wrong in this case. With an authority blog, you’re going to need to blog consistently. You’re going to need to attend to the needs of your readers, be present on social media and elsewhere on the web, network with readers and other people in the niche, and so on. In many ways, running an authority blog can seem like a full-time job.
But the income that comes from it is passive in the way that something you write or do now could earn for you for years to come. Indeed, you can grow the income from an authority blog to massive levels. But this is not for the faint of heart – it’s something you really have to be dedicated to. For that reason, and more than ever before, you have to love the topic you choose.
If you have a topic in mind, go ahead and investigate the current authority blogs that are present in your niche. Take notes on what you think makes them successful. Take notes on what you think they do really well and what they don’t do so well.
This can help you decide the specific angle you want to take with your own blog, or even if it’s worth doing at all. These authority blogs can be more general than those little niche websites I was talking about in the previous section. However, they need to be broad enough that you can cover topics day after day without ever running out of things to talk about. Since this is an authority blog, you’ll take a longer-term view of what it means for such a blog to become successful. A little niche website might become successful much more quickly, but it won’t pay off as much in the long run.
It’s so important that you take a unique angle and that you stand apart from the crowd that is already out there. Choose a catchy name for your blog that you think will resonate with the people of that niche. Set up your blog and make sure you pay attention to its branding so that it, once again, stands out.
Then, I recommend you come up with a content schedule for the next several months. Many people start blogging but then stop because they haven’t planned well enough in advance. Plan out what you going to write, and even consider getting a lot of the writing done up front. You’ll be much more likely to stick with your blog and to see it through to success. You can schedule several blog posts to go out in advance so you don’t have to worry about it every single day. You should, however, attend to reader comments every day.
How are you going to make money?
You can monetize with Google AdSense, join affiliate programs, review products, post paid ads on your blog, and more. Really, the sky is the limit with an authority blog. You are going to provide a lot of value to the people of your niche. You are also going to have the opportunity to make a lot of money in a lot of different ways.
Since you are going to host an authority blog, I highly recommend you focus on building your list. You want to include opt-in forms on your blog, along with ‘squeeze pages’ that give something away for free to your audience, so you can build your list at every turn. Once you have a list, you really can choose your own income.
You can create your own products to sell, promote affiliate products, and more. If this business model appeals to you, I urge you to tackle it as you would a new job. It can seem like a job to build up an authority blog. But once you do, it really can earn for you on autopilot. An authority blog can earn you a lot of income and respect and open up a lot of opportunities. For instance, many bloggers go on to write books, take on speaking engagements, offer group and/or one-on-one coaching programs, and more.
Earning Passive Income with Kindle Books
Kindle marketing is a topic that energizes a lot of people. I get pumped with energy about it because it’s really appealing to be able to self-publish on a powerhouse platform like Amazon. Many people want to write their own fiction books and Amazon is the perfect place to do that. Many others, even people who don’t consider themselves to be writers, are interested in publishing nonfiction books because they know it will be profitable.
You can definitely earn passive income with Kindle books no matter what you’d like to write, but there are some things you should know first. You have to choose a topic that’s popular. You might get lucky and choose a topic and will take off like crazy just by chance. But more often, you should follow in the footsteps of what has already been successful.
I also want to mention that you can earn passively with Kindle even when you don’t consider yourself to be a writer. You can certainly outsource to a ghostwriter, if needed. Take a look at the different categories on Kindle that you might be interested in. Are the top books in those categories and subcategories selling well? Typically, a sales ranking of under 20,000 is best. The lower the number on Amazon, the better it is selling. You can find this number on the individual product pages on Amazon. If you see a book without a ranking number, it probably means it hasn’t sold any copies in a while, or ever. If you think the topic is selling pretty well, go ahead and develop your own ideas for your own book.
Create an outline based on what people need and want to know based on that genre, topic. After you’ve written your book, you need to format it for Kindle, optimize its title, cover, and description. Again, take a look at what the most popular authors are doing within your genre and make sure you are optimizing in the right way.
Then, you need to make sure you get people to review your book right on Amazon. It’s difficult to get sales on Amazon if you don’t have any reviews on your book. Ask people to give their honest review of your book (it can be friends, family, or whomever, as long as the reviews are honest and not paid for).
Also, begin to market your book. If you have a list, mention it to your list. Consider your social media contacts, and so on. You can pay for Facebook ads for a decent price to really jumpstart things. When you start to get some sales, Amazon’s algorithms will kick in and you can really start to earn some money on autopilot.
Of course, the best, most passive income actually comes after you’ve published several books. Each book acts as a funnel to your other books. The more books you have published on Kindle, the better. If you don’t see success right away, keep pushing it, keep optimizing, and keep moving forward. Kindle can be really fun and you certainly can earn a great income if you take the right steps and really dedicate yourself to the process. It’s all about optimizing, getting reviews, doing what marketing you can, and continuing to publish.
One of the simpler approaches to increase budgetary autonomy is to reconfigure your life with the goal that a significant bit of your salary isn’t effectively earned by your work. Rather, it must originate from easy revenue. Indeed, the possibility of automated revenue is firmly identified with the Berkshire Hathaway demonstrate, which I clarify in a prior component.
The essential thought of automated revenue is that it is cash gotten with practically zero exertion required to keep up the stream of wage once the underlying work has been finished.
Some regular cases of automated revenue are:
Lease of land property speculations
Patent eminences for a creation
Trademark authorizing expenses for characters or brands you’ve made
Sovereignties from books, melodies, productions, or other unique works
Benefits from organizations in which you have practically no everyday part or duty
Profit from Internet notices in a blog or on a site you claim
Profits from stocks, REITs, value shared assets or other value securities
Enthusiasm from owning securities, testaments of store or currency markets, or other money and money reciprocals
Leftover wage for a salesman on accounts that are ordinarily reestablished naturally, for example, a donning products agent that acquires a commission on his records, getting a couple of thousand dollars for each store every year for overhauling the clients once they have been opened
Why You Should Prefer Passive Income to Active Income
Automated revenue is alluring in light of the fact that it liberates you to invest your energy in the things you really appreciate.
An exceedingly effective specialist, legal advisor, or marketing specialist, for example, can’t “stock” their benefits in the expressions of one surely understood creator. In the event that they need to gain a similar measure of cash and appreciate a similar way of life one year from now (and the year after that), they should keep on working a similar number of hours at a similar pay rate.
Albeit such a vocation can give a fabulous life, it requires to an extreme degree a lot of forfeits unless you genuinely appreciate the everyday routine of your picked calling. Much more dreadful, once you want to resign, or get yourself unfit to work any more, your pay will stop to exist unless you have some type of easy revenue. Before, this was refined by worker investment in organization supported benefits designs however that ship has since quite a while ago cruised for a noteworthy part of the local and worldwide workforce.
The Two Broad Types of Passive Income
There are two kinds of easy revenue and all through your profession, which ones you concentrate on will probably rely on your current money related circumstance, abilities, aptitudes, and identity. The two classes of automated revenue are:
Easy revenue sources that expect funding to begin, keep up and develop
Easy revenue sources that don’t expect funding to begin, keep up and develop
The individuals who concentrate on the principal classification of easy revenue will require either family cash, stores from financial specialists, or the nerve to obtain expansive wholes by assuming the obligation to subsidize the buy of advantages. The least demanding to comprehend is somebody who takes out significant bank credits to construct a loft building or purchase rental houses.
In spite of the fact that this can transform a little measure of value into a huge income stream, it isn’t without a chance. When utilizing obtained cash, the edge of wellbeing is significantly littler on the grounds that you can’t retain a similar level of difficulty before defaulting and finding your asset report wrecked.
Another case of the main classification of easy revenue is somebody who has a possession stake in a working business, for example, a plant or furniture store and enables the business to issue obligation to subsidize extension. The early store supervisors in Wal-Mart who were permitted to contribute before the organization opened up to the world were in this position.
Substantial speculation portfolios additionally fall into this class of automated revenue. On the off chance that you possessed $10,000,000 worth of blue chip stocks, you could sensibly anticipate that profits of $200,000 will $500,000 every year relying on the sorts of organizations you organized; e.g., higher yielding securities, for example, real oil organizations will develop more gradually yet offer wealthier profit payouts than organizations with speedier development rates in the basic income per share.
Regardless of whether you spend your days playing golf, painting, or composing the considerable American novel, you would gather checks as those organizations paid out a part of their profit. The issue, obviously, is that it takes the ten million to be in that position; something few individuals will ever achieve.
The second class of easy revenue – that is, automated revenue sources that don’t expect money to begin, keep up, and develop – are much better decisions for the individuals who need to begin alone and fabricate a fortune from nothing. They incorporate resources you can make, for example, a book, melody, patent, trademark, Internet webpage, repeating commissions, or organizations that win about endless profits for value, for example, a drop-dispatch web-based business retailer that has almost no cash tied up in operations yet at the same time procures benefits for the proprietor.
The Path Most Often Taken to Passive Income
It appears that most basic way to creating extensively automated revenue streams is to work at an essential occupation and utilize your effectively earned wage to purchase resources that produce easy revenue all the time.
The specialist or legal counselor in our prior case, for example, could utilize his wage to put resources into a medicinal start-up or purchase offers of therapeutic organizations he sees, for example, Johnson and Johnson. After some time, the nature of exacerbating, dollar cost averaging, and reinvesting profits can bring about his portfolio producing generous automated revenue. The drawback is that it can take a long time to accomplish enough to genuinely enhance your way of life yet it is as yet the surest method to riches in view of the chronicled execution of business possession and stocks.