What would you do if you got money in your account every month no matter what you did or where you were?
Real estate and the Internet are two of the things that offer opportunities to create a recurring income, but there are more.
Follow along here and you will get a number of business opportunities presented.
In recent years, the concept of passive income has become increasingly common when it comes to making money.
What does it really mean to have a passive income and what can you do to get one? These are two of the questions we will answer in this article.
What is passive income?
The term “passive income” is exactly what it sounds like – an income you get without having to do physical work. The money comes in regularly as you continue to live your life as usual, whether you work or run your own business.
The biggest difference between your salary and passive income is that your salary disappears as soon as you finish your job. However, your passive income will continue to roll in as usual.
Most people acquire one or more passive sources of income in addition to their regular work to increase their salary.
The income can act as a buffer for unforeseen expenses or as a way to repay your mortgage faster. Whatever the reason, one or more additional sources of income are never wrong.
6 tips for a passive income
Today, there are several ways to make money without the need for regular work. Below we list some popular ways to create passive income.
1. Educations, courses and e-books
One of the best ways to create a passive recurring income is to create a product that you can sell over and over again without having to spend additional time on it.
We find examples most easily in the entrepreneurial world, where it has been popular in recent years to create courses and online training.
An online education is a good example of a product that generates a passive income. The training is only produced once and can then be sold again and again via a website or with the help of other platforms and social media.
With the right marketing channels, sales funnels and more, the chances of sales are maximized and you can make money on the product while working on other things.
A similar product is of course a book that is written and on which you receive royalty.
However, it can be difficult to achieve the sales ratio required to get a full-time income, but it is definitely an option when it comes to creating a product that generates passive income.
And who says you can not produce more such products? E-books work well here where printing costs and delivery costs disappear.
2. Invest in real estate
One of the absolute safest ways to create a passive income, but which unfortunately requires more capital, is to invest in real estate.
Properties are considered to be stable in their original value and, in addition, they can even increase steadily in value (depending on developments in the housing market).
By buying properties and then renting them out to tenants, you get money every month.
Make sure to set the rent high enough so that your repayment on the property is covered and that you get more money over each month.
Note, however, that during the first years, it may be a good idea to set aside the remaining amount in a pot for maintenance.
In any case, until you have a sufficiently large budget to cover any maintenance.
If you can also repay the entire debt on the house, you have a substantial passive income after that!
3. Invest your capital
Another tip for creating a passive income is to invest capital. It is an option that requires a lot of time, patience and of course capital to generate any form of income.
By investing in funds or shares in the long term, you have the opportunity to build a so-called money machine.
It is a concept that means that you invest money in stocks or mutual funds where they grow and generate returns every year.
By reinvesting the return, your money machine increases in size and the more capital you own, the higher the return.
Finally, if you have made the right investments, you can have an annual return equivalent to a full annual income.
This option requires that you have a disciplined savings and a long savings horizon.
4. Rent out a room
Another way is to rent out a room that is empty. If you have one or two rooms that you do not use in your apartment or in your house, you can rent them out.
It provides extra capital every month and if you are lucky, your income may also cover your housing costs, which means that you live for free.
If you do not own your home yourself, however, you should be careful to review the conditions that apply to subletting.
5. Communicate sought-after services
The Internet knows no boundaries – everyone wants to be visible and accessible.
Take advantage of this by offering companies services that you then pass on to others, but at a lower price.
An example could be companies that are in need of content for their sites.
Many companies that are already established online are looking for freelancers who can write texts for their websites.
If you come in contact with one, you may be overwhelmed with material to write about.
Then it’s your job to find writers who do the work for you, albeit a little cheaper.
In this way, you can help companies create good content and ensure that freelancers find new assignments while earning a good penny yourself.
However, there are some disadvantages to this concept. On the one hand, it can be time-consuming to act as an intermediary because you need to communicate with both customer and writer.
In addition, there is always the risk that the writers do a bad job or that they walk past you and write directly for the website.
6. Create a business model that provides returns
The last tip for earning a passive income is to create a development model, business model or sales network.
For those who are entrepreneurial, an investment in creating their own business model that is then resold can be an alternative.
An example of such a model could be a franchise chain. Well-known franchise concepts are Wayne’s Coffee, McDonalds and Subway, where driven entrepreneurs can buy into the concept and start their own business.
Every month or year, they pay a sum of money to the brand’s parent company to continue their business under its brand.
Creating such a model requires a lot of creativity and drive and if it feels awkward, the direct trade model may be better suited.
In direct shopping, you have the opportunity to be part of a larger brand or company and become a reseller for their products.
By helping the company find new resellers, you get a small commission on what these new distributors sell.
The more resellers you find who sell the company’s products, the greater the commission you will receive, which counts as a passive income.
The Internet should also be mentioned. This opportunity has made it perhaps easier than ever to create a recurring income.
Surf around, seek inspiration and learn internet marketing. You do not even have to have your own warehouse if, for example, you choose to sell other people’s things via dropshipping.
Important before creating a passive income
It is clear that everyone wants to earn a lot of money without doing physical work, and it is entirely possible. However, there are some things to keep in mind before exploring passive income sources. Below I share some helpful tips.
- Why do you need an extra income? If it is only your low salary that you want to increase, we recommend that you instead change jobs or negotiate your salary. Creating a stable passive income usually requires time, work and capital.
- One thing at a time. Concentrate on one source of income at a time. Wait and see how it develops and if it goes well, it may be time to expand. If, on the other hand, you notice that it is not the right path, you should change strategy. Always get money in first before increasing the number of sources of income.
- Keep your job. In the beginning, it is good if you wait to resign from your job. First, it can take a long time before passive income begins to roll in. It is rare that these sums will be particularly high in the beginning. Second, the value of certain investments, such as stocks and mutual funds, may decrease.
- Be realistic. You can of course aim high, but be realistic. Do not wait too long to change tactics, but at the same time avoid stress. In reality, unfortunately, few people earn such a large passive income that they can live on them alone.
I now hope that you have been inspired to get started and build your passive income.
And before you decide to invest money or start projects that can increase your income, you should always think twice.
Most investments are associated with risks that in the worst case can worsen your finances instead of improving it.
But other than that – Good Luck!