– Hey, friends, In this article, we’re gonna talk about nine different passive income ideas. And for each of those, I’m gonna talk about how hard it is to get started, how hard it is to make $100 a month from it, and how hard it is to maintain. once you’ve created the thing in the first place. For me, in my business, these nine different sources generate around $27,000 per week, these days, with varying degrees of passiveness. And obviously, this has taken me like eight years to build up.
So don’t expect to be hitting those sorts of numbers when you first get started. But this is the article that I wish I would’ve had when I started my financial independence journey many, many years ago, let’s go for it. All right, so when I say passive income, I always air-quote it, because there is really no such thing as passive income, there is no way to make money without doing anything at all.
What is Passive Income?
But when I say passive income, what I mean is that it’s money that is not directly tied to our time. So let’s say you were to write a book. If you write a book, you publish a book. That book is now on the bookshelves. You’ve done the work kind of once, to write and publish the book, but now, anytime the book sells, you make money from royalties, that is passive income. You could literally be making money while you sleep because you’ve created this thing, which is out in the world, which is generating income for you. The other thing with passive income is that it always takes a very long time to get going.
So if you see any ads before this article, talking about how you can get rich quick, by whatever scheme, or if you see people in the comments pretending to be me, saying, “Oh my God, “here’s how you can get rich quick with crypto, “WhatsApp this number,” that is all a scam, it’s not gonna work. There is no way to get rich quickly, it is not a thing. So if you’re looking for a get-rich-quick scheme, those things just don’t exist. So you might as well not even try.
And the way I think of this is that, ultimately, money is just a medium for exchanging value. The only way to make money is to provide value. And the only way to make passive income, passive money is to provide value in a way that is not directly tied to your time. So please, please, please, do not try and join a get-rich-quick scheme, they don’t exist. I’ve had lots of messages, over the years, from people who have tried signing up for a get-rich-quick crypto scheme or a gambling scheme or a “Hey, here is how you play poker online.” None of these things ever work. People always end up losing money.
The only way to make money is by providing value. And so, let’s talk about the nine different ways that you could provide value if you wanted to.
About My Mentorship
Just before we dive in, I wanna tell you that I’ve just launched my brand new Skillshare class about productivity for creators, and how to start a successful side hustle. That’s linked to the article description. Skillshare is sponsoring this article. I’ll tell you more about skillshare later on, but I wanna plug my own class because I think it’s genuinely really good, and people really like it. And it’ll help you get tips on how you can start side hustles in your spare time. Anyway, let’s get into the article. All right, so let’s kick things off with investing in stocks and shares. And in this context, the way that we provide value is by offering up our money, providing money and
1. Investing in Stocks and Shares
Introduction to Investing in Stocks:
Investing in service is, in a way, giving a form of value. And so, when we give our money to a company in the form of buying their stocks, it makes sense that we would get some kind of return for that investment. And we’re starting with this because investing in stocks is the easiest way to make any kind of passive income. If you have any sort of savings, and they’re sitting in a savings account, earning 0.01% interest, they’re not really doing very much for you. Whereas, if you had those savings and put them in stocks, you could potentially be earning passive income from the money that’s otherwise just sitting there.
Investing in Index Funds:
Now, I’ve got a whole article called the ultimate guide to invest in stocks and shares for beginners, which is gonna be linked over there somewhere. So that is a solid, half an hour long introduction to stocks and exactly how they work. But the thing that I recommend for most beginners as a non-financial advisor, and this is not financial advice, purely for entertainment purposes only, or so people say, or, at least, the thing that I do is that basically all my money that’s in stocks and shares is invested in index funds.
How to Get Started with Investing in Index Funds:
Starting a side business or investing in rental properties are just a few examples of passive income ideas that can help you generate additional income. Now, an index fund is something like the S&P 500. And when you invest, let’s say, $1,000 in the S&P 500, that basically means that your $1,000 is distributed amongst the top 500 biggest companies in the US. So, you know, weighted by how big they are. So like 2% of it would be in Apple, 2% in Facebook, 2% in Google, and 2% in Microsoft. And then you probably wouldn’t have heard of the 500th company on the list, but basically, all the big US companies you’ve heard of, you end up investing in all of them a little bit at a time.
So if you wanna get started with that, all you need to do is sign up for a stockbroker. If you’re in the US, you can use Webull, I think I’ve got the link in the description. If you’re in the UK, you can use Freetrade or Vanguard. Basically, whatever country you’re in, just Google the phrase “best stock broker platform,” and your country name, and you’ll find something that works for you. And then it’s very easy to be able to invest in an index fund. So within our famous Side Hustle Assessment Matrix, we’re gonna give the difficulty of starting a one-star rating, one outta five. It’s very, very easy to get started with stocks.
Making Passive Income from Investing in Stocks and Shares:
How hard is it to make $100 a month by investing in stocks and shares? Well, this kind of depends, because it depends on the performance of the stock market overall. So in the last 12 months from 2020 to 2021, the S&P 500 is actually increased by about 50%. That is a lot, it’s like gone up by a solid 50% despite COVID and everything going on. So if in April 2020, you had invested $2,400 in the S&P 500, the fact that it’s gone up by 50% means you would’ve made $100 a month, but obviously, this is not the way to look at it, because things can go up.
However, it’s important to keep in mind that the stock market can be volatile and there is no guarantee of returns. Investing always comes with a level of risk, so it’s important to do your own research and make informed decisions. Passive income ideas can provide a sense of security and stability, as they are not reliant on a single source of income or a traditional job market. It’s also important to have a diversified portfolio, which means investing in a variety of stocks, bonds, and other assets to spread out your risk.
Overall, investing in stocks can be a great way to earn passive income, but it’s important to approach it with caution and to do your own research. Starting with index funds can be a good way to dip your toes into the stock market, and over time, you can adjust your portfolio to suit your own risk tolerance and financial goals.
2. Starting a YouTube Channel
Idea number two for generating passive income is to start a YouTube channel. How hard is it to start a YouTube channel? It’s very easy to start a YouTube channel. You just go on youtube.com, click create a channel, and you can upload articles by just filming with your phone and uploading it. By focusing on passive income ideas, you can build wealth and achieve financial independence faster than relying solely on traditional income sources.
Making Money from YouTube
To be eligible for monetization on YouTube, you need a thousand subscribers and 4,000 hours of watch time. It took on average 90-something articles to get to a thousand subscribers. So, that’s quite hard.
Making $100 a Month on YouTube
On average, the kind of revenue per thousand views on YouTube is around about $2. Therefore, if you want to make $100 a month, you need 50,000 views on YouTube to make $100 a month.
Maintaining a YouTube Channel
Actually getting that first thousand subscribers is a lot harder than keeping it growing. Once you’ve got a thousand subscribers and your channel is growing, it means you’ve landed on a formula that works. Maintaining it then becomes easier than starting from scratch.
Effort and Skill Required
It’s actually very hard to make compelling YouTube articles, and it’s very hard to do well. It’s totally worth it, it’s a great skill set, and it’s really fun.
In our Side Hustle Assessment Matrix, we’re gonna give maintenance of a YouTube channel passive income stream to be around about two out of five stars. With effort and patience, it is possible to make a lot of passive income from YouTube.
3. Starting a Podcast
Passive income ideas can be particularly valuable for retirees or those looking to supplement their retirement income.
- It’s very easy to start a podcast, just go on anchor.fm or use Riverside.fm to record remote interviews
- You can use your phone to start a podcast with friends
Growing a Podcast:
- Podcasts don’t have an algorithm to help them grow, unlike YouTube
- Some podcasts grow by having a YouTube channel
- It’s harder to grow a podcast than a YouTube channel
Making Money from a Podcast:
- Podcasters make money through brand deals
- There is no YouTube ad sense for podcasts
- To make $100 a month, you need around 1,000 downloads per episode
Getting Downloads for a Podcast:
- The top 20% of podcasts get more than 1,000 downloads per episode
- It’s harder to get 1,000 podcast downloads per month than 1,000 YouTube views
- A podcast can still make money with 400-500 downloads per episode
Maintenance of a Podcast:
- Podcasters need to keep making episodes to maintain brand deals
- Once you know how to podcast, it’s easier to continue
- Starting a podcast: 1 out of 5 stars
- Making $100 a month: 3 out of 5 stars
- Maintenance of a podcast: 2 out of 5 stars
- The podcast “Not Overthinking” makes around $625 per week from brand deals and membership.
4. Becoming an Affiliate Marketer
Getting Started with Affiliate Marketing
One of the key benefits of passive income ideas is that they can continue to generate revenue for you even after you stop actively working on them.
- Signing up for an affiliate program like Amazon associates
- Posting special links on a website, social media, etc.
- Getting a percentage of sales from products sold through your link
Making Money through Affiliate Marketing
- 48% of affiliate marketers globally earn $20,000 a year
- Making $100 a month is hard
- Amazon offers only a 2-3% commission
- An average conversion rate of 1%
- Need 8,000 website visits to make $100 a month
- Building an audience or domain authority is necessary
- Skillshare offers a $7 commission for referring someone to a free trial
- Need 15 people to sign up for Skillshare with an affiliate link to make $100 a month
- Having your own classes on Skillshare can help
Building an Audience
- Creating useful content for free on the internet once a week
- Doing this for at least two years to build an audience
- 3.5 star rating for difficulty in making $100 a month
Maintaining Passive Income
- Evergreen content can provide reasonable passive income
- Once established, maintaining passive income is relatively easy
Success in Affiliate Marketing
- Skillshare affiliate income of around $11,000 per month
- Amazon affiliate income of around $450 a month from UK stores and more from the US and Canada
5. Selling a Digital Product
With the rise of technology and the gig economy, there has never been a better time to explore passive income ideas and diversify your income streams. All right, method number five of making passive income is by selling digital products. Now, these are products that you create once, like an ebook or a download or an app or something like that. You create it once, and then you can sell it multiple times because selling digital products doesn’t usually have any cost associated with it.
Examples of Successful Digital Products
One really good example is this guy called Traf, who I follow on Twitter, who made an iOS 14 icon set and sold it for like $30 a pop, a few months ago, and ended up making, I think, like $300,000 in the course of like a few weeks, just because loads of people around the world wanted to buy his icon pack. So he put the work into creating the pack, and now he’s selling it for lots of money. Another example is my YouTuber friend, Oliur, who has made, as he says, $700,000 from selling his website Tumblr themes since 2014. So he made the website themes for Tumblr. He sells them, and he makes $700,000 on average, well, overall, since 2014, that’s pretty cool.
The difficulty of Getting Started and Generating Income
So how hard is it to get started making digital products? I mean, anyone can write an ebook, an ebook counts as a digital product. So I’m gonna give this a two-star rating, two outta five stars, but obviously, again, money is an exchange of value. So the thing that you’re selling, you have to be providing enough value to compensate, to make up for the price that you’re selling it for. And that’s often quite hard, especially if you don’t have an experience in this sort of field. Passive income ideas can be a great way to supplement your primary income and increase your overall earning potential.
And how hard is it to make $100 a month? Well, it’s very easy to create an ebook, but it’s a whole different ball game trying to get people to actually buy your ebook or buy your icon or buy your app or buy your website themes. And because the market around this stuff is so competitive, you have to be genuinely really good to get people to buy your stuff.
Identifying a Problem and Providing Value to Customers
And the way you get people to pay you money for something is that you identify a problem that they have, you solve that problem, and then you charge money for it. And if you can do those three things, then it’s, I wouldn’t say it’s easy to make $100 a month, but it’s very doable to make $100 a month. You just genuinely have to have something that solves a pain point that other people are willing to pay for. So we’re gonna give this three outta five stars to make $100 a month from selling digital products.
The difficulty of Maintaining Digital Products
And finally, in terms of maintenance, we’re gonna give this a two out of five stars, because usually, you do have to maintain your product a little bit, but it’s often easier to do, it’s much easier to maintain a product than creating a product in the first place.
6. Selling a Course
Introduction to Online Courses
Passive income ideas require initial effort and investment, but they can pay off in the long run and provide you with financial security. Online courses are similar to digital products and are usually presented in article format. Creating an online course can be relatively easy, but the course needs to be of high quality for people to pay for it. Online courses can be filmed on a phone or iPhone, and the starting difficulty is rated as two out of five stars.
Getting Started with Online Courses
To start teaching online courses, one needs to know how to create and edit articles. However, creating a course and posting it on a website like Skillshare is an easy way to get started. Skillshare allows teachers to upload courses without charging for them. Using Skillshare’s platform, teachers can teach without having to create their own course platform.
Online Course Platforms
Skillshare is a popular platform for online courses. It operates like YouTube, allowing anyone to upload their courses provided they meet certain quality requirements. Skillshare has thousands of courses available on different topics, and anyone can take a course using the platform. Skillshare also provides a space for teachers to teach without directly charging for their courses.
Teaching on Skillshare
Skillshare allows anyone to teach a class on their platform. A teacher can create a class and upload it to the platform for free. The Skillshare algorithm ensures that the best courses rise to the top, so having an audience is not necessary. This makes it easier for people to start teaching on Skillshare and gain visibility for their courses. From creating digital products to investing in real estate, there are countless passive income ideas to explore that can help you achieve your financial goals.
Making Money on Skillshare
To make money on Skillshare, one needs around 28 students to take their class every month with a premium membership, which translates to about $100 per month. This is possible if the class is of high quality, and people enjoy it, resulting in high ratings and recommendations. Skillshare’s algorithm helps promote courses that are highly rated, making it easier for people to discover them. The other way to make money on Skillshare is by using the platform’s affiliate program, which pays for referring students to the site.
7. Building a Membership Community
Introduction to the Idea of Passive Income
The beauty of passive income ideas is that they offer long-term benefits, allowing you to earn money consistently over time. Passive income is a popular concept these days, and there are many ways to generate it. In this text, we will explore one of the most common methods for creating passive income: by creating a paid membership or community model.
Creating a Paid Membership or Community Model for Passive Income
Creating a paid membership or community model can be a great way to generate passive income, but it’s generally a bad idea unless you have an existing audience. If you have an existing audience that knows, likes, and trusts you, creating a value proposition that is so compelling that people will be willing to pay for a community-like service for this becomes easier.
Building a diversified portfolio of passive income streams can help you achieve financial stability and independence. Platforms like Patreon make it easy to start a membership program but to make $100 a month, you need to provide $100 a month’s worth of value, and that’s actually quite hard to do. If you can provide consistent value over a long period of time, some of your audience may be willing to pay for your membership.
Examples of Paid Membership Communities
Two examples of paid membership communities are discussed in this text. The first is Patreon, which is used by a YouTuber with 600,000 subscribers. She has 626 patrons, and she’s making somewhere between $3,000 and $7,000 per month in passive income from this audience. The second example is Ness Labs, a website that has a paid membership community that costs $5 a month. The website’s founder wrote a hundred blog posts over a hundred working days and built up an audience before launching the membership community, which now generates over $100,000 a year in annual recurring revenue.
Difficulty Level and Maintenance of Paid Membership Communities
Starting a membership program is easy, but providing enough value to maintain it is difficult. Once you have a formula that works, maintaining the program becomes easier. The economics of membership communities work in a way that if you keep showing up and providing value in some capacity, people have already signed up for the thing. While it may take a lot of work, a membership community can generate significant passive income. For instance, the Part-Time YouTuber Inner Circle generates roughly $2,800 a week from its membership community, but it requires a lot of work to maintain.
8. Automating a Business
Passive Income through Automated Business and Delegation
Passive income ideas come in many different forms, such as rental income, dividend income, and affiliate marketing. Generating passive income can be achieved by creating a business that sells goods or services and then automating or delegating aspects of that business. This allows for a reasonably passive income stream, as discussed in Tim Ferris’ “4-Hour Workweek.” There are several businesses that can be created in this manner, where goods or services are sold and then outsourced, automated, or delegated to make the income passive.
Examples of Passive Income through Automated Business and Delegation
One example is Oliur’s YouTube channel, where he talks about his $1 million Shopify store. He designs manufactures and sells vegan leather desk accessories, bags, and mouse pads. While setting up the business required loads of work, he now has a team of three other people that manage the business, which enables him to spend proportionally less time running it. Similarly, another example is a friend who runs an Instagram and Facebook ads marketing agency. His clients pay him a few hundred dollars per month to manage their Facebook and Instagram ads. He spends a small amount of time initially setting up the ads, but then automates aspects of the business using tools like Zapier to keep the business ticking along each month. If you’re looking for ways to increase your wealth and achieve financial freedom, exploring passive income ideas is a smart move.
Challenges of Generating Passive Income through Automated Business and Delegation
However, it’s not easy to get started with this approach. Creating a business that genuinely provides value is difficult, and providing value is necessary to make this income stream work. Additionally, maintenance is required to keep the business running smoothly. Therefore, we give this approach a four out of five-star rating for both the difficulty in getting started and the requirement to provide value to customers. For maintenance, we give it a three out of five-star rating.
9. Building an App or Website
With the right passive income ideas, you can earn money while you sleep, travel or spend time with your loved ones. Generating passive income is an excellent way to create additional revenue streams without the need for constant work. One way to do this is by creating software products.
Software as a Service (SAS):
SAS is a popular category of software products that allow developers to offer subscription services or one-time payments. Indiehackers.com is an excellent resource to find examples of people who have built software businesses that are making passive income.
The speaker shares their experience with creating a software product, BMAT Ninja and UKCAT Ninja, that was a question bank for medical applicants. They created this from scratch with their brother, and it took a lot of work but generated a decent amount of money.
Creating an app or website is challenging, and it requires coding knowledge, a compelling idea, and a lot of hard work. The speaker rates the difficulty of creating an app as five out of five. Getting people to pay for the app is another challenge, rated four out of five.
Once the software product is created, maintenance is easier, rated three out of five.
Creating software products can be an excellent way to generate passive income. The speaker encourages viewers to check out their playlist with tips for entrepreneurs and how to get started creating businesses from scratch. Passive income ideas are a great way to generate additional income without sacrificing your time and energy.