Smart Ways to Make Passive Income
November 10, 2020 | Joyce Ibrahim
It’s still early in the week, you’re behind your desk trading away hours for money, and daydreaming about retiring early and kicking back at your favorite destination. According to CNN Money, if you hope to retire in your 50s and maintain your standard of living, you’d need assets worth around 10 to 16 times your salary. And with the pandemic disrupting our lives from the way we save money to the stability of our jobs, it’s difficult to even set aside a significant amount of assets on a single source of income, let alone become financially independent. That’s where the importance of passive income comes into play. Warren Buffett said it himself, “If you don’t find a way to make money while you sleep, you will work until you die”.
Here are some ideas on how you can create passive income and get started on your journey to financial freedom.
Shareholders in companies with dividend-yielding stocks are entitled to payments at regular intervals, all you have to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the bigger your payout. Since there isn’t much else to do buying the shares, owning dividend-yielding stocks is an easy way to make passive income. According to Forbes, dividend investors can receive annual returns of 15% to 25% if they manage to pick the right dividend-paying stocks. However, before making such an investment, you need to do your homework. It’s incredibly important to do some thorough research on the company issuing the stock, and ensuring you’re comfortable with their financial statements and terms. Another sound option would be to consult a financial advisor who can help you pick the right stock for your goals.
Affiliate marketing is among the most popular ways to make passive income. If you have a blog or website, you can partner with a brand to promote certain products or services on your site. By just adding a link to a product or service on your blog or social media account, you can earn recurrent commissions every time a visitor clicks on the link and makes a purchase. Amazon is one of the most popular affiliate partners, with eBay, Awin, and ShareASale also among the most well-known names in affiliate marketing. In theory, this can be considered as a passive strategy since adding a link to your content can seem pretty simple. However, if you don’t manage to recurrently attract leaders and incentivize them to follow the links and make purchases, you won’t be earning much. That’s why, if you’re still starting out with your website, blog, or social media account, it would be wiser to take time creating your content and building traffic before joining affiliate programs.
Create and sell an information product
An increasingly growing strategy for making passive income is offering an information product, such as an e-book or a video course. With COVID-19 giving people both the time and the incentive to learn new skills and upgrade the ones they already have, designing a course and selling it on your website or platforms like Udemy and Skillshare can be an excellent income stream. You could also sell your course through an affiliate arrangement with other websites that provide relevant content. Although this is an easy and cheap way to create massive passive income, you will need to invest and equally massive amount of time and effort creating your information product. Much like affiliate links, it’s important to have built a strong platform and to understand how to best market your course.
While passive income can be seen as a quick and easy way to retire early, the truth is that it’s a goal that must be actively pursued. To make money while you sleep, you first need to invest your time, effort, and patience, and constantly strive to upgrade your skills and knowledge when you’re awake.
Need more ideas on how to create passive income? Let Brakket Invest help!