There’s a lot of buzz about passive income lately, especially during the pandemic time. Supposing some are not familiar with what passive income represents, let’s explain.
Passive income consists of being paid for a job after it is finished, simply put. Or metaphorically saying, the money continues to pile on your banking account even while you are sleeping.
To take basic examples, think of ebooks’ sale or rights to films and songs, real estate rental. All these systems make it possible to receive money “automatically” over the years.
Some passive income ideas require some upstream work (like writing a book), while others will take less setup effort (like dividends from shares on the stock market). Anyway, it’s best to search for an activity that you like.
The advantages of passive income are numerous. If you lose your job, you can face new circumstances by having another source of income. It is also an ideal solution to boost your chances to reach financial freedom.
Starting your small business
Starting a business counts many advantages, such as
- the flexibility of working hours,
- more independence
- the decisions are yours
- more wiggle room for choosing retirement plan
However, success requires a good business plan and sufficient initial capital to make things work. Also, making business decisions on your own is great and means you need to take a risk sometimes to achieve your goals. When it comes to small business ideas, here are some ideal options if you are familiar with the online working environment.
1. Start your dropshipping business
With the emergence of e-commerce, dropshipping has become very popular. This way of earning money is quite straightforward. You make an e-commerce website where you offer for sale the products of certain manufacturers and suppliers with whom you will work—no need for a warehouse. The goods are shipped to your customers’ addresses directly from your suppliers.
2. Create and sell digital products
These days, selling your own handcrafts, services, and products is an ideal way to afford passive income. Also, anything related to training, education, or the sharing of expertise can be very interesting to exploit.
For example, if you are a specialist in a particular skill, you can create and sell online courses via a multitude of online educational platforms.
3. Sell Printables on Etsy
If you love design, selling printables or digital products can be a great way to provide yourself with reliable passive income.
Digital products are low maintenance – you will need an online storefront on a website like Etsy. You close your sales every time someone downloads the link of your product. All you have to do is dedicate some time early on to perfect your designs.
Other sources of passive income
You must have heard of Forex trading and was wondering about how it could be profitable. Well, it’s a currency market with tremendous opportunities. Although it’s not a totally passive way to earn money it represents an excellent way to start a trading career that you can practice several hours a day. You will need to read the reviews and do some research to find a Forex broker to venture into the market. Finding a good trading platform enables you to start trading on a virtual account before investing any cent for real trading.
Besides Forex, Investing in high dividend stocks is a very common and very profitable passive income source. Many investors, when deciding to invest in the stock market, are particularly interested in yield stocks. They select some stocks to receive dividends (income paid by the company to its shareholders once or more times a year). Investing in stocks that pay regular dividends is indeed one of the best ways to generate passive income without too much work.
For example, let’s say you buy Apple shares. Not only is stock price likely to increase over time, which means your investment grows in value, but you will also be paid a dividend for every stock you own. Depending on your long-term investment strategy, you can either reinvest these dividends or get them back.