Post by freefundingdeal on May 8, 2020 15:29:46 GMT
Source: Escaping The 9 to 5
Note: This post may contain affiliate links. Please read my disclosure for more info.
Over the past few years, passive income has become one of the most frequently discussed personal finance terms on the internet.
Some of the most popular searches in Google include:
How Do I Generate Passive Income?
How Important is Passive Income?
What are Examples of Passive Income?
As someone who likes to investigate crooked internet marketers, yet also has an entrepreneurial spirit, I decided to look into these methods to determine whether passive income was an achievable goal or a concept used by predatory marketers to get consumers to buy self help material.
While there was plenty of evidence of sellers hawking questionable products that mentioned passive income, but did not appear to actually teach anything about the subject, there were also many legitimate opportunities to make money through passive income. This article will focus on these legitimate passive income ideas.
This overview is based on my 10+ years of trial and error, exploring virtually every method of achieving passive income.
This article is broken down into five parts:
Part 1 — An examination of what the term “passive income” means.
Part 2 — An explanation why passive income matters, and how it is integral to financial independence.
Part 3 — A quick overview of business ideas that other lists erroneously list as passive income.
Part 4 — A look at the criteria used to classify a business, product, or service as passive income, for the purposes of this list.
Part 5 — An overview of virtually all ideas for developing streams of passive income.
So while your results may vary, this is a good article for those looking for new passive income ideas.
In my quest to develop passive income sources over the past 10+ years, one of the only consistent patterns that has emerged is that everyone succeeds utilizing different (and often times unexpected) methods of achieving passive income.
Someone who can quickly write eBooks and make millions of dollars on Amazon, may struggle making a single penny from affiliate marketing or never sell a single stock photo.
Best of luck in your search for financial independence! Be sure to leave a comment at the bottom of the article and tell me which methods I am missing and which methods worked for you.
Part 1. What is Passive Income?
Passive Income is generally defined as a stream of income earned with little or no ongoing effort needed from the individual receiving the passive income in order to grow the stream of income. Passive income is income that is not proportional to the time you physically put into acquiring it. Active income (typically one’s regular job or additional part time jobs) is a direct exchange of your time and skills for money.
Examples of passive income include royalties earned from stock photography or from a digital course you create. In both cases, the content, whether self hosted or on a larger website, generally require little or no maintenance or additional financial investment to maintain the source of income.
The intriguing thing about passive income is that it can be generated literally while you are sleeping, freeing up additional time for hobbies or allowing you to increase your earnings by performing some other form of work while still generating previously established streams of passive income.
An example of this would be a person working a 9–5 office job where they are paid a fixed salary. This same person also receives regular passive income from an eBook that he wrote on gardening over two years ago. The office job requires direct effort to produce the agreed upon amount of income. The employee, whether hourly or W2, is trading their time for money.
The eBook is different. Regardless of what is going on in the office employee’s life, the book is listed for sale in its digital form on Amazon and the author does not have to perform any work (beyond the initial creation of the content) to maintain this stream of income. The employee can literally never check on that book and they will still receive their royalties, every month.
Part 2. Why is Passive Income Important
There are many articles dedicated to exploring the various ways to make passive income. But many fail to consider the underlying question — why is passive income (as opposed to active income) important?
The answer is actually a fairly simple relationship between time and money. Time is the most valuable commodity. There are only 24 hours in a day. Time is the greatest equalizer because not a single person can have more of it. It can never be recreated or re-spent. It exists once, then it’s gone. And that’s precisely why passive income is so important — because time is more valuable than money.
Unlike money, which can be earned, saved, spent, invested, squandered and lost, we can’t tuck away minutes on a clock. We can’t expect dividends on seconds or hours in the bank, or invest the time that we didn’t use on something else. Considering that most of the free world needs to work for a living, consuming much of the time they do have, this precious commodity needs to be prioritized.
Passive income is one of the most important strategies that that the rich utilize to get richer. It’s how you detach your ability to earn from the limited time that you have in a day. With passive income, you make money while you sleep. You also make money while you’re awake. It’s automatic and simply keeps coming in.
“If you don’t find a way to make money while you sleep, you will work until you die.” — Warren Buffett
However, creating a passive income stream is far from easy. It takes an enormous amount of effort and investment of your time with very little return in the beginning. It involves an overall sense of frustration and an enormous learning curve. Still, it’s one of the most worthwhile investments of your time that you could possibly engage in.
As the chart below illustrates, any amount of passive income earned is exponentially more valuable than the equivalent amount of money earned through traditional work (trading time for money).
$100 in passive income per month may not sound like a lot. However, to generate the equivalent of $100 in monthly passive income, you would need to have $30,000 invested earning 4%. This 4% return is fairly conservative when compared to the historical average annual return of the S&P 500, which is around 7% (after inflation).
Monthly Passive Income and the Annual Investment Equivalent
While passive income might not be the answer to all of your immediate financial problems, it is a pathway to success and most certainly the foundation for wealth and financial independence.
When you’re not stressed out focusing on just making enough money to pay the bills and you’re no longer living from paycheck-to-paycheck, there’s a mental clarity and an emotional catharsis that sets in.
You become free to spend your time doing things you actually care about. You can spend more time with your family, focus on improving your health, have the freedom to escape a job you hate, or pursue a creative passion that you otherwise would relegate to the few hours of your free time on the weekend.
Part 3. What is NOT Passive Income
Some ideas commonly touted by financial “gurus” as passive income which are not actually passive income. I hate to see these ideas misrepresented as I have been involved with many of these businesses myself, and know that they are time and capital intensive.
Vending Machines /Laundromat— I had a contract to provide food and vending services to Accenture. I purchased, managed, and restocked a number of vending machines. I can assure you that vending machines are far from passive income. You either need to spend enormous amounts of time fixing and restocking the vending machines or you need to pay someone to perform this function on a regular basis. Just because something is automatically dispensed to consumers does not mean it is passive income.
Real Estate/Rental Properties — Real estate development, speculation, or even renting out property is not passive income. Unless you pay someone to manage your properties every month, you will be responsible for a wide range of tenant issues. And if you’re paying a person or company to mage your property, this is no different than any other traditional business.
Paying off Debt — While it is a good idea to pay off high interest debt, this is often falsely classified as passive income. Paying off debt offers little in the way of systematization, scalability, and unlimited income potential.
Raw Land Flipping — I am still shocked when I see other authors include this on their list of passive income ideas. Raw land flipping (or renting) is not only extremely difficult, but it requires a ton of active effort on the part of the owner.
Refinancing Mortgage — Like paying off debt, this is potentially a good idea (depending upon interest rates, market conditions, and your opportunities to invest in certain ventures). However, this is by no means passive income. It cannot even be classified as income, let alone passive income!
AirBNB/Rideshare — While renting out unused space in your house or driving your car for Uber can be profitable, both of these ventures require active effort. Uber is especially time intensive and requires drivers to work 60+ hours per week to scrape by in many cities. There is also the additional maintenance and depreciation that occurs when you drive your car more than you normally would. While some of these costs may be fixed (car payment, insurance, etc.) the additional wear and tear on your car can be devastating to people who rely upon their car for day to day transportation.
Part 4. What is Considered Passive Income?
So if the ideas above are not considered passive income, what are some examples of true passive income streams?
For the purposes of this list, passive income ideas must meet the following criteria:
Recurring Payments — Passive income is income that requires no effort to generate on a recurring basis.
Systematization — Passive income streams must be derived from a systematic process. The ability to develop and perfect these processes is a key element of passive income.
Automation — The ability to outsource or rely upon automated systems allows passive income streams to remain truly passive.
Scale and leverage — After establishing a system that successfully generates income, this system must be able to be grow quickly, through the introduction of automation and other methods that allow you to scale a process.
Income Potential — Passive income cannot be constrained by the total potential income it generates. This is one of the basic qualities that separates passive income from a traditional salaried job.
Part 5. A Comprehensive List of Passive Income Ideas
1. Stock Photography
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passive income stock photography, stock photography income, realistic income from stock photography 2020, make money online
Source: Escaping The 9 to 5
Do you like photography? Do you have a smart phone with a camera? If so, you may be able to convert your photos into a passive income source.
Photography websites such as Shutterstock provide you with platforms to sell your photos. They may offer either a percentage or a flat fee of each photo that is sold to a site client.
In this way, a single photo could represent a passive income opportunity, since it can be sold again and again, without any additional effort after initially uploading the photo.
You simply need to create your photo portfolio, upload images to the photo platform, and then the activity becomes completely passive. All the technicalities of photo sales are handled through the web platform. You simply collect a check (or PayPal payment) each month for the royalties you receive on your photos.
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What’s The Catch?
When evaluating any passive income idea, it’s important to look for any unforeseen costs or roadblocks. When it comes to stock photography, it used to be extremely expensive to own professional photography equipment and time consuming to upload photos.
Now, with smartphones having such sophisticated cameras, it is possible to submit photos from your day-to-day life which can be licensed as stock photography.
This has both lowered the barriers of entry while also increasing the competition among photographers.
However, no longer needing expensive photography equipment has largely outweighed the increased competition, in my experience.
There is such a large demand for stock photography of virtually everything that you do not need “stunning” photos of exotic places to get downloads. In fact, some of my best photos (taken with a professional high-quality camera) have never even sold once, while random photos snapped with my iPhone have sold multiple times!
As I’ve learned, focusing on niche content and keyword tagging to boost photo visibility in various search engines is more important in stock photography than spending hours getting the perfect shot.
To be clear — that’s not to say that time consuming and ultra high quality photography isn’t worthwhile. They are just not as efficient to sell on most stock photography sites. Images taken using professional equipment need to be sold directly to marketing agencies and end users to receive fair payment.
Below are some examples of photos taken with an iPhone that I was surprised to see outselling some of my “better” photos:
Even in a category as saturated as “pink flowers” this image sells consistently.
Images of everyday objects (such as money) are utilized by bloggers to add color to their articles.
The stop sign is a great example of an “unexpected best seller.” It sells well because it can be used conceptually to represent a wide range of ideas (literal hazardous conditions, abstract concept of fear, etc.)
Learn More
If you want to learn more about passive income produced through stock photography, below is an article that explains the process in more detail:
Create Passive Income Through Stock Photography Using Your Phone
Passive Income Strategy #1 — Stock Photography
medium.com
If you are interested in signing up to be a Shutterstock contributor, click the link below to sign up for free!
Sell photos, footage clips, illustrations & vectors | Shutterstock
Shutterstock is a global marketplace for artists and creators to sell royalty-free images, footage, vectors and…
submit.shutterstock.com
2. Writing an eBook
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how to write an ebook and make money, where to sell ebooks, make money writing ebooks for kindle, amazon self publishing kdp
Source: Escaping The 9 to 5
There are three primary methods through which entrepreneurs can make additional income with an eBook:
Submitting an eBook file to a Major Platform (i.e. Amazon KDP)
Self-Hosting and Selling Your Own eBook
Utilizing Service That Converts eBook Files to Physical Books (i.e. CrateSpace)
In all three processes, the key to generating passive income is the fact that you can upload a digital version of your book once, and then you receive subsequent payments or royalties for a copy of this work. You are not responsible for marketing the book or processing the actual transaction.
Amazon (or other large book retailers) provide this function. While Amazon does take a 30% commission on most books, this is a reasonable fee as it allows writers to focus on writing more content, and spend less time worrying about running an eCommerce store.
What’s the Catch?
For many, writing their first eBook can be daunting. It’s one thing to make a series of witty posts; but writing a whole book can feel quite overwhelming.
Keep in mind though that you can always start by writing under a pen name and that eBooks do not need to be as long as traditional print books, to be successful.
Learn More
If you want to learn more about passive income produced through eBook creation and sales, below are two article that explains the process in more detail:
How to Earn $2000+ Per Month in Passive Income Through Amazon KDP
Passive Income Strategy #2 — Selling eBooks on Amazon
medium.com
How to Make $158,404 in Passive Income Writing Books for Amazon KDP
Mastering A9 — Amazon’s organic product ranking algorithm
medium.com
3. Creating Online Courses
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passive income online course, best courses to earn money online, passive income udemy, passive income online course
Source: Escaping The 9 to 5
If you consider yourself an expert on a particular topic, digital products are a great way to package that information and sell it to others looking to learn.
If there’s an abundance of free blog posts or tutorials on YouTube about what you’d like to teach, you can compete by delivering content that promises not education but transformation. In other words, don’t sell the product — sell the customer’s own potential after buying your product.
Similar to eBooks, online courses are another great source of passive income. While not quite as easy as eBooks to produce, online courses rely upon the same concepts:
Upload useful digital file to major hosting site
Allow consumers to download product for a fixed royalty
Collect royalties.
Unlike most eBooks, online courses are unique in that they can be sold at a much higher margin than most digital products.
There are (valuable) online courses that cost thousands of dollars. However, the principle remains the same — create valuable content once, and then focus on organizing and selling it to as many people as possible, through an automated process.
Some of the major platforms for online courses include:
Udemy
Teachable
Thinkific
Podia
Below is an example of a course package and resources created for aspiring UX designers:
Become a UI/UX Designer
Learning UI/UX design can be overwhelming, especially if you’re coming from a different field and you’re hesitant about…
store.nicolesaidy.com
The course is reasonably priced, has a straightforward value proposition, and is easy to purchase:
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passive income online course, passive income course, ux designer course, course design, passive income podia, passive income
The layout is clean and it is very clear what is included in the course materials:
Learn More
If you are interested in creating your own course, check out Podia or any of the aforementioned online course platforms:
Podia - Sell Online Courses, Memberships, and Downloads
Replace 5+ tools and keep all of your products, content, customers, email subscribers, payments, and data in one place…
www.podia.com
4. Affiliate Marketing
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passive income, passive income affiliate marketing, affiliate marketing for beginners, how to start affiliate marketing
Source: Escaping The 9 to 5
Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
There are many ways to promote a product as an affiliate. Some of the most common are:
Create a niche website — as discussed later in this article, you can create a niche website that consist entirely of other people’s products. While you only earn a relatively small commission as an affiliate, this model allows for scalability and tremendous growth.
Product reviews — You can create websites or blog posts which contain product reviews. You typically compare two competing products, and, should someone click on your affiliate link to buy the product, you get a commission.
Email lists — With an email list, you can send mass messages to your subscribers. Many email lists derive their value from their ability to directly market a product to engaged consumers. If you don’t have your own product to market, this can be a great way to boost your earnings.
When discussing the promotion of consumer products (tools, books, toys and household items) the biggest affiliate network, by far, is Amazon. Their Amazon Associates affiliate program lets you promote any item that is sold on their platform.
As seen in the screenshots below, once you sign up for Amazon Associates, you will be able to search and find products eligible to receive affiliate commissions.
For example, I really like whiteboard…I have like 6 in my office. Even though I work on my computer most of the day, I find that whiteboards are a useful way to organize my thoughts.
I could create an niche website or blog reviewing different types of whiteboards.
I would simply search in Amazon Associates for the whiteboard I am reviewing:
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
I would click the Get link button, which will generate a unique referral code and URL:
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
I would then insert the affiliate link into my blog or website.
And like that — I will receive a commission on every whiteboard sold as a result of the traffic I generate!
Some affiliate programs focus on up-selling memberships through free trials. So you do not even need to convince someone to buy a product. You just need them to give the free trial a chance and some percentage of users will likely find the product useful and subscribe beyond the free trial period.
As an example, Amazon will currently pay a $3 bounty for getting someone to sign up for a free Amazon Prime trial.
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
What’s the Catch?
You need to create content or have a large following to (typically) make affiliate marketing work. In the case of the Amazon Prime trial featured above, if you promote this product to 1,000 followers, you may only see a 2%–3% conversion rate (20–30 people), which translates to $60-$90.
Learn More
If you are interested in learning more about affiliate marketing, I suggest you check out Amazon’s Associates Program. It’s easy to use and free to sign up for:
Amazon.com Associates: The web's most popular and successful Affiliate Program
Join the Amazon.com Associates Program and start earning money today. The Amazon Associates Program is one of the…
affiliate-program.amazon.com
5. Print on Demand or Merchandise Design
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zazzle passive income, cafepress passive income, print on demand, make money online, print on demand passive income, wealth
Source: Escaping The 9 to 5
Print on demand (or Merch Design), has developed over two decades.. CafePress, an online gift shop that calls itself “the recognized pioneer of customizable products,” launched back in 1999, followed by Zazzle in 2005 and Redbubble in 2006.
There are many popular print on demand websites, but here are some of the most popular:
Zazzle
RedBubble
AmazonMerch
Teespring
CafePress
What’s the Catch?
Some of these programs require you to have your own website or they evaluate the traffic/domain authority of your website, meaning they can be hard to get approved for (RedBubble/AmazonMerch).
Also, margins in the print on demand business for creators is fairly low. However, once you upload a design, you can easily add it to hundreds of products. And once you list these products, you will earn royalties indefinitely.
For example, I have a store on Zazzle selling cryptocurrency-related clothing:
Cryptocurrency_Store: Designs & Collections on Zazzle
The Cryptocurrency Alliance is an independent expenditure-only committee (Super PAC), created to raise awareness about…
www.zazzle.com
I have not uploaded a new design in over a year, yet I still receive royalties every time a product of mine sells:
The other cool way you can make passive income from Zazzle is promoting other people’s products. While you earn a lower commission compared to selling your own product, it is easy to see how you could quickly scale this idea, as Zazzle has virtually every product imaginable.
You could answer someone’s question on an internet forum with a useful affiliate link, share a product you love on social media using an affiliate link, or even build an entire niche site around products created by others!
Learn More
If you want to learn more about passive income produced through print on demand creation and sales, below is an article that explains the process in more detail:
Creating Passive Income with Zazzle
How much money can you make creating and selling designs on Zazzle?
medium.com
6. YouTube Partner Program
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youtube advertisement, youtube passive income, make money with youtube ads, youtube partner program passive income, passive
Source: Escaping The 9 to 5
There are a number of ways that you can monetize YouTube. Many involve a lot of up front work (i.e.content creation, monetized with ad revenue). However, while this is not the most lucrative way to make money on YouTube, it is a legitimate way to produce passive income.
The first revenue stream you’ll likely explore is ads. Whether you want to earn money on YouTube without creating videos or as a content creator, joining the YouTube Partners Program and setting up monetization is a vital step. If you want to apply for the YouTube Partner Program, you can only start the application process when you reach a threshold of 1,000 subscribers and 4,000 valid public watch hours over the last 12 months.
How to enable monetization on YouTube
Sign in to the YouTube account you want to monetize.
Click the icon for your account in the top right corner.
Click YouTube Studio.
In the left menu, select Other Features > Monetization.
Read and agree to the YouTuber Partner Program terms.
Create a new AdSense account or connect an existing one to your channel. (You need an AdSense account to get paid.)
Set your monetization preferences.
Once that’s done, head back to the dashboard and click the Analytics tab on the left side. From there, you’ll need to choose Revenue from the tabs at the top, then scroll down to the chart Monthly Estimated Revenue to get an idea of your predicted revenue.
How many views do you need to make money?
The number of views you receive doesn’t correlate directly with revenue earned. If your video gets thousands of views but no one watches or clicks the ad, you won’t make any money. This is because of YouTube’s criteria for billing advertisers: a viewer must click an ad or watch the ad in full (10, 15, or 30 seconds) for you to get paid.
YouTube Premium | A Second Monetization Method
YouTube Premium is a paid membership program that allows fans to watch and support their favorite content creators without ads. For creators, not much changes, as they will get paid for content consumed by non-members on YouTube along with content on YouTube Premium.
Creators are paid for YouTube Premium based on how much members watch their content. Consider revenue earned from YouTube Premium as a secondary revenue stream in addition to what you’re already earning through ads.
What’s the Catch?
As noted above, you can only start the application process when you reach our threshold of 1,000 subscribers and 4,000 valid public watch hours over the last 12 months.
Additionally, while there are plenty of YouTubers making serious money, the bulk of their revenue comes from selling products (merch), promoting another company’s products (affiliate marketing), or selling their own educational tools (courses). These can be passive, but they are far more time intensive to set up and they are really variations of other passive income methods on this list.
Learn More
While I have made a small amount of passive income with YouTube in the past, it is one area I have not invested a huge amount of time trying to build content. Below is a video you may find useful. It focuses on making money on YouTube without a huge audience, which is probably the most useful primer for people reading this article:
Source: YouTube
7. Digital Display Advertising
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digital display advertising, digital display ads passive income, passive income display ads, passive income ideas display ads
Source: Escaping The 9 to 5
Display ads are ads that appear in the online space. The first display ads were ‘banner ads’, hyperlinked, image-based ads shaped as a strip, and usually located at the top of a web page. Later, as web design became more complex and creative, display ads evolved to a range of shapes and sizes, and included videos, interactive elements, pop-up functions and more. Today, banner ads simply refer to a specific size, of 468 x 60 pixels.
Display ads typically have low click-through rates — just 0.05% across all formats and platforms. However, while CTR is important, it’s not everything. When other metrics are considered, display ads do have an effect on brand awareness and intent to purchase. Despite the statistics on ‘banner blindness’, when consumers get so tired of online ads that they don’t really ‘see’ them anymore, display ads do work, and performance marketers use them as an important part of their online strategy, particularly in retargeting campaigns.
Probably the best known network of Display Ads is Google Adsense.
I have been using Adsense on a range of websites since I first began creating online businesses.
According to my account I’ve now sent over five million ad impressions to them, and I always get paid on time — every time.
Overall I find the quality of their ads to be pretty good and I like the huge range of options when it comes to selecting adverts that match your site.
Potentially most important of all, the revenue-per-click that you earn with Adsense tends to be at the higher end, meaning more money for you when compared to the majority of other ad networks.
What’s the Catch?
Google Adsense is technically passive income. When you create a new post on your blog or website and include Adsense ads, that blog or website has the potential to make you money not just once, but over and over again. That page and the ads are there forever, or until you take it down. I have pages on many sites that earn me income every day and I haven’t touched them in years. So yes, Google Adsense is passive income in that regard.
However, those of you who have been making websites for a while know how difficult it is to obtain thousands of visitors per day to your site. Most bloggers and website owners never see anything near that. In order for a website to consistently bring in thousands of visitors per day, it has to be a dominant site in a very popular and competitive niche which is updated constantly. If you start a website or blog today, it could take you 3 years working 50 hrs per week to see that kind of traffic, and even then, you might never see it. That makes Adsense a little less “passive” than most people think.
Learn More
If you want to learn more about making passive income through digital display ads, I would recommend you start with Adsense, as it is probably the largest and most beginner-friendly of the ad display networks:
Google AdSense - Earn Money From Website Monetization
Earn money with website monetization from Google AdSense. We'll optimize your ad sizes to give them more chance to be…
www.google.com
8. Creating a Niche Website
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creating niche website passive income, how to create niche website, niche website, passive income idea, passive income stream
Source: Escaping The 9 to 5
Building a niche website from scratch has become a proven way to make a decent income, provided you’re willing to put in the time and effort to make it worth your while. Plenty of people all over the internet have been able to grow their niche websites into a passive income that gives them money every month with very little effort.
This may sound too good to be true, but in fact, this is an achievable reality. That being said, a niche site is not a get-rich-quick scheme, and it will take time and effort to set up. Once that’s done, though, the income becomes relatively passive.
So what exactly is a niche site, and how much money can you earn by creating one? Those are the questions that we will attempt to answer in this article, along with the basic steps towards tackling the task of creating a niche site.
Definition of a Niche Site
A niche site is described as a blog that:
“may appeal to geographic areas, a specialty industry, ethnic or age groups, or any other particular group of people.”
So what does that mean?
Basically, it means that a niche site is a blog that you create with a specific topic and purpose that is meant to appeal to a certain group of people.
These people are usually connected by something they have in common, whether it be their location, their age, their interests, or any combination of those or other factors.
Why is this becoming such a popular marketing tool? Because it generates organic leads. Instead of pushing products or services on readers, these kinds of blogs have the goal of brand awareness. They develop a common question or topic, and highlight products and services that appeal to their readership.
The job of a niche blog writer is to produce content that is helpful to their target audience. This means providing information, resources, and recommendations for their niche topic. Then, using advertisements or affiliate links, niche blogs earn revenue from vendors in their area of focus.
What’s the Catch?
Unlike creating a Medium blog (or other “premonetized blogs”), creating a niche website takes some website develop experience, costs a small amount of money to maintain, and typically involves the creation of lots of content just to establish an audience.
9. Gated Digital Products
If you consider yourself an expert on a particular topic, digital products are a great way to package that information and sell it to others looking to learn.
If there’s an abundance of free blog posts or tutorials on YouTube about what you’d like to teach, you can compete by delivering content that promises not education but transformation. In other words, don’t sell the product — sell the customer’s own potential after buying your product.
You can leverage an existing reputation as an expert to garner attention for your products, or if you’re starting from scratch, you can create and give away free content to generate interest and leads for your paid digital products.
A digital product is an intangible asset or piece of media that can be sold and distributed repeatedly online without the need to replenish inventory. These products often come in the form of downloadable or streamable files, such as MP3s, PDFs, videos, plug-ins, and templates.
Digital products have many advantages that make them uniquely attractive to sell:
Low overhead costs: You don’t have to hold inventory or incur any shipping costs.
Extremely high-profit margins: There’s no recurring cost of goods, so you retain the majority of your sales in profits.
Potential to automate: Orders can be delivered instantly, letting you be relatively hands-off with fulfillment.
Flexible products: You can offer products for free to build your email list, monthly paid subscriptions for access to exclusive digital content, or licenses to use your digital products. You have a lot of options as to how you incorporate digital products into your business.
What’s the catch?
Unlike affiliate marketing or drop shipping, this requires the creation of your own digital products. This takes time, and unless you are successful with presales, you likely won’t see any money until the product is totally complete and is listed.
Depending on the product you are selling, there is also the potential issue of driving traffic to your content. While it might eventually become passive, if you cannot figure out a way to automate your marketing or create lasting organic traffic, your product may be lucrative but not a source of passive income.
10. Pre-Monetized Blogging
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medium blogging passive income, medium passive income, pre monetized blog passive income, passive income idea, medium earning
Source: Medium Blogging Guide
This article that you are reading, was written and published on (what I refer to as) a Pre-Monetized Blog. Although any blog can be monetized utilizing any number of strategies listed in this guide, Pre-Monetized Blogs are the WYSIWYG solution for writers who want to focus on writing, as opposed to marketing, sales, or website design.
Medium Blogging Guide's Newsletter
Learn How to Make Money Writing on Medium
mediumbloggingguide.substack.com
Medium is without a doubt the best example of this type of website.
medium partner program, medium logo, medium passive income, medium earnings, medium stats, medium format, medium formatting
medium partner program, medium logo, medium passive income, medium earnings, medium stats, medium format, medium formatting
For those of you who stumbled across this article through a search engine, or are not familiar with what Medium is:
Medium is the only platform on the Internet right now that allows anyone to sign up, post an article, and get paid earnings immediately.
Medium is one of the leading online publishing platforms. Both traditional media journalists and new writers can join for free and publish their content on the site. Unlike many publishing platforms, Medium is unique because of its Partner Program.
Medium writers earn money through Medium’s Partner Program. Partner Program writers are paid monthly based on how much time Medium members spend reading their stories.
I have spent a lot of time writing on Medium. And I realize many writers on the site will surely say something to the effect of: Medium takes a ton of work and should not be considered passive income, Casey Botticello!
However, Medium does meet the criteria spelled out in the beginning of this article, or at least some content does.
When you check that box, enabling your content to become part of the Medium Partner Program, you are monetizing your article.
After an article is monetized, it doesn’t matter when it is read — so long as it is read by a paying Medium subscriber, you will earn money off of it.
A lot of writers focus on creating articles that follow current Medium trends, current news, or content to keep their active readers engaged.
This is (most likely) not the content in your back-catalogue that will provide passive income.
However, if you are producing useful, evergreen content, you may keep earning (albeit, at a decreased rate) well after you publish an article or even after you stop writing on Medium.
What Is Evergreen Content and Why Is It Important?
The importance of evergreen content for any writer, marketer, or entrepreneur
medium.com
Take for example, my article on How to Make an Amazing PowerPoint:
How to Make an Amazing PowerPoint
A guide to creating a stunning and effective PowerPoint presentation
medium.com
While there will be new features added to PowerPoint over time, this guide will likely be useful to readers for the next 5+ years. While it is a relatively new article (so I don’t have much data to go off of), I would guess that it will do well over time as it climbs the ranks of articles internally, through Medium’s search algorithm or through external traffic, such as Google’s search engine.
If you really produce valuable and unique content, it is possible that it could even grow over time.
I describe this process, in my article, Medium Article Views: Long-Term Growth in Views Without Curation:
Medium Article Views: Long-Term Growth in Views Without Curation
The 10 month journey of a Medium story from 0 to 250K views
medium.com
What’s the Catch?
Medium only pays you for content consumed by paying subscribers. So while it may help your article reach a larger audience, this will not necessarily translate into higher earnings.
Also, like most of the passive income ideas on this list, success on Medium requires a large initial investment in time. Even then, it can be difficult to maintain momentum if you decrease the frequency of your publishing or stop writing on the site altogether.
Learn More
To learn more about making money through Medium:
Read this article:
How Much Money Can You Make Writing for Medium?
Medium Partner Program Earnings FAQs
medium.com
Sign up for my exclusive newsletter:
Medium Blogging Guide's Newsletter
Learn How to Make Money Writing on Medium
mediumbloggingguide.substack.com
11. Dropshipping and Ecommerce Stores
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dropshipping passive income, ecommerce passive income, e commerce passive income ideas, drop shipping passive income ideas
Source: Escaping The 9 to 5
Acquiring and stocking products are some of the most complicated parts in the process of selling physical goods online. If you want to sell products without having to handle them, then drop shipping is the way to go. This is the model that is promoted by most YouTube drop shipping gurus. Drop shipping consists primarily in selecting and promoting products that are offered by a fulfillment service. The fulfillment service stocks the products and ships them directly to the client once a sale is made on your website. It is a great way to sell products online without having to manage them physically.
What’s the Catch?
There are relatively high costs and small margins (more risk) than other ideas on this list.
12. Investment Income
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investment income passive, passive income investments, best passive income investments, best passive income dividend stocks
Source: Escaping The 9 to 5
When you build an income investing portfolio, you can create a reasonably stable source of passive short-term cash flow, while simultaneously building up long-term investments. There are many options when it comes to this type of investing and it can be a great way to get somewhat instant gratification.
An income portfolio is a collection of investments that yields regular income. This means that you receive cash on a regular basis, usually quarterly, semi-annually or annually, without needing to sell the investment.
An income portfolio is usually comprised of different investments that result in some sort of predictable payout. Some investments that you might include in an investment portfolio are:
Dividend-Paying Stocks. Dividend stocks are those that pay out a portion of company profits at regular intervals. You don’t have to sell your stock; rather, the company issues you payments based on the number of shares you have. This dividend payment is similar to profit sharing, since you get a portion of what the company has made.
Bonds. When you invest in bonds, you essentially lend money to an organization. Throughout the life of the bond, you earn interest. In many cases, the interest you earn is sent to you regularly. When the bond’s term expires, you receive the principal back. (You can then invest in another bond if you want, and receive even more interest as income.)
CDs. In many cases, it is possible to arrange for the interest you earn from a certificate of deposit to be paid to you on a regular basis throughout the term of the CD. A CD is also one of the safest investments for your money.
Annuities. These are complex financial products that you should carefully consider. Some people like to include them in an income portfolio, since you receive a regular payout. If you get an immediate annuity, the payments to you begin quite quickly; otherwise, you have to wait a certain number of years to start receiving your regular income.
Peer-to-Peer Lending/Microloans. You can also include loans made to others in your income portfolio. As your principal is paid back with interest, you receive regular income that you can spend, or that you can re-invest. Many investors keep the interest earned and reinvest the principal. Check out online peer-to-peer lending marketplaces like Lending Club or Prosper to get started.
What’s the Catch?
While income derived from investments truly is passive, it requires substantial amounts of initial capital.
While your money can grow at a compounded rate, it is hard to scale this idea once you have invested all of your capital.
Learn More
If you are looking to make money from your investments, I’d suggest checking out Personal Capital, as a way to track your net worth and cash flow:
Personal Capital Mobile App Review
Is Personal Capital the best app for tracking your spending and net-worth?
medium.com
13. (Some) Credit Card Rewards
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credit card rewards passive income, passive income credit cards, passive income with cash back credit card rewards, boa bbr
Source: Escaping The 9 to 5
If you’re confident that you’ll use your credit card responsibly, then a rewards credit card is a great way to earn a passive income. Rewards on these cards take many different forms: there’s cash back, points that can be used for travel, and other benefits which vary from card to card. Depending on which one you choose, purchases made on these cards can go a long way towards achieving financial independence.
That said, if you have trouble managing spending, or would have to go out of your way to spend to meet any credit card rewards threshold, then this strategy is no longer passive, and you risk losing money overall.
Probably one of the most straightforward examples of credit card rewards producing passive income is the Bank of America Better Balance Rewards Card.
BankAmericard® Better Balance Rewards users can get $25 every quarter, during which they have made more than the minimum monthly payment on their credit card bill. This feature makes the credit card fairly unique among balance transfer credit cards and what makes it one of our favorite balance transfer credit cards. If you pay off your balance within a quarter, you will not receive the credit — the BofA terms of service for the card state that a “zero balance or a credit balance does not qualify”. If you have a Bank of America checking, savings, or retirement account, this benefit gets an additional $5 in rewards per quarter, for a total of $30 per quarter.
I have four Better Balance cards which I use to pay monthly bills. That means I get $120 per quarter for paying off these small bills on time, per card. That is a total of $480 per year in passive income. It’s worth noting that the process is truly automated with auto bill pay linked to your account.
I have had the cards for years and never missed a payment, nor have I missed a reward cycle. After initially setting this system up I have not readjusted it (with the exception of a few minutes when two of the cards expired a year ago).
What’s the Catch?
However, this card-specific strategy may not work for everyone. While Bank of America does still offer a Better Balance Rewards card, I have only heard of a few other people getting approved for 3+BOA Better Balance Cards.
However, credit cards are constantly coming up with new schemes to lure in spenders. So stay alert, and if you catch on to the right program, that does not require you to increase or manufacture spending, then a cash back card can be a small but nice source of passive income.
14. Digital Artwork
Selling artwork to earn passive income in the form of digital products or resources is a growing attraction for many designers and artists.
It’s not a new concept though. Royalty free image libraries for example, have been going for decades. But things have changed dramatically since then. Artists have more control over their work and more options of where they choose to sell it.
There are tons of sites out there that allow you to sell simple digital products, without charging you exorbitant fees.
Etsy is probably one of the best known sites in this category.
What Can You Sell on Etsy?
1. Printable Wall Art
Printable wall art is the most common passive product to sell on Etsy. People are always looking for a way to upgrade their home. And a printable is perfect for that. Your customers can print it out themselves, and hang it in their home/office. I have met two people online who have six figure businesses that consist solely of printable wall art on Etsy!
2. Printable Planners
Printable Planners are a great way to stay organized. You can find the style that you like, print it out, and clip it to your clipboard or staple it together.
3. SVGs
SVG stands for Scalable Vector Graphic. People use SVGs to design graphics, print stickers, cut vinyl designs or to use them as clipart. There is a really strong market for SVGs.
4. Printable Package Designs
A lot of people (especially Etsy shop owners) are looking for a way to style their product package. The packaging is the first thing their customers see, so it should make a killer impression.
5. Invitations
If your niche is wedding, parties, events or something similar; You should design invitations. You could easily design them in Canva/Illustrator, or create an editable template in Canva or Word so your customers can edit them themselves.
What’s the Catch?
Like stock photography, the market has become increasingly saturated with these products in an increasingly globalized digital economy.
It can take real skill or an artistic touch to create a digital product that stands out from the rest.
Learn More
if you are interested in learning more about Etsy, check out their website below:
Etsy - Shop for handmade, vintage, custom, and unique gifts for everyone
Find the perfect handmade gift, vintage & on-trend clothes, unique jewelry, and more... lots more.
www.etsy.com
15. Membership Website
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create membership website, membership website passive income, passive income idea, passive income idea 2020, passive income
Source: Escaping The 9 to 5
Instead of selling individual digital products, you can bundle them together and lock them behind a paid subscription to generate recurring revenue.
This approach is ideal if you plan to maintain a growing library of premium content and nurture a community of passionate members. In some cases, paid digital subscriptions can even create an opportunity to directly monetize your existing content marketing efforts.
Since this content is behind a gate that only paying subscribers can access through their customer account, you can also host exclusive content that can be streamed rather than downloaded.
You can build this type of business idea by using ChargeRabbit for recurring subscription billing and SkyPilot as your digital delivery system.
16. Mobile Applications
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make moeny with mobile apps, passive income mobile apps, apps passive income, passive income ideas mobile apps, passive money
Source: Escaping The 9 to 5
Sweatcoin
The Sweatcoin app is a free mobile app that tracks your steps each day and then converts them into a digital currency called “Sweatcoin” that can converted to cash via PayPal.
While this app does drain your phone battery slightly, almost everyone walks or moves around on a day-to-day basis — so why not get paid for it?
What’s the Catch?
Like many apps, it does somewhat drain your phone battery.
In order for the app to work, you need to enable location tracking.
It can take a few weeks before you start earning money, based off the minimum cash out levels.
Learn More
If you want to learn more about making passive income through the mobile app Sweatcoin, check out my review of it or sign up below:
Use The Sweatcoin App to Get Paid to Walk or Jog
Passive Income Strategy #3 — Mobile Applications
medium.com
Sweatcoin | It pays to walk
We convert your steps into sweatcoins, to spend on products and services. Walk, earn, spend, repeat. You’ll see, it…
sweatco.in
17. Car Wrapping
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passive income car wrapping, car advertising, car wrapped for money, how much money can you make wrapping a car with ads
Source: Escaping The 9 to 5
While there are a number of unconventional ad spaces, I’ll focus on car wrapping for the purposes of this example.
Have seen those cars and trucks with Monster or Red Bull energy drink advertisements all over them. You may have wondered how that happened, or you may have been inspired by the advertisement and went to the gas station to pick up a refreshing Red Bull.
It’s called car wrapping. And anyone can do it to make money.
Wrap advertising or a vehicle wrap actually started 1920s with putting vinyl decals on taxis.
Pepsi was the very first company that used car wrapping. Wrapping cars allowed them to advertise their product to a plethora of people.
Subsequently, more companies began utilizing car wrapping. After all, it allows them to advertise their product 24/7 to hundreds of thousands of people.
So, How Does Car Wrapping Work?
Here’s how this process works: companies go through car wrapping companies to find willing drivers.
These companies advertise other companies that specialize in car wrapping.
If you interested in having your vehicle wrapped, you sign up with one of these advertising agencies.
The first step is giving information about your car and daily driving patterns. These companies want to know the type of vehicle you drive, your daily commute route, and how many hours a day you spend driving.
This is the necessary information that advertisers have to consider in order to find a driver that can actually get the advertisements out to enough people. If you don’t drive much, you may not be eligible for car wrapping.
After you fill out your application, you will be accepted and your information will be entered into their databases. When an ad comes along that matches your profile, you will be contacted.
They will give you the details of the steps you need to take, the pay, etc.
To get the ad on the car, auto wrap is used. The material is typically vinyl decal, but it actually looks like paintwork is applied to the car.
Depending on the advertisement, the vinyl may cover part of all of your vehicle.
How much can you make?
How much you make from car wrapping depends on different factors like the kind of car you drive, your daily driving habits, the routes where you drive each day, and whether the ad covers the whole car or just a small part.
Generally, you can expect to earn between $200 to $1000 a month for wrapped car.
What’s the Catch?
You need to be comfortable driving around in a car with a large promotional wrapping. You also need to drive the car a certain amount of miles per month, typically in a fairly specific area, so this may not work for someone who works at home or has an extremely short commute.
Learn More
There are many companies that provide car wrapping services, but the only one I have any personal experience with is:
Wrapify | Performance-Driven OOH
Wrapify, the performance-driven ad tech platform for brands powered by OOH and the gig-economy.
www.wrapify.com
18. Internet Browsing
Source: Escaping The 9 to 5
Swag Bucks rewards you for using a combined Ask.com/Google engine. That’s it. Just search the Web like you normally do, earn “Swag Bucks” along the way, and then redeem them for merchandise, gift cards, and other rewards.
There are multiple ways to earn Bucks. You can start a search from the Swag Bucks home page (just like you would from Ask or Google), or install the Swag Bucks toolbar for Firefox, Internet Explorer, or Safari. Alternately, Swag Bucks plug-ins are available that merely add the engine to your browser’s built-in search bar.
Every time you search, you have the chance of winning Swag Bucks. A Buck here, three Bucks there — over time it adds up.
What’s the Catch?
This passive income method will only produce a very small passive income stream.
Learn More
If you are interested in learning more about Swagbucks, check out the link below:
Swagbucks | Make money browsing the internet
Get paid to surf the web
www.swagbucks.com
19. Crowdfunding
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crowdfunding, crowdfunding passive income, passive income idea, passive income for beginners, passive income 2020, make money
Source: Escaping The 9 to 5
Crowdfunding it is the process of raising funding online from various contributors. Patreon is probably the most common of these platforms.
Simply put, Patreon is a member-based platform that enables you to get paid directly by your audience. Through this site, you generate revenue from the content that you are already creating. Fans, or patrons, commit to paying an amount they choose, which is usually due each month or every time you post new content. When you use Patreon to crowdfund they take a small fee, and you get the rest of the money.
Patreon gives subscribers a way to join your community and pay you for making the things they enjoy, without the need for a middleman. Since they choose the amount and frequency of payment, they never have to worry about unplanned charges. More importantly, Patreon helps you build a patron and artist relationship with your audience.
Here are a few of the platform’s primary benefits:
You get a predictable income. Since you can clearly see how much each subscriber pays and at what frequency (such as per post or on a monthly basis), you know how much money to expect.
You can still use other income sources. If you are using affiliate links, Google AdSense, or any other type of revenue generation, you can continue to benefit from them without affecting your Patreon account.
You retain ownership of your content. Everything you create is still yours, with Patreon claiming no rights to ownership.
You don’t have to manage payments or support. All of the details of processing payments and providing support for the Patreon platform are handled for you.
Before you get started, it’s important to note that using Patreon to crowdfund works best when you already have a following on your blog or website. Your patrons will usually become aware of this option through your site and social media presence, and will choose to support you because they already enjoy your content. This means you should take the time to build your audience before you invite them to become patrons.
Another thing to keep in mind is that Patreon charges a finance fee, based on a percentage of your patron’s contributions. The rates are transparent, but are subject to change, which can impact your patrons and your earnings down the road.
What’s the Catch?
To make Patreon or other crowdfunding sites profitable, you typically need an existing audience from another platform who is willing to support your work financially.
This typically involves the creation of quality content for months if not years. So there is usually a very large initial investment of time.
Learn More
Best way for artists and creators to get sustainable income and connect with fans | Patreon
Patreon is a membership platform that makes it easy for artists and creators to get paid. Join over 100,000 creators…
www.patreon.com
— Casey Botticello
Thanks for reading this article! Leave a comment below if you have any questions. Be sure to sign up for the Personal Finance Newsletter, to get the latest articles on personal finance, passive income, entrepreneurship, and more!
Personal Finance
Learn how to manage your money | Topics include: Budgeting, Banking, Credit Cards Insurance, Mortgages, Investments…
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If you liked this article, here are some other articles you may enjoy:
5 Best Services on Fiverr to Jump Start Your Business
Affordable services for your small business
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What I Didn’t Learn at Wharton About Personal Finance
A comprehensive guide to personal finance for young adults
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Casey Botticello is a partner at Black Edge Consulting. Black Edge Consulting is a strategic communications firm, specializing in online reputation management, digital marketing, and crisis management. Prior to founding Black Edge Consulting, he worked for BGR Group, a bipartisan lobbying and strategic communications firm.
Casey is the founder of the Cryptocurrency Alliance, a Super PAC dedicated to cryptocurrency and blockchain advocacy. He is a graduate of The University of Pennsylvania, where he received his B.A. in Urban Studies.
Note: This post may contain affiliate links. Please read my disclosure for more info.
Over the past few years, passive income has become one of the most frequently discussed personal finance terms on the internet.
Some of the most popular searches in Google include:
How Do I Generate Passive Income?
How Important is Passive Income?
What are Examples of Passive Income?
As someone who likes to investigate crooked internet marketers, yet also has an entrepreneurial spirit, I decided to look into these methods to determine whether passive income was an achievable goal or a concept used by predatory marketers to get consumers to buy self help material.
While there was plenty of evidence of sellers hawking questionable products that mentioned passive income, but did not appear to actually teach anything about the subject, there were also many legitimate opportunities to make money through passive income. This article will focus on these legitimate passive income ideas.
This overview is based on my 10+ years of trial and error, exploring virtually every method of achieving passive income.
This article is broken down into five parts:
Part 1 — An examination of what the term “passive income” means.
Part 2 — An explanation why passive income matters, and how it is integral to financial independence.
Part 3 — A quick overview of business ideas that other lists erroneously list as passive income.
Part 4 — A look at the criteria used to classify a business, product, or service as passive income, for the purposes of this list.
Part 5 — An overview of virtually all ideas for developing streams of passive income.
So while your results may vary, this is a good article for those looking for new passive income ideas.
In my quest to develop passive income sources over the past 10+ years, one of the only consistent patterns that has emerged is that everyone succeeds utilizing different (and often times unexpected) methods of achieving passive income.
Someone who can quickly write eBooks and make millions of dollars on Amazon, may struggle making a single penny from affiliate marketing or never sell a single stock photo.
Best of luck in your search for financial independence! Be sure to leave a comment at the bottom of the article and tell me which methods I am missing and which methods worked for you.
Part 1. What is Passive Income?
Passive Income is generally defined as a stream of income earned with little or no ongoing effort needed from the individual receiving the passive income in order to grow the stream of income. Passive income is income that is not proportional to the time you physically put into acquiring it. Active income (typically one’s regular job or additional part time jobs) is a direct exchange of your time and skills for money.
Examples of passive income include royalties earned from stock photography or from a digital course you create. In both cases, the content, whether self hosted or on a larger website, generally require little or no maintenance or additional financial investment to maintain the source of income.
The intriguing thing about passive income is that it can be generated literally while you are sleeping, freeing up additional time for hobbies or allowing you to increase your earnings by performing some other form of work while still generating previously established streams of passive income.
An example of this would be a person working a 9–5 office job where they are paid a fixed salary. This same person also receives regular passive income from an eBook that he wrote on gardening over two years ago. The office job requires direct effort to produce the agreed upon amount of income. The employee, whether hourly or W2, is trading their time for money.
The eBook is different. Regardless of what is going on in the office employee’s life, the book is listed for sale in its digital form on Amazon and the author does not have to perform any work (beyond the initial creation of the content) to maintain this stream of income. The employee can literally never check on that book and they will still receive their royalties, every month.
Part 2. Why is Passive Income Important
There are many articles dedicated to exploring the various ways to make passive income. But many fail to consider the underlying question — why is passive income (as opposed to active income) important?
The answer is actually a fairly simple relationship between time and money. Time is the most valuable commodity. There are only 24 hours in a day. Time is the greatest equalizer because not a single person can have more of it. It can never be recreated or re-spent. It exists once, then it’s gone. And that’s precisely why passive income is so important — because time is more valuable than money.
Unlike money, which can be earned, saved, spent, invested, squandered and lost, we can’t tuck away minutes on a clock. We can’t expect dividends on seconds or hours in the bank, or invest the time that we didn’t use on something else. Considering that most of the free world needs to work for a living, consuming much of the time they do have, this precious commodity needs to be prioritized.
Passive income is one of the most important strategies that that the rich utilize to get richer. It’s how you detach your ability to earn from the limited time that you have in a day. With passive income, you make money while you sleep. You also make money while you’re awake. It’s automatic and simply keeps coming in.
“If you don’t find a way to make money while you sleep, you will work until you die.” — Warren Buffett
However, creating a passive income stream is far from easy. It takes an enormous amount of effort and investment of your time with very little return in the beginning. It involves an overall sense of frustration and an enormous learning curve. Still, it’s one of the most worthwhile investments of your time that you could possibly engage in.
As the chart below illustrates, any amount of passive income earned is exponentially more valuable than the equivalent amount of money earned through traditional work (trading time for money).
$100 in passive income per month may not sound like a lot. However, to generate the equivalent of $100 in monthly passive income, you would need to have $30,000 invested earning 4%. This 4% return is fairly conservative when compared to the historical average annual return of the S&P 500, which is around 7% (after inflation).
Monthly Passive Income and the Annual Investment Equivalent
While passive income might not be the answer to all of your immediate financial problems, it is a pathway to success and most certainly the foundation for wealth and financial independence.
When you’re not stressed out focusing on just making enough money to pay the bills and you’re no longer living from paycheck-to-paycheck, there’s a mental clarity and an emotional catharsis that sets in.
You become free to spend your time doing things you actually care about. You can spend more time with your family, focus on improving your health, have the freedom to escape a job you hate, or pursue a creative passion that you otherwise would relegate to the few hours of your free time on the weekend.
Part 3. What is NOT Passive Income
Some ideas commonly touted by financial “gurus” as passive income which are not actually passive income. I hate to see these ideas misrepresented as I have been involved with many of these businesses myself, and know that they are time and capital intensive.
Vending Machines /Laundromat— I had a contract to provide food and vending services to Accenture. I purchased, managed, and restocked a number of vending machines. I can assure you that vending machines are far from passive income. You either need to spend enormous amounts of time fixing and restocking the vending machines or you need to pay someone to perform this function on a regular basis. Just because something is automatically dispensed to consumers does not mean it is passive income.
Real Estate/Rental Properties — Real estate development, speculation, or even renting out property is not passive income. Unless you pay someone to manage your properties every month, you will be responsible for a wide range of tenant issues. And if you’re paying a person or company to mage your property, this is no different than any other traditional business.
Paying off Debt — While it is a good idea to pay off high interest debt, this is often falsely classified as passive income. Paying off debt offers little in the way of systematization, scalability, and unlimited income potential.
Raw Land Flipping — I am still shocked when I see other authors include this on their list of passive income ideas. Raw land flipping (or renting) is not only extremely difficult, but it requires a ton of active effort on the part of the owner.
Refinancing Mortgage — Like paying off debt, this is potentially a good idea (depending upon interest rates, market conditions, and your opportunities to invest in certain ventures). However, this is by no means passive income. It cannot even be classified as income, let alone passive income!
AirBNB/Rideshare — While renting out unused space in your house or driving your car for Uber can be profitable, both of these ventures require active effort. Uber is especially time intensive and requires drivers to work 60+ hours per week to scrape by in many cities. There is also the additional maintenance and depreciation that occurs when you drive your car more than you normally would. While some of these costs may be fixed (car payment, insurance, etc.) the additional wear and tear on your car can be devastating to people who rely upon their car for day to day transportation.
Part 4. What is Considered Passive Income?
So if the ideas above are not considered passive income, what are some examples of true passive income streams?
For the purposes of this list, passive income ideas must meet the following criteria:
Recurring Payments — Passive income is income that requires no effort to generate on a recurring basis.
Systematization — Passive income streams must be derived from a systematic process. The ability to develop and perfect these processes is a key element of passive income.
Automation — The ability to outsource or rely upon automated systems allows passive income streams to remain truly passive.
Scale and leverage — After establishing a system that successfully generates income, this system must be able to be grow quickly, through the introduction of automation and other methods that allow you to scale a process.
Income Potential — Passive income cannot be constrained by the total potential income it generates. This is one of the basic qualities that separates passive income from a traditional salaried job.
Part 5. A Comprehensive List of Passive Income Ideas
1. Stock Photography
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passive income stock photography, stock photography income, realistic income from stock photography 2020, make money online
Source: Escaping The 9 to 5
Do you like photography? Do you have a smart phone with a camera? If so, you may be able to convert your photos into a passive income source.
Photography websites such as Shutterstock provide you with platforms to sell your photos. They may offer either a percentage or a flat fee of each photo that is sold to a site client.
In this way, a single photo could represent a passive income opportunity, since it can be sold again and again, without any additional effort after initially uploading the photo.
You simply need to create your photo portfolio, upload images to the photo platform, and then the activity becomes completely passive. All the technicalities of photo sales are handled through the web platform. You simply collect a check (or PayPal payment) each month for the royalties you receive on your photos.
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What’s The Catch?
When evaluating any passive income idea, it’s important to look for any unforeseen costs or roadblocks. When it comes to stock photography, it used to be extremely expensive to own professional photography equipment and time consuming to upload photos.
Now, with smartphones having such sophisticated cameras, it is possible to submit photos from your day-to-day life which can be licensed as stock photography.
This has both lowered the barriers of entry while also increasing the competition among photographers.
However, no longer needing expensive photography equipment has largely outweighed the increased competition, in my experience.
There is such a large demand for stock photography of virtually everything that you do not need “stunning” photos of exotic places to get downloads. In fact, some of my best photos (taken with a professional high-quality camera) have never even sold once, while random photos snapped with my iPhone have sold multiple times!
As I’ve learned, focusing on niche content and keyword tagging to boost photo visibility in various search engines is more important in stock photography than spending hours getting the perfect shot.
To be clear — that’s not to say that time consuming and ultra high quality photography isn’t worthwhile. They are just not as efficient to sell on most stock photography sites. Images taken using professional equipment need to be sold directly to marketing agencies and end users to receive fair payment.
Below are some examples of photos taken with an iPhone that I was surprised to see outselling some of my “better” photos:
Even in a category as saturated as “pink flowers” this image sells consistently.
Images of everyday objects (such as money) are utilized by bloggers to add color to their articles.
The stop sign is a great example of an “unexpected best seller.” It sells well because it can be used conceptually to represent a wide range of ideas (literal hazardous conditions, abstract concept of fear, etc.)
Learn More
If you want to learn more about passive income produced through stock photography, below is an article that explains the process in more detail:
Create Passive Income Through Stock Photography Using Your Phone
Passive Income Strategy #1 — Stock Photography
medium.com
If you are interested in signing up to be a Shutterstock contributor, click the link below to sign up for free!
Sell photos, footage clips, illustrations & vectors | Shutterstock
Shutterstock is a global marketplace for artists and creators to sell royalty-free images, footage, vectors and…
submit.shutterstock.com
2. Writing an eBook
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how to write an ebook and make money, where to sell ebooks, make money writing ebooks for kindle, amazon self publishing kdp
Source: Escaping The 9 to 5
There are three primary methods through which entrepreneurs can make additional income with an eBook:
Submitting an eBook file to a Major Platform (i.e. Amazon KDP)
Self-Hosting and Selling Your Own eBook
Utilizing Service That Converts eBook Files to Physical Books (i.e. CrateSpace)
In all three processes, the key to generating passive income is the fact that you can upload a digital version of your book once, and then you receive subsequent payments or royalties for a copy of this work. You are not responsible for marketing the book or processing the actual transaction.
Amazon (or other large book retailers) provide this function. While Amazon does take a 30% commission on most books, this is a reasonable fee as it allows writers to focus on writing more content, and spend less time worrying about running an eCommerce store.
What’s the Catch?
For many, writing their first eBook can be daunting. It’s one thing to make a series of witty posts; but writing a whole book can feel quite overwhelming.
Keep in mind though that you can always start by writing under a pen name and that eBooks do not need to be as long as traditional print books, to be successful.
Learn More
If you want to learn more about passive income produced through eBook creation and sales, below are two article that explains the process in more detail:
How to Earn $2000+ Per Month in Passive Income Through Amazon KDP
Passive Income Strategy #2 — Selling eBooks on Amazon
medium.com
How to Make $158,404 in Passive Income Writing Books for Amazon KDP
Mastering A9 — Amazon’s organic product ranking algorithm
medium.com
3. Creating Online Courses
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passive income online course, best courses to earn money online, passive income udemy, passive income online course
Source: Escaping The 9 to 5
If you consider yourself an expert on a particular topic, digital products are a great way to package that information and sell it to others looking to learn.
If there’s an abundance of free blog posts or tutorials on YouTube about what you’d like to teach, you can compete by delivering content that promises not education but transformation. In other words, don’t sell the product — sell the customer’s own potential after buying your product.
Similar to eBooks, online courses are another great source of passive income. While not quite as easy as eBooks to produce, online courses rely upon the same concepts:
Upload useful digital file to major hosting site
Allow consumers to download product for a fixed royalty
Collect royalties.
Unlike most eBooks, online courses are unique in that they can be sold at a much higher margin than most digital products.
There are (valuable) online courses that cost thousands of dollars. However, the principle remains the same — create valuable content once, and then focus on organizing and selling it to as many people as possible, through an automated process.
Some of the major platforms for online courses include:
Udemy
Teachable
Thinkific
Podia
Below is an example of a course package and resources created for aspiring UX designers:
Become a UI/UX Designer
Learning UI/UX design can be overwhelming, especially if you’re coming from a different field and you’re hesitant about…
store.nicolesaidy.com
The course is reasonably priced, has a straightforward value proposition, and is easy to purchase:
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passive income online course, passive income course, ux designer course, course design, passive income podia, passive income
The layout is clean and it is very clear what is included in the course materials:
Learn More
If you are interested in creating your own course, check out Podia or any of the aforementioned online course platforms:
Podia - Sell Online Courses, Memberships, and Downloads
Replace 5+ tools and keep all of your products, content, customers, email subscribers, payments, and data in one place…
www.podia.com
4. Affiliate Marketing
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passive income, passive income affiliate marketing, affiliate marketing for beginners, how to start affiliate marketing
Source: Escaping The 9 to 5
Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
There are many ways to promote a product as an affiliate. Some of the most common are:
Create a niche website — as discussed later in this article, you can create a niche website that consist entirely of other people’s products. While you only earn a relatively small commission as an affiliate, this model allows for scalability and tremendous growth.
Product reviews — You can create websites or blog posts which contain product reviews. You typically compare two competing products, and, should someone click on your affiliate link to buy the product, you get a commission.
Email lists — With an email list, you can send mass messages to your subscribers. Many email lists derive their value from their ability to directly market a product to engaged consumers. If you don’t have your own product to market, this can be a great way to boost your earnings.
When discussing the promotion of consumer products (tools, books, toys and household items) the biggest affiliate network, by far, is Amazon. Their Amazon Associates affiliate program lets you promote any item that is sold on their platform.
As seen in the screenshots below, once you sign up for Amazon Associates, you will be able to search and find products eligible to receive affiliate commissions.
For example, I really like whiteboard…I have like 6 in my office. Even though I work on my computer most of the day, I find that whiteboards are a useful way to organize my thoughts.
I could create an niche website or blog reviewing different types of whiteboards.
I would simply search in Amazon Associates for the whiteboard I am reviewing:
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
I would click the Get link button, which will generate a unique referral code and URL:
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
I would then insert the affiliate link into my blog or website.
And like that — I will receive a commission on every whiteboard sold as a result of the traffic I generate!
Some affiliate programs focus on up-selling memberships through free trials. So you do not even need to convince someone to buy a product. You just need them to give the free trial a chance and some percentage of users will likely find the product useful and subscribe beyond the free trial period.
As an example, Amazon will currently pay a $3 bounty for getting someone to sign up for a free Amazon Prime trial.
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amazon associates program, amazon affiliate, amazon affiliate program, amazon associates passive income, amazon passive incom
What’s the Catch?
You need to create content or have a large following to (typically) make affiliate marketing work. In the case of the Amazon Prime trial featured above, if you promote this product to 1,000 followers, you may only see a 2%–3% conversion rate (20–30 people), which translates to $60-$90.
Learn More
If you are interested in learning more about affiliate marketing, I suggest you check out Amazon’s Associates Program. It’s easy to use and free to sign up for:
Amazon.com Associates: The web's most popular and successful Affiliate Program
Join the Amazon.com Associates Program and start earning money today. The Amazon Associates Program is one of the…
affiliate-program.amazon.com
5. Print on Demand or Merchandise Design
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zazzle passive income, cafepress passive income, print on demand, make money online, print on demand passive income, wealth
Source: Escaping The 9 to 5
Print on demand (or Merch Design), has developed over two decades.. CafePress, an online gift shop that calls itself “the recognized pioneer of customizable products,” launched back in 1999, followed by Zazzle in 2005 and Redbubble in 2006.
There are many popular print on demand websites, but here are some of the most popular:
Zazzle
RedBubble
AmazonMerch
Teespring
CafePress
What’s the Catch?
Some of these programs require you to have your own website or they evaluate the traffic/domain authority of your website, meaning they can be hard to get approved for (RedBubble/AmazonMerch).
Also, margins in the print on demand business for creators is fairly low. However, once you upload a design, you can easily add it to hundreds of products. And once you list these products, you will earn royalties indefinitely.
For example, I have a store on Zazzle selling cryptocurrency-related clothing:
Cryptocurrency_Store: Designs & Collections on Zazzle
The Cryptocurrency Alliance is an independent expenditure-only committee (Super PAC), created to raise awareness about…
www.zazzle.com
I have not uploaded a new design in over a year, yet I still receive royalties every time a product of mine sells:
The other cool way you can make passive income from Zazzle is promoting other people’s products. While you earn a lower commission compared to selling your own product, it is easy to see how you could quickly scale this idea, as Zazzle has virtually every product imaginable.
You could answer someone’s question on an internet forum with a useful affiliate link, share a product you love on social media using an affiliate link, or even build an entire niche site around products created by others!
Learn More
If you want to learn more about passive income produced through print on demand creation and sales, below is an article that explains the process in more detail:
Creating Passive Income with Zazzle
How much money can you make creating and selling designs on Zazzle?
medium.com
6. YouTube Partner Program
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youtube advertisement, youtube passive income, make money with youtube ads, youtube partner program passive income, passive
Source: Escaping The 9 to 5
There are a number of ways that you can monetize YouTube. Many involve a lot of up front work (i.e.content creation, monetized with ad revenue). However, while this is not the most lucrative way to make money on YouTube, it is a legitimate way to produce passive income.
The first revenue stream you’ll likely explore is ads. Whether you want to earn money on YouTube without creating videos or as a content creator, joining the YouTube Partners Program and setting up monetization is a vital step. If you want to apply for the YouTube Partner Program, you can only start the application process when you reach a threshold of 1,000 subscribers and 4,000 valid public watch hours over the last 12 months.
How to enable monetization on YouTube
Sign in to the YouTube account you want to monetize.
Click the icon for your account in the top right corner.
Click YouTube Studio.
In the left menu, select Other Features > Monetization.
Read and agree to the YouTuber Partner Program terms.
Create a new AdSense account or connect an existing one to your channel. (You need an AdSense account to get paid.)
Set your monetization preferences.
Once that’s done, head back to the dashboard and click the Analytics tab on the left side. From there, you’ll need to choose Revenue from the tabs at the top, then scroll down to the chart Monthly Estimated Revenue to get an idea of your predicted revenue.
How many views do you need to make money?
The number of views you receive doesn’t correlate directly with revenue earned. If your video gets thousands of views but no one watches or clicks the ad, you won’t make any money. This is because of YouTube’s criteria for billing advertisers: a viewer must click an ad or watch the ad in full (10, 15, or 30 seconds) for you to get paid.
YouTube Premium | A Second Monetization Method
YouTube Premium is a paid membership program that allows fans to watch and support their favorite content creators without ads. For creators, not much changes, as they will get paid for content consumed by non-members on YouTube along with content on YouTube Premium.
Creators are paid for YouTube Premium based on how much members watch their content. Consider revenue earned from YouTube Premium as a secondary revenue stream in addition to what you’re already earning through ads.
What’s the Catch?
As noted above, you can only start the application process when you reach our threshold of 1,000 subscribers and 4,000 valid public watch hours over the last 12 months.
Additionally, while there are plenty of YouTubers making serious money, the bulk of their revenue comes from selling products (merch), promoting another company’s products (affiliate marketing), or selling their own educational tools (courses). These can be passive, but they are far more time intensive to set up and they are really variations of other passive income methods on this list.
Learn More
While I have made a small amount of passive income with YouTube in the past, it is one area I have not invested a huge amount of time trying to build content. Below is a video you may find useful. It focuses on making money on YouTube without a huge audience, which is probably the most useful primer for people reading this article:
Source: YouTube
7. Digital Display Advertising
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digital display advertising, digital display ads passive income, passive income display ads, passive income ideas display ads
Source: Escaping The 9 to 5
Display ads are ads that appear in the online space. The first display ads were ‘banner ads’, hyperlinked, image-based ads shaped as a strip, and usually located at the top of a web page. Later, as web design became more complex and creative, display ads evolved to a range of shapes and sizes, and included videos, interactive elements, pop-up functions and more. Today, banner ads simply refer to a specific size, of 468 x 60 pixels.
Display ads typically have low click-through rates — just 0.05% across all formats and platforms. However, while CTR is important, it’s not everything. When other metrics are considered, display ads do have an effect on brand awareness and intent to purchase. Despite the statistics on ‘banner blindness’, when consumers get so tired of online ads that they don’t really ‘see’ them anymore, display ads do work, and performance marketers use them as an important part of their online strategy, particularly in retargeting campaigns.
Probably the best known network of Display Ads is Google Adsense.
I have been using Adsense on a range of websites since I first began creating online businesses.
According to my account I’ve now sent over five million ad impressions to them, and I always get paid on time — every time.
Overall I find the quality of their ads to be pretty good and I like the huge range of options when it comes to selecting adverts that match your site.
Potentially most important of all, the revenue-per-click that you earn with Adsense tends to be at the higher end, meaning more money for you when compared to the majority of other ad networks.
What’s the Catch?
Google Adsense is technically passive income. When you create a new post on your blog or website and include Adsense ads, that blog or website has the potential to make you money not just once, but over and over again. That page and the ads are there forever, or until you take it down. I have pages on many sites that earn me income every day and I haven’t touched them in years. So yes, Google Adsense is passive income in that regard.
However, those of you who have been making websites for a while know how difficult it is to obtain thousands of visitors per day to your site. Most bloggers and website owners never see anything near that. In order for a website to consistently bring in thousands of visitors per day, it has to be a dominant site in a very popular and competitive niche which is updated constantly. If you start a website or blog today, it could take you 3 years working 50 hrs per week to see that kind of traffic, and even then, you might never see it. That makes Adsense a little less “passive” than most people think.
Learn More
If you want to learn more about making passive income through digital display ads, I would recommend you start with Adsense, as it is probably the largest and most beginner-friendly of the ad display networks:
Google AdSense - Earn Money From Website Monetization
Earn money with website monetization from Google AdSense. We'll optimize your ad sizes to give them more chance to be…
www.google.com
8. Creating a Niche Website
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creating niche website passive income, how to create niche website, niche website, passive income idea, passive income stream
Source: Escaping The 9 to 5
Building a niche website from scratch has become a proven way to make a decent income, provided you’re willing to put in the time and effort to make it worth your while. Plenty of people all over the internet have been able to grow their niche websites into a passive income that gives them money every month with very little effort.
This may sound too good to be true, but in fact, this is an achievable reality. That being said, a niche site is not a get-rich-quick scheme, and it will take time and effort to set up. Once that’s done, though, the income becomes relatively passive.
So what exactly is a niche site, and how much money can you earn by creating one? Those are the questions that we will attempt to answer in this article, along with the basic steps towards tackling the task of creating a niche site.
Definition of a Niche Site
A niche site is described as a blog that:
“may appeal to geographic areas, a specialty industry, ethnic or age groups, or any other particular group of people.”
So what does that mean?
Basically, it means that a niche site is a blog that you create with a specific topic and purpose that is meant to appeal to a certain group of people.
These people are usually connected by something they have in common, whether it be their location, their age, their interests, or any combination of those or other factors.
Why is this becoming such a popular marketing tool? Because it generates organic leads. Instead of pushing products or services on readers, these kinds of blogs have the goal of brand awareness. They develop a common question or topic, and highlight products and services that appeal to their readership.
The job of a niche blog writer is to produce content that is helpful to their target audience. This means providing information, resources, and recommendations for their niche topic. Then, using advertisements or affiliate links, niche blogs earn revenue from vendors in their area of focus.
What’s the Catch?
Unlike creating a Medium blog (or other “premonetized blogs”), creating a niche website takes some website develop experience, costs a small amount of money to maintain, and typically involves the creation of lots of content just to establish an audience.
9. Gated Digital Products
If you consider yourself an expert on a particular topic, digital products are a great way to package that information and sell it to others looking to learn.
If there’s an abundance of free blog posts or tutorials on YouTube about what you’d like to teach, you can compete by delivering content that promises not education but transformation. In other words, don’t sell the product — sell the customer’s own potential after buying your product.
You can leverage an existing reputation as an expert to garner attention for your products, or if you’re starting from scratch, you can create and give away free content to generate interest and leads for your paid digital products.
A digital product is an intangible asset or piece of media that can be sold and distributed repeatedly online without the need to replenish inventory. These products often come in the form of downloadable or streamable files, such as MP3s, PDFs, videos, plug-ins, and templates.
Digital products have many advantages that make them uniquely attractive to sell:
Low overhead costs: You don’t have to hold inventory or incur any shipping costs.
Extremely high-profit margins: There’s no recurring cost of goods, so you retain the majority of your sales in profits.
Potential to automate: Orders can be delivered instantly, letting you be relatively hands-off with fulfillment.
Flexible products: You can offer products for free to build your email list, monthly paid subscriptions for access to exclusive digital content, or licenses to use your digital products. You have a lot of options as to how you incorporate digital products into your business.
What’s the catch?
Unlike affiliate marketing or drop shipping, this requires the creation of your own digital products. This takes time, and unless you are successful with presales, you likely won’t see any money until the product is totally complete and is listed.
Depending on the product you are selling, there is also the potential issue of driving traffic to your content. While it might eventually become passive, if you cannot figure out a way to automate your marketing or create lasting organic traffic, your product may be lucrative but not a source of passive income.
10. Pre-Monetized Blogging
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medium blogging passive income, medium passive income, pre monetized blog passive income, passive income idea, medium earning
Source: Medium Blogging Guide
This article that you are reading, was written and published on (what I refer to as) a Pre-Monetized Blog. Although any blog can be monetized utilizing any number of strategies listed in this guide, Pre-Monetized Blogs are the WYSIWYG solution for writers who want to focus on writing, as opposed to marketing, sales, or website design.
Medium Blogging Guide's Newsletter
Learn How to Make Money Writing on Medium
mediumbloggingguide.substack.com
Medium is without a doubt the best example of this type of website.
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medium partner program, medium logo, medium passive income, medium earnings, medium stats, medium format, medium formatting
For those of you who stumbled across this article through a search engine, or are not familiar with what Medium is:
Medium is the only platform on the Internet right now that allows anyone to sign up, post an article, and get paid earnings immediately.
Medium is one of the leading online publishing platforms. Both traditional media journalists and new writers can join for free and publish their content on the site. Unlike many publishing platforms, Medium is unique because of its Partner Program.
Medium writers earn money through Medium’s Partner Program. Partner Program writers are paid monthly based on how much time Medium members spend reading their stories.
I have spent a lot of time writing on Medium. And I realize many writers on the site will surely say something to the effect of: Medium takes a ton of work and should not be considered passive income, Casey Botticello!
However, Medium does meet the criteria spelled out in the beginning of this article, or at least some content does.
When you check that box, enabling your content to become part of the Medium Partner Program, you are monetizing your article.
After an article is monetized, it doesn’t matter when it is read — so long as it is read by a paying Medium subscriber, you will earn money off of it.
A lot of writers focus on creating articles that follow current Medium trends, current news, or content to keep their active readers engaged.
This is (most likely) not the content in your back-catalogue that will provide passive income.
However, if you are producing useful, evergreen content, you may keep earning (albeit, at a decreased rate) well after you publish an article or even after you stop writing on Medium.
What Is Evergreen Content and Why Is It Important?
The importance of evergreen content for any writer, marketer, or entrepreneur
medium.com
Take for example, my article on How to Make an Amazing PowerPoint:
How to Make an Amazing PowerPoint
A guide to creating a stunning and effective PowerPoint presentation
medium.com
While there will be new features added to PowerPoint over time, this guide will likely be useful to readers for the next 5+ years. While it is a relatively new article (so I don’t have much data to go off of), I would guess that it will do well over time as it climbs the ranks of articles internally, through Medium’s search algorithm or through external traffic, such as Google’s search engine.
If you really produce valuable and unique content, it is possible that it could even grow over time.
I describe this process, in my article, Medium Article Views: Long-Term Growth in Views Without Curation:
Medium Article Views: Long-Term Growth in Views Without Curation
The 10 month journey of a Medium story from 0 to 250K views
medium.com
What’s the Catch?
Medium only pays you for content consumed by paying subscribers. So while it may help your article reach a larger audience, this will not necessarily translate into higher earnings.
Also, like most of the passive income ideas on this list, success on Medium requires a large initial investment in time. Even then, it can be difficult to maintain momentum if you decrease the frequency of your publishing or stop writing on the site altogether.
Learn More
To learn more about making money through Medium:
Read this article:
How Much Money Can You Make Writing for Medium?
Medium Partner Program Earnings FAQs
medium.com
Sign up for my exclusive newsletter:
Medium Blogging Guide's Newsletter
Learn How to Make Money Writing on Medium
mediumbloggingguide.substack.com
11. Dropshipping and Ecommerce Stores
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dropshipping passive income, ecommerce passive income, e commerce passive income ideas, drop shipping passive income ideas
Source: Escaping The 9 to 5
Acquiring and stocking products are some of the most complicated parts in the process of selling physical goods online. If you want to sell products without having to handle them, then drop shipping is the way to go. This is the model that is promoted by most YouTube drop shipping gurus. Drop shipping consists primarily in selecting and promoting products that are offered by a fulfillment service. The fulfillment service stocks the products and ships them directly to the client once a sale is made on your website. It is a great way to sell products online without having to manage them physically.
What’s the Catch?
There are relatively high costs and small margins (more risk) than other ideas on this list.
12. Investment Income
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investment income passive, passive income investments, best passive income investments, best passive income dividend stocks
Source: Escaping The 9 to 5
When you build an income investing portfolio, you can create a reasonably stable source of passive short-term cash flow, while simultaneously building up long-term investments. There are many options when it comes to this type of investing and it can be a great way to get somewhat instant gratification.
An income portfolio is a collection of investments that yields regular income. This means that you receive cash on a regular basis, usually quarterly, semi-annually or annually, without needing to sell the investment.
An income portfolio is usually comprised of different investments that result in some sort of predictable payout. Some investments that you might include in an investment portfolio are:
Dividend-Paying Stocks. Dividend stocks are those that pay out a portion of company profits at regular intervals. You don’t have to sell your stock; rather, the company issues you payments based on the number of shares you have. This dividend payment is similar to profit sharing, since you get a portion of what the company has made.
Bonds. When you invest in bonds, you essentially lend money to an organization. Throughout the life of the bond, you earn interest. In many cases, the interest you earn is sent to you regularly. When the bond’s term expires, you receive the principal back. (You can then invest in another bond if you want, and receive even more interest as income.)
CDs. In many cases, it is possible to arrange for the interest you earn from a certificate of deposit to be paid to you on a regular basis throughout the term of the CD. A CD is also one of the safest investments for your money.
Annuities. These are complex financial products that you should carefully consider. Some people like to include them in an income portfolio, since you receive a regular payout. If you get an immediate annuity, the payments to you begin quite quickly; otherwise, you have to wait a certain number of years to start receiving your regular income.
Peer-to-Peer Lending/Microloans. You can also include loans made to others in your income portfolio. As your principal is paid back with interest, you receive regular income that you can spend, or that you can re-invest. Many investors keep the interest earned and reinvest the principal. Check out online peer-to-peer lending marketplaces like Lending Club or Prosper to get started.
What’s the Catch?
While income derived from investments truly is passive, it requires substantial amounts of initial capital.
While your money can grow at a compounded rate, it is hard to scale this idea once you have invested all of your capital.
Learn More
If you are looking to make money from your investments, I’d suggest checking out Personal Capital, as a way to track your net worth and cash flow:
Personal Capital Mobile App Review
Is Personal Capital the best app for tracking your spending and net-worth?
medium.com
13. (Some) Credit Card Rewards
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credit card rewards passive income, passive income credit cards, passive income with cash back credit card rewards, boa bbr
Source: Escaping The 9 to 5
If you’re confident that you’ll use your credit card responsibly, then a rewards credit card is a great way to earn a passive income. Rewards on these cards take many different forms: there’s cash back, points that can be used for travel, and other benefits which vary from card to card. Depending on which one you choose, purchases made on these cards can go a long way towards achieving financial independence.
That said, if you have trouble managing spending, or would have to go out of your way to spend to meet any credit card rewards threshold, then this strategy is no longer passive, and you risk losing money overall.
Probably one of the most straightforward examples of credit card rewards producing passive income is the Bank of America Better Balance Rewards Card.
BankAmericard® Better Balance Rewards users can get $25 every quarter, during which they have made more than the minimum monthly payment on their credit card bill. This feature makes the credit card fairly unique among balance transfer credit cards and what makes it one of our favorite balance transfer credit cards. If you pay off your balance within a quarter, you will not receive the credit — the BofA terms of service for the card state that a “zero balance or a credit balance does not qualify”. If you have a Bank of America checking, savings, or retirement account, this benefit gets an additional $5 in rewards per quarter, for a total of $30 per quarter.
I have four Better Balance cards which I use to pay monthly bills. That means I get $120 per quarter for paying off these small bills on time, per card. That is a total of $480 per year in passive income. It’s worth noting that the process is truly automated with auto bill pay linked to your account.
I have had the cards for years and never missed a payment, nor have I missed a reward cycle. After initially setting this system up I have not readjusted it (with the exception of a few minutes when two of the cards expired a year ago).
What’s the Catch?
However, this card-specific strategy may not work for everyone. While Bank of America does still offer a Better Balance Rewards card, I have only heard of a few other people getting approved for 3+BOA Better Balance Cards.
However, credit cards are constantly coming up with new schemes to lure in spenders. So stay alert, and if you catch on to the right program, that does not require you to increase or manufacture spending, then a cash back card can be a small but nice source of passive income.
14. Digital Artwork
Selling artwork to earn passive income in the form of digital products or resources is a growing attraction for many designers and artists.
It’s not a new concept though. Royalty free image libraries for example, have been going for decades. But things have changed dramatically since then. Artists have more control over their work and more options of where they choose to sell it.
There are tons of sites out there that allow you to sell simple digital products, without charging you exorbitant fees.
Etsy is probably one of the best known sites in this category.
What Can You Sell on Etsy?
1. Printable Wall Art
Printable wall art is the most common passive product to sell on Etsy. People are always looking for a way to upgrade their home. And a printable is perfect for that. Your customers can print it out themselves, and hang it in their home/office. I have met two people online who have six figure businesses that consist solely of printable wall art on Etsy!
2. Printable Planners
Printable Planners are a great way to stay organized. You can find the style that you like, print it out, and clip it to your clipboard or staple it together.
3. SVGs
SVG stands for Scalable Vector Graphic. People use SVGs to design graphics, print stickers, cut vinyl designs or to use them as clipart. There is a really strong market for SVGs.
4. Printable Package Designs
A lot of people (especially Etsy shop owners) are looking for a way to style their product package. The packaging is the first thing their customers see, so it should make a killer impression.
5. Invitations
If your niche is wedding, parties, events or something similar; You should design invitations. You could easily design them in Canva/Illustrator, or create an editable template in Canva or Word so your customers can edit them themselves.
What’s the Catch?
Like stock photography, the market has become increasingly saturated with these products in an increasingly globalized digital economy.
It can take real skill or an artistic touch to create a digital product that stands out from the rest.
Learn More
if you are interested in learning more about Etsy, check out their website below:
Etsy - Shop for handmade, vintage, custom, and unique gifts for everyone
Find the perfect handmade gift, vintage & on-trend clothes, unique jewelry, and more... lots more.
www.etsy.com
15. Membership Website
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create membership website, membership website passive income, passive income idea, passive income idea 2020, passive income
Source: Escaping The 9 to 5
Instead of selling individual digital products, you can bundle them together and lock them behind a paid subscription to generate recurring revenue.
This approach is ideal if you plan to maintain a growing library of premium content and nurture a community of passionate members. In some cases, paid digital subscriptions can even create an opportunity to directly monetize your existing content marketing efforts.
Since this content is behind a gate that only paying subscribers can access through their customer account, you can also host exclusive content that can be streamed rather than downloaded.
You can build this type of business idea by using ChargeRabbit for recurring subscription billing and SkyPilot as your digital delivery system.
16. Mobile Applications
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make moeny with mobile apps, passive income mobile apps, apps passive income, passive income ideas mobile apps, passive money
Source: Escaping The 9 to 5
Sweatcoin
The Sweatcoin app is a free mobile app that tracks your steps each day and then converts them into a digital currency called “Sweatcoin” that can converted to cash via PayPal.
While this app does drain your phone battery slightly, almost everyone walks or moves around on a day-to-day basis — so why not get paid for it?
What’s the Catch?
Like many apps, it does somewhat drain your phone battery.
In order for the app to work, you need to enable location tracking.
It can take a few weeks before you start earning money, based off the minimum cash out levels.
Learn More
If you want to learn more about making passive income through the mobile app Sweatcoin, check out my review of it or sign up below:
Use The Sweatcoin App to Get Paid to Walk or Jog
Passive Income Strategy #3 — Mobile Applications
medium.com
Sweatcoin | It pays to walk
We convert your steps into sweatcoins, to spend on products and services. Walk, earn, spend, repeat. You’ll see, it…
sweatco.in
17. Car Wrapping
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passive income car wrapping, car advertising, car wrapped for money, how much money can you make wrapping a car with ads
Source: Escaping The 9 to 5
While there are a number of unconventional ad spaces, I’ll focus on car wrapping for the purposes of this example.
Have seen those cars and trucks with Monster or Red Bull energy drink advertisements all over them. You may have wondered how that happened, or you may have been inspired by the advertisement and went to the gas station to pick up a refreshing Red Bull.
It’s called car wrapping. And anyone can do it to make money.
Wrap advertising or a vehicle wrap actually started 1920s with putting vinyl decals on taxis.
Pepsi was the very first company that used car wrapping. Wrapping cars allowed them to advertise their product to a plethora of people.
Subsequently, more companies began utilizing car wrapping. After all, it allows them to advertise their product 24/7 to hundreds of thousands of people.
So, How Does Car Wrapping Work?
Here’s how this process works: companies go through car wrapping companies to find willing drivers.
These companies advertise other companies that specialize in car wrapping.
If you interested in having your vehicle wrapped, you sign up with one of these advertising agencies.
The first step is giving information about your car and daily driving patterns. These companies want to know the type of vehicle you drive, your daily commute route, and how many hours a day you spend driving.
This is the necessary information that advertisers have to consider in order to find a driver that can actually get the advertisements out to enough people. If you don’t drive much, you may not be eligible for car wrapping.
After you fill out your application, you will be accepted and your information will be entered into their databases. When an ad comes along that matches your profile, you will be contacted.
They will give you the details of the steps you need to take, the pay, etc.
To get the ad on the car, auto wrap is used. The material is typically vinyl decal, but it actually looks like paintwork is applied to the car.
Depending on the advertisement, the vinyl may cover part of all of your vehicle.
How much can you make?
How much you make from car wrapping depends on different factors like the kind of car you drive, your daily driving habits, the routes where you drive each day, and whether the ad covers the whole car or just a small part.
Generally, you can expect to earn between $200 to $1000 a month for wrapped car.
What’s the Catch?
You need to be comfortable driving around in a car with a large promotional wrapping. You also need to drive the car a certain amount of miles per month, typically in a fairly specific area, so this may not work for someone who works at home or has an extremely short commute.
Learn More
There are many companies that provide car wrapping services, but the only one I have any personal experience with is:
Wrapify | Performance-Driven OOH
Wrapify, the performance-driven ad tech platform for brands powered by OOH and the gig-economy.
www.wrapify.com
18. Internet Browsing
Source: Escaping The 9 to 5
Swag Bucks rewards you for using a combined Ask.com/Google engine. That’s it. Just search the Web like you normally do, earn “Swag Bucks” along the way, and then redeem them for merchandise, gift cards, and other rewards.
There are multiple ways to earn Bucks. You can start a search from the Swag Bucks home page (just like you would from Ask or Google), or install the Swag Bucks toolbar for Firefox, Internet Explorer, or Safari. Alternately, Swag Bucks plug-ins are available that merely add the engine to your browser’s built-in search bar.
Every time you search, you have the chance of winning Swag Bucks. A Buck here, three Bucks there — over time it adds up.
What’s the Catch?
This passive income method will only produce a very small passive income stream.
Learn More
If you are interested in learning more about Swagbucks, check out the link below:
Swagbucks | Make money browsing the internet
Get paid to surf the web
www.swagbucks.com
19. Crowdfunding
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crowdfunding, crowdfunding passive income, passive income idea, passive income for beginners, passive income 2020, make money
Source: Escaping The 9 to 5
Crowdfunding it is the process of raising funding online from various contributors. Patreon is probably the most common of these platforms.
Simply put, Patreon is a member-based platform that enables you to get paid directly by your audience. Through this site, you generate revenue from the content that you are already creating. Fans, or patrons, commit to paying an amount they choose, which is usually due each month or every time you post new content. When you use Patreon to crowdfund they take a small fee, and you get the rest of the money.
Patreon gives subscribers a way to join your community and pay you for making the things they enjoy, without the need for a middleman. Since they choose the amount and frequency of payment, they never have to worry about unplanned charges. More importantly, Patreon helps you build a patron and artist relationship with your audience.
Here are a few of the platform’s primary benefits:
You get a predictable income. Since you can clearly see how much each subscriber pays and at what frequency (such as per post or on a monthly basis), you know how much money to expect.
You can still use other income sources. If you are using affiliate links, Google AdSense, or any other type of revenue generation, you can continue to benefit from them without affecting your Patreon account.
You retain ownership of your content. Everything you create is still yours, with Patreon claiming no rights to ownership.
You don’t have to manage payments or support. All of the details of processing payments and providing support for the Patreon platform are handled for you.
Before you get started, it’s important to note that using Patreon to crowdfund works best when you already have a following on your blog or website. Your patrons will usually become aware of this option through your site and social media presence, and will choose to support you because they already enjoy your content. This means you should take the time to build your audience before you invite them to become patrons.
Another thing to keep in mind is that Patreon charges a finance fee, based on a percentage of your patron’s contributions. The rates are transparent, but are subject to change, which can impact your patrons and your earnings down the road.
What’s the Catch?
To make Patreon or other crowdfunding sites profitable, you typically need an existing audience from another platform who is willing to support your work financially.
This typically involves the creation of quality content for months if not years. So there is usually a very large initial investment of time.
Learn More
Best way for artists and creators to get sustainable income and connect with fans | Patreon
Patreon is a membership platform that makes it easy for artists and creators to get paid. Join over 100,000 creators…
www.patreon.com
— Casey Botticello
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Casey Botticello is a partner at Black Edge Consulting. Black Edge Consulting is a strategic communications firm, specializing in online reputation management, digital marketing, and crisis management. Prior to founding Black Edge Consulting, he worked for BGR Group, a bipartisan lobbying and strategic communications firm.
Casey is the founder of the Cryptocurrency Alliance, a Super PAC dedicated to cryptocurrency and blockchain advocacy. He is a graduate of The University of Pennsylvania, where he received his B.A. in Urban Studies.