You’re rocking it out on your 9-5 and you already have a side hustle going. If you already have a lot on your plate but you have a financial goal you need to hit, it might be time to try finding a source of passive income.
Passive income opens up opportunities to increase your financial power without needing constant attention. They require as little or as much effort as you’re willing to put in. So where do you start?
Here’s a guide on how you can start earning money without the need for continuous effort.
What is Passive Income?
According to Investopedia, passive income is defined as “earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable, but it is often treated differently by the IRS.”
In terms other than economics-speak, it’s an opportunity to earn money without actively working for it. It of course takes work to set up, but if you set up your passive income stream correctly, it generates money on its own so you don’t need to constantly work in order to add to your income.
Passive income takes many forms. It can be someone who writes a blog and gets revenue through advertisements. It can be someone who shares affiliate links on their social media. It can be someone who invests money in the stock market.
How you choose to make passive income is up to you.
How to Make Passive Income
Contrary to what you might read in other blogs, passive income is not a get rich quick scheme. You aren’t going to make thousands of dollars in your first month and probably not your first year.
To generate passive income, you need to decide how much of a different kind of an investment you’re going to make: time.
How much time are you going to invest in setting up and maintaining your passive income stream?
This is the first question you need to ask yourself, because it is single handedly the most important factor in determining what passive income stream you will pursue.
Investing with an app like Acorns? Set it and forget it.
Sharing affiliate links on Instagram? Leave it in your bio, post about it when you feel like it.
Running a blog? Say goodbye to your free time. (But if you have the patience – this option can be incredibly rewarding)
When deciding where to start, think about your financial goals. What do you hope to accomplish with your passive income?
Do you want to:
- Make enough to quit your job?
- Make a little money on the side to spend on fun things?
- Invest over time to save for retirement?
Once you decide what your goals are and how much time you have to spend on pursuing those goals, you can take a look at different options available to you. You can build up to include as many of the following ideas as you’d like, but try to establish only one at a time.
If you dive in head first, you will not only overwhelm yourself, but you might make rash decisions that result in poor investments. Experiment slowly to see what works for you.
Passive Income Ideas
Building a passive income doesn’t happen overnight. It’s not a get rich quick scheme and you won’t be able to quit your job in a month. When you build wealth, you start slowly and make decisions wisely. If you’re not sure where to begin, find a mentor to help guide you in your journey.
Here are some different passive income ideas you can explore as options to generate more income.
Starting a Blog
If you’re looking to create extra cash flow for yourself, and you have patience, starting a blog can be a great option. Let’s be clear though, starting a blog (and especially one that takes money) takes A LOT of time. However, it can also be extremely rewarding.
If you decide to go this route, here’s a high-level look at the steps you’ll tackle:
1- Develop Your Brand
Before you do anything, you need to know who your brand is. What will your blog be called. What do you want the domain name to be?
Is that domain name available at GoDaddy? What will your logo look like?
This first step can be the hardest. Identifying the personality, tone, and look/feel of your brand can seem daunting. But we’ve put together a few resources to help you here.
2- Registering a Domain Name
We recommend GoDaddy for domain name registration, but we do not recommend them for hosting. Their server speeds tend to be slow which has an impact on Google’s Core Web Values with the load time of your site.
If you want your site to generate income for you – you need to be in good graces with Google’s algorithms. Otherwise, your content won’t rank well organically and you’ll miss out on potential traffic.
3- Pick a Web Host
While it’s possible to start a business with no money, it will take much longer for it to be successful. Investing a little money in yourself and your new venture will help things happen much faster. Picking a good web host is one of the areas that is worthy of spending a little extra money.
So what makes a good host? We’re personally big fans of Cloudways (affiliate link). However, using Cloudways does require some technical knowledge (even with their fantastic support). If you’re not technically savvy, we recommend Siteground (affiliate link) to start with – and then moving over to Cloudways later in your blog’s lifespan.
Siteground has fantastic support and a control panel that will be easy for you to use. They also provide a WordPress install for you. Meaning, you don’t have to worry about the initial platform install.
If you’re asking, what’s WordPress? It’s a CMS platform (Content Management Platform) that has become the standard in blogging. Over 40% of websites are built on WordPress, and we couldn’t recommend it more.
4 – Design Your Website
This is another area that it is wise to invest a little money in. Having a well-designed and well-developed WordPress theme will aid in your site’s technical performance, which of course matters considerably with Google as well as your visitors. If a visitor has a poor user experience on your site, they’ll likely close out and not return.
A general rule of thumb states that a user should be able to find anything they’re looking for on your site within 3 clicks. While that’s not always possible, it’s always something you should aim for.
Need help with designing your website? Or just a helpful advisor to guide you? A membership to Women’s Business Daily includes guidance on everything you need with starting an online business (and especially a blog). It’s one of the best investments you’ll make in yourself.
5 – Content Creation & SEO
Content creation is another area that it’s wise to invest in. You can write great content all day long. But if you’re not strategic with it and using SEO (search engine optimization) best practices, Google isn’t going to do you any favors.
When it comes to writing content, think about what you would put into Google if you wanted to find your article. This is a great way to identify your focus keyword. For example, our keyword with this article is “passive income.”
SEO is a pretty complex topic, so we’re not going to dive into it too deeply in this article. But if you do already have a blog, and you’re looking for a free SEO review, reach out to us!
Pro Tip: When picking images for your article or blog posts or even for use on other areas of your site, make sure it’s an image you either have the rights to, or an image that you have a license to use. Meaning, don’t just pull an image from Google Image Search. This is a good way to get yourself in legal problems.
Marketing is one of the areas that a lot of new bloggers neglect to do. Marketing doesn’t have to be difficult, and there’s no need to think you have to spend a lot of money in order for it to be effective. Start with setting up social media accounts for your site and sharing your content on these platforms.
From here, network with other bloggers, offer to do guest posts on other blogs, reach out to podcasts and offer yourself as a guest or content expert (depending what your blog is on). These are just a few ways to market yourself without spending money. And if you have a budget for marketing, a great place to start is simply with boosting posts on Facebook to reach your target audience.
There are some common mistakes that amateur bloggers make, but surrounding yourself with an amazing community of women who have built successful digital brands before helps lower that risk. And if anything you’ve read here seems overwhelming, then we absolutely recommend joining our site for extra support and resources.
Affiliate marketing certainly plays a role in generating money from a blog, but it’s possible to do affiliate marketing without a blog.
Essentially, affiliate marketing is advertising someone else’s product or service and getting a commission when someone makes a purchase using your link. This simple concept can be applied across industries and in practically any context.
If you aren’t sure where to begin, you can start with a program like Amazon Affiliates. When you sign up for their program, you can generate an affiliate link from any of their products. If you get people to buy those products using their link, you get a small commission from the sale.
While their program is extremely easy to use, their commission rates are very low. You would need to have a high traffic volume to truly generate significant income from this venture.
A high performance blog would be a good way to do that, but if you have a large following on social media, you can use that platform to promote your link as well. If you have a lot of followers on Instagram, you could make a post about how much you love the product and tell people to check out the link in your bio.
Not nearly as much work as producing a blog, but it might be just as effective if you’ve generated a significant following.
So many sites nowadays offer affiliate programs. If you search hard enough, you can certainly find an affiliate program for an industry or product you’re passionate about.
Investing Extra Cash
One way to make passive income is through investment. Just like all passive income streams, this source can be as hands off or on as you’d like. Something like trading stocks can be extremely lucrative but it requires constant vigilance and supervision of trends.
One of the easiest, most hands off approaches to personal finance investment is an app like Acorns. You can manually invest in your account, sign up to have round ups of your credit card transactions invested, or have a set amount transferred one day a week. You get to pick your investment profile, ranging from low to high risk, and they do all the investing for you. You just get to watch whatever level of investment you made grow.
Another option that doesn’t require much effort is high yield savings accounts. This option requires you to have a significant amount of money that you’re able to leave to accrue interest over time, so this option is not accessible to everyone.
One of the most hands on and largest investments you can make is when you invest in real estate. If you invest in a property, you can make money through rental income. If done correctly, this can eventually replace your full time income. This takes a large amount of time and money, so again, this option is not for everyone.
Selling Digital Products
This doesn’t require as much work as a blog, but it takes more work than passively investing money.
A digital product can be a variety of things. It could be an e-learning course you sell through a website or it could be art designs you sell online.
For example, if you have a talent for creating graphics in Canva, you can generate templates and sell the links on Etsy. If you set it up correctly, when customers buy your digital product, the link gets sent automatically to the digital download. Unless a customer messages you to ask a question, you don’t need to do anything on your end to fill orders.
If you make art designs, you could set up a print on demand shop on Bonfire or Printful. You can even integrate your Printful account into an Etsy shop. You can make designs when you want, and you can just leave the shop to generate income when you don’t have time to expand.
Passive Income Shouldn’t Cause You Stress
Creating passive income streams can be as hands off or as time consuming as you’d like it to be. While setting up your source of passive income takes a bit of time and effort initially, once it’s established, a lot of passive income sources are largely self-sufficient.
Something like a blog, on the other hand, will require constant effort. If you don’t have room on your plate, choose a passive income source that does not require consistent upkeep so you can make money while you sleep.
If it starts to become too overwhelming, take a break. Return to it when you’re feeling more refreshed.
What are some of your favorite ways to generate passive income? Let us know in the comments!Published in