The average adult will spend one-third of his life at work – that is about 90,000 hours at your place of paid employment over a lifetime. And we are going to spend another one-third of our life in bed. Other activities we engage in are left with the remaining third. Our modern society is designed to have you spend the bulk of your life either worrying about money-related issues or trying to make money. So, we sacrifice our health, relationships, and spirituality chasing after money. The only way you can reclaim a significant part of your time for these other activities is to either live a sedentary life or develop a passive income stream – that is make your money work for you, even while you are spending the other one-third of your life sleeping. The first option isn’t very attractive to most people. So we are left with one option; build a passive stream of income so that you can continue making money whether you are working or not.
In this video, I’m going to share with you 7 smart ways to make passive income. Before we get to it, be sure to subscribe to After School TV for more insightful videos like this.
Bear in mind that passive income does not mean no work is involved. In most cases, you have to invest a lot of time and effort to build a solid passive income stream. And in a lot of cases, you have to keep working on your passive income stream to keep it growing. So let’s be clear that this is not a get-rich-quick or do-nothing-for-money kind of tutorial. Now that we are clear on that, let’s get to it.
1. Sell Information Product
From video courses, to ebooks, information products are great ways to generate passive income. This is because it has the advantage of infinite shelf space, invisible products and automation.
For infinite shelf space this means that there is no limit to the quantity of products or variety of products you can have. While a physical store owner or physical product seller will have to stock new products to continue selling, you just have to create an online course or publish an ebook once and generate an unlimited number of sales. You can fill from one order to one billion orders. That’s a massive advantage.
For invisible product, this implies that there is little worry of theft or maintenance of the product. Once it is created, the product exists without really existing.
For automation, you don’t need an army of employees to take orders, respond to inquiries, fill, and deliver items. Technology takes care of the process from marketing to delivery. Usually, the bulk of the effort of making money from selling information products comes from creating a product people want to buy and setting up the sales funnel with a high return on investment. If you get it right and put in the hard work, you can be on your way to generating an unlimited flow of recurring income.
2. Digital Estate Property
You already know about real estate property. What about digital estate properties? You will understand this when you think about how real estate works. You buy a property; either a land or a completed building. Buying a building is usually expensive and out of reach of most people. So your best bet is buying a land you can afford and develop it. You rent it to tenants and businesses, and generate passive income.
In the same way, you can buy a domain name, develop a website on it, grow it into a source of information and generate passive income from advertising, affiliate marketing and sales of your product and services. Many blogs and websites fall into this category. The major work is to build the platform to attract high traffic. If you get it right, you can generate an unending stream of passive income from your digital estate property and still have it to sell if you decide to.
3. Digital Property Rental
Just like you can build your own digital estate, you can also rent estates built by bigger companies and build your business on it. Whether you create a channel on YouTube, a page on social media or a profile on an ecommerce website, you are renting the property. Typically you don’t pay directly to use these properties but you don’t have full control of the platform.
It is often easier to grow when you rent than when you build from scratch. For example, if you want to build a blog and generate passive income as a writer, you may find that writing on a platform like Medium would offer you faster growth than starting your own blog from scratch. In fact, in a lot of cases, like building a YouTube channel, you are better off using existing platforms than trying to start your own video streaming platform. Just know that because you are building on another person’s property, you have to adhere to their guidelines and rules, even if you don’t find it convenient. And they can penalize you if they feel you are flaunting any rules. But it’s often a risk worth taking.
4. Invest in a Business
You can generate passive income by investing and being a silent partner in a business. This is often very risky because there are no guarantees the business will succeed. But with high risk comes the potential for high rewards. Often you get to make money when the company becomes successful through dividends or when the company goes public.
Alternatively, you don’t have to go this route to make passive income investing in a business. You can invest as a loan and get paid a percentage over an agreed period of time. There are many tech startups where you can invest in other businesses or projects and generate passive income over time.
5. Create an App
The app stores may be crowded with different applications and new ones added every day, but there is still money to be made from apps – of course, that would depend on the type of app. If you have a great app idea that has commercial value, you can hire a programmer to create the app for you. Then you can sell the app on the popular app stores or offer it for free and generate reviews from ads. As your app download grows, you continue to add new features and make it more appealing to users. Bear in mind that you will have to invest in marketing to draw attention to your app.
6. Build a Business
Income from a business can either fall within the active or passive income category, depending on how you run the business and the business model. If you run your business as an entrepreneur, you can build your business into a passive income stream over a period of time. But if you run your business like a self-employed business owner, you may likely end up with active income because your business cannot survive without you. People who build passive income from a business deliberately create a system around their business using technology, other people’s time, knowledge, network, and money – so that the business can grow to the point where it can function in their absence. Or like is the trend today, they can sell the business to a bigger corporation and cash out big.
7. High Yield Interest and Money Market Funds
If you don’t want to invest a lot of thoughts about what is going on with your money, but want it to work for you, high yield interest accounts and the money market are basically passive income vehicles. You don’t have to put in any initial work to make money. You just let your hard earned money work for you. Mutual funds, bonds and treasury bills; as well as peer-to-peer lending fall into this category. If you or your business has idle cash sitting in the bank, your money is losing value. There are many ways you can put your money to work and earn a passive income. You can use the power of compound interest to gain huge rewards from passive investing over a long period of time.
The basic principle at work with generating passive income is leverage. You can make your money work for you; make the tools or systems other people have created work for you or build your own system to work for you. And even if you choose to build your own system, you still have to use existing technology tools and systems, to achieve an effective and efficient system of passive income.
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