7 Best Ways to Earn Passive Income: Always Be Earning
My parents are Baby Boomers. For their generation, post-education life was all about cultivating a career. The world expected them to pick a profession, start in the mail room, and then climb the ladder toward that fancy gold watch called retirement.
I’m a Millennial. I have paid close attention as the concept of a career path has increasingly given way to a focus on maintaining varied and often simultaneous revenue streams. More and more professionals rely on Passive Income to maximize their earning.
Passive Income doesn’t have a direct relation to the amount of work you do or the time you spend working. By its nature, Passive Income is less limited than Active Income. Traditionally, Passive Income meant ‘Investment’, which required either significant capital or major financial risk.
These days, a combination of mass mentality change and personal technology has rocketed Passive Income into the mainstream. Many ambitious professionals have one or more ‘side hustles’ to boost their earnings. I’ll share seven of the best ways to earn Passive Income.
#1 Share Your Ride
For many people, a vehicle is the 2nd most exhausting aspect of their financial lives. First you buy it (or lease it), and then you’re saddled with car payments, insurance, gas, and maintenance. However, there are plenty of people who either choose not to own a car or can’t afford one. This introduces our first opportunity for Passive Income.
Uber & Lyft
If you live in NYC, you may know that the City Council recently passed legislation to cap the number of new vehicle licenses for ride-hail services (like Uber & Lyft). Why? The boom in the number of drivers is putting the survival of traditional Taxi services at risk. It’s just that popular to be a ride-hail driver.
While driving for a ride-hail service isn’t technically ‘Passive Income’ (you have to spend the time to do it), it’s incredibly flexible around fixed schedule jobs. Drivers can choose to be active at their discretion and can turn down fares. Driving a lot can turn into a significant supplemental revenue stream.
If you’re not comfortable driving passengers or you want to maximize truly Passive Income, you can use a service called GetaRound to loan your car to strangers.
Getaround installs a device that allows your car to be unlocked using a phone app. It also tracks and insures your vehicle. Clients pay the owner $5/hour or more to borrow the car (40% of which goes to Getaround). Think of it like Airbnb for your car. Speaking of…
#2 Rent Your Room
Airbnb is the clear king of this particular Passive Income niche. Renters eschew traditional hotels to stay in your home or apartment. You can rent out a specific room or the whole deal. Airbnb provides a battery of services including advertising/name recognition, insurance (up to $1M), a platform for vetting potential renters, and a completely customizable experience. As the Airbnb renter you set all the prices, availability, and rules (pets, parties, smoking, etc).
#3 Promote a Product
I remember an era when only celebrities made money from product endorsement. Now, almost anyone can generate passive income by promoting merchandise. Here are a few common ways.
Affiliate Blogs & Articles
With online affiliate marketing, you recommend products or services and then make income when your site drives traffic to the products’ site. This traffic is quantified by monitoring ‘click-throughs’. These occur when internet browsers click on a link to a product on your site and are directed to the product producer’s site.
If you build enough credibility (usually through a content-driven blog), you can generate this money yourself. If you’re just starting out, consider writing articles for an established affiliate website known for authentic product reviews.
Product Promotion on a YouTube Channel is similar to old fashioned Television advertising on a much smaller scale. You generate content that will attract viewers to your channel. Producers place ads in your content. You get paid when you reach a certain number of views (and paid more as your viewers increase). As of this year, YouTube has set a threshold of 1,000 viewers and 4,000 hours of watched content before you can qualify to earn money through sponsorship. So, while this is still a viable (and extremely popular) side-hustle, it may take a lot of time and energy to start earning revenue.
#4 Get Cash Back for Spending
While this isn’t the original intent of the expression ‘you have to spend money to make money’, it applies. Making additional purchases won’t help you build up your bank account, but you can earn Passive Income by doing your inevitable spending in specific ways.
Credit Cards with Rewards
Many credit cards offer travel benefits and cash back as rewards for making purchases. As long as you spend within your means, making purchases on credit cards can benefit both your credit score and your bank account. If your work allows you to make reimbursable charges on a personal credit card, you can really rack up the cash back on credit card purchases without even spending your own money.
Cashback services are gaining a lot of exposure lately: extensions like Honey and apps like Ebates are already used by millions of people, that want to find a great deals.
They all work pretty similar: app partners with major retailers to generate cash back on the purchases you make online. For driving traffic (you) to a website, app gets a commission based on your purchase. If you are signed into the app, they pass a portion of that commission on to you. This commission is available by PayPal or paper check every quarter.
Honestly, cashback is not a way to generate a ton of Passive Income, but it is free, almost effortless, and takes no additional time away from other profit-generating activities.
#5 Run an Online Store
This season, financial experts project that a whopping 57% of holiday shopping will be conducted online. One way to generate a Passive Income stream is to get in on the merchant end of all this capitalism, either by selling your own products or other people’s.
Sell Your Goods
Some people run an online store to sell products that they craft, build, or otherwise generate. If you don’t have the experience or cache to run your own site, you can make an account on a platform like Etsy. Of course, they’ll take a chunk of your profits, but they’ll also help market your merch and protect you from fraud.
Sell Other People’s Goods
You can also sell products from other producers. The most common way that this works is to function as a Drop Shipper. Drop Shipping means that when a customer orders a product from your site, you pass their information on to the supplier who ships to them directly. You never carry an inventory or deal with shipping. Platforms like Shopify facilitate this sort of arrangement. You pass on a higher percentage of the gross receipts, but you also do a lot less for each purchase. Theoretically, you could handle a much larger virtual inventory than a physical one.
#6 Sell Your Photos
The internet is FULL of photography and most of those photos don’t originate from trained photographers. Modern digital cameras (even the one on your phone) are significantly more advanced than their earlier counterparts, making it easier and faster to share a large volume of high-quality shots. While this market saturation can also work against you, there is still opportunity for the amateur photographer to generate Passive Income
When websites, companies, and individuals need high-quality photos with good composition, they often search stock photography sites like Shutterstock and Adobe Stock. If your photos are high quality enough (in terms of resolution and composition), you can submit them for review by archive sites of this type. Most of the better sites have pretty high standards for acceptance. Once your photo is accepted, you make a commission every time someone purchases the right to download and use your photo.
There are also apps that you can download that will automatically search the camera roll on your phone for the most high-quality and in-demand photos. (Kinda creepy, right?) EyeEm and Foap are two sites that work like this. The upside is that it takes almost no effort on your part. The downside (besides a computer sniffing through your selfies) is that you’ll pocket a much smaller commission than with stock photography sites.
#7 Sell Your Words
As a freelance writer, I would be remiss if I didn’t close with this last one.
I started my freelance writing career with a site called Upwork, which is a platform that puts freelancers and employers together. For the freelancer, the major benefits include building a writing portfolio and work history, browsing thousands of potential employers, and protection against having your intellectual property ripped off. (If you follow their policies, Upwork will pay you the terms of your contract even if the employer doesn’t.) The only real downside is the 10% – 20% finder’s fee you pay Upwork. In my opinion, this was money well spent to find a new contact, but less so as the relationships evolved.
Eventually, my work developed beyond that platform. Today, I’m excited to work with a variety of contacts who publish my content (like this article). It’s hard work, and I wouldn’t necessarily call it Passive Income. But it’s flexible, and it’s what I love to do.
The Bottom Line
Do what YOU love to do.
Contemporary Passive Income streams bring people closer to the pursuits that drive them. Sometimes they provide a platform to experiment with a new trade or discipline with very little risk. Other times, they allow individuals the financial freedom to take an extra vacation or invest in a new hobby. Start with the avenues I’ve provided in this article. Do your own homework, too. See what Passive Income opportunities can do to enrich your life.
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