It can be hard to pay off all your bills on a monthly basis, never mind putting aside money to invest. However, more and more people have started supplementing their salary with passive income.
Unless you’re Warren Buffett or Bill Gates, you’re bound to struggle with the bills from time to time. In fact, most people will find that their regular paycheck just isn’t enough to cover all of their expenses at some stage throughout their life.
Taking on an extra job might not be an option though. There are only 24-hours in the day and most people have a life beyond the nine-to-five.
But there are other ways to earn a bit of extra money without doing the graveyard shift. In recent years, setting up a source of passive income has become increasingly popular as a way of giving your finances a much-needed boost.
What Is Passive Income?
Passive income is a consistent stream of money that doesn’t necessarily require your constant presence or effort in earning it.
Unlike most jobs, where you have to actually show up and work a certain amount of hours to get paid, a passive source of income means that you are earning money without being there at the time.
Unless you’re extremely good at it, passive income is unlikely to rescue you from the early morning commute. In reality, you’d have to come up with a truly groundbreaking idea, work hard to get it off the ground, and then continue to maintain and support it—which is essentially just like founding your own business. But there are ways that you can greatly supplement your current income with a passive income source.
Remember, no source of income is entirely passive, and you’ll probably have to put in some time and effort up front. But once you’ve got started, you can gradually taper back your involvement as it runs itself.
Bearing all of this in mind, let’s take a look at five of the best ways you can tap into some passive income right now:
While the stock market might be an efficient way to grow wealth over the long-term, there are ways that you can regularly earn money from your investments too—dividend stocks!
Some companies choose to pay their shareholders at regular intervals with a cash bonus called dividends. These tend to be larger and more well-established companies, like Coca-Cola or Ford, who no longer need the extra cash to reinvest back into the company.
A typical dividend-payer will pay out between 2-3% a year, so maybe you shouldn’t buy your condo in the Cayman Islands just yet. But if dividend stocks are carefully and consistently invested in over time, investors will eventually start to receive substantial cash payments.
More stocks, but of a different kind!
Stock photos are an increasingly important resource for the advertising departments of many companies—a resource that they’ll happily pay for. So whether you’re a professional photographer or a part-time snapper, the photos you take can become a great source of residual income if they’re made available to the right people.
Just one good photo could be used numerous times, bringing in money for the owner each time it’s used. If you set up a portfolio and upload tens—or even hundreds—of photos, you could start pulling in a significant wage straight away from your images.
Granted, there are potential hazards with letting strangers into your home. But there is one big advantage with renting out rooms on Airbnb, and that’s plenty of money!
Airbnb has become a reputable booking agent for travelers in recent years and renters in some locations can charge premium prices for rooms that would otherwise lie unused. In fact, the average price for an Airbnb in cities like New York and Boston comes in at between $160-$180 per night. That still works out cheaper than the average hotel.
Some people have jumped fully on the room-rental train and bought property with the sole intention of keeping it on permanent short-term lease (although measures are being brought in to curb this in some cities).
Nonetheless, if you happen to own an apartment that isn’t permanently occupied, or even if you have a room that’s used for nothing but junk, Airbnb is a really simple way to start pulling in some significant passive income.
Make an Online Course
It’s not just teachers who can teach!
If you have a hobby or interest that really know a lot about, why not share it with the world for a little profit?
Sites like Udemy allow you to create your own online courses that can be accessed by anyone across the world for a fee. Udemy takes you through all the steps in creating your course, making sure that your course will actually be attractive and helpful for potential students. These courses use downloadable PDFs and video lessons to teach, so once you’ve actually created the material, your involvement is minimal.
The key to creating a course is to find a specific demographic you can help. The worst thing you can do is try to make a course that appeals to everyone because it will inevitably end up attracting no one at all.
And don’t worry if you think your interests or ideas are too obscure. Udemy already offer tutorials on everything from ‘Body Language For Entrepreneurs’ to online boxing classes!
Dig Out Your Old Notes
Ok, so making an entire course might seem like a bit too much effort. But there are other ways you can still earn an educational buck.
Passive income guru Pat Flynn was once an architect studying for his LEED exams. As a novel way to help himself study, Flynn decided to write a blog about the materials he was preparing. He went on to pass the exams, but then got laid off in the midst of the financial crisis.
However, Flynn noticed that he was now being referred to as an expert on architecture exams in various online forums. He soon figured out that the blog he created to help himself study was generating thousands of visits a day from fellow exam candidates across the world. Flynn decided to add Google Ads to his site and then compiled an ebook of notes which could be downloaded for a small fee. Soon, he was earning more than he ever had as an architect.
Flynn’s success with his notes might have been an exceptional one-off, but it proves that people value the notes of people who have already completed exams and received their qualifications.
If you have the know-how, you could collate all of your old exam notes into an ebook that you can sell online. Alternatively, you could upload your notes to a site like Oxbridge Notes, which does all the hard-work for you.
Rubicoin operates a full disclosure policy. Rubicoin staff currently hold long positions in Coca-Cola and Ford.