Passive income is the money you generate with minimal or zero effort after an upfront investment. It eliminates the limitation of time from your ability to earn, so you can make money in multiple ways concurrently. Additionally, you get peace of mind and more time for personal interests and development. Read on to discover five proven passive income ideas you can implement to generate thousands of dollars.
1. Dividend-Paying Stocks
If you invest in a company with dividends, you earn a portion of their profit based on your investment size. In other words, you become the corporation’s shareholder, and you’re entitled to an annual or quarterly dividend.
Choosing the Best Stocks
Consider investing your money in dividend aristocrats. These are a select group of S&P 500 companies that have paid and increased their dividend base for at least 25 consecutive years. Investing in stocks with such a track record reduces the risk of losing your money.
As long as you’re earning a dividend every year, your investment is safe, and you’re making extra money for free. What’s more, your passive income from dividend aristocrats grows year in and year out.
The amount of money you can generate from stocks depends on the percentage of share price a company pays in the year. Therefore, it’s prudent to shop for stocks with high dividend yields to maximize your return.
For example, you might find a company with an annual dividend yield of $2.00 per stock. That might sound like nothing much. But what if you invested more and purchased 200 stocks? You would effortlessly earn $400 from the company that year as passive income.
2. Selling Physical Products Online
Many consumers like buying commodities online due to the convenience of placing orders from home and waiting for a delivery. They can also access a wide range of products and prices on different ecommerce sites.
While online shopping was growing organically over the years, it made a dramatic leap in 2020 due to COVID-19. Lockdowns due to the pandemic forced even those who were skeptical about ecommerce to develop online buying habits. That’s one reason why online sales have recently skyrocketed, and you can even make a full-time income as a dropshipper.
Where to Source Products
There are two fantastic sources of physical products for resale: AliExpress and Alibaba. AliExpress is a great starting point for buying items at wholesale prices and dropshipping them to your customers. Use either platform to establish your best niche and winning products.
For better margins and more profits, move to Alibaba to stop overreliance on a few suppliers from one region. The platform features worldwide manufacturers and distributors, giving you more price options for the same product.
You’ll want to partner with reputable suppliers who have been in business for several years. Focus on building a relationship first instead of pushing for rapid supplies, especially if you’re looking for long-term business.
Ask the supplier to quote prices for different quantities of an item, say 50, 200, 1,000, 5,000, and so on. You’ll be surprised at how drastically prices can fall as you increase your order. Your selling price should include all the costs of sourcing the product and shipping it to your customer, plus your margin.
3. Affiliate Marketing
Affiliate marketing means selling other people’s products and making a commission off the sales. It’s an excellent passive income opportunity when you have an audience on social media and other digital channels.
Find a business that offers products and services you think your audience will buy and promote their affiliate links. Build a list of customers or people who follow you or engage with you online. Then define a touchpoint where you can promote relevant affiliate links.
Be sure to promote products that you’re familiar with (preferably commodities you have used). Potential customers will be more confident if you can answer basic questions about what you sell.
Where to Find Affiliate Products
One of the best places to find products to sell through affiliate marketing is clickbank.com. The platform has many digital and physical products you can promote online and earn commissions. Choose an affiliate product link and promote it through your social channels, email, website, blog, and other online platforms.
4. Selling Digital Products
Professionals and industry experts can make easy passive income by creating and selling digital courses relevant to their field. You can sell ebooks, podcasts, and other digital resources on various subjects.
If you want a digital product that gives you almost 100% margin, try selling private label right (PLR) products. These are ebooks and video guides that you can buy once and do whatever you want with them. You can edit them, put yourself as the author, resell them, give them away for free, and so on.
Refining PLR Content
While PLRs have great content, most of them come in simple formats, like plaintext ebooks. You have to make them more attractive to your audience and customers, or they won’t read them.
Fortunately, there are many free and paid tools for improving these digital products. If you don’t have the time or don’t want to learn how to enhance PLRs, sites like plr.me sell ready-to-use content.
5. Real Estate
One of the most rewarding industries is real estate, especially if you own rental property. It’s a great business since you have a tangible high-value asset that generates long-term passive income.
Single-family units are perhaps the most sought-after houses since newlyweds and small families are always searching for new homes. You can net hundreds to thousands of dollars of passive income per month. Buy and rent out whichever real estate property you find marketable.
Where to Find Homes for Sale
Most people with real estate experience will agree that Zillow is ideal for finding houses for sale. The platform allows you to narrow your home search based on your preferences and budget.
Zillow also provides an estimate of the monthly costs associated with maintaining a given property. Add your mortgage, property taxes, and HOA fees to estimate a reasonable rent amount for a home before even buying it.
A good strategy is to ensure that your tenant pays the mortgage and other expenses. You’ll earn free money from the rent after paying off your monthly mortgage amount.
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