Are you actively working for a job and looking for some extra income? Well, great news! You can create recurring passive income and make extra money, even in your sleep. If you believe you have the potential to monetize what you own and the motivation to do so, but you aren’t sure how to start exactly? This article is for you. In this article, you will find the necessary information about passive income and the best passive income ideas for 2023. So, let’s dive in!
What is Passive Income?
Passive income is the money you earn without doing much “active” work, and coming from a source that is not an employer or a contractor. However, not doing so much active work does not mean that you do not work at all. In contrast, you put some additional effort into creating a new source of income.
Let’s illustrate. You are an expert in some subject, let’s say, philosophy. If you decide to give an online course on philosophy on an online platform, that is your passive income after you start to generate revenue. So, it is basically an income that is not strictly tied to your time corresponding to your active work.
To sum up, passive income is the money you keep earning while you sleep. But, it is not as easy to earn passive income as it sounds. It requires time, effort, and a product that can be monetized. You can create anything including a blog, online course, book, or a piece of art, and earn money from it even though you don’t work actively on it. Still, you put effort into it beforehand.
Passive income can be generated from:
- Investing: You can invest in assets and earn money from them. It can be real estate, renting out your spare room or apartment, interest, capital gains, royalties, and dividend stocks. This requires an initial investment, which you need to save.
- Creating: You can create products and services to earn money. Some of the passive income you can generate are selling ebooks, teaching online, writing books, creating music, creating and selling logos and designs, and creating content in newsletters and blogs. This requires you to put effort into creating and might take a long time to earn money.
What is the difference between active and passive income?
Now that you know what passive income is, it is time to know what it is not. There are some differences between passive and active income and some important details that you should be aware of:
First and foremost, the source of income is different. In active income, you earn money through effort or output. In passive income, you earn from upfront work. That means, both require work but answer to “when” matters here. You get paid by your company for the work you do in a month, but you can still earn money from the book you published after 10 years.
Secondly, it is not a full-time job. You can be a full-time blogger for a brand, then it is your job. Or, you can write blog posts for your own site and link them with affiliate links, then you monetize your content and it becomes passive income.
It is also not a side hustle. They are usually active, but some of them can be turned into passive income. Let’s see some examples from 28 Passive Income Ideas To Build Real Wealth.
Source: 28 Passive Income Ideas To Build Real Wealth
Additionally, it is worth noting that it requires patience. Not everyone who initiates to generate passive income becomes rich or even earns enough money to keep going. As 9 Passive Income Ideas – How I Make $27k per Week emphasizes, some people can make $27,000/week but as they say, they have been doing this for 8 straight years! So, it is important to have consistency to achieve a certain point.
4 Benefits of Passive Income
Let’s see what are the benefits of having a recurring passive income:
1. Having additional cash flow
It is always good to earn extra income. Besides your active work, you will have extra income that you can save or use for investments, equipment, hobbies, or even just to pay bills! It can also provide an alternative wealth option. This will reduce the stress of losing your job and depending on only one source of income.
2. Working freely
Unlike an active job, you can work whenever and wherever you want! Based on the passive income stream, you can work while traveling, you can work before you sleep or you can finish your work in a year or less. It is completely up to you.
Photo by Tatiana Syrikova
3. Monetizing what you already have
The beauty of passive income is there are so many things that you already have or could do that can be monetized. Teaching what you know the best online can bring income to you. Similarly, writing a book can bring money even years after you finish it.
4. Having financial freedom
When you just get familiar with it and become more successful, it goes beyond just being extra money. You will gain a significant amount of time and money that you can smoothly pursue other projects in your mind, like starting a business.
How to Create Recurring Passive Income Step by Step
Step 1. Decide what you want to do
The first step is deciding what you want to do to generate passive income. There are some questions to ask if you want to write a book, create content, make investments, build an online store or develop an app. Asking what are your passions, talents, and abilities will form a map for you. There are so many ways that can fit your dreams, skills, and sources. Additionally, you should be thinking about your job, if you still actively working. This way, you would not lose your balance.
This step is all about researching and finding the best option. You can refer to the resources during decision-making.
Step 2. Assess your skills, time, and budget
After deciding what you will do, it is important to consider your skills, time, and budget. What you will do should be in line with your skills and abilities, so that it won’t require excessive time and effort to create a source of passive income.
Time is also important here. Your long-term goal is to invest time and create more time for yourself. In the short run, you might spend some time getting started. Upfront working also takes time. So, it is best to balance your time.
Moreover, whatever you do, you need a budget that should provide you with essentials. Even if you decide to do a podcast, start a YouTube channel, or run a blog, you will need some equipment. Make sure your budget covers the most basic needs.
Photo by Monstera
Step 3. Plan and go for it
In this step, you are all set. Now, make a plan that works the best for you and go for it. While planning, make sure you invest time and effort. Even though it is not a full-time job, it still necessitates hard work.
After learning technical knowledge of passive income, it is time to practice. We listed 11 passive income ideas for beginners. Let’s see together how you can create recurring passive income with the pros and cons of each option.
Passive income ideas 2023 for beginners
1. Teach an online course
Knowledge is power. Are you good at marketing or illustration? Great! Why not share them with the world? Similar to other digital products, you can sell online courses repeatedly without holding any inventory or stock. You can use online education platforms, and YouTube channels or you can even go for your own website.
If you decide to teach an online course,
(-) Might be time-consuming because you need a strong plan on the curriculum, equipment, and a little bit of time to record. You might also create templates and downloadables for your students.
(+) It is always fun to share knowledge! There will be so many people who appreciate your efforts.
You can find more information on How to Create an Online Course – Raklet!
2. Monetize a blog
You can be a blogger if you like to write and create content. Starting a blog can be challenging at first, but it has become an important business model that generates passive income. A blog can bring money by:
- Selling your products
- Running ads through Google AdSense or other platforms
- Affiliate marketing
- Creating sponsored posts
- Selling ad space on your blog
(+) You can use pre-made templates, online platforms like WordPress, Blogger, etc.
(-) It might take time to build an audience and start earning money.
Want to read more about this? Check out What is Monetization: A Detailed Guide for Creators – Raklet for a complete guide.
Photo by cottonbro
3. Create a print-on-demand store
Selling print-on-demand is a great source of passive income. You work with a supplier to customize products like notebook covers, books, shirts, phone cases, or bags. You will add your designs on these plain items and your supplier prints them. Since it is on-demand, you don’t have to pay for anything beforehand, which means you will not be left with unsold products.
You can sell them on online platforms like Shopify, Woocommerce, or even Instagram. It can be a great start for owning a business!
(+) You don’t have to manufacture the plain items, just do what you do the best, which is designing, and then sell them online!
(-) You need to find and make a deal with a supplier, which means collaborating with others.
4. Sell stock photos
Are you into photography? Good news. You can create an extra revenue stream by taking photos and selling them online. There are great stock photo platforms like Pexels and Shutterstock that will pay for high-quality photos and videos. If you have a camera, you can already start by thinking about the style you will go for.
(+) It is easy to make money even if it is a small amount. Upload them on the stock photos site instead of leaving them on your phone or computer.
(-) Based on the photography style, you may need permission to take pictures of people or even locations. It may require paying fees for this. Also, you might generate minimal sales at first.
5. Become an Instagram influencer
An influencer is a person who can sway people’s decision of buying a product or a service. Not only shopping behavior but also an influencer can direct people’s way of living, preferences of clothing, and more. Instagram is a great platform where you can build a community and share your opinion and ideas.
If you are interested in fashion, you can create an account that focuses on fashion. This way, the people who share the same interests with you can become your follower and you can grow your community.
When you have an engaged audience, you can find many ways to generate passive income. You can partner with businesses and promote products, or you can sell your own products.
(+) Instagram is a great platform with a great number of users, so you can find your space to build your community.
(-) You need to be active and post on a regular basis to keep it up.
6. Start a YouTube channel
It is really easy to set up your YouTube account and start filming videos. In this sense, YouTube can be a great source of passive income. Being eligible for monetization on YouTube requires 1,000 subscribers and 4,000 hours of watch time. It means you will need great content and some time to reach these numbers. For Ali Abdaal, this took 6 months and 52 videos to start earning income from YouTube.
But if you are determined and have important content that everyone will watch, this shouldn’t stop you. As we mentioned before, not everyone can earn passive income, it requires hard work, determination, and consistency.
(+) Really easy to get started and requires almost no money to invest at first.
(-) It is hard to earn money quickly and big amount of money.
Photo by Sander Dalhuisen
7. Write and sell a book
Writing a book is both fun and can bring money. If you have ideas on your mind, start writing them on a piece of paper! You can write an ebook and sell it online or you can traditionally publish them. Both will bring passive income, even after years.
(+) Easy to begin. You only need one paper and your creativity.
(-) Requires a really long and heavy upfront work.
8. Become an affiliate marketer
Today, social media is everything. Whenever we consider buying a product, going to a restaurant, or reading a book, we immediately go to our phones and look it up on Instagram, YouTube, or Twitter.
Affiliate marketing means that you are selling other people’s products but earning a percentage of each sale. You can just sign up for an affiliate program and get the link to a product. Then you promote this product and link them on your platforms. There are affiliate programs like Amazon Associates that you can partner with and get started.
(+) After building a website, or a community that often gets visits, the money you can earn from affiliate marketing can be quite good.
(-) It is hard to reach a great number of people if you are at the beginning. It requires a great amount of upfront work.
9. Sell digital content
Digital products or digital content can be a great source of income. They can be anything, ebooks, printables, lessons, music, apps, NFT, artworks, and more. They can be in the form of Kindle books, templates, plug-ins, PDFs, or music files.
Once you create them, you can sell them online repeatedly. There are endless possibilities for what you can sell. For example, you can sell printable schedules if you run a blog on productivity. Or, you can sell guides on how to doodle, design your logo, or anything.
(+) You create your digital product once and you sell them as many times as you want.
(-) People might be distant to buy digital content like printables, so you might need to offer free templates first to show them how talented you are.
10. Rent out your spare room
Is there a room in your house that is not being used for years? You can partner with a rental company like Airbnb to generate passive income from your spare room by renting it out. There is a high demand for rental rooms or houses, especially during the holiday season and vacations since it is usually cheaper than a hotel and more comfortable than a hostel. This can bring a significant amount of passive income.
The most important thing here is the reviews. Make sure you cover every need of your guests and never lie on your profile!
(+) If you already have a room or even a house, you are ready to go. Moreover, if you decide to use an online platform like Airbnb or Vacasa, there is a little thing to do.
(-) You might need to renovate your home. Besides, sometimes you can be busy and will not be able to rent out, which stops the revenue.
11. Building a membership community
You can earn passive income by building a membership community and selling memberships. Creating a paid membership model might be hard to build from the scratch, but if you have an existing community that trusts you, it is perfect.
You can create premium content only for your members by using membership software. You could also opt for platforms like Patreon and find patrons who can support you keep creating content.
Raklet is an all-in-one membership management software that allows you to sell memberships and engage with your community in a meaningful way. You can create discussion boards, organize events, and share media files with your members. We offer great software where you can grow your community.
If you decide to give it a try, don’t forget to schedule your demo!
And that’s it!
Now you know everything about passive income and have ideas on how to start earning passive income. It is time to decide what you want to do and get started.
Don’t forget to read these articles from our blog for more inspiration:
