Passive Income in 2022: A Beginners Guide
Making Passive Income
It has never been easier to make money and this article will talk about the different ways in which you can do so. We all love cash flow, more if it is coming in passively. Having extra money coming in each month allows you to live a little better than you currently are and who says no to that? More money coming in means you can add more to your savings, pay off some debt, upgrade your home, or maybe learn a new skill you wanted to.
When smartphones and ultra-fast internet became commonplace, this birthed many new opportunities for a lot of people. You suddenly had access to all the information you could want and need. It was now possible to talk to people from all corners of the globe at the same time. The world became a lot smaller, which has changed how we now live. One of the greatest things to come out of this is the ability to make money online.
Different Ways to Make Passive Income
Passive income is defined as any income you don’t have to actively work for. You set up the system, put in the necessary information and material, set prices, and the income essentially operates on its own. Depending on the way you earn your passive income, you put in different amounts of effort for the machine to start running. The best part about passive income is that it can run alongside your regular job. You could be working a standard 9-5 and have your passive income operating 24/7. This makes it easier for you to worry less about money and focus on yourself and maybe catch up on your favorite shows.
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Selling a Course
Each of us has something we are good at. Some of us know knitting, some know how to cook, some know how to fix cars, and some know how to create businesses. We know how to do these things because someone taught us and with experience, we were able to refine our skillset. Similarly, there are people all over the world who also want to learn. In 2022, it has never been easier to teach online. Nowadays, if you want to sell a course online, all you need is a lesson plan, camera, mic, and internet connection to get your course on the internet. Several platforms allow you to sell your course to people across the globe.
One of the largest platforms is Skillshare. This website has a multitude of courses available for just about anything there is. You can create a course, upload it, and slowly begin generating income. Depending on how well your course is made, you could be making a few hundred to a few thousand dollars a month. On Skillshare, you earn based on the number of minutes watched. For each minute watched by a student with a premium account, the creator will earn $0.06. For instance, if a course had 40,000 minutes watched, the teacher would be paid 0.06 x 40,000= $2,400.
Selling E-Books
E-books are slowly starting to dominate the world of reading. Having an entire collection of books online or on your phone sounds like every book worms dream. Amazon has introduced its Kindle Direct Publishing (KDP) program which allows for you writers to publish their books free of cost. The writer keeps 70% of each sale with the remaining going to Amazon. Moreover, Amazon will handle publishing, distribution, and even after-sales service.
When deciding to sell an e-book, you need to keep a few things in mind. For starters, you need to do your research and select the right genre. There are many to go around and each has a certain demographic to appeal to. See what the trends are like, what sort of content sells, and what the books are like. You can either write these books yourself or hire a ghostwriter to do the job for you. Once written, you can have an attractive cover designed and upload all of this to Amazon KDP. After this, Amazon handles the rest for you.
Selling Digital Downloads
Digital downloads are a great way to sell a product without having to deal with any logistical issues. A digital download can be a planner, guide, set of stickers, or anything that doesn’t need to physically be sent to the customer. Etsy makes it incredibly simple for you to sell digital downloads. All you need to do is create the item, upload the listing, add the right content to ensure the listing is optimized, and publish it. Once the product is live, every time a customer makes a purchase, the product is instantly delivered to them.
You can sell a singular item or a bundle of different items in different sizes. For example, if you are making Christmas cards, you can design one wishing everyone Merry Christmas or create a bundle where each card is addressed to different family members. For someone who wants to give one card, they can get a single item. For someone who wants to send out more, the bundle is ready.
Digital downloads remove the logistical complications that come with physical products. There is no physical inventory, saving you storage costs. There is no shipping, saving you transport costs. There is no delay in delivery nor is their concern that the parcel will get lost in transit. Moreover, sales are made around the clock ensuring that you have money coming in all the time.
Affiliate Marketing
Marketing is a broad term but at the core of it, the job is promoting a product or service. One of the newer versions of this is affiliate marketing. In this, an individual or social platform will promote a product or service using a link to the website of said item. Amazon has the largest affiliate program in the world. Each time someone clicks on your affiliate link and makes a purchase, you make a percentage of the profits. There are two ways to do this: using your existing audience, and advertising directly to an audience.
In the first scenario, if you take a look at Tech YouTubers such as MKBHD or iJustine, you will often find them mentioning the phrase ‘this product is linked in the description.’ This is an affiliate link and each time a viewer uses it to make a purchase, they are paid. Various social media personalities across different social networks are often seen directing their audience to different affiliate links for products being used in their videos.
In the second scenario, people will run targeted ads using these affiliate links across social media. These ads will target different audiences and niches, prompting them to click on the link and make a purchase. Each time a user clicks these links, the affiliate makes an income.
Dividend Stocks
Stocks are individual shares of a company sold on a stock exchange. Each stock represents a single unit of ownership in a company. While there are many types of stocks to choose from, dividend-yield stocks are the way to go if you want to generate passive income. A dividend is a return you get on your ownership of a stock. This dividend is paid out of the company profits and the percentage is predetermined. Since a dividend is paid per share, the more the merrier.
You can either invest in individual stocks or invest in a dividend ETF which is a collection of different stocks from different industries. An ETF is considered better than an individual stock due to the reduced risk. ETFs are made up of different stocks from different industries. For example, an ETF could contain stocks from Coca-Cola, Levi’s, Apple, Boeing, Nike, and Pfizer. It is highly unlikely that every industry will underperform at the same time, hence increasing your chances of making an income while reducing risk at the same time.
The best way to invest in stocks is through a brokerage platform. These platforms allow you to do your research, invest, and then set up an automated investment plan. If you want your dividend deposited in your bank, that can be done. If you want your dividend reinvested, the platform will automatically do that. Before you get into investing, it is strongly advised that you do as much research as possible. There are hundreds of resources online you can use to learn, understand, and then implement with.
Renting Out Assets
If you own a car, home, apartment, or something like photography equipment, renting them out is a good way to make passive income. Someone will pay you to use your possessions and depending on what it is and how long they rent it for, your income is coming in on its own. For instance, a common practice is for people to make a down payment on a property, rent it out, and use those rent payments to make payments on the property. This way, the asset is paying for itself and you are making passive income. For instance, if your monthly payment on the house is $1,000 then you can rent it out for $1,300 a month. The $1,000 goes to the monthly payment and the $300 goes into your bank account.
Many people have used this method to create extensive portfolios which grow their passive income over time. Similarly, you can rent out your car and follow the same model. In a few years, when the asset is paid off, you can sell it and make that money back. This one requires a little more effort because you need to ensure your product is something that is in demand. Owning a property in the middle of nowhere or in an unsafe part of town will do you no good. Owning a car that leaks oil and doesn’t have a working AC will also defeat the entire purpose.
Conclusion
With inflation making it harder to make ends meet, it is time that many of us make an active effort to earn passive income. Similar to how we make an effort in our current job or business, we must also start working to create more streams of income. This might sound like a challenge, and it often is, but on the other side of it is money coming in that doesn’t actively require you to work for it. in 2022, technology and the internet have made it incredibly simple for you to create a product or service in your home and make it available to people across the globe. Get started today so you can eventually have passive income coming in!
