A GOOD FREELANCER NEEDS A DIVERSITY OF INCOME. PASSIVE INCOME MIGHT BE THE BEST WAY TO GET THERE.
Why is it that people are always measuring the amount of money Bill Gates is making while he’s in the shower? The sheer amount of money he makes certainly interests people, but more so people are obsessed with the idea of making money without doing anything. What might be called passive income. Bill Gates has spent a long career creating many many immensely profitable revenue streams, a lot of which now require him to do nothing at all. These streams were not easy to build mind you, he worked harder than most people for over 40 years. You probably won’t be able to match the financial situation of Bill Gates, but you can create your own streams of passive income. They won’t bring in Microsoft levels of money, but they’ll be much easier to build than a massive tech company too.
Before you decide to sell your home, or your car, or your clothes, or anything, consider renting it out. Renting your possessions is one of the most common and most lucrative forms of passive income. It’s relatively easy to get started, and even easier to maintain. There is a certain degree of stress involved but what’s life without a little risk?
By far the most popular method of making passive income is renting out your home through AirBnb. There may be no one company that has influenced the travel and hospitality industries more than AirBnb. On their platform you can list your home no matter the size. A six-bedroom brownstone and a small quirky streamer trailer are equally rentable. You can rent out the entire place or just some of the rooms, and choose to either stay in your home while it’s being rented or host from a far. If you choose the latter there is of course a degree of risk there, but AirBnb has a pretty good insurance plan that all hosts get coverage from. Plus, millions of people rent their homes from afar everyday so clearly it’s relatively safe. If you choose to stay in your home while hosting, your guests may expect a degree of concierge service from you (this isn’t a requirement of course). You can recommend them local bars, restaurants, libraries and whatever else they might be interested in. The experience of renting your home isn’t just lucrative, but can be a fun excuse to meet new people. There are other home-renting companies offering similar services to Airbnb including Homestay, VRBO, and onefinestay. Definitely check your local laws and regulations before you start renting.
If you don’t want to rent your home to people, you can rent it to stuff. There are multiple companies that will allow you to rent out spaces in your home as storage for other people. Neighbor and Storeatmyhouse are just a few. You can rent spaces as big as a garage to as small as a closet. You can decide how the person renting your space has access to their stuff. Some people might want to be able to access their stuff without needing you so if you can accommodate that you’re likely to get more offers. Another type of spatial renting that’s become quite popular is renting out your parking space through apps like SpotHero. If you have an open driveway, or maybe you’ve bought a spot at your local airport, you can rent out that space (for a good deal of money) whenever you aren’t using it.
The latest greatest trend in the renting out your shit market, is car-sharing. Apps like Turo and Getaround have exploded in popularity as you can make hundreds of dollars (event thousands depending on your car) a month by letting people pay to use your car when you aren’t. Owners can set their own rates for vehicle rentals, the length of the rental, mileage limitation, and choose to rent whenever they like. Some apps require you to be there when keys are handed off, or put your keys in an easily accessible lockbox. Other apps require you to install certain GPS hardware into your car if you want to use the app. This way people can safely access your car without you being there. The GPS hardware installation costs money though whereas just signing up is totally free. Depending on the app rental owners make between 60-85% of earning from their car.
The amateur investor is having a real comeback with the popularity of apps like Robinhood, Acorns, and E*trade. This can be considered a kind of passive income, but unless you’re investing big amounts, the return might not be that big. On the other hand, if you spend a lot of time on these apps and trade very frequently then the return may grow, but of course that means it’s less passive.
If you’re new to these apps and don’t know a stock from a teakettle, then we’d recommended doing some real research before diving in. If you’re still hesitant then index funds may be a good place to start. Index funds are normally a mix of stocks or bonds designed to match a specific financial market. Most of the time, you’re able to diversify your investment portfolio rather easily. That way, if one investment goes south, you can have other options to pick up the slack. As a bonus, these investments can typically be liquidated in 1-3 business days.
If you’re a bit of a gambler and are looking for more risk, high dividend stocks may be for you. High yield dividend stocks are those that have a higher yield than the benchmark average. If you consider this option, be sure to read the fine print and calculate your potential earnings. Some high dividend stock earnings cap at a certain amount.
To some, investing is just another word for betting, and no matter how “skilled” one is at reading trends, this is not a safe form of income. That mindset is totally understandable. If you want to keep your investment closer to home consider peer-to-peer lending. This is when you invest money and resources into a business opportunity you think has promise. Do you have a friend starting a business that you think has real potential? You may be able to support them and get a stock in the company. Plus, you can get a much better sense of a business and a person (especially one you’re close to) than you can a stock. If you choose peer-to-peer lending you may want to get a lawyer involved so you’re not making a deal based on word alone.
The form of passive income with the most earning potential is probably creating and selling content. The initial investment in creating this content of course isn’t passive, and may in fact take a lot of work. Once finished though, could potentially bring in more money than your regular job. Who knows? You could write a New York Times bestseller.
As online learning has grown in popularity so has the creation of online learning. Many online learning sites fill most of their libraries with courses made by everyday people. There are a plethora of sites you can upload courses to, each with a wide variety of subjects offered. This means the course you create could teach pretty much any topic, from psychology to water color paints. Your course doesn’t need to look like a Masterclass course either. You don’t want it to look lazy, but don’t spend too much time worrying about production value, and spend more time trying to be the best educator you can be. The more people watching your videos the more money you’ll make.
Another very common passive income stream is making money off of stock photos. Where do you think stock photo companies (Shutterstock, Adobe, Getty, etc.) get their photos from? If you’ve got a camera, you can add to their photo libraries. The one things here is, while this is a tactic that absolutely works, it takes quite a lot of time and effort to make any kind of substantial income. The major stock photo sites have millions and millions of photos. Those companies obviously can’t pay you a ton for each photo, they’d go bankrupt, which means the payment schemes these sites use aren’t super lucrative unless you upload a high volume of content. This may not be the most passive of incomes, but if you love taking photos, selling your pictures could become a great side-gig. Once you’ve accumulated a lot of photos on these sites, it could start generating a significant amount of money passively, so it’s a long game.
Any piece of content that you can make once and then sell has the potential to be passive income. That’s why sitcom stars are so stupid rich. They made a hit show decades ago and still make tons of money every time that show airs. It would be great if you could just “make a hit,” but you don’t need to create the next Friends to make good money. Writing a book that sells to a few thousand people can be a big deal, especially these days, as you can self-publish and keep the majority of the profits. If you’re not the most creative person, try writing a self-help book. They’re incredibly popular right now and if you read a few you’ll realize most aren’t very good. You’ve lived a life, write what you know and do your best to make it interesting. All you have to do is a fool a few people into buying it.
Passive income is, in many ways, an ideal scenario for making money. There are many routes to make significant passive income. Choose one and start heading there as fast as possible.