If you've been searching for ways to increase your finances in addition to your salary lately, you might have come across the term, "passive income," and wondered what exactly that entails.
Sure, it sounds attractive, right? The very idea of being one's own boss and not needing to spend too much mental or physical energy doing work, while making unlimited money, is every professional's dream—especially if you hate your job.
However, before jumping into how you can earn passive income and what passive income ideas are available for you to explore, it's essential to define what is meant by the term "passive income" and exactly what effort is involved.
What Is Passive Income?
Passive income occurs when you are making money from a venture, with minimal active involvement or ongoing effort on a daily basis. This affords many significant advantages, such as:
- Being able to have greater control over your time and energy
- Enhanced wellbeing and mental health
- Time to focus on building other larger-scale business ventures or explore other career opportunities
- Financial security and stability that leads to wealth-building for you and your family
- Risk diversification through having multiple income streams
Passive income side hustles or business ventures typically tend to have the key characteristic of scalability, which means, with some research and using the right tools, you can dramatically increase your earnings without a proportionate increase in effort.
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10+ Passive Income Ideas
For ideas on what high-paying passive income side hustles might work for you, you could consider any of the following as falling into the "passive income" category:
- Real estate investing
- Buying dividend stocks
- Airbnb rentals and experiences
- High-value item rentals
- Writing and publishing a book
- Blogging and vlogging
- Creating a course
- Enabling ads on your YouTube channel and X account (formerly Twitter) if you meet their threshold requirements
- Selling printables and digital art on platforms such as Etsy
- Stock photography
- Affiliate marketing
- and loads more
How To Create Passive Income In 2024
The problem is, many people have the ideas, but they are overwhelmed with them and don't know where to start.
For the purposes of this article, it would not be possible to go into detail about everything one needs to know to begin and launch their high-paying passive income streams, especially as the steps are obviously different for each venture, and can vary depending on your current circ*mstances, financial situation, and background.
However, there are a few essential, high-level steps you can take to build passive income that generates enough for you to even consider leaving your job:
1. Pick Your Idea
First, you'll need to pick an idea. This might seem simple, but believe it or not, this is one of the most difficult phases for most professionals seeking to leverage their skills to build passive income, especially if you are multi-talented, as there is so much to choose from, as is evident from the list above.
To simplify things, it's best to pick the idea that resonates with you the most, comes most naturally to you, and requires the least personal effort and financial expense, especially if you are short on cash and have little spare time.
2. Research
Second, you'll need to research it to understand what you need to get your passive income side hustle venture set up. You'll want to know if you're required to gain any extra qualifications, licences, or complete any preliminary steps to set up.
This phase is extremely critical to your success, as it can make or break the future of your passive income venture.
3. Choose The Right Model And Outsource For Passive Income
In tandem with your research, you should look into the most cost-effective software and means of making your idea truly passive, so that you don't need to be present from day to day involved in the operations. For example, if you decide to invest in property, you might opt for using a crowd-investing approach or use a property manager to handle the day-to-day, so you're removed from the daily operations.
4. Set Up The Infrastructure
Next, you'll need to set up the infrastructure. That means creating automations and an entire plan for how each step in the process would be carried out with the least involvement from you. For example, for an online course, you might decide to create a highly-optimized landing page, which funnels your prospects into a free session leading to your course. You would also want to include automated emails for every type of scenario possible, so you're not losing any opportunities or any money.
5. Reinvest For More Passive Income
Last but not least, don't forget to diversify your passive income streams. While being able to have the option to work your full-time job (or not) is the goal, you should not rely on a sole source of passive income, because you are then left vulnerable to market changes and could potentially end up in a worse position than if you were to remain working in a 9-5.
As your side hustle (or full-time venture) kicks off, reinvest a portion of the funds into your next passive income idea.
Repeat this pattern each time your passive income idea, and you'll find yourself the master of your own career, personal finances, and wellbeing.
