RuanDaveyIf you’re earning a good, steady income from your 9 to 5 job, why would you look any further?
Well, for starters, you know that deep down inside, you’ve always dreamed of having more from life – more money, more freedom, and more flexibility.
And, your 9 to 5 job requires you to put in heavy hours, so there’s no time left for friends, family, or health!
So you’ve heard of passive income, where you can literally earn income while you sleep, but how does it actually work?
This article will explain the difference between active and passive income, and I’ll share my top 6 passive income earning ideas.
What Is Active Income?
Active income is money you earn due to the work you do by “trading your time for money.”
Money is earned in exchange for performing a service. For most people, active income from a job is their only source of income.
Active income examples are your day job, freelancing, coaching, or consulting. In all of these, you’re trading your hours for money. There’s a limit on what you can earn, and very often, it depends on how many hours you are willing to work. Even as the manager or head of a corporate company, you are still reliant on a very often capped salary.
What is Passive Income?
Passive income is money that flows in automatically and regularly from a source or multiple sources other than a 9 to 5 job. The source of passive income is typically from an investment such as real estate or funds, or work completed in the past, that continues to make money without any additional effort.
The reason why passive income is appealing is that it requires little effort to continue making money.
Most of the work is done upfront, and then you only do a small amount of work along the way to continue earning it.
Examples are Affiliate sales commissions, investment returns, and selling your own courses or products online.
Many people think of passive income as a ‘get-rich-quick’ system. They think it’s a way to earn money for nothing, but the truth is, it still involves work.
The difference is you put in the heavy lifting work upfront. Once you have a successful passive income source set up, you can earn money on autopilot and do only a relatively small amount of work along the way.
For example, you may have to keep your product updated or your rental property maintained. If you have an online course, you just need to update the course content to keep the money flowing in.
So, which is better – Active or Passive Income?
Well, when it comes to creating financial freedom, passive income leaves active income in the dust.
Keep in mind, to continue earning active income, you need to keep working those heavy hours. If you quit, you don’t get paid. Your time equals money.
On the other hand, passive income doesn’t require you to work actively. And the money continues to flow in for many years.
So, if you’re looking to create your dream life where you are financially free, passive income is the way to go.
The amount of money you can earn from passive income is unlimited. Once you’ve taken the time to set things up correctly, you to sit back and enjoy the financial rewards for years to come.
Here are my top 6 passive income generating ideas
1. Affiliate Marketing
This is a great place to start for anyone who wants to earn passive income online. Essentially, you promote other company’s products and services in exchange for a commission. The great thing is, you don’t need to have your own products or services to get started.
There are thousands of online companies that run affiliate programs, and commission can vary between 3-10% for low-cost products or services and up to 25% or even 50% for high ticket commission items. Affiliate marketing can be a very lucrative and sustainable source of income, especially for companies that offer monthly subscription affiliate commissions.
It’s easy to find a company or product that is aligned with your particular field of interest.
The SFM teaches people how to get started online and how to set up their own affiliate business in a step-by-step way.
2. Trading the FOREX market using Expert Advisors (EA’s)
Trading the forex market using EA’s is one of the best ways to create your very own wealth-building strategy.
Three reasons why I love this method:
- You use powerful software called Expert Advisors (EA’s) that quite literally do the trading for you on autopilot. You set up your trading strategy upfront, and then the software does the daily trading for you.
- You leverage the old and powerful principle of compound interest calculated weekly to scale up your income over time.
- You can control risk through the EA settings.
In the past, trading in forex was reserved only for professional traders and those who understood the principles of technical analysis. Let’s face it, the thought of looking at a trading chart to buy and sell FOREX (or any market) can be pretty daunting to the average person.
But with the development of automated trading software, this has changed completely.
Companies like Aurora Prime provides access to EA’s and teach people in a step-by-step way how to start trading the FOREX market by using EA’s.
3. Dropshipping
Dropshipping can be one of the most profitable passive income sources you’ll find online.
Essentially, you source trending products from the AliExpress marketplace in China by using a tool called Oberlo.com and selling them to customers worldwide by listing them on Shopify.com.
Once people buy the products from your online shop, AliExpress delivers the product to your customers wherever they are in the world. You get a percentage of the sale.
The startup costs are relatively low because you don’t keep physical stock. Still, your advertising costs can be relatively high, because you focus on front-end marketing and driving traffic from Facebook or Google Ad’s to your digital storefront on Shopify.
4. Print on Demand
With Print on Demand, you sell your own custom designs using a platform like Printify.com onto various types of blank products such as blank t-shirts, hoodies, or mugs. Printify will then create a digital copy of your artwork on that T-shirt or product. Then you can place it onto your digital storefront.
When a customer buys that T-shirt from you, Printify will charge you the base cost of T the shirt (approx. $7-9) and the shipping charge (approx. $4), and you make the difference. One of Printify’s partner companies will then print that T-Shirt and ship it to your customer for you, wherever they are in the world.
5. E-Commerce – Amazon FBA
With Amazon FBA, you source and buy physical products from China or elsewhere and then ship them to Amazon’s warehouse for storage and fulfillment. Amazon lists your product and then sells and delivers them to Amazon buyers.
Because you need to buy and own the stock, your startup capital is higher than with drop shipping. Still, typically your profit will also be higher as you buy in bulk at wholesale prices.
The biggest advantage with Amazon is that you are leveraging its huge customer base of more than 200M customers/month!
So your focus is less on front-end marketing and more on sourcing products to sell online.
6. Starting a Blog
Blogging is a great way to earn passive income through affiliate links, courses, or sponsored posts.
While it does take quite a bit of upfront time and work to create a profitable blog, it is one of the most sustainable ways to generate an audience through organic traffic or by building an email marketing list.
The best thing about blogging is that it’s free! A good blog can be turned into several income streams through affiliate links or sponsored posts.
So if you’re looking for an easy passive income idea, which isn’t going to cost you a thing, then blogging might be the perfect option for you.
So there you have it!
My final tip is this – Don’t put all your eggs in one basket!
Learn the all-important rule in money – diversification. When it comes to passive income, pick more than one source of income but no more than three. Otherwise, you will be spreading yourself too thin.
Most of these passive income-generating ideas can even be done as a side hustle while keeping your full-time gig.
But some of these can eventually be used to far surpass the income from your 9 to 5 job, so you can finally get more than you’ve ever dreamed of!
Leave a comment below if you found this useful or let me know what you are already doing to generate a passive income source.
Contact me if you want to learn more about how to get started with generating your very own passive income source today!
