2020 brought many challenges and forced the majority of us to pivot and work online, with many people looking into ways how they could make a passive income.
Earning a passive income can be life changing. It literally means you can make money as you sleep – who’s not up for that?! I have actually been earning a steady passive income since 2015 without barely lifting a finger. This passive income has enabled me to give up my well-paid job in Central London, live abroad and travel long-term without having to dip into my savings or worry where my next meal was coming from as I had guaranteed money coming in every month. It’s not to say if you earn a passive income you have to give up your day job though – many people choose to earn it on top of their salary as a neat way to earn extra money, and for a few years whilst I was working as a Flight Attendant I did that too.
To be able to earn a passive income and have financial freedom is something that is desired by many. However many people don’t understand ways you can create a passive income. In this article I’m going to show you how you can make it possible for yourself.
But first, what is a passive income?
What Is A Passive Income?
To have a stream of passive income means you can make money from something that takes very little effort to maintain. Don’t be misunderstood though and think that you don’t have to do any work to bring in a passive income: you will need to make an upfront investment in time and/or money. The hard work is put in at the beginning.
A while after the initial upfront investment the hard work will start to pay off as an income stream starts to come in. It may be slow to begin with and it may take a while before a return in investment is seen, but eventually this income stream is able to maintain itself, enabling you to earn a fairly consistent revenue without much effort required from you.
All forms of passive income require either an upfront investment in time or money. Often they require an upfront investment in both.
You cannot earn a passive income without being willing to give at least one of the above.
Whether you have residual money or have some spare time on your hands, if you put in the effort it is possible that you can start to earn a passive income.
Misconceptions About Making A Passive Income
- It is easy
- You will earn money straight away
- The income is consistent every month
It is true that some forms of passive income are a lot more profitable and easier to set up than others. Also some forms of passive income will start to make money fairly quickly, whilst others don’t start to see a decent profit being made until one year or more down the line.
And depending on the type of passive income chosen, the income can vary greatly each month due to user demand (for example if you have an online Christmas digital product or you have a holiday home that is only suitable for renting a few months of the year).
HOW TO MAKE A PASSIVE INCOME ONLINE IN 2021
Most ways of creating passive income online don’t require a huge upfront monetary investment which is great. Instead, they do require a huge investment in your time at the start to get things up and running.
Create A Website
One of the best ways to make a passive income online is to have your own website. When you have your own website you have the potential to make a passive income through several different ways such as on ad networks, affiliate marketing and selling your own digital products (read more about all these below). You will need to put time and some money into starting your own website at first, but this can be one of the most successful long-term ways of earning passive income!
The upfront fees for starting a website are extremely reasonable – you can create one for less than $4 per month if you choose the popular company Bluehost as the hosting provider for your website! Click on the banner below to start creating your own website now!
Monetising through ad networks
Once you start to get a decent amount of visitors to your website this is when you can start to make money through ad networks advertising on your site. Ad networks pay you to let them advertise relevant products and services on your website and you can make several hundred dollars per month or more with this method of passive income alone! It is one of the most stable forms of income each month for many bloggers.
If you have 10,000+ website viewers per month you can make money through advertising with Ezoic. Click on the banner below to apply for their affiliate network!
If you have 20,000+ viewers per month you can apply to the SheMedia advertising network, or if you have more than 50,000+ readers per month to your website you can apply to Mediavine advertising network.
If you are thinking to create a blog or have just started one lately there are some big mistakes you need to avoid if you want to ensure you have a successful blog and earn passive income quicker – click here to read more!
Affiliate marketing is basically when you partner with a company to become their affiliate and whenever someone who you refer to them makes a sale, you make a small commission. You are basically the salesman – the middle man promoting the product. Affiliate Marketing is most successfully done through blogs or websites, which is another reason why it is a great idea to start your own website!
It can take a while to build up sales, but in turn it can even lead to a full time passive income all on it’s own! If you don’t have a website you can still do affiliate marketing via your Social Media channels such as Facebook or Instagram, but it might be harder for you to get accepted by some companies as an affiliate as many prioritise those with websites.
To join an affiliate program the easiest way is just to type it into Google. For example if you want to join the Bluehost affiliate program just type in “Bluehost affiliate program” into Google and you’ll be taken to the affiliate page. You can then just sign up. If your website seems like a good fit for the brand they will accept you onto their affiliate program.
Sell An Ebook
Selling an ebook is a really good idea for how to make a passive income online. And once you have written the book is it actually very easy to start selling it! The great thing is that you don’t even need a publisher as you can just go through Amazon’s Kindle Direct Publishing. You also don’t need your own website to promote your book – although if you do have a website that’s great as you can also sell it and advertise it on there which will bring in more website views.
If the idea of selling an ebook appeals to you, think about what your expertise are. What information do you have and what information do people need? What questions do people have that you have the answers to? Are you able to put this knowledge into a book you can sell online?
There is so much free information available on the internet these days that you need to think carefully before you just dive in and start writing an ebook. You need to do your market research – are people actually looking for this information? Can they already access this information easily online for free? Are there already lots of ebooks out there that teach the same thing? There is no point creating something if there is no space in the market for it.
Like creating a website, writing an ebook will take a lot of time for you to create and it is a big upfront investment in your time. But once it’s done it is a great way for you to make money with minimal effort. With digital products like an ebook however don’t expect it to be an overnight success. You will also need to do a lot of upfront marketing to promote your book to your audience!
Create A Course
If you’re highly skilled in a particular subject and are better at explaining things and speaking to the camera as opposed to writing your knowledge down in a book you should think about creating an online course as a way to make a passive income online. Perhaps a photography course, a web design course, a digital marketing or social media marketing course, a course on how to successfully create a blog, a sewing course, a cooking course, a podcast creation or freelance writer course. Heck there’s even courses on ‘How To Create A Course’! The possibilities are endless – you can literally make a course on anything these days!
Some of the best platforms on which to create online courses are Udemy and Teachable.
If you are looking for some online course creation classes there are plenty on Skillshare – click here to get FREE access!
Sell Your Own Digital Products
Selling your own products on your website or on sites such as Etsy is another effective way to make a passive income online. I love Etsy as you can sell digital products on here such as digital downloads of your art for people to print out and hang in a frame on their wall. The benefit of selling digital products like this is that you don’t have to print, package or ship your products – you just send a digital file of the product by email, the client can instantly download it and then they do the rest!
You can of course sell physical products where you ship the product to the customer but this just means more work for you. The advantage of the digital product is that the customer will get it instantly (great if you are in a different country or travelling a lot). Also if you are selling a physical product it means you have to have it there with you to be able to physically send to the customer. And if you sell a lot of products it means you have to have them all available! Personally this just wouldn’t be feasible for me as I am travelling a lot so wouldn’t have space to bring all the products around ‘just in case’ someone buys one whilst I am away. So selling digital downloads is perfect if you are travelling around a lot and it isn’t practical to have physical products with you all the time!
Apart from digital wall art you can also sell things like digital monthly planners. If you are good at designing things Etsy could be a great way for you to make some money.
If you have your own website you can also set up your own shop through WooCommerce fairly easily.
Sell Your Photos Online
If you enjoy photography and take good quality pictures why not sell some of your photos online to earn some extra cash?
Companies, magazines and websites are always looking for stock products to buy online, so this can be a great way to make some extra passive income. Upload your photos to a stock image site, then each time someone purchases one of your photos you will earn some money. The same photo can even be sold again and again – it isn’t just a one time purchase.
You need to be careful not to sell yourself short though – sure it may be great to make $50 from a photo now, but imagine if a huge company bought your image and it was posted all over billboards in New York. You wouldn’t get a single cent as you sold all your rights to the photo when you put it on a stock photo website. Just make sure you are happy with the price you are selling it at.
There are some stock image sites that don’t pay much for your photos so you want to make sure you avoid those. Websites like Deposit Photos, Shutterstock and EyeEm are good websites where you can sell your photos for a decent amount of money – sometimes for a few hundred dollars per photo.
Start A YouTube Channel
Nowadays most people will prefer to watch a video as opposed to read an article for the same amount of information as it requires less effort on the consumer’s part. Video is quicker and often more effective and people can retain the information better. It can also appeal to a much larger audience as language is less of a barrier as video content is visual. Video is the way forward, however much us traditional writers hate to say so.
Starting a YouTube channel can be a great way to make a passive income online. You’ll need to create engaging videos and post regularly, and soon you’ll start to get views and people subscribing to your channel. Once you have over 1,000 subscribers and have had 4,000 watch hours in the past year you can apply to join the YouTube Partners Program and start monetising your channel!
YouTube has been on the back burner for me for ages as I wanted to get my income through my website stable and consistent before I branched out and focused on YouTube properly. It is always best to establish yourself in one area first and monetise there, as opposed to spreading yourself too thinly and therefore not making any money.
Like a blog, with your YouTube you’ll need to put a lot of time into it and still need to keep updating your channel and adding fresh content – you can’t just do all the work at the beginning and then do absolutely nothing later on just because you are making money! But it is a great little earner and videos can become a passive income earner for you for years! You can create videos on whatever you fancy – there are a million different options! With video content you can really go very niche or really broad on your content – it’s up to you!
Creating content on a YouTube channel is a good alternative to creating an online course if you aren’t confident people would be willing to pay for your content straight away. You could always start on YouTube, build a name and some authority for yourself, then take it from there if the demand is great enough! Creating YouTube videos with yourself in is a great way for your audience to get to know you and build a relationship with you, thus beginning to form trust. This will then make it easier if you decide to sell products later down the line as people will like you and so will want to buy from you.
Create An App
If you have a great idea for an app, why not think about hiring a programmer who can develop an app for you. You can find developers on Fiverr for very reasonable prices. Once the app is developed you can sell it to the App Store and earn passive income from it.
Create Your Own Clothing Line
Sometimes the thought of releasing your own clothing line sounds pretty tempting right? But all the designing, printing, packaging, shipping and promoting seems a bit overwhelming. Especially if you will be away on holiday or travelling for a few weeks – who is going to take over it then?!
Enter Merch by Amazon. They specialise in custom designed t-shirts and will take care of all of the above. For free. All you have to do is design what you want on the t-shirt! You’ll make money on every t-shirt sold, and as it will be sold on Amazon you’ll be able to reach so many people!
OTHER WAYS TO MAKE A PASSIVE INCOME:
If you are not keen on the online aspect of making a passive income, you don’t have that much free time to spare or you are just looking for easier ways that you can instantly start making a passive income with the resources you already have, here are several suggestions.
All of the below ways to make a passive income are ones that require you to invest the money upfront. This will then lead to you generating passive income. The good thing about these passive income streams however is that with most of them you will probably have already made the investment which will mean it is quick and easy to set up and start earning a passive income.
PASSIVE INCOME IDEAS THAT REQUIRE AN UPFRONT MONETARY INVESTMENT
Rent your property
Renting your property is one of the easiest and most profitable ways to make a decent steady passive income. Whether you are lucky enough to own several properties, you have a buy-to-let property or even if you just have the property you live in, you can still make a passive income through it. And you can choose whether to rent it for long term (6 months+) or short term lets (a few days or a couple of weeks).
Short Term or Long Term?
Short term letting is more profitable as you can charge more per night, but the money can be less steady as it isn’t guaranteed you can always get bookings. Long term letting on the other hand is much easier as you don’t have to keep finding new bookings for your property every few days, as well as making sure the property is cleaned and ready in between visitors every few days or weeks.
If you have a vacant property or spare room that you won’t ever need (ie: for guests) then letting your property long-term is a lot easier. If however you don’t want people full-time in your spare room on your vacant property (for example you like to use it as a holiday home every couple of months) then short-term letting is more suitable for you.
Renting Just A Spare Room
If you live in a 2+ bed house or apartment, you can rent out the spare room in your home easily. Obviously you don’t make as much money compared to if you were renting out the whole place as the tenant will be sharing the communal spaces with you, but it is still a great way to make a few hundred extra dollars each month. The money will really start to add up, and the money can sometimes even cover the cost of your monthly mortgage payments!
Most people nowadays prefer to advertise and select rental properties online from websites such as the ones listed below:
If you only want to do short-term lets and don’t want someone permanently living in your property, why not think about advertising it on Airbnb. Whether it is just your spare room or your whole home, Airbnb is a great way to make a little earner.
With Airbnb you can even rent out your property whilst you go on holiday if you wish! This way you get to make some money when your home would be vacant anyway! You’ll need to make sure the dates match up and you (or someone else) is available to meet them for the handover of the keys, but doing this could actually cover a lot of the costs of your holiday!
Vrbo (previously known as HomeAway) is another great place to advertise your property. Like Airbnb it is perfect for short term holiday rentals.
Spare Room is a fantastic website for renting out your property or a room in your home if you are based in the UK or USA. It is generally used for longer term letting as opposed to the above two websites, and is generally used to rent spare rooms and not a whole property although you can still advertise whole properties on the website. It is generally used by young professionals and millennials and one of the great things about it is that you’ll find people looking for properties a few months in advance, as well as people looking last minute for properties.
Rent Out Your Car
Are you using your car less now that you don’t have to drive to the office every day? Why not consider renting it out for short periods as a way to easily make some extra cash! Not only that but you can make money by referring it to your friends and family!
Car Next Door has a great Refer A Friend program where if a friend signs up and books a car or rents their car out within 30 days they will receive $15 off! Plus you will also get $15 for referring them! Click here to start with Car Next Door! You can choose as and when to rent it out so it fits round your schedule, and your car is covered by insurance so no need to worry.
Rent Your Camera Equipment
If you aren’t using your camera equipment often, why not rent it out to make some extra money as opposed to just letting it sit in your cupboard! Kyoyu is an Australian company where people can hire out Canon camera equipment – whether it’s the camera body, lens or accessories. You can rent out your equipment for a set price each day, and the process is very easy. Click here to visit the Kyoyu website.
Cashback Rewards Cards
Lots of credit cards provide cash back schemes – meaning for every purchase you make on the card you can earn a small percentage back! Even if you are someone who doesn’t go clothes shopping or dining out a lot this is still worth getting. You’re going to be shopping anyway right – for your groceries, bills etc, so why not earn some money back in the process?! This way you can earn some ‘passive’ income (as you are saving money on your outgoings).
Just make sure you understand how a credit card works before you get one. Only spend within your means so you can definitely pay the full amount back every month. If you can’t pay it back you’ll be charged a lot of interest which will far outweigh any savings you make on the cash back and you’ll be financially worse off.
With the cash back rewards cards you can then use the savings you have made to get money off flights, hotels or just get the amount saved paid back into your account. This is such an easy way to make some money!
Put Your Savings In A High Yield Savings Account
If you have some savings, High Interest Savings Accounts are a really great way for you to make a steady passive income. You don’t have to think much about it and it will just be making money in the background! High Yield Savings Accounts with banks are a safe way to generate a passive income.
Invest in The Stock Market
Stocks are something that go way over my head, but they are definitely a good way to make a passive income. I know many friends and family members who make money through stocks. You will need to do your research well, and generally unless you invest a large amount of money you won’t make a significant amount of money so it is all relative. However even if you only invest a small amount into stocks, you can consistently make a good passive income over time.
Remember the Avon lady that used to call around the house trying to convince you to buy some beauty products? She was doing network marketing – also known as multi-level marketing. By getting into Network Marketing and building your own team beneath you, you can earn a passive income as you’ll make commission off the sales of everyone in your team! The larger your team, the more commission you’ll make and the less work you will actually have to do to make a decent income!
OTHER WAYS YOU CAN MAKE MONEY ONLINE:
These ways to make money online aren’t so much passive, but they can definitely help you if you have found yourself now without work and are looking for a new way to make money. The great thing about the suggestions below is that you can do these jobs from anywhere in the world.
Teaching English Online is a popular way to make money. In my spare time I enjoy teaching on Cambly, which is a really great platform as you don’t have to commit to set hours each week – you can just log in and out whenever you feel like it!
Lingoda, Whales English, VIP KID and English Class 101 are also good sites where you can make an income teaching English but I really liked how easy it was with Cambly to choose my hours each week and reserve my favourite students. You can choose which level of students you would prefer, and if you would rather just do conversational practice (a lot easier) or do more structured lessons.
No lesson prep is required beforehand and payment is done through Paypal every week which is really convenient. Generally with Teaching English you will need to be a native English Speaker and need to hold a TEFL certificate, but many sites like Cambly let you teach without one which is great so you can start teaching straight away once your application has been approved! Click here to apply to become a Cambly tutor.
The great thing about teaching English online is that you can do it from anywhere in the world and at any time of day! So whether you want to do it for a couple of hours in the evening, or teach for a full day you can. With Cambly you can literally teach at any time of the day and there will always be students waiting to have a lesson with you!
Other Teaching English sites do pay more (Cambly is on the lower end of the pay scale) but you have to commit to dedicated hours and students every week so the flexibility is reduced.
Social Media Manager
Many companies these days need to outsource their Social Media to someone experienced in social media networking and advertising. If this is something you have knowledge and a passion for you can easily advertise yourself as a Social Media Manager on Fiverr.
Pinterest Virtual Assistant
Contrary to popular belief, Pinterest is an invaluable source of gaining traffic for your website and many website owners are really keen to outsource the job of creating pins and pinning to Pinterest. You can also advertise to be a Pinterest Virtual Assistant on Fiverr and the great thing is that you really don’t need much experience to know how to do it.
I think you can tell by now: Fiverr is an amazing site on which you can sell your services and personal skills online to create an income. If you have knowledge about website design you can find plenty people who are willing to pay you to redesign their website for them. Click here to head to Fiverr and sell your services online!
Find Housesitting/Petsitting Jobs Online
Housesitting actually enabled me to live and travel around Australia for a whole year without paying for accommodation and I really recommend it if you enjoy looking after animals! Basically when people go away on holiday they get a house sitter in to look after their pets. It is a lot less stressful for the pet than going into a kennel as they get to stay in their home environment. And you get somewhere free to stay.
You don’t need to go abroad just to do house sitting though – many people house sit in their local area. Some even rent out their apartments or houses whilst they are off housesitting so they make even more money that way! House Sit Match is a great website to use, or click here to save 25% off the Trusted Housesitters membership fee.
As you can see, there are a wide range of ways to make money passively and online. It can be scary having to be your own boss and be accountable for your own actions, but it is a great way to get on the path towards financial freedom. If there is anything you need any clarification with or need some more advice please don’t hesitate to drop me a comment and I will do my best to help!
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