Passive income is any earnings you receive without having to work at a job. There are many types of passive incomes, but here are five that I believe every beginner should consider: rental properties, affiliate marketing, blogging and website design, stock trading, and Bitcoin mining. These all require different levels of investment on your part but can provide anything from small side-income to a real living wage with just one or two hours per day spent working on them.
What is Passive Income
Passive income is any earnings that come without having to work. There are many types of passive incomes, but here are some of the most popular types: rental properties, affiliate marketing, blogging, and website design, stock trading, Peer to Peer lending, and bitcoin mining.
The first step to passive income is discovering your passion. Maybe you love cooking, so you could start a blog about it or find another way to monetize your hobby. You may be really into cars, so you could create an online marketplace for car parts after hours on the side. If you’re good with computers, then maybe freelancing would be a good choice for you or real estate investing if you have enough capital to get started.
The second step is figuring out what you’re good at and how you can use that to create a passive income. Maybe you have a great way of growing plants, or you could start an online business where you take people’s outfits and sell them through your eCommerce store. Once you determine the right industry for you, it’ll be much easier to find ways to make money.
Types of passive income
Passive income can be classified in many different ways. The most popular distinction is the difference between earned and unearned passive income. Earned passive income is money that earns itself with little to no involvement on your part, such as rental incomes if you’re a landlord. Unearned passive income is money you work for but doesn’t necessarily come your way until later, such as affiliate marketing or Bitcoin mining.
There are also different types of passive incomes, typically influenced by the effort required to generate them. The more effort required, the higher the return per hour spent working on it is likely to be. “Rental properties” would be the easiest type of passive income because all you have to do is maintain it and collect rent from those who live in it. “Blogging” is a more complicated task as you have to post articles on a website, update them frequently, and market your business to drive traffic. This takes much longer than just having a single rental property, but the return per hour spent working would likely be significantly higher.
Rental properties are a good type of passive income for beginners. It is a very popular choice amongst those who have little to no experience in real estate investing. It’s simple and doesn’t require a considerable investment, but you’ll need a down payment and a hefty monthly mortgage payment to pay off. You also have to keep it maintained, which takes time from your day. However, the rental income you receive can be significant depending on how much money you invest into this property and how much work you put into maintaining it. If you’re not afraid to put in a little effort, rental properties can be an excellent way to make money while building your passive income stream over time.
Affiliate marketing is where you become an affiliate for a business by providing them with traffic or customers, and they give you a commission based on what they sell. This is an excellent passive income because you don’t have to wait for your money.
You only need to work when you can generate traffic or customers, whether through social media accounts, SEO efforts, blogging efforts, anything. Some of the biggest affiliates are Amazon, Shareasale, and impact.com. Once you put the effort in once, it will continue to come indefinitely as long as there is market demand for the product or service you are selling.
Blogging and Website Design
Blogging is a very popular type of passive income. It takes time to build up, but it can be a powerful platform for selling goods and services once you get the traffic coming in, which, over time, should become more accessible and more manageable as long as your blog continues to grow and improve.
Let’s break down the main components of blogging and what it takes to make money through this channel. The first component is your website or blog itself, which you are monetizing with every post that gets published on it. Your platform needs good SEO, allowing other internet users to search for your site easily; the more targeted traffic you get, the better.
You also need to create valuable content that is going to keep making people come back for more. This means you need to find a specific topic, identify your target audience, and write valuable, interesting articles that those readers will enjoy reading. Your website should demonstrate authority in this niche, making it easy for other internet users to trust your recommendations over others who are not as knowledgeable on the subject.
You also want to make sure you are including affiliate links in your posts which, when clicked, track any sales you make and give you a commission based on your visitor’s purchases.
The third component is traffic and how much of it you get. Social media accounts like Facebook and Twitter can be great ways to get targeted traffic to your blog. SEO blogs post a new article regularly, including a small snippet of code that displays ads from an affiliate program you signed up for, so any click-throughs will give you a commission.
Any visitors you have should be taken to a landing page where they convert by either signing up for email updates or leaving their contact information in exchange for the ebook you offer. If you can get traffic to your blog and keep them coming back, you’ll begin to build up a passive income stream over time. Just make sure your blog is always improving with age so you don’t lose out on valuable SEO positions, which could lead to lost traffic.
Stock trading is very time-sensitive and comes with high risks, so it can be a volatile passive income form. It requires a lot of research, patience, knowledge, and experience to get into the game, but if you know what you’re doing, then you can see some lucrative paychecks every month or year. You can’t just jump into the stock market and hope to make a good investment. You need to educate yourself and learn how it works before you start putting your money at risk.
One of the easiest ways to get started is through an online brokerage like E*TRADE or Scottrade. These websites allow you to open up a brokerage account, make an initial deposit, and then you can start buying stocks or mutual funds right away. If you want to take your investing career seriously, you must make sure your plan is realistic. Don’t overextend yourself; don’t put all of your money into one stock that could tank within a few months. It’s essential to invest using a solid strategy. If you don’t have one, take your time to plan things out before you start taking risks with your money.
It’s also important to stay flexible and open-minded when it comes to investing in the stock market. The market is always changing, which means opportunities are constantly arising, which can help increase your income depending on how quickly you react to a new opportunity. Being able to make the right decisions quickly and understand how the market works will help improve your chances of making money. You also need to make sure you have a backup plan if things don’t go as planned, but these risks come with big rewards, which can be highly beneficial to your bank account.
Bitcoin mining is essentially using computing power to process Bitcoin transactions. It’s a very high-risk investment because it’s hard to know when mining will become profitable or not. Mining difficulty is constantly increasing, making it harder for your computer to solve the cryptographic problems necessary to make a valid block and earn Bitcoins.
The only way to properly mine bitcoins is to either get a large amount of computing power and get in on the largest mining pools or buy an ASIC machine, which is currently the fastest way to mine bitcoins. You can determine your estimated cost per kilowatt-hour to determine how much money you’ll be spending on electricity each month for this investment to be profitable. It’s also important to know that Bitcoin mining is very time-sensitive. Every 2016 blocks (solved Bitcoin transactions), the difficulty of mining increases by about four percent, which means you will make less money than the previous period unless you invest in more computing power.
If this sounds like it might be something you want to get into, make sure you do a ton of research first. It’s important to understand everything there is to know about Bitcoin mining, the different hardware options available, and the opportunities for growth in this market before you start spending your hard-earned money on it.
Peer-to-peer lending involves loaning out money to other people in a format that’s more like an investment than a traditional loan. You use a website like Lending Club or Prosper to connect with borrowers who are looking for fast cash, and you can earn a return on the money you’re investing while helping someone get out of debt.
In peer-to-peer lending, there is always an element of risk, but it’s relatively low. Before you invest with Lending Club or Prosper, there are many factors to consider, but they can provide a good return on your money. It’s important to remember that you won’t get back the same amount of money if you decide to invest in peer-to-peer lending instead of a CD, but the return is much higher, and you can earn around four percent in this market.
Passive income opportunities for beginners. While they may not be a quick way to make money, these three examples can help you earn an additional monthly or yearly income with relatively low risk and investment–whether it’s bitcoin mining, peer-to-peer lending, or investing in stocks. If you’re interested in passive income that comes from different sources than your traditional job, where there is always the threat of losing your source of income because of factors like layoffs and financial difficulties, consider diversifying into one (or all) of these methods today!