Five years ago I decided to do everything I could to become my own boss. It was then that I was fired from my full-time job. The decision meant that I could develop myself professionally and take on more freelance activities. But it also meant that somehow I had to earn passive income every month.
Then and now it was out of the question for me to buy a property and rent it out – although it is supposedly one of the best ways to generate a passive income. I didn’t have the money to invest in buying a home and I didn’t have the time to manage an apartment to rent. I knew I had to find other ways to make the idea of passive income a reality.
The catch with passive income is that it fluctuates. In some months I make more money from it than I make from my business or freelance work. In other months, I barely earn enough to cover my grocery bills. So, from my point of view, it is only suitable as one of several ways to make money every month.
Over the years, I’ve found five ways to have passive income ranging from a few hundred dollars to over $ 1,000 each month. This is my strategy:
1. I let the money work for me and earn from the interest
When I first heard the sentence from a friend, “You have to let your money work for you”, I pricked my ears. I had no idea what that meant or how to do it. Today I know: One easy way to earn a passive income is to think carefully about investing.
One of the best ways to do this is to choose a high interest savings account or keep the money in a fixed income savings bond. With the latter, you should pay attention to the runtime. Interest rates tend to be higher if you choose a two or five year term over a six month term.
I switched my money from a savings account with an interest rate of 0.01 percent to a savings account with an interest rate of 1.6 percent (although the interest rate has since decreased). This allowed me to earn compound interest every month, which increased the money in that savings account. In five years my fiance and I made about $ 15,000 in interest on our high-yield savings accounts together.
2. I give online courses
After working as a business coach for companies and individuals for several years, I decided to bundle my knowledge and skills in online courses.
These courses cost between $ 99 and $ 150, making them an affordable option for people who want to work with me but are unable to spend the money on a one-on-one session.
Offering these courses is very complex at the beginning. You need to plan the course and record the videos. But once it’s live and you have a solid marketing plan, people come into the courses and sign up monthly. Once a user signs up for the course, there is practically no work to do on my side, so this income is passive and ongoing.
3. I benefit from affiliate marketing
Another strategy is an affiliate model. While it typically makes less than $ 100 a month, it is still a passive income.
For example, if you sign up for Amazon’s partner program or the RewardStyle program, which is popular with lifestyle bloggers, you can earn a percentage on every sale you refer. I often share books I read with my email subscribers and use my Amazon affiliate link when linking to the product. If they click on this link and decide to buy the product or something else while they are shopping, I will earn a percentage from it.
Of all the other strategies, that brings me the lowest income. But it grows as my audience gets bigger.
4. I sell e-books
Another strategy are e-books that I sell for download and that interest my audience thematically. I’ve listed these books on my business and personal website for around $ 15-30. Customers like to opt for this cheaper item (as opposed to courses or coaching), and that leaves me room to win them over to higher-priced products in the future.
The other benefit of an e-book is that once you’ve spent the initial time writing and assembling the book, there is practically no need for any further supervision. Once people find the book and buy it, you will earn passive income.
5. I invest in dividend stocks
One new strategy I’ve turned to lately is investing in dividend stocks. These are securities of companies that regularly pay dividends. I look at established companies that already have a track record of distributing profits to their shareholders.
I invest in stocks with a dividend yield of three to five percent annually. Since I haven’t invested a lot of money in these papers, it’s unlikely that I will bring home a lot of cash in the form of dividends each year – but every little bit of passive income matters to me right now.
This article has been translated from English. You can find the original here.