People confuse passive income with the money earned just by sitting around idly. While a part of it is true, it is a misleading definition. Passive income is a source of income that is not directly tied to your time. For example, an employee earns money by putting in 40 hours a week in an office. Every day that they decide not to work leads to a deduction from their salary. What if you could earn without putting in fixed hours continuously? Something like growing a tree requires initial work to ensure that it is healthy and bears fruit in the end.
So, passive income is a form of income source where, once you set up everything, you can leave the source on autopilot with minimal interruptions. So, what are some ways to earn passive income? Let's look at the most popular passive income sources that you can start working on today and potentially earn a handsome amount of money with dedicated efforts. Does that make sense?
Passive Income Sources to Earn From in 2023
Investing means putting your money into various financial instruments to earn an income due to interest or value appreciation. You start by picking the alternative to invest in crypto, FDs, mutual funds, stocks, etc. Depending on your income and risk appetite, you can select a channel to invest and earn a passive income. The biggest issue with this option is that you need money to get started. Also, there is a chance to lose all your funds in case of loss or a market crash. The safest investing option with moderate income potential is SIP, where you invest your money into a bunch of top companies to generate assured income. Certain channels as stocks require constant monitoring and juggling around them. You can pick a channel based on your convenience factor and how much time you are willing to invest.
Content creation is one of the most booming income stream options. People use it as a proper and only source of income as well. However, if you don't have time, with restricted hours, you can build a content library to earn without having to keep creating content. There are multiple platforms on which you can create content and aim at various content formats- videos, audio, texts, etc.
YouTube involves creating video-based content. You could pick a niche and start creating content. However, the money doesn’t come instantly. It takes about 1000 subscribers and 4000 watch hours to start getting paid. But, once your channel picks up the traffic, you could earn even with reduced time allocation. The income starts from as low as $100 (₹8000) and can up to lakhs as your channel grows. It takes 3-4 years for some people to start earning, while some channels boom within a few months. The core idea is to offer valuable content that either educates or entertains the audience.
Content creation on social media could include both video and image formats. You start by picking a desired social media platform to build an audience. You do this again by offering valuable content. Once you build the audience, you can monetize them in multiple ways. It could be by selling digital products, sponsorships, etc. Each platform has a dedicated content format and algorithms. You need to understand the audience, their needs, and their algorithms to survive in the competitive content creation industry.
Blogs have been a great way to earn passive income for ages. If you think you can write about a particular niche, then you should opt for blogging. You will need to buy a domain and build a website. It would not cost you a lot. But if you want cheaper alternatives, you could start on platforms like Medium, where getting started is easier. However, you will be dependent on a third-party website for user information and also income potential reduces. With a proper website, you can leverage Google Adsense to earn. Also, collaborations or paid sponsorships act as a great income source for blogging.
Affiliate marketing is promoting someone’s product in exchange for earning a commission. Now, this one requires audience building in the form of a community or group of people who purchase from your recommendation. You earn a small percentage, depending on the product and terms, for each purchase. Now, some companies pay for each referral, while others pay for each purchase. For products with a subscription model, one might earn a consistent commission as long as the consumer stays with the company. If you have a great network to sell affiliate products, you could start earning quickly.
The podcast is an audio-based content creation channel. Here, you create audio-based content to entertain or educate your audience. Start by picking the platform to upload and start your podcast, which can be Apple, Spotify, Google, or any other desired one. Again, the main aim is to build an audience, that can be monetized with time to earn a passive income. Like other content creation channels, it takes time to monetize your podcasts. You need to build a strong and loyal audience base.
Sell Digital Products
Selling digital products is a way to earn a passive income as well as the most popular way to monetize your audience. Often many content creators create some digital product to earn a passive income on the side. It requires a one-time effort and gets paid for each sale. For instance, if you write an ebook in a niche in which you have expertise. Then every time the book sells, you earn without having to actively sell. You might need continuous promotion to create demand and awareness, but nonetheless, it is a great way to earn without having to toil yourself all the time. Now, you could deal with four major categories:
- Info Products: Info products include ebooks or other resource material in digital format to educate the audience. You will need to start by deciding the core topics of the info product- what will you talk about? Then, after the completion of info product creation, you decide on a platform to sell your info product. It is advisable to set up a website and sell products to avoid commission cuts.
- Courses: You can sell courses on many platforms such as Udemy. Look for niches where you can add value for the audience and create a course. Decide pricing for your course that people will be willing to pay. Finally, promote your product, which is crucial for each digital product to inform and motivate the target audience.
- Templates: You can create and sell templates on Gumroad and other platforms to earn income. For instance, there are templates for budget allocation, preschool shopping, dairy writing, and much more. You simply need to analyze the need of the customers/ audience and create a product. One thing to notice, third-party apps like Gumroad cut commission fees for each sale.
Resell Retail Products
Reselling or flipping products with a profit margin is a great way to earn a passive income. You will start by deciding the market and target audience, to whom you will sell. After this, you finalize the products and vendors for procuring and selling these goods. Now, this is an active income source. If you wish to convert it to passive income, you can create a dedicated website for easy ordering and sell effortlessly. This way you will set systems in place and can earn passive income.
Another option that a lot of students and married or unmarried housewives opt for is teaching or tutoring. You could teach the children in the locality depending upon your educational qualification. It requires a limited 4–5 hours a day and pays really well. However, this requires a direct time investment. You earn only as long as you teach, which keeps you hooked on the job and doesn't give much flexibility. So, instead, you could opt for platforms that allow you to record and deliver lectures.
You can get paid to click, upload, and sell your pictures. Some websites pay you to upload and help you sell your pictures like stock images. So, if you click good-quality pictures, you can earn a side income by selling pictures. You don't need to continuously keep updating and uploading pictures. Instead, once you put it on the respective website, you can earn it every time someone buys and uses the image.
You could sell pictures (animated or not) on many websites, like Canva, Adobe Stock, Crestock, Fotolia, Freepik, etc. You earn about 40% royalties on the photos, depending on the platform. Some platforms offer a flat rate of, say, $2.5 per download of the image. These numbers are evolving, and the income potential is variable. Depending on the platform and the kind of pictures you upload, it can vary.
Google Adsense is the ads you see on Google and YouTube. For each click, the content creator of that page earns an income. Now, you can earn an income from Google AdSense by creating content on YouTube, writing blogs, or running a website. Google Adsense displays ads along with your content. If people click on it or make purchases via that ad, you earn for each view or purchase.
Selling notes is one of the easiest ways to earn money, especially as a college or high school student. If you already have your notes, all you need to do is merge and compile them into a comprehensive and useful resource. However, you need to keep a decent price point for these and find students who buy these notes. Generally, it is easier in colleges due to an identical syllabus across universities. This way, you can earn passive income by creating notes once and selling them year after year.
So, with all these sources, you can start early to earn money on the side and gradually make enough money to sustain basic needs. Many people rely on these as their source of living. If you are starting early or on the side, it can be great to try out multiple things to pursue them later in the future.
So, of all these, which one should you pick? Of course, interest in a particular field matters a lot. Apart from that, look at these three factors to decide which field to go into: income potential, entry barrier, and maintenance. Does the field give you enough money to sustain your needs and your income goals? Is it easier to get started? Will I be able to continue this in the long run in the future? If the answer to all these is yes, then you can pick an income source to get started. One thing to remember is that you can only earn money by providing value. No matter how easy or hard it is to start or how much you earn, if you don't provide value, you will not sustain for long.
What is the best passive income source?
The best passive income sources include:
- Content Creation
- Google AdSense
What is affiliate marketing?
Affiliate marketing is promoting someone’s product in exchange for earning a commission. You earn a small percentage, depending on the product and terms, for each purchase.
Where can I sell pictures online?
You could sell pictures (animated or not) on many websites, like Canva, Adobe Stock, Crestock, Fotolia, Freepik, etc.