As opposed to active income — where you have to render services and get paid a certain amount within a particular time frame — passive income is being able to continuously generate money over time, even after you’ve done the work. Contrary to popular belief, some measure of work is still involved in passive income, but what makes it so appealing for people is that you don’t have to do a regular 9-to-5 shift for it.
While passive income may sound like a very lucrative way to earn, keep in mind that, as with any undertaking, there are safe and risky ways to go about it.
Safe Side Hustles to Generate Passive Income
Some passive income generators involve less financial risk but require more of your time to build. If you want to explore safe side hustles, here are some ideas:
Sell Digital Information Products
Since many people are now working from home, you can take advantage of this setup by creating and selling digital information products. These consist of e-books, video courses, or printable materials that can be downloaded for a price. This method doesn’t require a significant amount of capital, although your income may depend on how aggressively you market your digital products.
Some websites to consider are:
Affiliate Marketing
If you already have a significant following in social media, you can try affiliate marketing. All you need to do is place a link on your site or social media account and, every time someone clicks on this link and purchases from the company whose products you’re promoting, you can get a commission.
However, unless you can get many visitors or followers to click your link and make a purchase, this method will not work as well as you might expect.
Some websites to consider are:
Answer Surveys
There are some websites that pay people to answer surveys that are used by large companies for market research. Depending on the site, you can complete short surveys that may take only 10 minutes, or longer surveys that can take about half an hour or more.
When taking this passive income route, check if the site pays in cash as some pay in discount coupons. It’s also important to remember that this is not a get-rich-quick scheme as you typically need to complete a number of surveys before you can collect your earnings.
Passive Income Ideas with a Little More Risk
As they say, you have to spend money to earn money. The following passive income ideas may have more financial risks involved, but the rewards are also typically higher:
Rental Properties
People will always need a home to stay in and businesses will always need a place to conduct their operations. Filling this demand through your rental property can provide you with a steady income stream.
However, you also need to be aware of the risks involved, which may include:
- Tenants paying late or are unable to pay
- Property damages rendering the place uninhabitable
- A weak market for the property
If you think the rewards outweigh the risks, investing in real estate for renting can be a good way to secure regular passive income.
Stock Investment
Investing in stocks is another high-risk, high-reward passive income generator. This way, you can diversify your portfolio, which can help you weather future economic downturns. The caveat, though, is that you need to do a lot of research to determine which stocks are worth investing in.
Investing in a Business
Being a private investor or a silent partner in a business can let you earn a significant amount of money without having to be actively involved in the business’ day-to-day operations. However, your return on investment (ROI) would depend on how well the business is performing. You can minimize your risk by investing only in small amounts, but your ROI would not be as high either.
Work Smart
Everyone wants to achieve financial stability, and you can easily do this if you work smart as opposed to working hard. Ways to generate passive income can help you achieve your financial goals, but only if you know and are prepared for the risks involved.
