WARREN BUFFET said:
“Never depend on a single source of income. Invest in creating a second source for a good living”.
As life passes, you retire from your job, and at that stage, when you need some rest, there should be a source of income that can generate enough for you.
Those who have managed to achieve some financial success almost all have one thing in common: they have several sources of income. But it does not mean that they have several jobs; on the contrary: they know above all how to benefit from “passive income.” That is why they earn money continuously… even while sleeping!
What is passive income?
Creating a source of passive income for yourself does not mean “making money without doing anything.” In the world of personal finance, there is a lot of discourse about passive revenue. It can be defined as:
“An income that involves little effort to earn through different resources and that can be maintained.”
You setup an activity that will allow you to continue making money despite not making an outstanding effort. In any case, an initial effort will often be required on your part.
Passive income is a great solution to create time for yourself that you will be able to dedicate to more fulfilling projects or to enjoy life and the things you love overall. It is a concrete form of freedom and financial independence.
But often, the most challenging thing is to know where to start: which projects to launch to make passive income a reality? There are dozens or even hundreds of solutions, but here are our seven favorites:
The best ways to generate passive income in 2020
Choosing the right sources of passive income allows you to use your time the way you want. You don’t have to spend tens of hours a week to run your business. The goal will be to get the best return from your business for the least amount of time spent.
Of course, we are not talking about scams, multilevel sales, or other suspicious or dishonest businesses on the internet. The ideas presented in this article are legitimate ways of making money while you sleep by creating something that excites you and puts your experience and skills to fair use.
Launch your dropshipping business: With the explosion of e-commerce; dropshipping has become very popular around the globe. The passive income system works quite simply:
By creating an eCommerce store, you can sell the products of others.
Then, when someone visits your site and places an order, it is sent to the provider in question. It is then, he who will directly send the order to the customer – which means that you earn money on the sale without ever having to manage stocks!
Although programming skills were needed to set up an e-commerce store in the past, you can now do so with minimal coding skills with the help of third-party software and platforms such as Shopify.
One can launch a dropshipping store by just buying an appropriate domain name and a fast hosting service. First, you have to build your website either by coding yourself or by using a third-party software such as Shopify or a similar service. After that, you will choose the products you want to sell online to earn a good commission.
The most time-consuming part is Search Engine optimization though. You can create your website in one day but it won’t appear as number one on the Google search results page.
Therefore it will take time, and you will need an SEO professional who can rank your website on the first page of Google and other search engines. The cost of SEO professionals varies from company to company, but it starts from 15$ per hour.
- Create and sell digital products
Selling digital products allows you to create passive income without a large initial investment. These days, selling your digital products is a great way to create a passive income. Among digital sales, everything related to training, education, or sharing expertise can be exciting to exploit.
For example, if you are specialized in a particular field, you can create and sell online courses, an e-book or a podcast. It’s up to you to find what you are passionate about! Nowadays, you can also easily sell your books on the internet through Amazon kindle.
- Rental investment: a classic of passive income
Rental real estate is a good source of passive income. You can earn money even while sleeping but unlike the other options on this list, real estate demands a very important initial effort to find, purchase and oftentimes, repair the rental property. In addition to that, even after the property has been rented, the landlord is still responsible for the maintenance of the property which may require additional work.
People often ask themselves if REITs are a good alternative to real estate investing, REITs are a more comfortable and fully passive alternative to rental investment but it nearly always comes with lower benefits and lower profits than if the person takes care of the process themselves.
With the invention of the internet, it is now possible for anyone to invest in real estate and earn a good profit, higher than that of REITs. This can be done using multiple online platforms that allow you to invest in profitable properties located far away from your primary residence.
The leading and most reputable platform is Solomartel.
Solomartel acquires real estate assets, such as offices, retail facilities, shopping malls, and residential facilities, which are then rented and generate monthly rent payments to Solomartel’s clients.
The collected rent will be divided among the partners of Solomartel; it is a perfect option for totally passive and free of involvement property investment.
Although such companies are selling investment products and making the investment process very simple, their investment products are not paper assets like shares, stocks, or REITs.
Instead, the stake that an investor has in a Solomartel investment is linked to an actual piece of actual real estate and as such, the investors own their real estate either fully or partially.
- Launch your blog
Having your blog can, of course, be a passion. But often, you will want to earn at least enough money to cover the costs associated with putting it online. In any case, know that it is possible to go even further and offer yourself a real source of passive income thanks to this blog!
To launch your blog and start creating passive income, you will first need a domain name, hosting solution, and content generation system (or CMS). The best CMS for blogs is WordPress, as it is easy to use and manage.
Once your online content and monetization solutions are implemented, you can earn money regularly, whether you spend extra time there or not.
- Sell your photos online.
Selling your photographs online is an excellent way to earn passive income. It’s quite simple. Hundreds of online platforms offer “royalty-free” images, meaning that internet users pay (either by download or by package) to be able to download a photo and use it freely.
By uploading your own photos on the net, you can earn passive income every time someone purchases your photographs.
- Investing in dividend stocks (passive income)
What are the dividends?
In the financial and business industries, dividends are the profits distributed to the shareholders based on their ownership of a company.
How can somebody earn dividends?
It is important to identify the dividend-paying companies because not all companies pay dividends to their shareholders. It is the stocks or shares of these companies that you need to buy if you wish to benefit from dividends. Once the stock has been bought, the new shareholder can simply relax and wait for the dividends to be distributed to him once the company has made profits.
Many dividend stocks can be bought on the stock exchange but it is important to identify a good company that will perform well and be able to give out dividends in the long term
Many people are especially interested in yield values when placing their money in stores on the stock exchange. They select individual shares to collect dividends (an income paid by the company to its shareholders one or more times a year). Investing in stocks that pay regular dividends is indeed one of the best ways to generate passive income without too much work.