The Only Passive Income Guide You Need in 2020
Updated on: by Olivia
Passive income is probably the most talked about way to make money right now.
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And it makes sense why.
It certainly sounds awesome, right?
When something is passive, that means it’s not active.
It’s subtle, peaceful, and unmoving…which is pretty much how we all want our jobs to be, right?
Passive income is an amazing thing, but it may not be exactly what you’re thinking.
Still, it’s undeniably one of the best ways to make money in 2020 and beyond, and this guide is going to teach you how to do it.
What is Passive Income, and Why Is It So Popular Now?
Passive income – also known as residual income – is money that you start earning after you’ve done most of the legwork to get the income stream moving.
Most people think it’s money that just comes to you while you sleep.
They forget that the money has to come from somewhere though.
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Passive income can take some time to work for you, but once you take care of the beginning work, you should start to reap the benefits as consistent residual income.
That doesn’t mean that passive income is something that takes no work after the initial work, either.
You may still have to do some upkeep to your income stream from time to time to keep it going, but it’s still not like a traditional job that requires constant work.
So, while it’s called passive income, you don’t necessarily make money passively. Not totally passively, anyway.
But this form of income has become incredibly popular over the last several years with the growth of the gig economy that prides itself on offering people good-paying work with flexibility.
In essence, that’s what passive income is.
And although it’s gotten more widespread recently, it’s actually a concept that’s been around for a while.
Think of Avon, for example, a leading multi-level marketing company.
The idea behind every MLM is that, as you move up the ladder and start getting people under you who want to sell, too, you won’t need to work as much.
That’s because you’ll not only make a profit from what you sell, but you’ll also earn commissions on what your downline sells, essentially making you money without putting in extra work.
Once you build a strong downline, you can see money coming in passively.
You started the work that led to that income, but once it’s there, it’s more of a “set it and forget it” type thing.
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Great! Let’s move onto some passive income ideas that can help you make money without spending all your extra time working.
The Best Residual Income Ideas
I can’t stress enough how fantastic affiliate marketing is if you’re looking to get a passive income.
Although it definitely has a learning curve and can take time to start making you money, anyone can do it.
That’s the beauty of it, actually.
If you can set up a website (or have someone else set one up for you) and write some great content for it, then you can become an affiliate marketer.
What is affiliate marketing?
It’s linking to products and services you want to recommend to others and earning a commission from every sale that goes through your links.
Affiliate marketing niche sites are huge right now.
These are sites that are focused on a very specific niche, like tiny home interior decorating or dog health.
All content on these sites is tailored toward the visitor.
For example, the dog health site might have an article about the best dog foods to feed overweight dogs.
In the article, the writer might link to various dog foods from Amazon or Chewy that he or she recommends to readers who visit that article looking for specific dog foods to try.
The owner of the site will set up affiliate accounts with Amazon and Chewy to link to those products.
When people buy from their links, they get a portion of the sale.
Commissions can be pretty low, like 1% to 3% of a sale, but that’s why you have a strategy that involves lots of pages with lots of links.
Many affiliate site owners also own several websites, so they have numerous income streams instead of just one going at any time.
It’s genius, and it works.
If you have money to invest, you might consider doing it with peer-to-peer lending.
This form of passive income has you lending money to individuals who need a loan.
Your money may make up just a portion of their loan, especially if you have a small investment amount.
Then, other lenders will make up the rest of the loan.
You’re connected directly to the person seeking the loan and will basically invest your cash into them.
As they pay back the loan, you benefit from getting a portion of the interest, depending on how much you invested.
These investments do come with risks, like if the person fails to pay back his or her loan.
However, they can also give you some easy passive income as you keep investing and building your stash of investments.
Selling Digital Stuff
Go to Etsy and see just how well sellers are doing selling digital things, like logos, graphics, and website themes!
Most people think of Etsy as a place to get handmade goodies, which it is, but it also allows sellers to sell digital stuff.
Because you can make something digitally and sell it over and over again, this is an awesome way to get paid with a passive income.
You can also opt to sell custom graphics but make it easier on you by starting with a base graphic and tweaking it to your customers’ needs.
Either way, it takes a lot of time off your hands when you sell this type of item rather than physical stuff you have to make and ship.
Advertising with Your Car
How much easier could it be to get paid than to drive your car around and let it make money for you?
That’s exactly what some people do.
Why have a car that isn’t doing anything for you financially?
Instead, put some advertisements on it and get paid by the advertiser.
This method is best for people who frequently drive in busy areas.
If you don’t drive many miles each week and live in a rural area without many cars on the road, advertisers won’t want to work with you.
Bring your car in to det some decals, drive around, and boost your income every month.
Renting things you don’t need can be better than selling them if you’re looking for passive income.
A sale happens once.
Renting can happen over and over again as long as someone needs the items.
You can rent just about everything nowadays, including parts of your home (or your full home) with Airbnb.
Buro is an app that lets you rent almost anything.
With BabyQuip, you can rent baby gear to other parents.
You can even use CurbFlip to make a steady income renting out your driveway or parking space.
When you publish books with Kindle Direct Publishing (KDP), you self-publish, meaning that you won’t have to spend a bunch of money and time with a publisher who does it for you.
And your books will be eBooks, so the amount of time it takes to get your words in front of Amazon customers is minimal.
Books are perfect for passive income because you can sell them over and over again, especially when they’re digital versions!
And being that they’re on the Amazon platform, there are virtually endless customers at your fingertips.
Authors are paid from a global fund, which is the pot of money that all KDP books go into.
That pot continues to grow each month, with $26.2 million in December of 2019 alone.
Selling Online Courses
Once you create an online course, you can decide how many people you want to have access to that course and what price you want to sell it for.
Most course creators don’t have to do much with the course itself once its complete besides market it and, maybe, pop in for one-on-one coaching if that’s something they offer for course participants.
But if you are doing one-on-ones, you can probably command the biggest bucks from your course, too.
It’s not unusual for a course price to be over $1,000 nowadays, and I’ve seen them as much as $10k.
Think about it: If you sold just 10 courses at $1,000 each, that’s $10,000 in your pocket already!
If courses are working for you, you’ll want to keep making new ones with fresh content as often as it makes sense for your niche.
So there’s definitely work involved here, but the income potential is almost limitless.
Whether you take photos on your smartphone or you have a legit camera and dabble with serious photography skills, you can make money over and over again on your photos.
Stock photo sites are popular with bloggers, website owners, and businesses who need photos for their sites, branding, etc.
A lot of people purchase images to make their social media feeds pop, too.
The process can also happen on an app called Foap, which pays you 50% of the purchase price for each of your photos.
Some people even choose to start their own stock photo websites, offering new image batches every month for people to buy separately or as part of a subscription bundle.
Drop shipping is a form of ecommerce that doesn’t require you to hold any inventory or ship items yourself.
Instead, you host the images and descriptions of products you want to sell on your website.
Then, when someone makes a purchase on your site, you’ll head to the wholesale vendors you partner with and make purchases for your customers.
So, you’re the middleman and will have to take some time to place orders.
But you’ll never be the one packaging and shipping the items, which takes a lot of time off your hands.
And, you’ll get the profit from whatever the difference is between your selling price and the price of the item you have to pay for.
If you choose to do this with Amazon through its Fulfillment By Amazon program, you can even skip handling the customer service stuff because Amazon will do that for you, too.
Outsourcing Your Work
Earning an income while someone else works for you.
That’s the general idea of outsourcing!
If you’ve built up a business already, like freelance editing or app design, and you’re bringing in steady income, then you might consider outsourcing at least some of your work to another expert in the field.
You could send half your editing work to your helper and pay them a rate that still brings you a profit, for example.
More and more freelancers and business owners are beginning to do this once they feel confident enough in their current state of business.
If you don’t yet have anyone you trust enough with business tasks, you should work on building your network on LinkedIn and in relevant Facebook Groups, both of which are excellent places to find similar people with similar skills.
Websites like these allow customers to browse designs to get printed on mugs, t-shirts, bags, and other items, and you’ll get a share of the profits every time something sells!
Use Cashback Apps
Shopping with cashback apps can be a great way to get money for something you’re doing already, like grocery shopping or online shopping at your favorite stores.
Ibotta is what you’ll want to use to get rebates on stuff you buy.
Shopkick can pay you just for visiting the store, snapping some photos of specific items or scanning barcodes, and scanning your receipts.
You don’t have to do anything other than shop to make this work for you!
Using Credit Cards Wisely
If you get into the habit of using credit cards with rewards to make purchases and then paying them off right away, you can reap the rewards without getting hit with interest!
For example, say a credit card pays 5% cash back for purchases with a specific store.
You make a $100 purchase and get $5 in rewards.
Pay that $100 back to your card before the next billing cycle, and you’ve made an easy $5 just from shopping.
Some cards even let you use your rewards toward your payment.
Remember to always use your rewards cards for purchases to boost your rewards faster, but it could be a good idea to keep a notebook full of purchases to remember what you need to pay off to avoid interest.
Put This Passive Income Guide to Use!
Now that you have some legitimate ideas for growing your income passively, it’s time to put them into practice.
I’d also love for you to drop your other passive income ideas in the comments.
What’s worked for you? What hasn’t?
If you try anything on this list, please do come back in a few months and share your results!
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