Have you ever heard of the phrase passive income before?
In scouring the internet, researching different ways to make money online of phrase kept on cropping up. Passive income.
There are many different ways to work online, and that’s what I discuss on this blog. Audio transcription. Writing. Proofreading. Data input.
This are nice because you can do them from home, in your own time, or from the coffee shop. Or even the beach.
Wouldn’t that be a blessing…
Passive income is an idea that probably appeals to the same sorts of people – but with one key difference. It makes money again and again, without having to alter your orginal input. It’s literally the gift that keeps on giving.
What is passive income?
The clue is in the name. Passive. That’s the key difference between this and other forms of money making, and also the reason it is so appealing.
A ‘gig’ requires you to carry out a job for a set fee.
Perhaps you’re a skilled writer. You agree to write a 2,000 word blog post about the benefit of having life insurance.
You receive £50. Good work if you can get it.
Well what if that article could continue to make you an income again and again without you having to do anything at all?
How amazing would that be?
Well that’s the principle of a passive income. The idea that you put the effort in once, and then reap the rewards again and again in the future.
While you’re in bed. While you’re in the bath. While you’re watching a documentary about the life cycle of the British vole.. Basically all the time.
This sounds too good to be true!
Well, quite. It’s the holy grail. But it’s absolutely possible, so long as you’ve got the right idea or asset.
Everybody is probably already familiar with the idea of earning a passive income, they just don’t necessarily know it. If you’ve got a bank account, specifically a savings account or invesment, then you are probably already earning a passive income to some extent.
Think about it. Your bank pays you interest in your savings. They’re very keen to take your money off your hands because then they can lend it out to other people for a larger fee. So much so in fact, that they’re prepared to pay you extra money to look after it for you for a while. That’s the essence of interest.
So if you can afford to put savings in the bank and leave it alone, it will make you money while you sit back and do nothing.
Now of course the economy being what it is, with historically low interest rates, means this is out of the reach of more and more people. But the principle remains. You put something in. Then you leave it. And it makes you money.
Making money by already having lots of money is clearly the ultimate way to earn an income, however what I’m more interested in on the blog is ideas for realistic things you can do to earn a passive income from your output. Creating something. Making something. And reaping the rewards afterwards.
What are some different types of passive income?
I will compile a definitive list of passive income ideas, that I can add to as and when different trends come online.
But for now, these are a few of the things people do. It will give you the gist of what I’m talking about.
– Photography. Think about it. You take an awesome photo of a bird diving for a fish. You own that photo. You can sell it. And every single time someone downloads if you can receive an income.
– YouTube. If you run a successful YouTube channel then yes, uploading content regularly is important. But the videos you already have can continue to make an income in the background.
I’m pretty sure some of the original ‘viral’ video dudes have been able to retire of the income of a single, popular video. That’s unrealistic, obviously, but that’s the essence of a passive income.
Websites and blogs – The principle here is the same as with YouTube videos. If you create content that is good enough and you host ads on your site, it will make you a passive income in the background. You just need to pay for hosting.
Air bnb – This is another monetary related one. Of course you need to be lucky enough to have a spare property or spare bedroom. But if you do, you can lease it out to others and allow it to rake in money for you while you do very little.
This sounds like a great idea!
It is! Seriously, I don’t know why they don’t teach you passive income skills at school. Everything you learn is geared towards getting a traditional job, working till you’re 70, then retiring gracefully.
That’s not my idea of fun.
Okay, not everyone is going to be able to retire early, but wouldn’t it be great to have another source of income flowing into your bank account alongside your existing job?
I’ll be exploring in more detail all the different ways you can do this, but hopefully this is a good explanation of what a passive income is and how beneficial it can be to have one.
Just gotta come up with that killer idea now and I’ll be living on a beach for the next 40 years.
We can all dream.