The legendary investor Warren Buffett once famously declared ‘if you don’t find a way to make money while you sleep, you will work until you die’.
While this statement sounds dramatic, finding a passive income – that is, a sideline that earns you money while you’re doing other things – is crucial to our long-term financial health.
Passive income has been around for decades, of course, with the likes of stock market investments and real estate to name just two, but the 21st century has brought new ways for us to make money while we sleep. Here are 5 of the best of them for this year.
Create an online course
To start your own business, or even hold down a full-time job, you need to have a skill that somebody will pay for. Knowledge is power, and nowadays creating an online course is a great way to make money from your expertise.
Sites such as Teachable and Udemy exist solely for helping you create and market your course, offering tutorials and case studies to put you on the right path. They don’t need to be conventional topics either: successful courses in the past have included the likes of ‘How to text a girl’ and even ‘Telepathically communicating with an animal’.
The best thing about them for entrepreneurs, though, is that they continue to pay for long after you put in that initial few hours’ effort, making them the ideal passive income stream.
Copy the traders
Investing in stocks and shares can appear daunting – often people feel like they need to have thousands in the bank to get involved, or that it’s too complicated.
The truth is that nowadays it only takes a small amount of money and a few clicks of a button to get started.
Trading apps such as eToro have a ‘copy trading’ option, where an algorithm lets you automatically copy the trades of experts. Most of the top traders achieve positive returns year after year, such as London-based Heloise Greef who has an average annual return of 20% since 2016.
Their expertise is vital here, as they know strategies to minimise risk, which makes it feel less like playing the lottery. There’s even a stop-loss option which you can put in, so that you stop copying their trades should your investment dip below a certain amount.
However, perhaps the best thing about this is that once you’ve set up your copy trades, which should only take around 10 minutes, you don’t need to do anything else. Just check the app every now and again if you feel like it.
The best way to describe dropshipping is selling stock without getting your hands dirty. You act as the link between the buyer and supplier, like with a conventional store, but you don’t handle the products directly. In fact, you never even own the stock – you simply purchase as much as you need for orders then transfer it directly to a prepaid sale.
Another big plus is that it doesn’t take much capital to get up and running, as you’ll already have the money in hand – websites such as Shopify and Wix charge a standard amount to get your site started with them, offering guides and training.
You can get a dropshipping model set up today – you just need to select the products you think will sell, set up the site and wait for orders.
If you’re a fan of writing, then you have what it takes to set up a blog. The easy part is setting it up – platforms such as WordPress have the process mapped out for budding bloggers, including picking a domain name and a webhosting service.
Marketing is a little trickier, but if you use social media every day for business or personal reasons, you’ll know your way around Twitter or Instagram to spread the word. LinkedIn is also an excellent place to let people know about your writing.
Perhaps hardest of all, though, is selecting a niche. If you write about popular topics, then it’ll be harder for you to get noticed. However, we can get around this by thinking of our slightly unusual interests, or maybe we do something unconventional for work which we can write about.
Getting regular readers to your blogs through SEO and high-quality content is when the money starts to roll in. You’ll be able to market certain products to your readers in return for a fee, meaning you’ll be earning cash even when your device is switched off.
Information doesn’t have to come in the form of e-books and blogs. Smaller items, such as guides and checklists can still be popular depending on the topic.
Have you written a killer cover letter that has landed you your dream job? Sell it online. Created a beautiful design that makes people’s jaws drop? Put it on Etsy. Many websites exist for this purpose, you just need to list your product or service and include the right keywords. Market research is useful here to find out what people are looking for.
You can sell each item multiple times, which will keep that money coming in and it requires virtually zero cost.