Here’s how to get started with passive income, the key to a comfortable retirement in today’s world.
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Many Americans want to retire by age 67, and many of us would like to create wealth that we can pass down for generations. However, many folks are not on track to reach either of those goals. In a survey of 2,000 Americans ages 40 and up, with a minimum of $25,000 in investable assets, the majority of those in their 40s had less than $100,000 in retirement savings. For those in their 60s, over a quarter had less than $50,000.
We can no longer rely on a single income source to make enough for retirement, and certainly not for generational wealth. The secret to those who are accomplishing these goals? Passive income.
Passive income is money earned without requiring active work. These forms of income typically require a fair amount of work up front, with the goal of eventually being a hands-off venture in the future. This is how people make money while they sleep. Passive income usually entails investing in stocks or property, or selling a product.
Related: Passive Income In A Global Pandemic? 3 Tricks We Learned For Success in Any Environment
Ready to get started? Here are a few of the most popular passive-income options.
1. Digital products
Digital products are online products that can be instantly downloaded or accessed. Ebooks, how-to guides, online courses, templates and apps are all examples of digital products. You’ll need to find a way to market these items. It doesn’t take a huge following to make money — apps like TikTok make it easy to “blow up” with one good video.
With digital products, you’ll also need to find a place to host them — whether you’re selling from your own website or elsewhere. Etsy is great for templates, Amazon is ideal for ebooks and Udemy is popular for courses.
Related: 3 Effective Marketing Strategies for Selling Digital Products Online
Investing is a tried and true form of passive income. Investing in individual stocks takes time and research, so it’s better to invest in mutual funds or ETFs for easy passive income. While there is still some initial research, the stock market is all about time in the market; once you’ve invested, you need to let it sit. This is because of compound interest. The more interest you earn on your investments, the more that interest will earn interest. This is why it’s so important to invest early and consistently.
3. Make a YouTube channel
Many people are scared away from the idea of making a YouTube channel for fear of showing their face — but that isn’t a requirement. Have you ever searched for a video of a thunderstorm on YouTube? Or a video of birds chirping to leave on for your cat? People make thousands off of those videos, and they can be created without spending any money.
Once you’ve set up your channel, you’ll need to find a video and audio. You can find free videos on websites like Pixabay.com, but there are plenty of others to find with a simple Google search. Next, within the YouTube studio, go to the YouTube audio library and search for the appropriate sound. Use video-editing software to put them together, and post the video. Once you’ve been accepted into the YouTube partner program, you’ll begin earning ad revenue.
4. Affiliate marketing
Affiliate marketing refers to selling goods and services that are not your own and earning a commission for the sale. These commissions are tracked via a unique link: You get people to click your link and make a purchase, then get credit and commission for the sale.
People often go about affiliate marketing in one of two ways: by building a presence on social media, or by building a blog. With the first option, you’ll need to create a sales funnel that will ultimately lead the customer to the products you’re selling. With building a blog, you’ll need to flesh it out with content and make sure your SEO is on point so people will find the blog. It doesn’t hurt to have a social-media presence to bring people to your blog as well.
When choosing affiliate programs, you’ll need to first choose a niche, then choose the items with the best commission percentage, so you’re earning the most for your time.
Related: 3 Tips to Get Started With Affiliate Marketing
There are easy passive-income forms, but the really rewarding ones can take some work up front. Once you’ve put in the time, you can sit back and watch the cash flow in.