If you are a real entrepreneur, the chances are that you’re interested in better time management and making the most out of your day. When it comes to income, the best way to make money without taking too much of your time is by starting passive income businesses.
Being a successful entrepreneur is all about making money in different ways. The average millionaire has seven streams of income.
This doesn’t mean that millionaires work seven jobs. They just invest in other business ideas and open a new passive income stream that will fuel their budget for many years.
What Does Passive Income Mean?
Traditionally, passive income is earned through many things in which a person is not actively involved. Usually, passive income requires upfront investment and a lot of nurturing before you are able to make some money without lifting a finger.
In today’s article, we will take a look at some of the most effective passive income strategies and give you an idea of where you should start building your passive income portfolio.
Go for a High-Yield Savings Account
Sometimes the best kind of income comes from the money you already own. There are many online banks that started offering higher rates that can help you transfer your money into a source of passive income.
Most of the banks will give you from 1.3% to %2.2 returns on savings depending on the time and amount of money you want to save. Also, most banks don’t offer any kind of fees for a savings account, so you don’t have to worry about losing money.
However, in order to make a good passive income flow, you need to have a substantial amount of money in your bank account. The amount of money earned through a savings account is very little when you start with less money.
Rent Out a Room or Apartment
Starting a passive income business might sound very appealing, but sometimes simple things like renting out part of your apartment can generate a high amount of income per month. In fact, real estate investment is the most commonly used passive income source from entrepreneurs.
The success behind a good investment model lies in the high return rate. When it comes to real estate, most people that are years in the business average out a return rate of 12.25%. However, it is hard to start a real estate business since it requires a significant upfront investment to buy an apartment or house.
This is not the end of the road. You can start small by renting out a room in your house. There are plenty of apps like Airbnb that will help you rent out a room in your house. So, if you have a spare room in your house, try advertising it on such websites. Depending on your location, you can earn from $500 to $1500 per month, only by renting out a room.
Invest in Dividend Paying Stocks
One of the best ways that most entrepreneurs go for is investing in stocks. For example, if you have a $100K in savings, investing that money into a savings account will give you a 1.5% return rate.
However, if you invest that amount of money in stocks, you can grow and make more money without lifting a finger, which is why even the best passers in NBA history, like LeBron James, are not passing on building their investment empire.
For example, if you decided to buy ten stocks from Tesla at the beginning of 2020, it will cost you $880. That same stocks today worth $6070, so you would have made a $5190 profit only by having enough money to invest.
Apart from making money from increased stock value, you can go for a much long-term strategy by investing in dividend stocks. Highly successful companies like Philip Morris, Hasbro Inc, or Evergy Inc. offer dividend stocks.
Dividend stocks are companies that pay out regular dividends to shareholders. As we mentioned, these are well-established companies that want to share their profits with all the shareholders.
The average dividend yield (the amount of money you would receive back) is 2.5%. There are companies with a higher dividend yield that goes up to 6%, which is a considerable passive income.
When it comes to dividend stocks, since we are talking about well-established companies with very few innovation possibilities, you cannot expect that the overall price of the stock will jump in value.
Commission earning programs are very popular at the moment. The idea behind this business is that you’ll have a chance to promote a product or service and get a commission from each purchase. In order to start with affiliate marketing, make sure that you believe in the product that you are promoting, and it doesn’t involve any kind of scam.
There are many different ways you can start affiliate marketing. One of the most commonly used affiliate marketing strategy is starting a website. There are plenty of affiliate programs that can earn you a significant amount of money per month.
Depending on the success of your blog, you can even earn more than $50.000 per month only from commission sales.
However, starting an affiliate program website or YouTube channel is not passive income. Even though you earn money from people that click on your link and without any additional effort, you need to put in a lot of work to attract people to your blog in the first place.
This means that you will constantly be working on updating your blog content in order to get more clicks on your affiliate links.
Start an Online Course
The popularity of online courses increased substantially over the last couple of years. Especially after the pandemic hit at the beginning of this year, people were forced to change their learning habits and go digital.
When it comes to online courses, there are many platforms like Teachable or Udemy that can help you start your journey. Starting an online course isn’t as scary as it seems, and you don’t have to sit around when your students are online.
All you need to do is find the best way to transfer your knowledge to your students and start making a learning material. You can provide video content, documents, presentations, or any other way that is great for teaching your students.
After that, you can upload your learning material and earn money whenever someone purchases your online course.
These are some of the best passive income strategies. You need to be smart enough to let the money work for you and use your time as effectively as possible. There are many other passive income strategies, but these ones prove to work best.
Now all you need to do is get your mindset right and start building your different sources of income.