Passive income was a new terminology while I was in college. I didn’t even know what it meant or where it came from. I soon figured out that it was one of the most important type of incomes that existed. It was the type of income that would soon set me free.
So what exactly is passive income?
Passive income in my own words: Income that comes to you every week or every month things like rental properties, portfolios, or intellectual properties. It is income that, after it’s built up, puts money into your bank account probably for the rest of your life. It is also income that no longer requires your direct involvement. Income that will work hard for you no matter what.
Now what’s strange to me is that I had always thought that in order to earn money you had to put in time. In other words time was equal to money. I now know that is not true. Of coarse you must put in the time to build a business or create a source of passive income. But once the asset is created, you now go on to create another asset that will do the same thing. I’ve since learned that every dollar has the potential to go out there and find another dollar. And because of this I have been able to create multiple streams of income that will send money my way every month no matter what!
So here it is!
11 ways I actually earn passive income
1. Intellectual Properties.
So what exactly is an intellectual property? It is something that you’ve created with your mind. An invention derived from creativity. It could be a design or a book. It also could be songs you’ve written, a patent or a trademark of some sort. These all fall into the category of intellectual properties.
My intellectual properties are:
- Books that I have written.
I currently earn a decent amount of money from books that are currently on sale at places amazon. While it took me a long time to write these books, now that they’re published I will continue to earn income every week when someone purchases them online.
- Songs I have written.
Yes I am a song writer and have written many songs over the years! Since I own the rights to these songs I’ll continue to get paid every time they are played on the radio. This includes places like spotify, pandora, Sirius XM. It is an asset that will continue to generate income for years to come.
2. Affiliate Marketing
What is affiliate marketing and how does it work? At it’s core, affiliate marketing is based on referrals. An example of this is: You own a blog and you promote a product on your website. No you don’t on the product. If someone were to purchase that product from say, amazon, you would receive a commission of up to 10% of the sale.
You refer people to products and services that you’ve tested in order for them to buy them. I have been an affiliate marketer for more than 10 years and it continues to pay me every month
3. Paper assets
Paper assets are things like Stocks, Bonds, and Mutual Funds. When done correctly, you can hedge investments and earn passive income from stocks. I have set up a direct link between my bank account and various paper assets to invest a certain amount each week. I use service like Acorns to automate my investments efforts into specific portfolios. Additionally, I follow certain stocks in order to take calculated risks.
4. Rental Properties
Rental properties have the potential to bring in loads of money! Rather than buy and flip a house, we purchase properties and rent them out. Our focus here is cash flow rather than capital gains. We use the banks money to finance the property and then our tenants pay the mortgage while we get to keep the asset! Sweet deal right?!
Again the idea here is monthly cash flow. Even if our property loses value due to market volatility, the monthly income continues to come in. In fact, when the housing market goes down, we get even more renters looking for a place to stay. If done correctly rental properties can be an enormous asset.
I’ve always been a big talker. Someone once said maybe I should right that stuff down. Or better yet, share you experience and expertise with others. That’s where blogging came in. I really didn’t earn any money at first, but after a while, say about a year, I started earning consistent money as a blogger. I could say now that blogging is close to being one of the top ways I earn passive income.
By talking about the things I love and my passions, I was able to turn my blogs into serious cash hogs! The primary tools with my blogs are Affiliate Marketing.
6. Google Adsense
Google adsense has been around for some time now. It is a top earner in my online businesses. Here is adsense in a nutshell:
On one side you have what is know as an advertiser. These advertisers have a product they want to sell. Sitting right in the middle you have Google. And on the other side you have Publishers or bloggers like myself. The advertisers pay google on platforms like adwords and google will place those ads on publishers websites. When someone clicks on those ads, publishers like me get paid per click. If your website gets a ton of traffic, google adsense can easily become a substantial amount of money for you!
7. Selling a Product.
There endless types of products you can create if you really wanted to. I’ve created a product that is imported from China and sold on amazon. It really wasn’t that expensive to make the product either. Basically you want to create a product that solves a very specific problem. If you’re solving their issue, they will buy your product! Simple as that!
8. Purchasing Websites
I got in to purchasing websites about 2 years ago. On websites like Flippa, I was able to find websites people wanted to get rid of. I would buy them and then turn them into a profit. Rather than spending the countless hours creating a blog like this one here:), you can buy into a creation and make it better. Make it your own. I think this is an excellent Idea if you’re afraid to create your own blog. Find a site that a niche that you’re interested in see if you can keep the traffic coming in and turn it into a profit!
9. Invest in Peer-to-Peer lending.
Peer to peer lending has grown quite a bit over the last 5 years. It’s an excellent way to grow your portfolio of passive income! With this type of lending you can invest in small businesses as well as people without a “regular” bank involvement. The income you receive will come from interest payments on those loans. Sites like Lending club and Funding Circle are great for safely facilitating these type of loans.
It will however, require an upfront investment of a certain amount of cash. Even still, it’s pretty good and I still earn with these types of loans. Maybe you should give it a try!
My partner and I own a home in a college town that we use specifically for Airbnb. It has brought us quite a bit of dough over the last 3 years. The great thing with this is that we almost never go vacant with any of our rooms. We actually earn more with renting out the rooms separately than we would if we rented out the entire house. And people are still calling for vacancies!
It wasn’t too difficult to get into. I do advise to get a house maid or something similar to keep the property in check. We’ve had a few small things broken before. People tend to be messy quite messy as well. Still, it’s a solid investment. Just be sure to hire a maid or house keeper!
11. Small Business
We believe that building a business is the best way to earn passive income. Our blog here at ace cash flow is part of a larger business structure I’ve created. Although it takes time to create, and there are plenty of set backs, a business that finally turns to profit is an amazing accomplishment. Your business will continue to bring in profits without your direct attention.
A successful business is one that doesn’t need the owner or creator in order to continue to profit. Building a business is not the easiest thing to do and most will fail in five years. But, if you abide by certain “solid” business principals, you stand a chance at being very successful. In the end, you’ll be very glad you built it!