On average, a millionaire will have at least seven streams of income. Not one, not two, not even three…seven! So, if you’re trying to reach your financial goals and obtain your dream lifestyle by slogging away at a job that provides you one income, it’s going to be tough.
Rather than putting all of your eggs into one basket, it’s a better idea to divide them, and a lot of people have learned just how vital it is to have more than one stream of income, and why passive income is so important, during the pandemic.
Passive income is a type of income that you receive without putting a lot of effort into creating or managing it. Initially, you will have to put in the effort to create a stream of passive income, but once it’s set up, it makes money for you, hence the term ‘passive’.
Everyone wants passive streams of income, but not everyone has the drive, motivation, or knowledge to set up a passive income – most people have no idea where to start. However, it really isn’t that difficult although it may seem overwhelming, In this article, I’m going to share 9 different types of passive incomes for 2021 that you can set up now!
Create Online Course (Self-hosted Or Using Platforms Like Udemy)
Most of us have a good amount of knowledge and expertise of a specific niche or a few specific niches. So, rather than having all of this information stored in your head, give this information to others and make money by doing that.
Although you might think that your expertise is general knowledge and that you have nothing much to bring to the intellectual party, you do! In fact, most people actually only know a small fraction of what you know, so never allow yourself to underestimate your skill and expertise and hold yourself back.
Instead, be confident in your expertise and make your knowledge work for you by creating and selling an online course.
Creating an online course can take anywhere from a week, to months, depending on how interactive you want the content you provide to be. A standard online course typically has video content (where you will speak to your students), worksheets, assessments, information sheets, and sometimes even live videos, private chats, and e-books.
If you are confident in creating an online course and you already have a platform to distribute your course on, then you can easily push out your course. However, if you’re not so confident at creating online courses, it’s a good idea to use an online course creator such as Udemy or Thinkific.
When people think about passive income, most of the time their minds will go to affiliate marketing, and this is because affiliate marketing is one of the easiest ways of creating a passive income stream.
Affiliate marketing is where you promote a company’s product and earn a small commission when someone buys the product due to your marketing.
There are some simple steps to affiliate marketing that you will need to take!
First, you need to create a blog, Youtube channel, or social media account that provides content in the niche that your affiliate products are in. This makes sure that your readers or subscribers not only trust you and your opinion, but they are also genuinely interested in this niche and want to purchase products in this niche, meaning they’re going to be more likely to actually buy a product through your affiliate link.
Secondly, you need to sign up for an affiliate marketing program. The most obvious and popular affiliate marketing program is Amazon Associates. This allows you to promote any product on Amazon and earn a small commission if someone buys a product through your link. You can also choose other affiliate marketing programs, but Amazon is the easiest and best-performing one.
Thirdly, you need to market the platform that holds your affiliate marketing. You can do this by prioritizing SEO, using Google Pay Per Click advertising, or by using an entire digital marketing strategy.
For many years affiliate marketing was one of the ways I earned money online although I never tried to rely just on this form on income as it can be unpredictable.
If you want to start a business selling products, or you already have a business that sells products, you can turn it into a passive income by using Amazon FBA (FBA meaning Fulfilled by Amazon).
Amazon FBA takes away all of the hassles that comes with having an eCommerce business, such as product storage, marketing, selling, and dispatching. So, you have more time to focus on your other streams of income.
To use Amazon FBA, you need to have a product, or products, that are ready to be sold. Then, sign up to FBA, ship your products to Amazon warehouses and let Amazon deal with shipping your products.
Once Amazon FBA is set up, all you need to do is see the money from your sales roll into your account every two weeks. You don’t have to put any effort into doing anything else, hence it’s a great passive income stream!
Obviously, you do have to pay for Amazon FBA, but as long as the sale of your products is covering this cost, you can make money.
Dividend stocks are stocks that payout money every year. The best type of dividend stocks is high yield dividend stocks, clearly because they provide much larger amounts of money per year.
Dividend stocks are beneficial because they have low volatility, unlike other investments, so you know that your money is safe, and you can predict what your yearly dividend amount will be, depending on how much you have invested.
Even if you trade more volatile stocks, having dividend stocks is a good idea because it creates stability in your investment portfolio. Knowing for certain that you’re going to have this passive income yearly puts your mind at ease, and of course, allows this type of income to really be classed as passive!
If you’re interested in dividend stocks, do your research and aim to invest in large corporations that have been successful for a long period of time, such as Proctor and Gamble or Apple. Then, directly through the company or through a broker, purchase the stock and wait for your dividends to come to you!
Each year I add to my dividend and growth stocks. My aim is to fund my lifestyle completely from dividend stocks in the next 1-2 years.
Currently, the annual dividend payments pay for our rent and utilities each year!
Peer To Peer Lending
Peer to peer lending is a great means of passive income – you support small businesses while making money on lending, it’s a win-win scenario! Peer to peer lending has been around for a long time, but it’s not always been widely available or ‘safe’. However, with technology being readily available and subsequently the presence of online platforms existing, peer to peer lending is more popular than ever.
I’m going to be discussing peer to peer lending through online platforms, so it’s important to say that peer to peer lending is most definitely not just giving money to a small dodgy business that one of your acquaintances has set up, who will most likely run away with your money. Instead, it’s lending money to small businesses with extensive business plans and a proper loan request.
Peer to peer lending allows you to loan money to small businesses and start-ups, without the ‘middleman’ of the bank, then the borrowers pay the money back to you, with interest.
The great thing about peer to peer lending is that once you’ve granted a loan, you don’t have to do anything but wait for the repayments to come back to you.
If you’re interested in peer to peer lending on an online platform, the most popular two platforms are Peerform and LendingClub.
Most people know that cryptocurrency, whether trading, mining, or holding it, is an incredibly good way to make money, and it’s a very profitable stream of passive income, as long as you know what you’re doing.
One of the best things you can do, if you hold cryptocurrency, is to stake it. Staking cryptocurrency involves holding funds in a cryptocurrency wallet, in order to support the operation of a blockchain.
By staking cryptocurrency, you receive rewards – you have additional coins added to your wallet, meaning the amount of cryptocurrency you hold increases. This is much like earning interest in a bank account, but it’s much more profitable!
Obviously, to be able to stake cryptocurrency, you do need to understand cryptocurrency, even if only at a beginner level, and you need to hold cryptocurrency. If you’re looking to get into cryptocurrency as a stream of passive income, it’s a good idea to check out Binance and Coinbase.
Property Rental Income (Or Better Still Reits Dividend Income)
Property has always been one of the most obvious types of investments, and subsequently, rental income through the owned property has been a type of passive income people have benefited from for decades. It’s still a pretty bulletproof type of investment!
If you already own a property and decide to rent it out, you’re making a type of passive income every month. If you still have a mortgage on your property, then hopefully the amount of rent you get paid will cover the mortgage, as well as give you some extra cash to put towards your life.
If you are thinking of buying property to rent out as a type of passive income, make sure you’re investing your money in the right type of property, the right areas, and go for the best mortgage option, to ensure your return on investment is as good as it possibly can be.
If you don’t own property and you don’t intend on buying property to rent out, you might want to look to REIT (Real Estate Investment Trust). REITs take capital from a multitude of investors and invest in income-producing real estate, then pay back dividends to investors.
I used to own a house in London but sold in shortly after moving to Malaysia. Renting out your property can be a headache as you need to manage it, even with a property agent.
These days I prefer to own REITS as an alternative to physical property.
This is a hassle-free way to own property without having to manage them – all with earning anything from 4-8% dividend income per year!
Sell Your Content In Stock Libraries (Can Be Photography Or Even Music)
If you’re talented with a camera, or you produce music, you can make money just by selling your content onto stock libraries. The best part about putting your content on stock libraries is that you can use old content that you would’ve otherwise done nothing with, so you’re essentially making money by doing nothing – this is passive!
If you’re a keen photographer, or you have photos that you think could be bought online by brands or individuals, start uploading and selling your images on photo stock libraries. The best ones out there are Adobestock, Shutterstock, and Alamy.
If you’re a musician, or even if you dabbled with creating music in the past, you can sell content on stock libraries too. The best stock libraries for musicians to sell to are Epidemic Sound, AudioJungle, and Pond5.
Crowdfunding Real Estate
We’ve all heard of crowdfunding (hopefully), but have you heard of crowdfunding for real estate? Maybe not! Crowdfunding for real estate has become increasingly popular over the last few years with investors, and for good reason.
The concept of crowdfunding real estate is that people looking for real estate investment will reach out to a group of investors, asking for a small contribution of money towards their project.
If you choose to invest in crowdfunding real estate, you can either invest funds for a stake in the real estate project, or you can lend money as a loan (this is a type of peer to peer lending, removing the bank from the equation) in return for a stake of the project’s return (sales or rental income).
There are various benefits as an investor, such as low-levels investment, short term returns, and higher return peer to peer lending.
I have used Crowdlords in the past and earned a respectable 24% net profit from investing through their platform.
Ready To Get Some Passive Income Streams?
After taking a look at all of the passive income stream ideas in this article, hopefully, you’re ready to start diving deeper into some of them and generating different forms of passive income for yourself.
Remember, the average millionaire has seven streams of income, so make sure you have at least a few!
Don’t let the word ‘investment’ scare you off either, because you have to invest in ideas, and in yourself if you’re ever going to live the life that you imagine for yourself – the most successful people invest in themselves.
Good luck generating passive streams of income in 2021!