What Is Passive Income and How Can I Get It?

Making money is simple.

We work, then we get paid for that work.

If you want time off, you either don’t get paid, or use vacation time.

But what if I told you there's another type of income out there? One where you don’t get paid per hour, you get paid while you sleep, and even get paid for years without doing any work.

This is commonly referred to as passive income.

What Is Passive Income

Passive income is income you receive without having to be physically present to earn.

This is money that you created something to sell years ago, and it continues to be sold today.

A common example of this is a book.

An author may spend many hundreds if not thousands of hours writing a book. After it’s released, they may then spend money to advertise, as well as considerable time doing interviews and getting the fact that that book exists known, all so they can receive the income from selling that book.

If it’s a very good book and continues to sell for years, even decades, then that author will continue to get royalties, or passive income, even though they have done nothing with that book for years now.

If you’re a good writer, fiction or non-fiction, you can and probably should write a book. But there are many other ways that you can make passive income

Dividend Investing

Dividend investing is the easiest way to start earning passive income.

You take money you earned the old-fashioned way and invest in companies that pay out dividends. It’s like your money is now your employee, and you make money off them “working” in the stock market.

There are two things I love about dividend investing, over investing in an index fund or something similar.

First, you start getting money right away. Depending on the company you invest in you’ll get the next monthly or quarterly payment. Though that could be only a few dollars or even a few cents depending on how much you invest to start with. But after a while it will start to snowball.

My favorite thing to do is buy more stock, with the money I get from dividend payments. It’s “free” money I didn’t have to earn by working, and I’m buying more things that will in turn make me more money, otherwise known as a snowball.

The second thing I love about dividend investing is that I don’t have to sell off a piece of my portfolio in order to get money.

In a typical investing situation, when the time comes to get money, you have to sell a few shares of the index fund. Hopefully, that fund has grown so much that you aren’t taking a loss, and will continue to grow so you never sell it all.

With dividend investing though, you never have to sell off a share to get money, just wait for the next quarterly payment.

Create A Product Or Business

We already talked about selling a book, in fact, you could create an Amazon Kindle-only book and sell a lot of them for very little, making you some passive income.

But you could sell an actual product, preferably one that you work on once, and are able to sell it over and over again without being online.

Blog

A blog could be considered a passive income product.

You spend years growing an audience, creating content that will help them, and selling products on that blog.

A blog as a business is a long-term strategy, and will not pay off overnight, but if you spend the time, it can make a lot of money for you while you’re not working on it.

Online Course

Everyone is learning online now, and you can learn anything by typing it into a search engine.

But, people are still buying courses all the time to learn a new skill or hobby.

If you have a skill, you could easily create a course, and sell it. Once the course is created you could be completely hands-off and just make passive income.

Sell Your Pictures

Companies need stock photos, and because of legal reasons they can’t just go to Google and take an image from there.

To make sure they don’t get sued, they will buy stock photos.

Sites like Shutterstock will let you upload your photos and once they are there people will buy them without you doing anymore work, even years after you uploaded them.

Advertise On Your Car

If you drive for work, whether that’s rideshare driving, food delivery, or even just a long commute, you can make passive income by having ads on your car.

Services like Wrapify, allow you to sign up for campaigns, get your car wrapped, and start making money just for driving around.

When the campaign is done, you remove the wrap, no damage is done to your vehicle, and you’ve made a some money.

Real Estate

We’ve all heard about the “slum lord” that just collects rent, never fixes things, and though they take forever to respond to any of your concerns, they expect you to respond to them right away, especially if it’s because you haven’t paid rent yet.

We are in no way encouraging you to become a landlord like this, in fact, you don’t even have to become a landlord to invest in real estate.

If you have the income to get rental properties it’s a great investment, but if you don’t there are services that let you invest partially into a real estate project and get partial income from it.

You could also “dip your toes” by buying your own home as a duplex, triplex, or quadplex, and renting out the other units.

Anything Is Better Than Nothing

I have one type of passive income that makes me about $3 a month. That’s it, but when the check comes in the mail every month it’s super exciting.

$3 isn’t much, but for doing nothing and collecting it every month since 2017 I’ve made at least $180, and will continue to make more.

Whatever you’re form of passive income is, starting small is always a good way to start.