Passive income is the dream of many people; the ability to earn money without having to invest any time. When you’re suddenly disconnected from the need to be in a certain place at a certain time the whole world becomes your back yard. You can travel for months, even years, on end in the confidence that money will continue to drip gently into your account.
But how do you achieve this goal of passive, hands-free income? In truth, most such strategies require focus and hard work to begin with. Very few investments are ever passive from the very beginning. With enough patience, however, many can become passive over time.
Here are five of the most popular ways to earn an income without needing to turn up to work every day…
When you’re an employee you stop earning money when you stop work. Just think of the solicitor that is paid by the hour. Certainly, his rates might be impressive, but as soon as he retires the payments stop. Not so for the owner of the business, though. Those payments keep on coming year after year into the future; exactly one reason why so many lawyers are keen to “make partner” as early as possible.
Of course, starting a business does come with inherent risks, but there are ways to mitigate these. Opening a franchise, for example, increases the odds of success by following a proven formula. Alternatively, established businesses can be purchased from brokers like Link Intellectual Property or BusinessBroker.net, who specialise in helping to connect buyers and sellers.
Websites are another excellent source of passive income. The Internet is filled with stories of people who have started their own small website, only to earn enough to free themselves from a day job.
Don’t think that you necessarily need to be a technical whizz-kid to get started earning passive income online. Once again, a number of brokers also allow you to purchase existing profitable websites. This way you can earn immediate income from your investment, rather than waiting months or even years for it to mature.
Stocks and shares are perhaps the form of passive income that we’re most familiar with. In many ways investing in equities can be thought of as buying a very small part of an existing business. In exchange for your investment you earn dividends from the company.
The downside to equities is that the income produced can be reasonably small in comparison to the sums invested. If you want to earn a few thousand dollars per month then you’ll need a whole lot of cash to get started. On the other hand, there are numerous funds who do the hard work of identifying and trading in the stocks on your behalf; all you need to do is write them a check and wait for the income to start arriving.
Over the years real estate has proved time and again to be one of the most reliable sources of passive income. What’s more, unlike buying stocks and shares, when you invest in property you own a physical asset that can be seen and touched; for some people this feel safer and “more real”.
It goes without saying that buying properties isn’t entirely passive; someone will still need to find and vet your tenants, collect the rent and carry out routine maintenance. Fortunately, this can be done by a managing agent for a fee, in essence making property investment completely hands-off.
The other real benefit of real estate investing is that you can earn money in two different ways at the same time. Firstly, you can earn rental income on a monthly basis. Secondly, of course, thanks to increases in property prices you can also enjoy long-term capital growth.
Getting started earning royalties in property doesn’t necessarily have to be as expensive as you might imagine either. For one, a number of crowdfunding sites allow you to start investing from just $10, while a small number of companies specialise in selling low cost properties specifically to investors.
We all know that musicians and published authors earn ongoing royalties from their work, but you don’t need to be an MTV superstar to earn royalties. It’s also possible to earn ongoing passive income in a number of other ways.
One example is the growing number of people writing and publishing Kindle books. You do the work once, and every time someone purchases a copy you earn money. Others are creating software products, or licensing photographs, which can be sold over and over again.
Take some time to investigate how you too might earn consistent, ongoing royalties as a way to grow your passive income. Perhaps this will be the year that you can finally begin to enjoy the pleasures of long term travel without the need to worry about how you’ll pay the bills!