We all need money to survive.
Having this particular resource provides us the security for necessities such as food, clothing, shelter, healthcare, and other basic human needs. Even our wants.
Money can't buy happiness is purely a subjective statement. But, could also provide luxury, as seen in Leo's character in The Wolf of Wall Street.
He showed us that money is a power that we could use for anything we want that money could buy.
Becoming a millionaire or a multi-billionaire even maybe a shot in the dark, but certainly possible for everyone. This financial status is achievable and doable.
Most ultra-wealthy ones know the secret to building long-lasting, generational wealth and financial stability.
No, it's not about pinching every penny (although that is another thing too!) or skipping your $5 latte for the next couple of years.
It's all about building wealth through businesses that generate passive income.
Furthermore, the poor remain poor because they spend most of their money. The middle class stays middle class because they save most of their money.
On the other hand, the wealthy get wealthier because they invest most of their money. Therefore, no matter how small you start, pay yourself first and invest!
You need to understand the game's rules if you want to win. Study what the wealthy do and replicate it!
Read more:
- 21 Types of Passive Income That Will Generate Your Wealth.
- 18 Unique Ways To Create Passive Income and Boost your Cash Flow
The Streams of Passive Income
Nowadays, having multiple sources of income is the new normal.
It's not practical if you solely rely on a single job. If something happens that forces you to stop working, it will cause many problems that will affect your daily activities.
Unless you have enough emergency funds that can last you for a while.
However, the point is having multiple streams of passive income helps you feel at ease and financially stable.
For instance, if you got retrenched from your work, you will not be reliant on a paycheck because you have other means to cash.
Moreover, it will be easier to achieve your financial goals, less stress, more freedom to pursue your passion, and are location independent.
Not only that, but it will also help you be financially independent and retire early!
However, when it comes to earning through streams of passive income, it is not easy money.
Yes, it becomes easier over time after you've developed your credibility. Still, time, effort, and skills are what you trade for money. Like what Jordan Belfort did, he eventually became his own boss.
But in case you haven't got one yet, I know it could be very confusing to know where to start and could sometimes be intimidating. More especially now that everyone's doing it.
So with that, here are some of the most common streams of passive income that you should know.
What are the five (5) most common streams of passive income?
Freelancing Activities
Freelancing is among the most common side hustle that many of us know.
However, based on your niche, you can offer freelance services to legitimate, paying individuals and institutions, even while living in a van!
Writing, proofreading, scoping, digital marketing, vlogging/blogging, and photography are the most common freelance work.
Unlike the other activities on this list, freelancing requires intermediate to advanced skills among passive income streams.
There is no need for specific formal education for these side jobs. So your natural talent would be your main advantage.
How to get started
One of the easiest ways is to grow your network to get started.
As beginners, your primary market would be small, mostly friends and family. However, putting out the word through your small circle can help get more engagements from friends of friends and friends of the family, and they can even help connect clients to you.
It's all about maximizing your available connections.
Social media offers tons of free marketing, so you can also take advantage of that.
For example, you can do simple online posts of some of your work using specific hashtags, put up mini vlogs on a youtube channel, gain business partners, or join community groups that do the same freelance activity as you.
It will serve as your digital portfolio, which you may continuously update as you constantly grow and continue the engagements as a freelancer.
Renting Out Your Assets
Do you have two cars and always use one while the other is stuck in your garage?
Maybe you have tons of books on your shelves that you barely visit anymore?
Is your apartment too big for you? Or a piece of land from your ancestors that you're still thinking about what you should use for that gives you the best return?
Whatever it may be, as long as you think that this asset has excellent value, you should include it in your streams of passive income.
There are many different digital platforms today that can be used to put out your assets for rent, like Airbnb, and even as simple as Facebook. But what's more important is knowing your target market.
This passive income generator can provide a reliable source of income for short-term or long-term rentals as long as you know which market you should penetrate more.
However, one of the most significant risks of renting out your asset is the potential damages. It's a factor that could potentially affect your streams of passive income as it could lower its market value once returned with damages.
Of course, a paying customer would want to maximize the benefits they could get from your asset and would only be willing to pay the amount with what you have to offer.
How to get started
You can start by listing your extra property or space on Airbnb. Additionally, you can also do house flipping.
Remember that you don't have to do it alone for the house flipping. You can arrange a group of friends and have a share in this investment.
It will need some work on your part. After that, you'll only have to wait for the money to kick in from rental income monthly.
On the other hand, if you're worried that you don't have an asset or a physical property, you can still invest in REITs (Real Estate Investment Trusts (REITs).
These are investment vehicles that hold properties within them – and you as the owner get to benefit from the gains, refinances, sale, income (or loss) on the property.
Investors use REITs to minimize their exposure to individual real estate properties or avoid the huge capital investment required to buy a single property.
However, to some extent, you may need to worry about mortgages, maintenance, taxes, and other costs for real estate assets. Still, it should be manageable as you continue the passive income activity.
Selling Your Own Products/ Services
Today, as we continue to devour the world's technological advancements, we find new ways to increase engagements and social interactions.
As a result, more online platforms helped expand market reach from all segments, making it easier to sell products/services.
Selling is among the most effective streams of passive income, as it's like owning your own business.
You can sell anything from simple homemade cookies, arts & crafts to your e-books and digital arts.
As long you think there is value to your work and you can quickly identify a market for it, you should try to sell them as a passive source of income.
You wouldn't believe how much a company pays for acquiring intellectual property rights. It's one great way to earn passive income, especially for the creative minds who have a lot of great ideas, be it in music, arts, writing, etc.
Content creation is a form of selling products that requires a lot of work.
Given the competition today, it is very hands-on and probably more tedious than freelancing, especially its marketing side.
You always have to highlight what sets you apart from an interested audience. But once you can create something that has a lot of use in this digital age, it's possible to generate passive income through sponsored content such as display advertising through Google Adsense or affiliate links.
Creating Online Courses
Creating online courses is related to selling your products/services, too, except that this one is a more stable stream of passive income as it requires a higher level of expertise.
Online classes are here to stay with us for a long time. As a result, many students and universities have opted for the convenience of e-learning.
So if you are an expert in a particular subject, perhaps you could earn through your knowledge, expertise, and skills!
Creating online courses can earn a massive passive income from simple audio or video courses. In addition, it allows you to continuously make money without needing to do much after your initial work.
How to get started
Create your course on:
If you would like to embark on this venture, an effective marketing strategy is through what we call the “freemium model.”
It provides a glimpse of the course's content and requires additional payment to unlock the whole course.
Your level of expertise should be at par if you would like to make the most out of creating online courses as the initial content of the course would make or break the sale, not to mention the importance of the course you're making.
You may have been a source of knowledge at one point in your life; you can identify that expertise and put them into writing, making it as enjoyable as possible in a video or audio form. Then make it available for a fee online.
We all have our interests and expertise, but it's not enough that you're good at it if you want to create online courses. You should have proven mastery in your specific field as your credibility is in line.
After all, you will now become more than just a tutor or teacher, but a mentor.
Investing in Stock Market
Indeed, investing is the most effortless stream of passive income.
Dividends or capital gains you earn from putting in money for a corporation's use drive it. The more you reinvest the dividends you gain, the more the investment grows and increases the interest.
The buy-and-hold strategy is among the most common ways to earn money in investing.
For example, by using a retirement account, you definitely won't feel the gains until you are old enough to enjoy its benefits. More like a savings account, but you are earning more interest because of the money invested.
Another way to establish an income stream in investing is via dividend stocks. It is where the investors gain from the company's earnings depending on their shares.
Furthermore, it's less volatile than other stock options for investing. But, of course, it's also up to you if you want to keep using your dividends for continued investing or you would prefer to cash out.
How to get started
Index funds or exchange-traded funds (ETFs) are the most common investment vehicles.
The corporation holds the dividend stocks and invests according to the latest market index, rather than picking and choosing individual stocks to buy.
Therefore, index funds are a hands-off approach for the investor as you're letting the organization handle your money and hand you the earnings in due time.
But there are also other forms of investing in the stock market. For example, instead of buying ownership rights in a corporation through stock, bonds could be an alternative for investors to lend their money for corporate use and other institutions like the government.
Investing in bonds is safer but tends to earn the lowest interest.
There are many different ways you can invest today in the stock market, accompanied by various online tools for investing.
They made it easier to understand and maximized digitalization, making it more available to the more significant market.
But, of course, you have to put in the effort in research to ensure that these streams of passive income are within your financial goals.
At what age should I start having these streams of passive income?
The streams of passive income mentioned above are primarily applicable for young adults at 18 and above. Given the restrictions and expertise that some of these activities require.
For once, getting access to various investment apps requires your bank details and for most countries, owning a bank account independently starts at 18.
In terms of creating online courses, some might require a bachelor's degree and further studies to prove your credibility which makes you a genius if you got one at 17.
Renting your assets has some legal repercussions that minors might find difficult to understand.
Selling products/services and freelance activities are quite tedious jobs. So in case, an 18-year-old below would like to pursue the venture, they might need parental guidance so that you won't get taken advantage of and waste time.
However, it does not necessarily mean that a young, skillful 15-year-old wouldn't be allowed to have a passive income.
Is it practical to own more than one stream of passive income?
There's no specific reason to stop at owning a single passive income generator. However, do not forget to consider your current situation and keep in mind your financial goals.
In addition, the primary purpose of having a passive income is to earn better.
So as much as possible, you would want to get more streams of passive income. But it all depends on how well you handle multiple activities at once, considering your regular job.
If you happen to have a good-paying regular job, but it takes up a lot of commitment from you, you might consider investing in having a less-hassle passive income.
Of course, you have to regularly ensure that a part of your salary goes straight to investment, so it grows better.
But if you have a lot of time, young blood that craves for more than just a regular paying job, maybe you'd consider the ff:
- Getting multiple investments,
- Selling,
- Some freelance activities, if you can,
- Online courses,
- And renting out some of your assets or stuff.
Streams of Passive Income- Wrapping Up
Indeed, it is advantageous to have a regular income stream. Therefore, what more if you have multiple passive income sources?
It provides financial stability. So better look out for those streams of passive income that you can work with.
It's essential to know your goals or motivation regarding earning through the different passive income streams.
Also, the labor and costs it would incur for such an initiative and the financial risks involved.
After all, you are engaging through these streams of passive income to gain money. So you should be mindful of the cost implications.
It takes a lot more than just allocating money to become a passive income earner. Some of which require tedious work and time like freelancing and selling. On the other hand, a high level of expertise like creating online courses, maintenance and checking like in renting your assets, and extensive research through investing.
These activities do not just earn you income instantly; it requires building your credibility and putting in the effort to study the niche before you see the gains.
Of course, these are not just the only activities you could capitalize on. You can do anything of value and make it a stream for passive income.
One can explore specific ideas, and you'd be surprised to see that you can become a passive earner in no time.
But more than earning through these multiple streams of passive income, we hope this is not a plot for another Jordan Belfort who got drunk on money.
Be the Flower of Wall Street instead!
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