The coronavirus pandemic has caused a great deal of financial hardship with record unemployment rates and many more people seeing either their hours or their salaries reduced. Many people are rethinking their personal finance strategy to figure out how they can fortify themselves for the future. One way to increase your financial security is through passive income. Essentially, passive income is money earned with little to no effort, although it may involve a significant upfront investment of time and/or money. However, this passive income can provide security during rocky periods or boost overall savings to enable individuals to meet their financial goals more quickly. The following are some great ways to generate passive income:
1. Information products
A great way to produce passive income is through information products, such as video courses, podcasts, or e-books. Individuals should think about those topics in which they have some expertise and how they might develop a course for other people. Often, individuals have knowledge about some niche topics either through work or a personal interest that they can monetize. The courses can be distributed and sold on a variety of third-party platforms, such as Coursera, Skillshare, and Udemy. The strategy involves an upfront investment, but with a quality product and perhaps a little bit of marketing, the revenue can be substantial. The product needs be of the highest quality, however, or else people will likely search for a different solution.
2. Affiliate marketing
People who own websites or influential social media accounts can use affiliate marketing to drive passive income. Many companies will pay to have marketing banners on websites and accounts that produce a lot of traffic. Individuals can earn a commission on any sales generated through affiliate marketing. Of course, individuals will need to take the time to create a website or account in order to generate traffic. This strategy is probably best for individuals who already have websites or social media accounts that have become popular as a way of monetizing, or for those who have a great idea to fill a gap in the market with something new. However, once websites are heavily trafficked, this strategy can generate considerable income.
3. Rental property
For people who can afford to purchase real estate, rental properties are a great source of passive income. Before opting for this strategy, individual should be aware that these properties can take more time than they might have expected. Of course, individuals can always hire third-party companies to manage the rental property, which will cut into income, but can help to make the money more passively earned. Before investing in real estate to rent, people should do some legwork in terms of calculating how much they will probably spend and how much they will likely receive in annual income. While factoring in things like taxes and repairs can really cut down on how much money that you can make from a property—especially in certain jurisdictions—it is still possible to make decent money with some smart moves.
4. Renting space
Some people may have extra room in their living spaces that they do not need. Older people who have had children move out often have additional space, but even younger individuals with an office or other sort of room that they do not use may be better served by renting out their space. Renting out space is particularly beneficial for individuals who have rooms within their home that are not necessarily connected, such as a finished basement with a kitchen and bathroom. This way, the living spaces are separate and people will not feel like they are giving up their own space in any way. You should also do your due diligence when looking for tenants to make sure they are dependable and respectful people who will not be late with their rent or harm your space. Many people try to rent to friends or their acquaintances.
5. Create videos that go viral
One way of earning passive income is to create a video that goes viral. People who already enjoy creating content or those who have thought about it may want to give this strategy a try, especially since it requires little more than some time and a smartphone. Naturally, some strategy is involved in creating a video that goes viral, so you should do some research before you start to create one. Even if the video does not go viral, if it gets a lot of followers, then you can still make money from advertising. Something like a video blog can generate significant income, although it will require consistent content creation and could start to feel like a second job. While this approach to passive income might prove more challenging than the other ideas on the list, it is perhaps the one with the greatest potential for income.