A passive income stream could help to keep your finances secure. Below is an explanation as to what a passive income is, how it can benefit you and how to set one up.
What is a passive income?
A passive income is any form of income that you don’t have to constantly work for. An initial investment may be needed up front, but after that you can sit back and let the money come in.
Why set up a passive income stream?
A passive income could be useful to have alongside a main source of income as a safety net. During times when you cannot work or cannot attract business, a passive income stream can allow you to keep earning something.
Business owners can especially benefit from creating a passive income stream. If you’re sick and unable to work, a passive income can help you to earn something so that you can financially survive. A passive income could also help if your business has seasonal lows in which you find it difficult to attract business (such as a ski equipment company in summer). It may even allow money to keep coming in during times of unexpected downtime (such as the current pandemic).
Ways to set up a passive income
There are lots of different passive income streams that you can explore. By setting up multiple forms of passive income you can create a more secure and stable safety net for yourself. Below are just a few different types of passive income.
Rent out spare space
Got a room in your home you can rent out to a tenant? Or perhaps space in your office that you can rent out to another business? Collecting rent each month could be one way of establishing a passive income. You could even rent out space as storage, rent out a driveway as a parking space or even rent out garden space as an allotment.
Invest savings into stocks/crypto
You could make money by investing in instruments such as stocks or cryptocurrency. These instruments could rise in value over time, allowing you to sell them for a profit when you need some extra cash. You can use platforms such as global exchange, Swyftx, to trade crypto. There are meanwhile plenty of trading platforms for buying and selling stocks.
Try peer-to-peer lending
Peer-to-peer lending involves giving out a loan to someone online. This loan is then paid back to you with interest, allowing you to make some extra money. You can find peer-to-peer lending platforms online.
Sell an ebook/online course
Another way to establish a passive income is to sell a book or an online course. This will require a lot of work up front but once it’s written you can sell it and start making a continuous income out of it.
Get into affiliate marketing
Affiliate marketing involves promoting a product for another company. This could be via a blog post or a video. Every time you convert a new customer you get proceeds from the sale. There are guides to affiliate marketing that you can read online.
Earn royalties via images/music
It’s also possible to earn royalties by selling images online or by selling music/putting it on a paid streaming platform like Spotify. This could be a great way to make a passive income if you’ve got a creative passion such as photography or playing music.