5 Great Passive Income Ideas In 2022
Are you looking for the best ways to make passive income?
Don't worry!
This article will show you some of the best ways to make true passive income in 2022 and beyond.
Although the definition of passive income is debatable, let me clarify how l define it;
Passive income is some sort of residual income, whereby you invest some time or money upfront – and you get paid over & over i.e. for months, or even years to come.
It’s like planting a tree🌳 and you water💦 that tree till it’s able to provide fruits🍒 for you on autopilot♻️.
But bear in mind that, the level of passivity varies from one business model to another – since some business models are more passive than others.
Another key important factor is that, it’s difficult to achieve 100% passivity – since you have to put-in some little work here & there in order to maintain the income source.
If you don't maintain it, the income source might start to yield less and less income in the future.
For example, if you don't maintain and renovate your real estate🏯 properties, they might start to depreciate in value – since real estate needs some maintenance now & then in order to keep it in good state.
With that being said, here are some of the best passive income ideas right now.
Now, l know some people might disagree with some of the ideas on this list, but I'm going to explain why l chose them.
This is probably the best passive income idea, since buildings are 90% hands-off when it comes to management.
With real estate, you need to invest some money upfront i.e. in order to buy the properties like residential, commercial, or even industrial properties.
The most common form of real estate is whereby you buy a property, then you rent it – in return for a rental income, which is normally received on a monthly basis.
This is great for the long term, since this allows you to build a steady long term residual income.
However, there’s also another great way of doing real estate, which is a strategy known as flipping.
This is whereby you find properties that are being sold for cheap, then you buy them at a price that's below their actual market value.
Once you purchase those properties, you can then add value to them i.e. through renovations, or any other form of modification that can make the property look more better.
Once you do that, you can then resale the properties for a profit.
This is great if you want to earn a huge lump some of money within a short space of time, since you can buy a house for half the normal price, add some value, then resale it at a higher margin (few months later).
Alternatively, you can buy properties during huge economic crushes e.g. Covid pandemic.
In times like these, properties are being sold for a give away price since the supply far exceeds the demand.
Thus, the wise people are busy buying properties right now – with the hope of reselling them at a higher price i.e. when the economy recovers in the future.
However, these techniques are more active than passive, since you need to be actively researching about the current best deals.
But if you have a real estate agent who works for you, then it becomes more passive, since your money will be working for you i.e. the real estate agent will do most of the heavy lifting for you.
But if you're a solo individual who wants to enjoy passive income from real estate, then you might need to focus on buying properties & rent them out for a monthly rental income.
Now let me mention this;
Real estate might not be the best option for young people or for someone who doesn't have a strong financial base.
This is so because, you need some capital to invest in real estate, which is a huge road block for most people.
But if you have a good credit score and you qualify for a bank loan, then it might be easier for you to get some capital.
But in my opinion, l think it’s better to start with a business – preferably an online business, since it's easier to scale.
Once you build your business to a certain level, you can then take some of your profits & invest them into real estate.
2. Dividend Paying Stocks📈
This is also another great strategy for earning some passive income.
When l talk about stocks, most people thinks of day trading – whereby you have to keep your eye at the stock charts most times i.e. buy when the price is down, then sell when the price goes up.
In my opinion, day trading isn't passive in nature, since it involves a lot of active work – it’s almost like a job!🙄
When l talk about passive income, l mean something like investing your money in some blue-chip companies which pays dividends.
Blue-chip companies are those businesses which has been around for a longer period, probably more than 10 years or so.
These companies are more secure, since most of them are here to stay.
You might need to choose something like Index Funds, whereby the best companies in your nation are bundled into one basket, hence you invest your money in that one huge basket.
If one or two companies makes loses, you might still get some dividends from others which are preforming well inside that basket.
Dividends are a great way of earning a long term residual income, since you only need to invest your money into a company, then your money starts working for you.
If you want to see your money grow even much faster, you might need to put your shares on drip.
This is a scenario whereby all your dividends are automatically reinvested back into buying more shares.
Thus, your money will grow in the long term – so as the number of your shares.
Another great way to earn dividend income is through finding small private limited companies which are about to go public in few months time.
You can be able to buy shares at a pretty low price when the company is still small – hence, you can be able to buy more shares at a relatively cheap price.
When the company eventually goes public, the share value of that company might go up – thus, allowing your shares to raise in value.
For example, if the share price of a small private company is $0.50 per share and you want to buy 100 shares, you can buy those 100 shares at a total price of $50.
When the company eventually goes public, its share price might rise by 5 times to something like $2.50 per share. (just for illustration purpose)
This means that the shares which you purchased for $50 will now be worth $250.
Sounds great hey!😊
However, just like real estate, you need to invest some money in order to get started with stocks.
And if you're still young & you don’t have some money yet, this might not be the best option for you.
You might need to consider a business model whereby you can invest time, rather than money – and l will discuss about these business models in just a moment.
Another drawback of stocks is that, the returns may be very small i.e. some stocks pays as little as 2% per annum.
Now let's do the math real quick:
Let’s say you invest $100k @ 2% per annum, you will get $2 000 per year profit, which is roughly $167 per month on average.
So if you need to make some significant amounts, you might need to invest more money in order to see significant returns – which might not be available in most people's accounts.
This is my favourite form of passive income, since you can get paid for the work that you’ve done in the past.
With affiliate marketing, you can get started on an extremely low budget – unlike other forms of passive income.
If you choose the YouTube route, you can get started for free, since a YouTube channel is free to setup.
However, you can also choose the website route – whereby you create a website and you start writing some articles about some certain products in a particular niche.
You can also create a review website, whereby you publish reviews and comparisons in order to help customers with the right purchasing decisions.
However, you should keep in mind that, these organic strategies takes time – but once your platform is established, it can generate leads & sales for you on autopilot.
For example, when your website is still new, it might be difficult to get traffic and sales – since your website will still be lacking some authority on the internet.
But as your website gains some authority, it will start to rank better on Google & you will start to get leads & sales from pieces of content that you’ve created in the past.
If you want to bypass the organic strategies, you can use paid ads in order to get your offers in front of more eyebrows much quicker.
Most people run paid ads to a landing page, then they collect customer's details on that landing page.
After that, they will start sending some follow up emails which are all aimed at promoting specific offers.
Paid ads are good for scaling your business quicker – but in my opinion, l don't think that an affiliate business should solely rely on paid traffic.
This is so because ad campaigns sometimes fail to yield great results, or maybe your ad account might get banned due to changes in Facebook's/Google's terms of service.
Besides, a business which heavily relies on paid ads is less passive, since you have to actively work on these campaigns in order to keep them profitable.
So if you want to build a long term passive affiliate business, then you need to establish an organic platform – though you can use ads for scaling.
4. Software As A Service (SAAS)🛃
This is probably another great way of earning true passive income online.
Software As A Service (SAAS) is basically a software that’s used to fulfil different business tasks, in return for a monthly subscription fee.
If you don't have any idea about SAAS, refer to ClickFunnels, GetResponse, Ahrefs, or any other software which is used in online business.
The idea is to let people use the software, whilst they pay for using it i.e. mostly through monthly subscriptions.
This method is passive in the long run, since softwares only needs some few maintenance here & there in order to keep them functional.
Software updates are only done once in a while – hence, allowing you to earn true passive income for something that you’ve created a while ago.
However, bear in mind that you need to invest either time or money in order to yield true passive income from softwares.
If you're a software developer, l highly recommend you to invest some time in order to create the software yourself – so as to utilise your skills.
However, if you're not a developer, then your might need to hire someone on sites like Fiverr or Upwork, but this option does cost some money.
But once the software is up and running, it can generate some residual income for months – if not years to come i.e. on autopilot.
You can also hire the whole team on Fiverr which can take care of the software updates, customer support, etc. – hence, you wont necessarily have to worry about all these issues yourself.
This is very debatable since most people thinks that digital products only comes in the form of mentorship programs or courses.
Most people always thinks of ‘guru courses’ when it comes to digital products – but the thing is that, digital products comes in various forms.
And I've to admit that some are less passive than others.
For example, if you create an affiliate marketing course, you need to actively work on helping your students through answering their questions.
Obviously, this is less passive since this involves a lot of active work on a day to day basis.
However, the type of digital products which I'm talking about are simple downloadable eBooks or pdf files, whereby you don't necessarily need to work hands-on with your clients.
For example, if you create a pdf cooking recipe, you might not necessarily need to do some active work like constantly dealing with customers – hence, more passive for you.
What makes digital products more passive is that, you only create one copy of the product – and you can simply upload it to a cloud based platform.
If someone purchases the item, the pdf file will be automatically sent to the customer via different distribution systems.
Thus, this will turn into passive income in the long run, since you can earn residual income for a pdf file that you’ve created in the past.
However, you must have some adequate knowledge about a certain field before you start creating digital products about that field.
For example, if you have some knowledge about health and fitness, then you can share that knowledge via an eBook – then you monetise it through charging a certain fee for the eBook.
Wrapping Up
Passive income is the true way to financial freedom, since it allows you to separate your time from money.
You invest either time or money, then you start generating some residual income in the long term.
However, most people like to achieve the passive income lifestyle i.e. travelling the world, driving super cars, living in big homes, etc., but they aren't willing to do what it takes to get there.
But the truth is, you must be willing to do what it takes in order to achieve the lifestyle that you dream of.
If you ignore that, you may spend years talking about your dream life but without taking any action to get there.
So your homework today is;
1. What kind of lifestyle that you want to live in the long term?
2. What does it take to get there?
3. Which steps have you taken so far in order to chase those dreams?
Obviously, the first question is easy to answer, since you always have something in your mind that you always imagine.
However, the second and third questions are a bit challenging for most people, since most people out there feels offended by those questions.
But my advice is;
Once you manage to answer these questions, try to find other successful people in your field who’ve already achieved the kind of lifestyle that you desire.
Out of those people, choose one or two who resonates with you, research about how they achieved their success – and then, you learn from their strategies.
(It’s easier to remodel success than to reinvent the wheel)
Frequently Asked Questions
What Are Some Examples of Passive Income?
• Affiliate Marketing
• Real Estate
• Dividend Paying Stocks
• Software As A Service
• Selling Merch (through RedBubble, Teespring, Printify, Spreadshirt, etc)
• Any business that does not require your presence
How Do I Generate Passive Income?
In order to build a passive income stream, you definitely need to build an income generating asset.
The main idea of passive income is to put life in something that has the ability to sustain on its own in the long run – with little maintenance work in the future.
Thus, you need to put in some huge amount of work upfront in creating something like a website, then the website will turn into a passive income stream in the long run, since websites can rank higher for years with little minimum maintenance.
However, you can also invest in dividend paying stocks or real estate, thus making your money work for you in your sleep.
This allows you to generate income for months – or even years after the initial investment has been done.
Does Passive Income Really Work?
Passive income does exists and it actually work.
Most people are brainwashed by the traditional system, whereby they believe that you only get paid when you actively go to work, otherwise there’s no such thing like making money in your sleep.
That's the main reason why people spend their entire lives working for an hourly pay.
But the truth is, most rich people have various passive income streams which generates income for them on autopilot.
This allows them to separate their time from money, since their income is not determined by the amount of hours that they work. Instead, they earn money based on results.
Thus, if you want to achieve financial freedom, you definitely need to build some passive income streams so as to generate money in your sleep.
Always remember Warren Buffet's words;
“If you can't make money in your sleep, you will be poor forever".
Passive Income Ideas With Money
• Affiliate Marketing
• Dropshipping
• Selling Merch (through Teespring or other alternatives)
• Creating a digital product (that sells through automated systems)
