Passive income ideas: How to make your secondary revenue stream as effortless as possible
Over the past few years, the term “passive income” has become a buzzword in business circles and social media. The idea that you can make money “while you sleep” has been touted by many a social media business guru in YouTube video ads and Instagram posts.
As dreamy as this sounds, it’s important to know that unless you’re the heir of a family fortune, truly effortless income is very hard to achieve.
What is achievable through work and consistency is exponential income.
In other words, a gradually increasing return on your time and/or financial investment over the course of many years.
Although the goal is to maximize your earnings vs. time investment ratio, almost all passive income ideas will require a time and/or financial investment, in addition to regular maintenance efforts.
If you’re looking to build alternative income streams that will pay off exponentially and become more hands-off over time, it’s important that you:
- Choose a venture within your wheelhouse
- Manage your expectations
Your goal (at least for the short term) should not be to replace your employment income, but rather supplement it.
Here are some easily accessible, meaningful passive income ideas to get the ball rolling:
1. eBooks and programs
Are you an expert in your field?
Whether you’re a successful software sales rep, a gluten-free chef or a newborn sleep consultant, there are people looking for guidance in your area of expertise.
The first key to being successful with this passive income idea is to offer real value to your buyers. In other words, don’t jump into teaching a subject in which you have minimal experience or lack credentials.
The second very important factor is the “nicheness” of your subject matter. For example, you may be hard-pressed to sell a general weight loss plan to women, as thousands of similar programs already exist.
However, you might find more success in creating a “Baby to 5K” program for post-partum women who want to get back into running. The more specific your audience, the larger the proportion of this population you can reach.
Once you’ve created your program, you’ll need to find a course hosting platform that’s easy for both the creator and the user.
Platforms such as Teachable and Kajabi allow you to connect your program portal to your website by linking your GoDaddy domain name.
Expect to invest in a website, hosting and marketing funnels. You can promote your program or e-book on social media to generate clicks on your download links and encourage viewers to sign-up to an email list.
Our second passive income idea is aimed at all of you who have always wanted to write a book. Amazon makes this possible for virtually any aspiring author through its self-publishing platform KDP (Kindle Direct Publishing).
The online sales giant’s hands-off book distribution business allows writers, illustrators and children’s book authors to easily and economically create and sell high-quality books, without:
- Having to keep an inventory
- Manage sales and shipping
Once you’ve put in the hard work of writing and creating your book, this venture becomes almost entirely passive. (Although, of course, you’ll sell more books if you promote them.)
Manage your expectations with this one
Don’t expect to become a self-made millionaire through book publishing. Like most passive income products we’ll mention, the books that make the big bucks on KDP are usually very specific and niche.
Self-publication takes an initial investment that can range from a few dollars for a text-only novel to a few thousand dollars for a nicely illustrated children’s book.
Although it won’t cost you anything to upload and sell your book through Amazon, any formatting or illustration generally need to be hired out.
Places such as Fiverr and Upwork are excellent places to find freelance:
- Graphic designers
Don’t expect to fully recoup your investment for possibly a couple of years. However, the upside is that KDP royalties will continue to flow into your account, potentially for the rest of your life.
3. Content creation and affiliate marketing
You don’t need to be a famous influencer to profit from brand deals and affiliate marketing.
A number of YouTubers, TikTokers and Instagrammers with small to mid-sized followings review and promote particular activewear brands, Amazon products, baby items and more.
The more specific the subject matter, the better your chances of appealing to brands and reaching the threshold of 1,000 subscribers/4,000 watch hours required to monetize your channel.
An excellent way to supplement your YouTube AdSense income is by adding affiliate links to your video or bio descriptions. If you review products, viewers who wish to purchase the items in your video simply click on the links in your description, and you receive a commission on their total purchase from the retailer.
Amazon affiliate links can be easily set up online, while some retailers such as lululemon allow established creators to apply to partnership programs.
Affiliate links and sponsorship can also be profitable for podcasters, who may choose to create commercials as interludes in their episodes.
Learn more about making money with affiliate marketing in this 5-step plan.
Related: How to make money on YouTube
4. Real estate and vacation rentals
Anyone with the real estate footprint and the money needed to maintain a long or short-term rental property have a solid and ever-growing secondary income source.
This idea is undoubtedly the most traditional (and most lucrative) form of passive income.
With Canada’s homeownership rate plummeting and rental rates rising to unprecedented levels, Canadian landlords are in an envious position.
Those who are lucky to own a cottage can take advantage of the sky-high demand for vacation rentals as Canadians opt for local getaway destinations following the pandemic.
Although significantly more maintenance and cleaning are required to run an Airbnb or a VRBO, this alternative rental option can easily double or triple an owner’s earning potential in the high season, when compared to the average monthly lease.
Related: How to turn your cottage into a homestay in 6 steps
5. Trading apps and traditional investments
One of the more “effortless” passive income ideas on this list, stock market investing is a smart way to exponentially grow your savings account.
Mutual funds from Canada’s major banks have largely shown a positive return after three years, despite the recent state of the economy. They remain one of the safest ways of investing for long-term goals such as retirement.
If you’re particularly risk-averse or have time-sensitive goals, consider putting your money into a GIC.
Although the income potential is lower than that of a traditional mutual fund, a Guaranteed Investment Contract guarantees a specific rate of return over a fixed term. This means that you can predictably grow your investment without risking a loss in the event of a market downturn.
If you want to try your hand at managing stocks, stock-trading apps such as Wealthsimple are now available to any Canadian with a bank account. These platforms give individuals more control over stock selection and timing, and you can invest as little as one dollar at a time.
Whether you use them as fun experiment or a serious retirement investment tool, stock-trading apps are a hands-on way to increase your investment knowledge!
Our passive income ideas could make you money
Before starting on a quest to make money “while you sleep,” make sure that you’re ready to commit the time and effort necessary to create a sustainable, value-adding passive income stream.
When done correctly, having multiple income vehicles can
- Widen your portfolio
- Increase your personal household income
- Benefit your career
At the end of the day, the best and most durable passive income streams are those that benefit both the buyer and the seller. Focus on this aspect above everything else, and you may be enjoying the fruits of your labour for years to come!
The information contained in this blog post is provided for informational purposes only and should not be construed as an endorsement or advice from GoDaddy on any subject matter.
Image by: Solen Feyissa on Unsplash