The term frequently pops up in entrepreneurial articles, webinars, and books, but very few people fully understand what it means and/or what earning passive income looks like in the day-to-day.
By definition, passive income is the money you make from an enterprise that you're not actively involved in. In other words, it's when you find ways to grow your money with minimal effort. While there's some debate surrounding just how passive you really get to be, for the most part, passive income is earned relatively painlessly.
So what are some ways to earn passive income? We've listed a few ways below:
1. Affiliate Marketing | By definition, affiliate marketing is "a marketing arrangement by which an online retailer pays a commission to an external website for traffic or sales generated from its referrals." So all those ads you see on the side of a website/blog...that's affiliate marketing. If you already have a strong online presence, consider allowing others to advertise on your website. It's a very hands-off way to earn extra cash.
2. Selling Digital Files | Do you have a valuable creative skill? Consider creating templates, tutorials, and/or prototypes and selling their files online. For example, if you're a great graphic designer, create a few resume templates and sell the digital files for $10.00 each. It's a one-time initial effort that quickly pays for itself. Don't believe me? Just look at how many resume templates are currently available on Etsy.
3. Self-Publish an E-Book | While this may sound daunting, self-publishing is pretty straightforward. If you feel that your experiences or knowledge could be valuable to a certain audience, put together a 10-20 page e-book and sell it at an affordable price. Then you can sit back, relax, and let your money make itself. Interested? Amazon Kindle Direct Publishing & GumRoad are pretty popular.
4. Take a Survey | Did you know that you can get paid to take surveys? It's that easy. While watching Netflix or on the next long plane ride, take a few surveys and earn some extra cash. PennyHoarder has a great list of companies offering paid surveys.
5. Refer a Friend | How many times have you been served emails or ads reminding you that if you recommend a friend you can earn credit, cash back, or more? This is especially prevalent with credit card companies (the Chase Freedom card is great for earning cash back) & sites like Airbnb. See if your bank or companies you love have a referral program - for every friend you refer, you'll earn. (Pro Tip: "Capital One has a referral program for its account holders who refer new customers. Whenever someone uses your link to sign up for a new account, you’ll receive 50 bucks deposited into your account.")
And there you have it - pretty simple and straightforward ways to earn passive income! Do you already earn passive income? If not, are you thinking about it? Let us know your thoughts (and recommendations!) in the comments below.
Story by: Isabelle Edwards