Money Talks: Passive Income and you

As stated in the Cashflow Quadrant article, one of the best ways to succeed in the economy is to generate Passive Income. What exactly is Passive Income? Well, it is a means for you to generate income through non-employment method, especially through assets you own. Today, we are going to learn about different ideas to generate passive income so that you may one day, not need to work anymore when your passive income greatly exceeds your daily expenses. We will be breaking the ideas into three main sections - high time (effort), high investment, low investment and effort.

High Time

#1 - Starting a Blog



A blog is a very appropriate way that anyone with practically zero monetary investment can make passive income. As long as you write something that you are passionate about and market it well, your blog will succeed. Google Adsense and other ad companies will be your primary source of income on this platform. The effort of writing and marketing is extremely high and can be tiring after awhile. So, you need to be sure that this is something you want. If you persevere and market yourself well, your blog will be a stepping stone in your journey to being financially free.

#2 - Write an ebook



This will require quite a lot of effort on your part as writing a book is never easy. However, to get published on Amazon Kindle is fairly easy. Once you are published, you can start selling. If you have a blog or website, congratulations, you already have a wonderful platform with existing potential buyers. This method can be extremely time consuming but the pay off can be phenomenal if you take the effort to market the crap out of your book. So, make sure you write something interesting! 

#3 - Online Courses

An alternative to an e-book is doing an online course. It is very effort-intensive but when you release your course, it will pay off nicely forever as long as the skill you are teaching is in demand.  Think Khan Academy but you focus on making money.

#4 - Online Store for Real Services

What I mean by this is that you set up an online store but what you are selling isn't product but it is existing services such as transcription or translation work. The key here is that you don't do the work yourself, you become a front for the idea and then you can outsource it and take a commission between your buyer and the workers.

#5 -  Building an app

Nowadays, you younguns have access to so much technology and don't really use it to its full potential. If you are interested in tech, why not develop your own app. Your app could be an informational one (if you are not interested in investing in the time to make a game). However, this is a very high effort low return method as even the most successful apps on the Google Play store or Apple store would not generate constant passive income. Such examples of apps would range from Angry Birds to the I am Rich app.

#6 - Youtube

Youtube is a gold mine if you are capable of developing a personality that everyone wants or if you can share information that is unique to your skills. Personally, I tried the youtube game, it is really hit or miss when it comes to how much a person is interested in you. However, when you do hit, you can hit big!  
 

High Investment

#1 - Renting Property and spaces



 If you own a space and no one is using it, why not rent it out. If you don't own a space but have some extra cash lying around buy a space and rent it out. However, when you buy a space, you need to calculate how much is your percentage  profit. Make sure you aren't losing money, calculate how long before the space you purchases experiences turnover. Research is important here. The easiest means of renting out any free space you have is AirBnb. This site allows you to rent out your space while it takes a small cut.

#2 - Renting Equipment



If you are an avid user of gadgets, you can actually rent out your equipment to other individuals who may need something for a short period of time and cannot afford to purchase the whole thing at once. This would often be the case for cameras or even computers. However, keep note that there is a risk of potential damages so unless you are insured, this suggestion is not preferable.


#3 - Buying an existing business/franchise




If you purchase an existing business model, the system would already be implemented. As long as you follow the tried and true system, there will be profits to be made. These opportunities arise in developing urban areas as businesses want to branch out into potential locations at lower risk.

#4 - Starting your own business system



If you are extremely creative and have the ability to solve a problem that no one else can solve. Create a business system for the product! Manufacture the product and market it. This is extremely risky as it requires all hands to be on deck while being very expensive (at least during the first few phases of implementation as you can hire people later on to do your work for you). But if it does take off, your passive income will be on the rise.

#5 - Buy low, sell high



Have you ever noticed something that is lacking in your country? A product that people can get everywhere else except your country? This is what you can do to take advantage of that. Buy bulk of that product from the supplier overseas and resell it through ebay or in person at premium prices (while still undercutting direct sales from ebay (plus shipping)). 

Low Investment, Low Time

#1- Fixed Deposit

 Although investment may be considerably high before there is any noticable income, it is still a good start. Look through different banks and see what is the highest interest rate on them all and leave you lump sum of money that you don't need to use with them.  

 #2 - Start a website



You can start a small website like a blog for a really low sum of money (I plan on doing this if Money Talks takes off). Your expected investment is around $50 a year depending on your server provider. By starting a website, you can also have multiple authors come on board as guest bloggers. You don't necessarily need to pay them as you can claim it is for the experience and exposure. But it would be nice to offer some compensation for their work and you will definitely be paying a writing staff as your website grows. When your website grows, you can use it as a platform to sell products or ebooks and you will not have to be as involved. 

#3 - Starting an e-university



This may be high investment, high time if you don't do it correctly. Approach your local universities and offer to provide an web based platform. Then, outsource the work to programmers. You can get the university to fund your first e-university app as part of their program but if you become more well versed in the necessary processes, you have to option of opening your own private e-university webapp, offering a set tuition fee for access to webinars and the like. 

#4 - Merchandising



If you managed to create a brand name for yourself, making merchandise is a low investment (due to making upon order) and low time (just pay a designer to do it for you) mean of generating passive income. Simple things like mugs, shirts and posters can be very lucrative as you become more popular. 
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Now that you have learned how to make passive income, go at it! Remember, when your passive income exceeds your expenses, every bit of it is profit that you should reinvest. Through the method of passive wealth growth you will be able to retire early as you will be making money irregardless of your work! Good luck!

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Sean Wang