I feel I need to clarify right at the very beginning, that this is not an article offering get-rich-quick schemes, everything I am about to cover takes time and effort. However, once up and running you may well begin to see some passive income coming in to supplement your other work.
What is passive income?
Unlike active income, otherwise known as a wage earned from regular, daily jobs, passive income is money earned from activities where you have no active or direct involvement. You may often hear the phrase, ‘let your money work for you’, and this is often used when talking about a passive income stream.
But how can you earn a passive income?
There are various ways to this but you also need to factor in your attitude to risk and how much you could be willing to loss. Of course, this isn’t always the case, and I will discuss some of the various options in a moment, but it is important to remember that risk and reward often go hand-in-hand.
It is also not something that will happen overnight, so you need to be prepared to put in the effort, perhaps years in advance, in order to reap the rewards further down the line.
Ways to earn income on the road
Travel isn’t cheap, even for budget travel you need some income, and therefore it is important to consider just how much you are going to need before you even set off.
You will need to fact in accommodation and food costs, potentially fuel, and any extras. Don’t be fooled – those little treats you give yourself still cost money, so to do things like the laundrette (even in Thailand, in the cheapest parts of the country, we have to paid 40 Baht for our washing).
Nothing in life is completely free and therefore please do not think that you will be able to live solely on a passive income, especially at the start.
What passive income streams might you want to consider?
#1 Renting out your property
This is not an option for everyone, but for those of you that do have a property, rather than selling it, have you considered renting it instead?
When we first embarked on our trip to Mainland Europe, we took the option to rent our house out and for the first few years, and because we were also earning, we were able to over pay on the mortgage so that when we did sell it we had a large pot to play with.
For those that have perhaps paid their mortgage off however, rental income could be a profitable way to earn a passive income to fund your travels.
If you know you are going to be away for a while, perhaps a year or more, a long-term rental may be the perfect solution, whereas for those that are looking to travel more sporadically and, therefore may wish to return a bit more frequently, you could potentially look into letting your home as a holiday rental instead. The reward for this obviously varies depending on where you live and how appealing the area is to holiday makers, but in the short term you may find yourself earning as much as you would have done renting it out to just one family.
There are many things you need to consider when renting out your home, but it is a great way to earn a passive income while travelling the world. Follow this link to access comprehensive guides on generating income through rentals while travelling. Unleash your wanderlust and start building your financial freedom.
For those of us fortunate enough to have some savings that we do not need to tap into, this could be the ideal way to earn a passive income. However, while investing can be very lucrative, it is also risky.
Nothing is guaranteed when you invest, and you need to remember that you are relying on several external factors beyond your control. It is also something not to flippantly invest in. I would always advise that you seek out professional guidance from a reputable individual before parting with any of your hard-earned money.
Investments vary as well. You may feel confident investing in stocks and shares or foreign currency trades, which I have to say, is still something we are trying to get our heads around and we have been playing around with a dummy Forex account for about 7 years now.
You may decide to invest in something less risky, like a government bond, savings bonds or something similar. Just remember that while the risk is not as high, neither is the dividend payout.
Perhaps instead, the idea of bitcoins and cryptocurrency appeals and it has certainly become far more popular in recent years. This can be extremely profitable especially if you are willing to gain direct exposure to the demand for digital currency. In the same way as a bank account, you earn interest on cryptocurrency. It could be far more rewarding than your bog-standard savings account right now if you invest well.
To stay on top of any trading though, you need to keep up-to-date, and explore trading patterns that work for you.
Just remember – never invest anything you cannot afford to lose.
#3 Blogging or YouTube
With the role of the influencer increasing in popularity, starting a blog or YouTube channel could actually lead to a full-time income, however, please do not be naïve. This takes hard-work, dedication and time. Any Blogger or YouTuber you speak to will tell you that they spent months, if not years, building up an audience.
Only once you have grown a dedicated audience will you be able to explore passive income options like affiliate marketing and advertising to at least substitute part of your active income.
Affiliate marketing is where you can make commission on any sales generated from the retailers or service providers you promote. Perhaps the most common affiliate scheme is the one run by Amazon, although there are 1000’s of others out there. Just make sure that the brands you promote align with the message you are delivering on your site.
The same goes for advertising. If you write an article highlighting that you are against the use of plastics, I wouldn’t then go on to promote a company known for heavy plastics use. Your audience won’t appreciate it and may choose to vote by walking away from your content.
If you are interested in working online, check out this article on how to earn money as a digital nomad
#4 Selling Digital Products Online
For those that are slightly more creative, you may decide to write an E-book or design an online Cookbook for example. These products don’t rely on you being in a certain location at any one time and you don’t need loads of space to hold stock. When someone buys, you simply provide them with the downloadable link. Of course, it does help if you already have an online presence or at least understanding how to market yourself in order to get sales.
#5 Selling Photography
With more and more people looking to create content online, the need for digital images has increased ten-fold. Therefore, if you have a good-eye and can take a decent photo, you could find that others are willing to pay for the privilege of using them. There are many sites out there (for example Shutterstock) willing to pay people for each download they receive.
This type of passive income does take time to build up and I would also say you do need to understand certain techniques like SEO and Keyword searches in order to feature higher up in the rankings, but for those that have lots of professional-looking photos, you may find that this is the best way to get your work noticed.
Of course, there are many other ways to earn a passive income; it’s just about finding the right option that works for you.
If you have discovered other profitable, passive income streams, please do comment below. We are always looking at ways to increase our passive income as I am sure most people are.
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