What Are The Most Common Passive Income Strategies?
How are you going to build your Well, its going to depend on lot on which strategy you think you can implement. Here is a listing of some of the most common passive income strategies available to Joe and Jane average on the web.
1. Generating and selling Books/articles for revenue sharing
2. Owning and operating static websites for advertising dollars
3. Investing in stocks and bonds for dividend and coupon payments
4. Buying savings accounts and CDs for interest payments
5. Buying annuities for fixed payments
6. Owning rental property for rent payments
7. Network marketing for commission payments
8. Selling digital art work (e.g. pictures) or content for fixed payments
9. Peer-to-Peer Lending for interest payments
What is Your Budget?
How much money do you have available to put towards your passive income ideas? Do you have $100, or do you have $50,000+ to spend on your project? The amount of money you have can make a big impact on your options. For example, you won’t be able to buy an apartment complex with $100. However, if you have $50,000 – $250,000 available to spend, your options have greatly increased! First, consider your realistic budget and decide what passive income ideas are able to be obtained within that realm. Never fear, some of these strategies such as peer-to-peer lending for interest payments can be done for a little as $25.00.
How Much Time Do You Have?
Do you want to spend a lot of time building passive income? Would you prefer to spend 15 minutes and that’s it? Ask yourself how much time you really want to invest in building passive income. If you only want to spend a very limited amount of time on your passive income projects, then you should consider something like selling digital artwork or writing for revenue sharing sites. You have relatively less say over how these sites are run, so you can’t spend a ton of time on these even if you wanted to.
You can hire help to reduce the amount of time you invest in a project. The internet has made hiring someone in India or the Philippines really easy, so you could consider outsourcing your projects to another person or company which can give it to inexpensive skilled labor in Asia. Just remember, doing this will require you to have a higher financial budget verses if you did everything yourself. Check out Upwork.com or Fiverr.com to get help.
Weigh Your Risk and Reward
Are you willing to risk all of your hard work and funds over something that is not guaranteed? If your answer is no, then you should not consider risky passive income. Risky passive income assets would include things like real estate, volatile stocks, drop shipping, etc. You may want to consider placing your money in a CD or bond where you have less risk of losing your money. Just remember, with little risk usually comes little reward.
If all you only have a little money to invest towards creating passive income, don’t get discouraged! Create small projects and then take the income you receive from those projects to build bigger ones. If you spend a fair amount of time on your passive income portfolio, you can reinvest the money you make into furthering your projects. Reinvesting is especially easy for stocks, bonds or peer-to-peer lending which can automatically reinvest your profits.
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Photo: Flickr: Tax Credits