If you are like me, you are keen to improve your personal finances. It is one of the reasons you might be considering ways to develop passive income streams.
Being able to afford the lifestyle you want is a noble goal to pursue.
In most case, this is not possible because of lack of enough finances. That is why having multiple income streams is important.
It is said that wealth people have more than seven multiple sources of revenues. This is why they afford the kind of life many can only dream about.
The beauty of dreams is that you achieve them. You can make your personal financial dreams true by learning how to develop passive income streams.
What is Passive Income?
When it comes to money, passive income is the money that you generate without the need for putting in a considerable amount of effort to make it.
This is one of the most appealing revenue streams for many people.
Most like to have passive income streams because they require little effort to generate the income.
It is the idea of making money work for you. However, it is not easy.
To make passive income work, you will have two options; to either invest money to build it up, or to invest your time and effort.
You will have one of the above, and if you are lucky, you might have both.
However, for most people, they have time and effort, but are short on cash.
This means that you will work hard by putting in the hours upfront. It is like investing or putting in your ‘sweat’ equity.
Once you have your passive business or idea up, you can enjoy the benefits of making money in a passive way with very little maintenance.
For example, in blogging, you do the work of publishing content upfront. Thereafter, you earn passive income from the blog content for several years without going back to the content you wrote.
How to Develop Passive Income Streams
Passive income is the money you generate or make without requiring a lot of active involvement to generate it.
The idea of making money ‘while you sleep’ makes passive income streams very attractive.
You can be able to develop passive income streams by building assets that will be making money over time.
In simple terms, you can do this by putting in the efforts upfront and only doing very little to maintain the efforts.
Ideas and Ways to Develop Passive income Streams
If you are keen to build your passive income streams, here are ideas, tips and strategies you can use;
- Selling an online course
- Rental income
- Affiliate marketing
- Flip retail products
- Peer to peer lending
- Dividend stocks
- Create an app
- REITS
- A bond ladder
- Invest in high yield CD or savings account
- Rent out your home short term
- Advertise on your car
- Create blog
- Start a YouTube channel
- Sell designs online
- Rent out useful household items
- Drop-shipping
- Sell stock photos
- Invest in a business
- Rent your car
- Sell an e-book
When it comes to managing your personal finances, having multiple sources of income is a great idea. It is better when you can create and build passive income streams.
By passive, it does not mean you just sit and money drops from the skies. It means you are not actively involved in generating the income. However, you will have done the work upfront to make it a reality.
21 Ways to Develop Passive Income Streams
The reason you are reading this is because you are interested in the idea of making passive income.
To be honest with you, this is a very attractive way to make money. You can be able to get your dream lifestyle.
However, passive income does not mean you do not work. It means you put in the work once and reap benefits for a longer period of time.
You earn your income without being actively involved in generating it. That is the main difference between active and passive income streams.
Let me now share with you ways in which you can develop your passive income streams;
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Selling an online course
You can create a passive income stream by creating and selling an online course.
This will require a lot of work when building it. However, once you are finished, there is no additional work.
You will generate income from your course as long as you are selling it.
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Rental income
Buying income generating real estate is another way to develop passive income.
While the initial investment might be high, real estate is a good option if you want to earn passive income.
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Affiliate marketing
You can start or create passive income from affiliate marketing business. This involves promoting other people’s products or service and earning a commission.
It is possible to build an affiliate blog and generate income every month.
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Flip retail products
Retail Arbitrage is a relatively simple concept: You purchase a product for a lower, or slightly discounted, price and then sell the same product at a higher price, therefore flipping it for a profit.
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Peer to peer lending
If you are looking for ways to earn passive revenues you can consider peer to peer lending.
A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper or LendingClub.
Other players include Funding Circle, which targets businesses and has higher borrowing limits, and Payoff, which targets better credit risks.
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Dividend stocks investing
Investing in the stock market can make you money. You can get capital gains from the appreciation fo your stocks or shares.
It is also possible for you to earn passive income from stocks.
One strategy to make this work is the dividend stock investing. Dividend income can be very passive part of your investment portfolio.
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Create an app
If you are tech-savvy, you should consider creating or developing an app.
It takes a lot of work to build one.
However, once your app is up, users can down it and you generate passive income over a very long period of time.
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REITS
A REIT or Real Estate Investment Trust is a company that owns or manages income-generating real estate.
The rent generated from the properties is distributed to shareholder in the form of dividends.
The dividend income that REITs can provide makes them an attractive investment option for those looking for a form of passive income and if you need an income stream.
REITs pay out nearly all of their profits as dividends.
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A bond ladder
A bond ladder is a portfolio of fixed-income securities in which each security has a significantly different maturity date.
In a bond ladder, the bonds’ maturity dates are evenly spaced across several months or several years so that the proceeds are reinvested at regular intervals as the bonds mature.
A bond ladder is a relatively reliable source of passive income
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Invest in high yield CD or savings account
Investing in a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income.
You can also get one of the highest interest rates in the country.
The beauty of this idea is that you will not even have to leave your house to make money.
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Rent out your home short term
The concept of Airbnb is based on this idea of renting out your home or space in your home for short term use.
It is a great way to earn extra passive income. If you have additional space or rooms in your house you should consider joining Airbnb platform.
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Advertise on your car
Owning a car is a dream for very many people. However, running a car comes with extra costs.
You should find ways to off-set the costs by generating passive income.
One way you can do this is by leasing space in your car to advertisers.
You can get paid to have a banner on the side, front or rear of your car. This would provide you with passive income as long as you continue to provide that adverting space.
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Create a blog
I have found that starting or creating a blog can be a very good source of passive income.
The idea is for you to find a niche, pick your audience and create content that provides value.
Once you start getting traffic, you can then monetize your blog and earn income.
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Start a YouTube channel
In today’s world of video marketing, starting a YouTube channel can be a great way to make passive income.
You can monetize your video content in various ways.
The first option is to join the Google’s advertising program and generate money from Adsense. Another way to earn passive income with your channel is through affiliate marketing.
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Sell designs online
This is a very good idea if you are an artist or a graphic designer.
You can make money passively by selling your art or designs online.
All you need to do is create them, and upload them into an online platform.
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Rent out useful household items
Leasing is a very good way to earn passive income. You can do this by renting-out useful household items in your house.
You can start small on this way to earn extra income.
For example, you can rent out your lawnmower, power tools, tents and larger coolers.
The idea is to find for items that people need to use for a short period of time. While it might not make sense for someone to buy the item, you bridge that gap by renting the item to them.
This way, you are solving a problem and earning passive income while at it.
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Drop-shipping
This is very good and smart way for you to earn passive income.
Drop shipping is methods of retail fulfilment where you do not keep the products you sell in stock.
When you are drop-shipping, you purchase the item directly from a third party that ships the product directly to a customer
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Sell stock photos
If you are a photographer, you can sell your photos and generate passive income.
In fact, you can create additional passive income through photography using your smart phone.
There are many stock photos platforms where you can upload your photos and earn income.
An example of such a platform is Shutterstock. They may offer a percentage or a flat fee for every photo that their client uses.
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Invest in a business
This idea would involve investing in a business as an investor or shareholder. The objective is to ensure you are not actively involved in the day to day operations of the business.
If you have some extra cash, you can look into businesses to invest in.
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Rent your car
If you won a car, you can rent it out and generate additional passive income.
You can use taxi-hailing apps like Bolt. This allows you to provide services using your car and get paid for it.
If you hire a driver, you can turn your car into a passive income-generating asset.
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Sell an e-book
You can share your knowledge through an e-book. This involves writing an e-book and then selling it online.
You can earn passive income from your e-book.
Most of the work is done upfront in writing and creating the e-book. Once that is done, your income is mostly passive.
Conclusion
In conclusion you can be able to create and develop passive income streams.
This is the way to get actual financial freedom. You will be able to get the lifestyle you want when you achieve passive income streams.
I have shared with you several passive income ideas that you can pursue. You should do what works for you, and what makes you happy.
If you want to replace your active income with passive income, you should take the steps I have shared with you.
Find something you can do once, and that has potential to earn you passive income over time.
For example, you can start a blog, create YouTube channel, do affiliate marketing and get rental income among other ideas.