As many people flock to work-from-home opportunities, even more have explored their options when it comes to earning passive income. One roadblock of many passive income opportunities is the cost of entry. Some startup costs can deter some people from getting started.
So are there any legitimate passive income opportunities that don’t cost much to get started? The answer is a definite yes. There are several low-cost, lower-risk passive income opportunities that most people can start right away. As with the majority of passive income opportunities, there will be some work required—at least initially—before you realize profits. Here, we’ll cover a few of the most popular affordable passive income ideas.
What Is Passive Income?
Despite the name, passive income is rarely entirely passive. Upfront work is often required, but this upfront work can generate recurring income with little additional intervention on your part. For example, if you write an e-book, you will need to put in some work to compose the material and publish it online, but once your book is for sale, it can generate income forever. You will have to promote the book or update the content from time to time, but generally, most of the work is front-loaded.
Many people feel intimidated when they start looking for a way to generate passive income because many of the options seem complicated and some have hefty startup costs. Others, like real estate, require both a financial commitment and length of time that many people struggle with, especially if they are already employed full-time or have other pressing responsibilities. However, not all passive income streams are time-consuming or costly.
Share Your Knowledge
One of the best ways to generate passive income without investing a lot of money is to get paid for what you already know. Sharing your knowledge is a great way to avoid the steep learning curve of acquiring a new skill. Even if you are not an educator by trade, you can still use what you know to generate passive income with a little strategic planning.
With so many people interested in starting their own online or brick-and-mortar businesses, informational guides, e-books, and instructional videos are extremely popular. You can create materials that are easily accessible online. For example, if you are a plumber by trade, consider creating a simple blog that links to downloadable guides that can assist other plumbers in improving their business or getting started in the field.
If you teach as your day job, consider reformatting lesson plans or creating online courses on a course-creation platform like LearnDash, Teachable, or Thinkific. Many of these platforms offer an array of tools that make it easy to create a course based on your knowledge and expertise. Once your course is live, you can enjoy repeat purchases of the content you only had to create once.
E-learning is at an all-time high thanks to the coronavirus pandemic, so now is the perfect time to create an online course and share what you know. According to a study conducted by Global Industry Analysts, it is estimated that the online learning industry will be worth $325 billion by the year 2025. With predictions like this, it is easy to see why online learning can be one of the best passive income ideas around.
Invest in the Stock Market
Many people are intimidated by the stock market, so they shy away from it. However, with the popularity of trading apps and online platforms, the barrier to entry is lower.
Some top app-based trading platforms offer consumers the chance to purchase fractional shares. As the name suggests, fractional shares give investors a chance to buy a percentage of an entire share. For example, if a company’s share price is $1,000, a person could purchase a fractional share for $100. Trading platforms that offer fractional shares lower the barrier to entry for investing by making it easier for people to hold stock in top companies. Additionally, fractional shares allow novice investors the opportunity to get more familiar with trading and build the confidence to trade more seriously in the future.
For most people, especially those new to the stock market, mutual funds represent a cost-effective option. Mutual funds allow investors to pool their money with others to purchase stocks (or bonds, money market instruments, or other assets). Professional managers make the investment decisions for a mutual fund. The main benefit of investing in a mutual fund is diversification—the average mutual fund holds over a hundred different securities. This diversification also reduces risk, since the fund’s performance does not wholly depend on any one security. In addition, mutual funds have lower minimum investment requirements. They sometimes come with higher fees, however, so do your research and always read the fine print.
Plenty of Low-Cost Passive Income Options
The above list is by no means a comprehensive list of all the affordable and low-risk passive income opportunities out there, but it is a good start. As you embark on earning passive income, you will undoubtedly discover more opportunities, and you may even be inclined to try more time-intensive pursuits to maximize your income. No matter your approach, always do your research before dedicating your time or hard-earned money to passive income opportunities.