Building passive income is a goal many share for obvious reasons. Just about everyone likes the idea of making more money without doing a lot of extra work.
That said, “passive” income isn’t passive at first. You need to invest time, effort, and often money in the beginning in order to set up a passive income stream.
That highlights one of the main reasons why some people never try to earn passive income, even though they would like to: they feel they don’t have enough money or time to get started.
Are you one of these people? Although it is generally true that passive income strategies that yield high returns typically require large investments up front, there are plenty of other strategies worth considering if you’re on a budget. The following are just a few noteworthy low-cost passive income strategies to keep in mind.
Create Valuable Content
Your passive income stream will require some initial work to set up, but that doesn’t mean you have to spend a lot of money.
For example, many people have successfully earned passive income by writing books and publishing them online. Amazon’s Kindle Direct Publishing provides a way for writers to self-publish e-books for free and sell them on amazon.com. While you will obviously need to spend time writing your book, you won’t need to spend any money publishing it, unless you choose to pay for services like copy editing, formatting, and graphic design for the cover. However, it’s possible to do these all by yourself—for instance, you can avoid paying for design services by using an online tool such as Canva instead.
Creating an online course is a similar tactic many have leveraged successfully. If you have expertise in a certain topic, you could monetize it by sharing your knowledge on the Internet. Udemy, Skillshare, and Teachable are a few platforms you can use to publish your course and earn money from it.
Invest Slowly & Steadily
Investing in the stock market is another popular way to earn passive income. Of course, if you plan to go this route, it’s important to remember that you could lose your investment if you’re not careful. Your goal shouldn’t be to make risky investments in the hope of getting rich.
Instead, your goal should be to identify lower-risk investment opportunities, such as ETFs with strong reputations, and invest small amounts of money in them over time.
Will this yield major returns right away? No, but eventually, you’ll have a nice investment to fall back on should you ever need it.
Look at your budget. Consider all your expenses and determine which ones you can eliminate painlessly. Maybe instead of buying the high-priced cup of coffee every morning, you can make your own coffee at home. This could save you $20 per week—which isn’t much but adds up to more than $1,000 over the course of a year. If you want to take it a step further, rather than going out during your lunch break, pack your lunch; rather than pay for an expensive monthly cable television package, opt for a cheaper Netflix or Hulu subscription.
These are just a few examples; the point is to look at your expenses and see where you can save a few extra dollars every week. Instead of spending that money, invest it.
This is also a smart way to earn low-cost passive income because it doesn’t require much effort on your part. While you should research your investment opportunities at first to be confident you’ve selected a strong one, once you find the right opportunity, earning passive income is as simple as making a minor investment every week.
Consider Dropshipping
Plenty of people looking to earn extra money have achieved their goals thanks to the e-commerce revolution. Being able to sell products online has made it possible to succeed as a merchant without a brick-and-mortar shop. However, this might not seem like a feasible strategy if you don’t have the money to purchase inventory. Luckily, you have another option: dropshipping.
Dropshipping allows you to sell products online without purchasing the inventory ahead of time. You start by setting up your shop and partnering with a dropshipping supplier. The supplier typically manufactures your products, stores them, or both. When a customer places an order from your shop, you then order the item from the supplier. This can even be triggered automatically in some cases. The supplier ships the product to your customer. Essentially, dropshipping allows you to sell products and earn a profit without maintaining costly inventory or having to ship anything.
Rent Out Your Home
Airbnb and its competitors have made earning money off your property easier than ever. If you have a spare room, you could rent it out whenever you like. Or, you could rent out your home on Airbnb (or Vrbo, FlipKey, HomeAway, or several other sites) when you go on vacation. The costs you’ll incur are virtually nonexistent. Instead, you’ll simply be making money off space you already own.
Most importantly, remember that not every passive income strategy is ideal for every person. You need to find one you’re comfortable with. You also need to find one that’s right for your budget. These are all options worth considering.