5 Ways to Earn Passive Income

by Traci K. on August 16, 2010

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Everyone is familiar with active income: income made directly from your day-to-day job whether it’s hourly, salary, or contracted pay which comprises most peoples’ primary income source. But there is another strategy to supplement primary income, with little or no upfront work. Earn passive income with a primary investment of time or money, then sit back and collect your additional income streams with minimal upkeep. Here are five passive income ideas to help get you started:

1. Real Estate: Real estate is a traditional way to earn passive income. The best passive income opportunity through real estate is one of the most recognized: the rental property. Whether the property is already owned or bought for use as a rental, this one time, up front investment generates a monthly stream of income with little maintenance. But there are other forms to earn passive income through real estate, such as lumber sales from wooded property. This option does usually involve a large up front investment.

2.Investing: Interest and dividends make up another traditional avenue to earn passive income. Dividends are paid from investments such as stock exchange (high risk) and mutual funds (medium risk). The higher possible return usually involves more risk. Interest is from low risk investments with lower yields, but there is still a way to maximize your return. You can utilize everything from high interest checking and savings accounts, Cd’s, money market savings or investing in the stock market. There are a wealth of options depending on how much you have to invest up front and how much risk you are willing to take.

3. Information: Information products provide the best passive income for those with little money to invest up front. The products are a one time investment of effort to create an e-book, booklet or newsletter with market appeal. The e-book can be sold through a personal website and will require additional marketing. You could also use self-publishing companies that help promote e-content or try for places that publish to mobile devices. Both require that some form of need is addressed for the audience. Traditional paper publishing and self publishing also generate passive income, requiring different start up costs for any budget.

4. Advertising: Websites or blogs earn passive income online through advertising and affiliate programs. Advertising such as Google’s AdWords pays the website or blog owner as web surfers click on ads embedded in the page. Affiliate programs allow linking to products for sale. The website owner makes a small commission for purchases made by following the link to make the purchase. Website content draws people to the site, so unique or specialized content is important.

5. Sales: Content Selling/Reselling is a strategy for generating passive income online. Successful sales require original content that can be sold repeatedly, such as photographs and image licenses or sewing patterns. Other passive income ideas for content require upfront creation such as website or blog templates, desktop themes, and even mobile device applications. Reselling content can be as simple as setting up a web page for purchased content, using a domain reseller program or even selling domain hosting for other companies.
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