Passive income is one of the best kept secrets out there, referring to income received without the necessity of direct involvement. If you want to earn more and work less, creating passive income streams is the name of the game.
With so many passive income choices available for consideration, it can be challenging for many people to determine what the best options for them are. Consider these 5 methods for creating passive income in your life:
1. Network Marketing
Probably one of the most well known forms of passive income, network marketing offers a variety of products and services that will pay on an ongoing basis when customers reorder. Network marketing involves working with a brand, creating a consistent revenue stream through selling products and services and building a down line.
The down line are the members that you recruit in, who will also sell the same products and services. As a network marketer, you can create passive income through the reordering of products and services and through the percentage that you will make on the sales that your down line makes.
2. Rental Real Estate
Purchasing real estate to rent is also a common strategy to create passive streams of income. The monthly rental income created off one or a variety of properties can add additional income to the household, and in some cases, can replace the current primary sources of income. You can expect to receive around 1% of the property’s appraised value in monthly income, although this will vary based on the property’s location. So, be sure to research prior to purchasing a property or before establishing the rental price.
3. Residual Income
Residual income can be created from a variety of businesses. For example, residual income could be created from the following:
o An insurance agent who receives commission checks from the insurance policies that he or she sold from the prior year. This agent will receive ongoing, passive income as long as he/she remains an agent.
o A fitness instructor or weight lifting guru sells a video where they teach, receiving a portion of all of the items sold.
o If a photographer sells one of their photos as stock photography, they will make royalties every time the picture is purchased and used by someone else.
o A business owner who hires a manager, allowing them to receive income from the establishment without being there on a daily basis.
These are just a few of the examples of how someone could create a residual income stream for themselves.
4. Leveraged Income
Leveraged income refers to creating income streams through leveraging resources or other people. For example, one of the most commonly used methods online is affiliate marketing. Affiliate marketing companies pay other business owners or individuals a percentage commission for selling their products or services. Other possible sources of leveraged income include using subcontractors to complete work, a franchise system or a network marketing system that leverages a large down line.
5. Online Marketing
One of the newest forms of creating passive income is through monetizing a website. While this method will require time up front and some ongoing maintenance, the amount of income that can be earned from this system is more substantial than other business opportunities.
You can make money through pay per click ads, affiliate marketing and through the direct sales of products or services on your website or blog. It is considered a passive source of income as the money that is made once the website is established occurs through visitors clicking or purchasing from your online marketing efforts to direct traffic there.