Passive Income For Dummies Cheat Sheet

To earn passive income, you make a single investing transaction or create a single business project that then makes you money indefinitely — long after the work is done. Here, you find easy and relatively low-cost ways to start generating passive income for your personal needs.

Investing strategies for passive income

To earn passive income with investing strategies, you make a single transaction or trade and then earn money (such as interest, dividends, or another form of income) long afterward. Here are some potential passive income investing strategies to consider:

• Buy dividend-paying stocks. A lot of great stocks have paid dividends to investors, either quarterly or monthly, for many years. Their current dividend yields are usually 4 percent or more, but most of these stocks increase their dividends every year — usually meeting or beating the inflation rate.

• Purchase dividend growth exchange-traded funds (ETFs). Why buy one great stock when you can get a whole bunch of great dividend payers in a single investment vehicle? These types of ETFs, which invest in stocks that consistently raise their dividend payments, can provide predictable, growing dividends for years to come.

• Invest in real estate investment trusts (REITs). Get true passive income from top real estate firms that manage income-producing properties by adding REITs to your brokerage account. Imagine getting income, monthly or quarterly, starting with an investment of less than $100!

• Buy annuities. These passive income vehicles, which have been around for decades, give investors predictable, monthly income payouts. They’re issued by the most stable insurance companies in the market, and you can get an annuity that can provide monthly income for the rest of your life.

• Buy enhanced income ETFs. These vehicles are designed to generate higher‑than‑normal cash flow in the form of dividends by adding an income‑producing strategy — usually selling call and put options — from a traditional stock or bond portfolio. This can provide yields of 10 percent or more.

Business strategies for passive income

To earn passive income with business strategies, you can do some focused work that can take as little as a day or as long as a few days (or a week) in order to create a business project that has the potential to give you income long after your work is done. Check out the following passive income business strategies for inspiration:

• Do an online video course. Online education is a billion-dollar industry. You can turn your experience, expertise, or hobby you’re passionate about into passive income that continues to come in long after you record and upload your video.

• Write an e-book. It’s easier than you think — and artificial intelligence can even help you. When you’re done writing, you can offer your e-book on a popular platform like Amazon and receive royalty income indefinitely.

• Create and sell digital images and photos. Plenty of folks have generated passive income by taking beautiful or relevant photos with their smartphone or digital camera and uploading them to major platforms that sell images.

• Create an audiobook. People across the globe love to listen to audiobooks. It’s not difficult to create one. Once you’ve recorded it, you can upload your audiobook to popular audio platforms and generate some great passive income.

• Sell products through a print-on-demand (POD) company. If you’re artistic, you can sell your digital images on T-shirts, coffee mugs, hoodies, and more. You can automate the process by linking your online storefront with a POD company that fulfills your orders, so you can generate passive income 24/7 — even if you’re sleeping or on vacation!

The A/B business strategy for earning passive income

You can earn passive income when you master the arrangement referred to as the A/B strategy. Simply stated, you pair an offering to a market:

• The “A” is the offering. What can you offer that is valuable and that you can create in a relatively short period of time (such as a week or less)? Can you create an e-book, a photo, a minicourse, or another product? Or can you offer someone else’s product and earn an affiliate commission? You may already have everything you need to create your offering. For example, you can create an online course with your video camera. You can take a photo with your smartphone. You can produce an article or e-book with your laptop and some software.

• The ”B” is the marketplace. This market is a venue or platform, typically online, with an active and large audience and where you can sell your offering. An important consideration when choosing a marketplace is who wants your offering and is willing to pay for it. Great examples of marketplaces include Amazon.com for e-books, Udemy for online courses, Audible for your audiobooks, iStock for your photos and images, Pinterest for your affiliate links, and so forth. You’re limited only by your imagination, time, and efforts.

Do your research and apply yourself. Determine what you can offer and where you can offer it to maximize your passive income potential.