Passive income is an income that can be generated without having anyone actively involved. This means that passive income can be earned even when you're doing something else, or when you're sleeping.
Fixed deposit is the best example of how you can make passive income immediately. When you invest in fixed deposit from a trusted bank, you can earn around 3-4% interest rate p.a.. without doing anything. Well... the only thing you need to do is to make sure you're not withdrawing the money before the maturity period.
Thanks to inflation and many other economical factors, the price of products and services we purchase will only become more expensive and unaffordable year by year. It's becoming almost impossible for us to have our desired lifestyle by relying fully on our typical 9 to 5 job.
By generating multiple streams of passive income, it helps us to reduce our financial burden and be a step closer in achieving financial freedom.
As passive income has become a trend worldwide, there's countless content on the internet talking about passive income ideas. In fact, this had made many have a misconception that passive income is something achievable overnight without any effort at all.
If you’re looking for answers on how to make passive income fast, this might not be the suitable for you. The reason is because most approaches that I will be sharing to generate passive income requires plenty of time and effort to get started. If you’re serious in earning passive income and don’t mind the upfront effort, this article will definitely help you to make a complete understanding on how you can get started.
Here are some of the best approaches that is still profitable and achievable for you to earn passive income.
Amazon Kindle Direct Publishing is a platform for anyone to write and sell their eBook on Amazon. Whenever someone purchased any of your eBooks sold in Amazon, you'll earn a royalty from Amazon KDP. As long as the eBooks you've written a few years back is still selling in Amazon, you can still earn royalty from Amazon when someone purchased your eBook today.
Amazon Kindle Direct Publishing offers 2 different royalty options for you to choose from, either 35% Royalty Option or 70% Royalty Option. So, it depends on the selling price of your eBook and the actual number of transactions you received.
P.S. The pricing requirement varies for different countries.
If you're eBook is selling at $9.99, this means that the royalty option you're qualified for is 70% royalty. For each books sold in Amazon, you'll be earning $6.99. If you managed to get around 10 signups on a monthly basis, you'll be able to generate $69.90 passive income each month. The more you sell each month, the more you'll earn. Well. I guess you can do the calculations from here.
When you invest in Blue Chips, Real Estate Investment Trust, or other stocks listed in the stock market, you are able to receive dividend from the company you invest in on a quarterly/yearly basis. You'll need to register for a brokerage account from your local bank to get started.
The average benchmark for dividend yield is approximately 5%. So, if you invested $10,000 with a dividend yield of 5%. By the end of the year, you’ll earned a total of $500 in dividend. In this case, you’re generating $42 passive income per month.
Let's take a real-time example, Starbucks Corp. - having a dividend yield of 2.11% during the time I'm writing this article. If you were to invest $10,000 in Starbucks, you'll be earning a dividend of $211. But if you were to invest $20,000 instead, the dividend you'll received is $422.
This means that the amount of passive income you can earn through dividend investing is influence by the amount you invest as well as the dividend yield. The more you invest, the more dividend you'll receive. The higher the dividend yield, the more dividend you'll received with the same amount of investment.
Hate watching advertisements when all you want to do is to watch some YouTube videos? Well, that's how most YouTubers are making their money online. When someone sees an advertisement while watching one of your videos, YouTube will pay you a certain amount of money in return, even if it's a video created 10 years ago.
According to Influencer MarketingHub, you’ll earn $4.18 on average for every 1,000 advertisement views shown in your video. Let’s say you have 1,000,000 views in total on all your videos each month, you’ll be earning around S4,180 by the end of the month. Imagine you have 3,000,000 views each month, you’ll be earning around $12,540 passive income this month.
If you love creating and sharing content, then blogging is the best choice for you. You can set a dedicated section on your website used to place advertisements with Google AdSense. When someone visits your website and clicks on an advertisement, then Google will pay you a certain amount of money.
The amount of income you can generate from blogging depends on 1) the number of monthly website visitors, 2) advertisement click-through-rate (CTR), as well as 3) advertisement cost-per-click (CPC). These are the 3 important data that will affect the amount of passive income you can generate.
The average click-through-rate can be estimated to be around 1 - 2% while Google AdSense average CPC is around $0.5 to $2. If you're having approximately 10K website traffic to your website with a 2% CTR and an average CPC of $2, you'll be earning $400 on a monthly basis.
The concept of affiliate marketing is similar to our typical sales person. When you refer someone to purchase a product using an unique link given by you, you'll be able to earn commission from that purchase. This works perfectly well if your website is a review site for a niche market - e.g. web hosting provider. One of the famous affiliate marketing platform for you to promote almost any products would be Amazon Associates Program.
It depends on the commission rate of the products you're promoting. In average, you can earn around 30% commission when someone purchase a product through your affiliate link. If the product sold is around $200, that means you'll be earning around $60 per successful transaction.