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Financial independence is the #1 goal I and you are looking forward to achieving in life while thinking about the kind of passive sources of income ideas or businesses to engage in that will help us get there.
We all wish to live our lives without having to worry about money! Plus we are willing to do whatever it takes to gain financial freedom.
So let’s dig deeper and understand what is financial independence and how generating passive sources of income will helps us get there.
What is Financial Independence
Financial independence is simply the state of having sufficient personal wealth to live, without having to work actively for necessities.
For example, Mr. John’s quarterly expenses may total $3,000. He receives dividends from stocks he has previously purchased totaling $4,000 quarterly, while Mr. John also has more money in other assets. Under these circumstances, Mr. John is financially independent.
A person’s assets and liabilities are an essential factor in determining if they have achieved financial independence or not.
However, it does not matter how old or young you may seem to be or how much money you have got or make.
If you can generate enough cash to meet your needs either through passive sources of income or other forms of business, then you have achieved financial independence.
It does not matter how old or young someone is or how much money they have or make.
If you can generate enough cash to meet your needs from passive sources of income other than their primary occupation, then they have achieved financial independence.
The truth is your age is potentially irrelevant concerning financial independence.
If at 30 years old and your expenses are only $200 per month, and you have assets that generate $300 or more per month, then you have achieved financial independence, and you are now free to do things that you enjoy doing without having to worry as much.
Before we dive into the list of passive sources of income that guarantee you become financially independent, let look at the approaches to financial independence.
Approaches to Financial Independence
Since there are two sides to the assets and expenses equation, there are two main directions you can focus your energy to get to financial independence, they are:
- Accumulating assets and
- Reducing your expenses.
You are accumulating assets that will generate passive sources of income. You’ll hit the financial independence goal when your monthly passive income is higher than your monthly expenses. Income accumulation is the main focus of that course since we aim to be financially free.
One approach to financial independence is to reduce regular expenses while accumulating assets, to reduce the number of assets required for financial freedom. You can do this by focusing on frugal living or other strategies to reduce expenses.
17 Passive Sources of Income Ideas for Financial Indepence
In this section, I am going to elaborate on the various passive sources of income or passive income ideas that will help you become financially free.
More passive sources of income will continue to be added to the list from time to time, so bookmark this section for later.
1. Build an online business
A good passive income idea model and sound financial advice are to build an online business in which all is automated.
Building an online business will create room for creativity and flexibility. Still, your basics are that your business runs itself, you should in advance automate the billing/ads/affiliate marketing/shipping, etc.
Before venturing into an online business, remember integrity, Use your creativity! Do something of your own! It can be a marketplace, blog, store for digital products etc.
2. Build an Online Blog
Aha, this is my very best passive sources of income, it pays to have a blog of your own where you share whatever you love, build the network you so desire and in the end make money out of it.
Check out How to Start a Blog that makes money. Well once you built your blog, you can monetize it with a few alternatives: such as
Ads – Probably Media.net or Google AdSense (get paid for every impression or click on an ad)
Affiliate marketing – Signup to a various affiliate program, get your unique referral link, banner, or other promotional resources provided for you. Drive qualified traffic and get a commission for every sale you generate without even owning a website. Here is a step by step guide to affiliate marketing for beginners.
3. Start a YouTube channel
Youtube is an excellent passive source of income anyone can leverage today to gain financial independence. YouTube income can be your way into financial freedom.
Shoot quality videos on subject matter that interest you, grow your youtube channel to meet the requirement for monetization, and in the end, start making money.
4. Sell your photography online
Do you know that you can sell your photos online and make money that will make you closer to financial freedom? You can do this by converting your hobby (picture taking) into a passive income source.
For instance. If you like taking pictures (photography), there are several websites that allow you to sell your digital photos through their already built market and to get either a percentage or a flat fee of each photo that is sold, e.g. of such websites.
- Adobe Acrobat
Those photos can now serve as a passive source of income for you since they can be sold without your help and thus generate money for your without extra effort from your end.
5. Become an Affiliate Marketer
Prior to what I said earlier about Affiliate Marketing. In number two, passive income idea on my list. Affiliate marketing strategy gives you the ability to sell products even though you don’t own them.
How does it work?
- You signup into an affiliate program of your choice (like Clickbank, warrior plus) and choose a product that you’d like to sell and get your promotional resources for that product.
- You will get a commission for every product sold, and you just need to bring the customers to the product page and hope that they will buy (some will and some won’t – it’s all about statistics).
- You can create that traffic with online marketing, ad campaigns, building your own website/app or any other creative way you can think of, generating traffic to the product page.
Checkout the right approach to an affiliate marketing business.
6. Passive Income using Dividend, REIT and Interest
A kind of passive source of income similar to the wealthiest people in the world, they know how to harness the ability of stock investing, a dividend based investing and interest generated securities to make their income elevate without extra effort from their end.
7. Passive income through network marketing
Network marketing is also known as Multi-Level Marketing (MLM), this is a business model that allows you to generate ongoing income in two ways:
- By making a commission selling products and
- By recruiting other members who go on to sell.
Sounds too good, well it also creates room for you to make money from the sales made by those you have recruited. Read how I made over N100k in 2week via network marketing.
Please don’t rush into network marketing, and It’s also not a ‘get rich quick’ scheme.
You will have to work, like smarter, I’m afraid! However, with the growth of social media, network marketing is becoming more comfortable, and lots of people are now making a decent living from it.
8. Starting a Consulting Business
Another passive income idea to consider is starting a consulting business. So simple as you need not invest much in this.
Here is how to go about it.
- Instead of offering your expertise or services for free, a consultant offers advice and strategy for a token so that their clients can become more productive.
- It’s quite similar to freelancing, and there is no startup investment. You can start offering consulting services from your social media account. All you need is to create a page so users can request more information.
9. Passive Income through Freelancing
I would love to say that you should have this as one of your passive sources of income.
Here is why?
Freelancing is a popular way to make money online in a passive form because it doesn’t necessarily require any upfront investment of time or money neither is there any requirement for you to start making money through freelancing.
Right of the bait, once you start freelancing, which simply means trading any form of your services, skills or talent for money.
10. Sell your knowledge
If you are a guru of some skills and have been practising it days, weeks, month even years achieving quite good results, you can very well sell your knowledge on that particular skill by teaching others how to do it.
This is my masterpiece passive source of income, check how I sell my knowledge via e-books with ease.
The best part? You can decide to put your knowledge into a material piece (maybe ebooks) and determined price point for it to be sold without any middlemen.
Your knowledge could be any of the following.
- Consultancy and teaching
- Search engine optimization
- Social media marketing
- Creating/designing website
- Affiliate marketing and a lot more.
11. Passive Income through Dropshipping
Dropshipping has gotten a lot of hype, and you will find small entrepreneurs from all over the world earning from it.
It quite a lucrative passive income idea, that may or may not need an upfront investment.
The model on which it works is as follows:
- Find cheap products on Chinese websites like AliExpress which are sure to generate sales.
- Create a store around the product and list it on your site with a right profit margin.
- When someone orders on your e-commerce store, order it on AliExpress and get it delivered straight to your customer’s address.
Besides, You don’t need to have an inventory, buy a product, ship them manually, or any of those e-commerce related hassles.
The sellers will directly send the product to the given address without any bill or store name.
The go-to method of getting traffic to a dropshipping store is to run social media ads, but if you have a popular blog in a niche with a possibility to sell products, you don’t have to spend on ads.
12. Become a virtual assistant
Other great passive sources of income are becoming a virtual assistant. Virtual assistants perform a wide range of services for their clients, all of which can be completed online.
Depending on the day, they may open and reply to emails, schedule online work or blog posts, write mock-up letters and proposals, or perform data entry.
13. Passive Income through Podcasting
Podcasting is similar to blogging, and only you would do it via voice instead of typing. You would get the same benefits and approach it the same way (regular post content, etc.
But it’s just a way to suit people who would instead learn via listening versus reading.
You can earn passively from podcasting in the same way you would with blogging which is the number 2 passive sources of income on my list.
In other for you to become a podcaster, here is the right approach to follow.
- Create a website with which to put podcasts on
- Record your content – you can use a free recording program such as Audacity if you don’t already have something.
- Upload your mp3 along with a description to your website
- Start sharing it!
- Upload the mp3 on your site
- Add content as frequently as possible so that you build a fan base
- Start advertising your site on a social network, or via any other traffic generating method.
14. Buying and selling backlinks
A great passive sources of income for SEO professionals, and it a good one because n order to get higher search engine ranking on Google, a lot of website owners feels that they need to have a lot of backlinks pointing their site.
Actually, Google sees these backlinks as Vote, like I had linked to Audacity on my number 13 passive sources of income which is passive income through podcasting.
It will show Google that Audacity is worth linking to, they have a gain reputation from my site, and so Google will give Audacity more preference for their search engine placements.
So for you to generate passive income through backlinks sale, here are some steps you can take:
- Look for those who want to buy or sell links in forums of sites which talk about link building (like linkadage.com), or social media groups.
- Make yourself aware of the link buying and selling process
- Market only valuable links (links that have high Page Rank on Google)
- You can also create a website advertising your services
- Start promoting your site on social networks, send a pitch to website owners about your services.
15. Passive income through Data entry jobs
Data entry job is a passive source of income for those who like to work remotely. A lot of companies have random requests for different things (like converting hard copy data to electronic data).
For you to become a part-time Data entry operator, here are some steps you can take;
- Look out for data entry openings in freelancing sites such as Guru.com
- Start applying for those jobs
- Get the documents done on time
- So the task as accurately as possible
- Submit back the given job within the required deadline
- Collect testimonials and offer incentives for people to refer their friends.
16. Learn high-income skills
High-income skill (like copywriting) have proven to become a tremendous passive source of income. With high-income skills, you still have the flexibility to work remotely, securing your main job and of which your high-income skill pays higher.
Wondering the specific kind of high-income skills to learn, don’t worry this list of 28 highly profitable skills.
The right approach to high-income skills is by developing your first high-income skill, then scale it up by learning more of them.
17. Passive income through paid surveys
You already know that you can earn money by filling out paid surveys. You can also earn money by referring others to those surveys.
For you to make money by referring your friends to paid surveys, here are some steps you can make.
- Look for referral scheme in the paid survey site that you participate
- Refer your friends to those sites
- Encourage your friends to complete the surveys
- Get paid for those referrals.
A food for thought
You’ve probably heard the saying let your money work for you, what does that mean?
How can you do it?
If you are ready to learn, then check my 3 Code Secret, and I will welcome you to my ‘lecture room.