Before I can tell you about my favorite passive income ideas, I think it’s only fair to tell you what I think the term actually means. To me, passive income is income, whether currency, goods or services, which is received on a regular basis with relatively little effort on the part of the person receiving it. This makes it different from active income, which is like the paycheck a person works to receive, as well as portfolio income, which is income based on stock dividends, purchases and sales. Granted, the market moves on its own without the individual shareholder, but any investor will tell you that income is far from passive.
Getting back to the main point of my post, I wanted to share with all of my readers some of my favorite passive income ideas, including a couple of ideas that the average person may be able to use to start turning a profit sooner rather than later. Drop shipping is something you may have heard about before, and while it does require significant effort to set up an online store at first, once you have things in place you can just sit back and watch the money roll in. It works like this – find goods that are scarce in your local market or which are hard to find online and for which you could easily make a Google ranked page.
You should focus on low-cost goods that the general consumer would be likely to buy. That means things people want and more importantly, that they can actually afford. Goods which are hard to price-shop for online are what you’re really after, like specifically colored shoes or clothes, instead of branded televisions. You don’t actually need any inventory so there’s very little overhead involved. Post goods you can buy cheaply on your website, where you increase the price over what you pay to the point where you can claim a tidy profit, and make sales. Then just ship the goods direct to your customers.
You don’t need to deal in tangible goods to make passive income either. In fact, I find the idea of paying someone to create a marketable app for me and then putting it in stores all over the Internet a much more lucrative prospect. If you have a good app, it will literally sell itself, and all you need to do is show up once or twice a month to collect your income from the related sales. The same thing goes for eBooks, though those are a bit easier for me to write than apps since I don’t know a thing about writing in computer code languages like SQL, Java or HTTP.