Is there anyone who hasn’t heard about the miracle of passive income yet? A friend that rents out a spare flat, online influencers earning on affiliate marketing… they’re all tempting you to start your own side hustle. Should you actually try to earn money that way? First, let’s learn what qualifies as passive income.
What Is Passive Income?
The IRS describes passive income as “business in which the taxpayer does not materially participate“. As in, you’re not trading time for money –you’re generating income on autopilot, even whilst you sleep.
Cryptocurrency fans are one of the most prominent passive income participants. Yet, just investing in crypto might not be enough without actively learning or observing the market on a regular basis. Your tactics must pay interest to qualify as passive income. Right now, it can sound pretty confusing, we agree. So, what is passive income in practice?
Generally, two main points determine if you gain money non-actively:
- The cash stream doesn’t come from formal employment –like trading time for money (full-time, part-time, or even freelance).
- You don’t put a lot of effort into earning that cash, and you don’t tend to it daily like a full-time job.
These endeavors are not always easy to maintain, though. Also, any side hustle will take some time and money to build and reap their benefits. Some consumers choose to invest in financial products or make a buck off their already existing investments. That includes crypto lending or staking, cloud mining, and others for cryptocurrency investors. They might take days, weeks, or even months to generate any income.
But crypto isn’t for everyone –when it comes to more traditional ways to gain passive income, most people turn to rental property, bonds and savings accounts, and unemployment benefits. If you invest in businesses and don’t participate in them, that is also considered a passive income.
During the pandemic I invested in a friend’s laundromat. I put in a 33% stake, and I get monthly payouts for zero work. I did this just in case our blog flat lined (which thankfully didn’t happen).
Tip: Make sure you record your passive income cashflows. Every side hustle is taxed differently. It might be a bother to collect all the data for a financial statement later on.
Try These Strategies
Not everyone starts out as a passive income guru, you may need to walk before you can run.
Doing small gigs and micro tasks online
One of the easiest and fastest ways to earn passive income is to do some small gigs and micro-tasks online and learn from them. JumpTask platform has a huge collection of different tasks in which you won’t get bored of making cash. Variety is the spice of life!
The experience you gain from working with sites like JumpTask will help you create your own passive income when you’re ready. This is a great solution if you’re just starting out with online passive income strategies –you get to try a little bit of everything to find out where your strength lay. Quite often people hiring on JumpTask are hiring you to help grow their passive income, so you can learn from proven professionals.
Additionally, since micro jobs typically include things like blog writing, web design, virtual assistance data entry, taking surveys, writing reviews, and social media management, they are easy to apply to a flexible schedule. And a cherry on top, these types of gigs can broaden your resume (if that’s what you’re looking for).
When you’re ready, you can turn around and use JumpTask to outsource the work around your own passive income stream.
Renting out properties
Investment doesn’t always have to include bonds or cryptocurrency. Some people also become real estate owners by investing in apartments, houses, and even parking spaces. Don’t fret! You don’t have to spend thousands on a new property. Some people start by sharing their own.
If you’re not ready to be a long-term renter or want to dip your toes in for the first time, rent out a spare room in your apartment. Not only is that efficient for tourists, but it also won’t put pressure on you regarding maintenance, mortgages, or other costs. Airbnb is the best place to start renting out a spare room.
Don’t have a spare room –or not willing to let someone else into your home? Rent out a parking space! Unused parking spaces won’t always bring stacks of money, but it’s better than nothing. Moreover, high-traffic areas are ideal for earning a better passive income.
Getting into affiliate marketing
We get it. Offline passive income can be too bothersome for someone with a busy schedule. Thankfully, there are a lot of online opportunities to try out. Affiliate marketing is ideal for you if you already have a social media account or blog with an active fanbase.
Influencers make hundreds of dollars monthly by promoting different products or services through an affiliate link –during the pandemic when everyone was forced out of their job, we made upwards of $20k USD per month with affiliate marketing on this very website alone.
Of course, the earnings depend on your online traffic and how well you promote products –only promoting goods and services you actually use and trust is a good strategy. Some platforms are better suited for affiliate marketing than others. But how does that scheme work? When fans click on the link and buy the product, the affiliate (you) earns a commission from the site owner. The typical commission is around 3%-7%.
Some affiliate income is recurring for the life of the customer you pull in, like that of Safetywing or Cloudways website hosting (both companies we use and trust ourselves).
Affiliate marketing on a blog is much easier than starting a Youtube channel, in my opinion.
Our last blog post before the pandemic was put online in February 2019 and we coasted for 3 years without having to create any new content. If you want to be Youtube famous, you’ve got to publish fresh video almost daily or you fall off the hamster wheel.
Read our massive, comprehensive, fabulous free guide to starting a blog here.
Sharing your bandwidth
Like some of the other passive income strategies, sharing your data bandwidth from your ISP on platforms like Honeygain can benefit both you and the receivers. It’s similar to the peer-to-peer (P2P) network technology. Users would use the available bandwidth for an array of tasks. Then, the platform would compensate the bandwidth owner.
So, if you have a good internet connection and don’t usually use it all, sharing your bandwidth for a certain fee can be a great way to earn passive cash. The amount you receive through online payment services might be based on location, the bandwidth itself, and the number of users connected to the network.
In Asia, it’s also common for locals to put a coin op machine outside their home for paid WiFi access. You can build your own with a Raspberry Pi portable computer or buy a prefabricated one locally.
Wait –there’s more!
Passive income is our bag, baby. These ideas are only the beginning.
You can read more of our income generating strategies elsewhere on Hobo with a Laptop –learn how to make quick cash in an emergency, start your own blog from scratch, or sell merchandise like T-shirts without having to keep inventory or ship them yourself.
And that’s just the beginning, there’s plenty more to explore from your friendly neighborhood hobo.
Conclusion
Let’s wrap this one up –passive income is not always easy money at first. Still, there are a lot of side hustles you can take up to earn some cash. That includes renting out properties, doing micro tasks online, sharing your bandwidth, and being an affiliate. Don’t forget to document all your passive income endeavors!
Not prepared to handle passive income startup costs? You could get a quick loan approved within hours here.
Got a passive income idea you’d like to share with our readers? Please drop a comment below!