It's the ultimate dream – a passive income that continues earning you money while on autodrive. While I don't believe that a truly passive income exists, it is possible to build an income that requires very little ongoing work. Of course, with any of these techniques, the more effort you are willing to put in, the better the outcome will be. Furthermore, some of these ideas will require lots of work up front.
Here are 5 different ideas for building a passive income. These aren't obviously the only ways, but I think they are some of the most reliable.
Building a Blog
Building a blog will definitely be the most time consuming methods of the 5 to setup. But once it's got going, a world designed blog and bring in revenue for years to come. One of my blogs, which was setup years and years ago, still generates over $1k in passive income every single month. I don't add any new content or even promote it.
The trick to building a profitable blog is having a clear monetization strategy – such as promoting a single affiliate program, and then creating a lot of content to promote that money maker. Finding the right money maker can take lots of trial and error. Don't fall into the trap of trying to promote what everyone else is promoting. Instead, finding a product or affiliate program to promote that doesn't have a huge amount of competition is way easier to get started with.
A blog will be most successful as a passive income stream if you continue to add content to it. This is where I failed. I wish I had kept my blog updated and I continued to optimize it. I'm sure I would have a lot more passive income now if I had done that.
Acorns is my favorite of the mico-investment companies. Basically they invest your spare change into a diversified portfolio. I've just started out with Acorns, but I'm already in love with the set and forget approach.
This type of micro-investment isn't going to make you a millionaire. And will probably never bring in a huge amount of revenue. Personally I see it as a great way to make my cash work a little harder for me. I'm always going to have cash, I may as well make a little bit of passive income off it.
One of the things I've discovered about passive income is that it pays to diversify. One of my fav blogger Matthew Woodward, earns income from a huge number of different sources. Acorns isn't going to make huge dollars but it could be one of many sources of passive income you use to build an overall income.
Amazon Review Site
This is something I've experimented with in the past, and am just about to right a complete guide on. I think reviewing products is a great way to build a passive income. The idea is simple, you publish reviews on your site, which link through to Amazon. As a member of the amazon associates program, you'll earn a commission on every product sold from traffic that you have referred.
Just like building a blog, this is going to take a lot of work up front. But once it's setup, it's possible to generate income month after month will little effort. The learning curve here is also big. You're going to need to learn about SEO.
My Amazon review websites have never lasted more than 5 years before the revenue tailed off. So this method will require you to keep working at it. You may need to sell off older sites, which is a perfectly reasonable way to generate income.
This is probably the most reliable and easiest method. It's also the least profitable on my list. I don't really want to build a massive portfolio of dividend stocks. I think it's stupid as you'll only see a pay off during retirement. It takes a long time and a lot of money to build a dividend income.
I do own a number of stocks and I do earn a small dividend income. But nothing to get excited about. It contributes to my overall strategy of diversification. And I do like having some of my cash tied up in stocks, which makes it hard for me to mindlessly spend it.
So there are just 5 techniques I've used to build a passive income. There are many more. This hasn't been a very detailed guide on how to profit using each of these methods, but I hope this post serves as inspiration. Passive income is possible. If you'd like more info on any of the specific techniques let me know in the comments.