Earn While You Sleep: 7 Passive Income Strategies
We all feel better after a good night’s sleep. But waking up to see extra income in your bank account is a particular type of refreshing, especially when you know that you’ll get the same payment the following month and the month after that…regardless of the work you put in.
Having a passive income that doesn’t require an ongoing labor commitment is a major financial comfort. It’s a boon to any retirement and a useful resource to have if you’re still working but planning to transition to something more fulfilling. You can use it to fund a passion project, upgrade your retirement lifestyle, or pay for your travel, even while you’re traveling.
Fundamentally, passive income is the ability to use ownership to make money over and over again. Historically, this type of income was limited to wealthy landowners charging rent, but in the digital era there are many more possibilities, big and small, that we all have access to.
Consider the different types of information products that traditionally would have required a lot of resources to produce in large quantities: records, illustrations, photographs, films, written text, the list goes on. Digital reproduction means that any one of these can be reproduced any number of times and sold repeatedly at no extra cost. Today, once you have ownership of the original copy of a digital product, there is no limit to what you can earn from it.
Likewise, the digital era has introduced us to the new sharing economy, where our unused everyday resources can be repurposed as passive income creators. We can rent out extra space in our home, turn our vehicles into profitable assets, and find new money-making uses for old household items.
We also have more access to financial investment options than ever before. Fintech (financial technology) has brought investing to the masses with easy-to-use, jargon-free platforms that are open to any budget.
Of course, a passive income is not free money; it’s simply a frontloaded way to earn income. This means that there is initial effort at the beginning (while you create your digital product, for instance), but after that you’ll receive income on a regular basis, with little or no input. Alternatively, if you have available assets, you first need to learn how to leverage and manage them, then you can sit back and watch as they bring in money.
No matter what your skills, experience, or resources, there are many opportunities for you to create passive earnings. Here we’ll explore seven strategies that you might never have considered.
Make Money From Stock Photography
If you’ve read even one article about health issues, finance, childcare, green energy, food, or any number of topics, then the chances are you’ve seen a stock photograph.
Stock photographs are the generic pictures you see used again and again in brochures, magazines, posters, websites, billboards, and any kind of advertising. They’re pictures that have a specific topic of focus but are still universal enough to be used in many different contexts. For instance, a picture of a man in a suit holding his lower back could be used in an article about back pain, in advertising material for a pain relief medicine, or to sell orthopedic chairs.
Because stock photographs can sell over and over again, they’re an easy source of passive income for anyone who enjoys tinkering with their camera. All you have to do is pinpoint a subject you want to photograph—something simple with a defined concept works best— upload it to a stock photography website, and you’re done. Your picture can now sell repeatedly, without any further input from you.
Once you’ve built up a library of stock photographs, there is no limit to how much income you can make. Bonnie Caton takes stock photographs in her spare time, and she’s earning $10,000 a year from it.
“It’s a great little side gig. And it’s a lot of fun,” she says. “These days, with photography, you don’t need any experience to get started. And if you have a little more time to spare than I do, you could potentially replace your income with it.”
To give yourself a competitive advantage, one strategy is to base your pictures around topics, discussions, or products that are trending right now. Also, consider what kind of spaces and resources are at your disposal: Do you have access to any area that most people don’t? Do you have a photogenic pet or a kitchen with great light? You can be on the lookout throughout your daily routine for subject matter that might make useful stock photos.
According to Bonnie, you might already have stock photographs and not even know about it. “You may have photos sitting on your computer’s hard drive that you could start selling this week. Why not take an hour to go through them, find a few that you think would work, and upload them to a stock agency? That’s all it takes to start.”
Rent Out Your Free Space (Without Any Extra Hassle)
By now, you’re likely aware of Airbnb, the platform that allows you to rent out rooms in your home—or your whole home—on a short-term basis. If you’re a Savvy Retiree reader, you might even be doing it already. But, as simple a way to make extra income as it is, it’s not totally passive. There is still some management involved between each new booking. However, that doesn’t mean that you can’t make passive income renting out your space; you just need to look at other options.
There are multiple ways to make money from your property without the hassle of having someone in your home.
StoreAtMyHouse allows you to rent out a spare room or garage space as selfstorage to your neighbors. The platforms works similarly to Airbnb, giving you a site listing with pictures and a description of your available space, along with your pricing. However, you’ll have minimum interaction with clients, and there is practically no management involved, as self-storage is usually long-term.
The site recommends you price your space at about 50% the cost of local commercial self-storage. But with selfstorage units costing as much as $500 per month in urban areas, there is still plenty of profit to be made. To widen your reach, it’s also worth checking out Neighbor, a newer platform in this space.
Of course, you don’t even need to open your front door to create passive income renting out extra space. If you have a spare parking space, that’s either totally unused or free part of the day (while you’re at work, for example), you can make up to $250 per month or $5 to $40 per day, depending on where your space is located.
Sell an E-Book (That You Didn’t Write)
Writing and selling a book is no easy task. It can takes months, if not years of work, and there is little guarantee of a reward. However, by taking advantage of copyright laws and e-publishing, it’s possible to cut out all the toil and create a passive income from books that have already been written.
Most books fall under copyright, meaning you can’t sell them as your own. However, older books lose their copyright protection after a specified period, making it possible for anyone to sell them and make money.
Copyright laws vary from country to country, but in the U.S. copyrights last for 95 years for books written between 1924 and 1978. This means that this year (95 years after 1924), and for the foreseeable future, hordes of classic books will be released from copyright protection and into the public domain. All you have to do is turn them into e-books and sell them.
With easy-to-use self-publishing platforms such as Amazon’s Kindle Direct Publishing, Createspace, and Lulu Press, creating e-books is now simpler than ever, giving you easy access to a passive income stream.
Because anyone is free to use this strategy, it’s important to add value to the public domain books you publish. For instance, you can create original cover art, either by yourself or by hiring an illustrator—you can hire freelance illustrators economically on platforms like Fiverr. You can also add illustrations or annotations to your books, which might include a study guide, literary critiques, detailed biographies, or historical context. You can write this yourself, interview an expert, or hire a researcher.
Importantly, you should avoid publishing books that have already saturated the market, such as Great Expectations or Moby-Dick. Instead, try to find books that haven’t been published as e-books yet, either by browsing an antique store and looking for hidden gems or searching a library archive. One trick is to search for books that will become public domain next year. That way, once its copyright lapses, you might be the first to get your public-domain version on the market.
Ashley Hagemann, who’s blog, Experimental Cents, chronicles her attempts to earn online income, started creating public domain e-books following a car accident that left her unable to leave her house in Colorado for months. “I began publishing from the comfort of my couch and created a reliable side income,” she says. “One can easily make $500 to $1,000 per month selling books from the public domain with the right marketing strategies.”
For an extensive list of public-domain books, check out Project Gutenberg.
Sell Your Designs Using Print-on-Demand
Have you ever heard a sentence that made you think: “That would look good on a t-shirt.” Well, why not put it on a t-shirt and sell it?
Using print-on-demand services, you can sell your designs, whether they’re illustrations or slogans, on any number of products, including t-shirts, mugs, hats, notepads, bumper stickers, and loads more. All you have to do is create the design, and the print-on-demand service will handle the printing, packaging, and mailing.
Print-on-demand sites like Redbubble, CafePress, Zazzle, and Design by Humans all offer commission on any products they sell with your art on it. All you have to do is upload your design. You don’t even need to be a designer to do this, even text images that say something funny or catchy are popular. Once your design is on the website, it can sell any number of times, making you money while you sit back and relax.
The beauty of print-on-demand is that the big sites already have a massive audience and lots of traffic, meaning that you can make high sales figures with little effort. The only downside is that commission is usually between 10% and 20%. However, there is some flexibility. On Redbubble, for instance, you can adjust the “artist margin” to whatever you want.
Buy a Blog and Receive Passive Revenue
Blogging is a fun hobby to have, but just like with writing a book, it only becomes profitable after putting time and work into it, by adding posts regularly and building your audience. But building a blog from scratch isn’t your only option. You can also buy a blog that’s already turning a profit and generating income with little input.
Online marketplaces like Flippa and Empire Flippers allow you to purchase established blogs that have been put up for sale. Through these marketplaces you can check a blog’s profitability, its age, and how much traffic it gets on a regular basis—before you make a bid. Importantly, you can also see how each blog makes money. Blogs usually create income through advertising or affiliate marketing (making commission on services or products promoted through the blog). Both of these monetization methods can be entirely passive. However, to increase profitability and make the most of your investment, it’s advisable to hire a freelance writer or virtual assistant to add new posts to the blog on a regular basis (if you choose not to do it yourself).
Typically, you’ll be able to buy a blog for between 12 and 24 times its monthly income. This means that you make back the cost of the blog within one or two years. And, if you plan on making any improvements to it, you can start profiting from it sooner.
Ian Bond, who has bought multiple blogs, says that when you buy rather than build, the hard work is done for you. “Many folks do the hard work and find a niche with a passionate audience. They prove there is an economic opportunity, but they give up for personal reasons.
“These sites, making $250 to $750 per month, may be available for only 10 to 20 times the monthly earnings. And the economic viability has already been established.”
Like with any purchase, when buying a blog it’s important to do your own due diligence first.
Take the Safest Bet on Wall Street
To create income while you sleep, there’s no better teacher than Wall Street. A time-tested way to earn passive income is by owning stocks that have a long history of paying dividends.
Dividends are the profits that a company shares with its shareholders. To receive them, all you have do is own a dividend paying stock. After that, so long as the company continues to pay dividends, you’ll get paid quarterly for U.S. stocks, or every six months in much of the world.
For the safest stream of passive income through dividends, focus on strong, financially stable, long-standing companies with a proven track-record of stable or rising dividend payments over many years, preferably over decades.
You have two ways to approach dividends: Buy individual stocks or buy a mutual fund or exchange-traded fund (ETF) specifically focused on dividends.
Individual stocks require more homework, but you’ll earn more income because you can cherry pick individual companies with the best yields. In the current economic environment, look to consumer staples (companies selling products people need every day), real estate investment trusts focused on healthcare properties, and Master Limited Partnerships (MLPs) that operate pipelines shipping petrochemical liquids and natural gas. You’ll find yields among these companies ranging from 4% or 5% to about 8% or 9%.
ETFs, meanwhile, require less homework and you get “safety in numbers” by instantly spreading your risk across a large basket of stocks. The downside is that you earn less income. There are only so many stocks that pay high dividend yields, and the vast number of stocks the typical ETF owns ultimately dilutes the overall yield. You can expect yields currently in the 2.5% to 3.5% range with most dividend-focused ETFs.
A few ETFs to consider are Schwab US Equity Dividend, which tracks the Dow Jones US Dividend 100 index and pays a yield of 2.9%; iShares Core High Dividend, which is based on about 75 dividend-paying companies and pays 3.3%; and WisdomTree SmallCap Dividend Fund, made up of small-cap stocks, which, historically speaking, grow the fastest—pays a 2.9% yield.
If you’re new to buying stocks, search for a trading platform with low fees. You don’t want your profits to be eaten up before you receive them. Robinhood is a popular, simple-to-use, and commission-free platform. It has limited investment options, but if it’s your first step into buying dividends, it might work for you.
Sell Lesson Plans to Teachers
TeachersPayTeachers (TPT) is an online marketplace that lets you sell lesson plans and resources to teachers, including worksheets, clip art, music compositions, notes, or anything that might be useful in the classroom. In the last year alone, 5 million teachers have used TPT to purchase resources, so this is a massive market for selling digital products.
The good news is that despite the name, you don’t actually have to be a teacher to sell products on TPT. However, if you are a retired teacher, or are still teaching, you probably already have a treasure trove of resources you can start selling right away. As with print-on-demand, once you’ve uploaded your product, it can sell repeatedly with no extra work.
The scope for TPT is massive. Whether you’re interested in history, science, geography, economics, poetry, dance cooking drama, or you know a foreign language, there are many ways you can use your knowledge to create child-friendly classroom resources. If you have a talent for making artwork or music you’ll also find a multitude of product types you can create.
“Once you’ve uploaded your product, it can sell repeatedly with no extra work.”
To become a seller on TPT, you first need to upload one free product. After that, you can set your own price for additional material. You keep 55% of the profits for each sale you make. However, if you create a premium account, which costs $59.95 a year, you can make 80% on all sales.
Written by The Savvy Retiree Staff