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9 Passive Income Methods You Can Try Out Today

Kunal is an entrepreneur, blogger, affiliate marketer, YouTuber & investor. All the tips are tried & tested.Kunal has first-hand experience.

Introduction

Financial freedom starts when you start making money in your sleep. With the limited time that we can work in a day, we can only earn so much. Earning money in your sleep is the first step to ensuring a future that involves independence, financial freedom, buying that expensive item you had your eye on, or early retirement.

Take a look at the 9 Passive Income methods you can try out today:

  1. Royalties
  2. Affiliate Marketing
  3. Fixed Deposits
  4. Renting out your extra room or Property
  5. Creating a Youtube Channel & Monetizing it
  6. Creating & Selling Online Courses
  7. Sponsored Instagram Posts
  8. Blog/Website Monetization
  9. Investing in Stocks

What Do I Mean by "Making Money in your Sleep?"

Have you ever wished that you did some work once and you kept getting paid for it? Do you know that such work exists? I will give you a great insight into the world of money-making, where you keep getting paid for your hard work.

Broadly speaking, there are two ways to make money:

Working every day and getting paid for it (let's also take salaries into this criteria).

➼ Working once and seeing the results of that work (in the form of income) regularly once we have done it.

These are also known as active income and passive income, respectively.

In this article, I focus on the second way of making money where we work once & see the money keep pouring in (passive income).

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

What is Passive Income?

Any money you earn without too much work or effort is called Passive Income. Numerous passive income-generating ways require a lot of work, initially, like developing a blog or renting property, but eventually, these ways earn money even when the owner is asleep.

As the business gets going, the owner does not need to work on the business as much as he needed to upfront. The business produces Income, interest, dividends, etc. & appreciates in value over time.

You invest time & effort in building something upfront for the future that will bring in money as time goes by with little to no effort on the owner’s part.

Passive Income for Beginners

You can make Passive Income in many ways, which I will teach you ahead. Warren Buffet has a famous quote, “If you don’t find a way to make money while you sleep, you will work until you die.”

It is a general idea to take up part-time jobs and trade time for money as a side hustle. When someone needs money, they generally go down that route.

A better idea would be to invest time in a Passive Income earning business that would make money for them & let their money do their work.

If you don't find a way to make money while you sleep, you will work until you die.

— Warren Buffett

How Much Can You Earn Through Passive Income?

Passive Income is not a get-rich-quick scheme. You will not see results overnight. However, I will promise you that once you set up your income stream or streams, you will see a handsome amount of money coming to you regularly.

The amount could be a few hundred dollars daily to thousands or even a hundred thousand dollars over time. You will see the example of Pat Flynn ahead in the article, who earns more than $100k each month just by affiliate marketing.

What Do You Need?

  1. Persistence
  2. Consistency
  3. Hard-work
  4. Determination
  5. Willpower
  6. Positivity
  7. Dedication

I. Royalties

A royalty is a legally binding payment. It is paid to companies or individuals for using their assets on an ongoing basis. It includes copyright works, franchises & natural resources.

Royalties are revenue generators designed to compensate the owners of assets (such as songs or any property) when the owner licenses out the asset for another party's use.

If you are the owner of any asset you can license out, you can enjoy royalties for a long time. If you currently don't own any such asset, you can keep reading the article to create something & start earning royalties.

An Easy Example For You to Understand Royalties:

Musicians receive royalties when their original music is played on the radio, television, or streaming networks/services.

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

Points To Note

  • The parties to a royalty deal decide the terms of the licensing agreement and define it in a contract.
  • Royalty deals allow the owner of the asset to earn a steady income for their one-time hard work.
  • There is no risk involved in Royalty deals for the owner of the asset.
  • The person or company that uses the asset pays the Royalty to the owner of the asset.
  • Royalty agreements benefit both the licensor & the licensee (the owner of the asset & the person who will use the asset)
  • The amount of Royalty is generally in the percentage of profits earned by the licensee (the user of the asset) & the ratio is pre-decided by both parties.

Types of Royalties

Royalties may come in different types: patent royalties, book royalties, music royalties, etc.

If you already own any of these assets, then you can start earning royalties right away with this information.

Otherwise, you can create something of yours if you feel like it.

- Patent Royalties

Creators or innovators patent their creations. When a person or company wants to use that product, they can enter into a licensing agreement with the owner of the asset & pay royalties to them.

Both parties reap the benefits, and you can get a steady royalty income for your Intellectual Property (IP).

- Book Royalties

Generally, publications pay authors such royalties for the use of their books.

The authors receive royalties for every book sold. The amount is typically pre-decided between the publication & the author.

- Performance Royalties

In performance royalties, the owner of performance assets, such as music, can receive royalties whenever their music is played on the radio, television, used in a movie, or otherwise used by any other third party.

Musicians generally rely on private performing rights organizations such as the ASCAP or BMI to collect royalties for them.

II. Affiliate Marketing

Does selling a comb to a bald man interest you? Or do you think you can sell a thing better whenever you see some marketing gimmick or a sales pitch? If yes, then affiliate marketing is a great option for you to earn some money.

The affiliate marketing world is booming right now. If you like to sell products or are an expert in marketing, affiliate marketing can be an excellent fit for you. All you need to do is promote another company's products & every time you get a sale; you get money in your account.

The easiest & most convenient way to become an affiliate marketer is to start by promoting Amazon products. The best part is that the customer does not have to pay extra for buying that product through your link. The customer pays the same amount & you get a commission for getting that sale from the company whose product you promoted.

The customer pays the same price & the company pays you a percentage for driving a sale. Interesting isn't it?

Affiliate Commission of Pat Flynn, above $100,000! for 1 month

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

Affiliate marketing is the process of earning money (commissions) every time you promote a company’s products or services and drive a sale. You only get paid every time you drive a sale.

— Neil Patel

Where To Start?

Join the Amazon affiliate program & start earning your passive income. The Amazon affiliate program is one the biggest in the world.

You can start small, get a few sales & work your way up from there. The commissions are slightly on the lower side, but everyone you know probably already buys from Amazon.

Getting a few sales initially should not be a problem & you can move on to other programs that have higher commissions as you learn & grow in the space. You can try finding "Best affiliate programs" on Google if Amazon does not catch your interest.

Here are a few Affiliate programs that you can check out:

  1. Bluehost
  2. SEMrush
  3. ConverKit
  4. Elementor
  5. Hubspot
  6. Coursera
  7. Shopify
  8. Wix
  9. Hostgator

All these programs pay a lot more than Amazon, and you might want to check them out.

How To Promote? 4 Ways to Start Today

  1. If you have a Youtube channel, you can promote affiliate links in your video descriptions. With your engaged audience, you can see that your affiliate link gets clicks & you get paid every time someone purchases something from your link.
  2. You can promote affiliate links on your Instagram bio. Your engaged audience once again does the same as they do on Youtube.
  3. You can promote the same way on Facebook.
  4. If you run a blog, you can write articles & promote products in those articles.

Bluehost Affiliate Program

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

Who Are The Parties Involved?

Affiliate Marketing has the following parties involved:

  1. The affiliate marketing company that provides the product (For example, Amazon or Bluehost)
  2. The person who promotes the product (For example, you)
  3. The platform where you promote the product (For example, YouTube or your Blog)
  4. The audience or the person who purchases the product.

My Experience

Places where I use affiliate marketing:

  1. Instagram
  2. My Blog
  3. YouTube

If you are just starting out on HubPages as a writer, or if you have been here for a while, have you ever noticed an Amazon capsule option? That is an affiliate marketing option.

HubPages allows you to engage in affiliate marketing & earn some commissions through the sales that you get from your articles.

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

III. Fixed Deposits

Fixed deposits are a great way to make money in your sleep. They offer no risk. You can either invest in fixed deposits in banks or NBFC's (Non-Banking Financial Companies. The only point of risk comes in the form of the bank or the NBFC going bankrupt. Fixed deposits allow you to invest an amount of money for the duration of the pre-decided period (1 year, 2 years, 5 years, etc.) & earn a pre-decided amount of interest on it.

The amount of interest that you earn is fixed & is not affected by market fluctuations. The primary benefit of fixed deposits is that your money is safe, the principal amount increases & you earn interest for keeping it with the NBFC or bank. Some financiers offer higher fixed deposit interest rates for senior citizens. Once you keep your hard-earned money with the institution of your choice, you are making money in your sleep.

Fixed Deposit Interest Rates Around The World (Highest to Lowest)

  1. Venezuela - 36%
  2. Argentina - 34%
  3. Turkey - 17.5%
  4. Madagascar - 13.75%
  5. Georgia - 8.95%
  6. Armenia - 8.03%
  7. South Africa - 8%
  8. Sierra Leone - 8%
  9. Zambia - 7.93%
  10. Belarus - 7.5%
  11. Egypt - 7.4%
  12. Tunisia - 7.38%
  13. India - 7%
  14. Mongolia - 6.9%
  15. Australia - 1.2%
  16. USA - 1%

Fixed Deposit Rates in India

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

My Experience

I have been investing in Fixed Deposits for 5 years now. I have been able to collect a decent amount of money through the interest that I get through this way of investing. I live in India. When I started investing in Fixed Deposits (FDs), the interest rate I used to get was around 16%.

Today, the interest rate is down to 7% at most. Senior citizens get about 8%. However, the upside is that there is no risk involved & I earn a decent profit at the end of the year with practically no work or risk.

IV. Rent Out Your Extra Room or Property

If you live in a too-big house, why not rent out the extra rooms & make some money?

Extra property that you are not using can also generate rental income. It will help if you put idle assets to use & make money. Imagine how much wealth you can add to your net worth if you generate rental income from that extra room or property that you have.

Rental income allows you to claim tax benefits as well. The areas where you can avail these benefits are:

  • Depreciation
  • Improvements
  • Ordinary & necessary expenses

➼ If you have interest on loans (mortgage), insurance payments, maintenance costs, physical wear & tear on your property, you can deduct it all. You may have nominal loss through depreciation, which in turn you may deduct against other income.

➼ In other words, you can achieve positive net cash flow from rental income minus expenses & still have a net loss for taxes. Although, keep in mind that depreciation will reduce the property's cost basis to calculate capital gains if you sell it.

You even get someone to hang out with when you are feeling lonely or have the Superbowl on. Having a tenant gives you extra security in terms of finances and protection against robbery, trespassers, etc.

If you develop good relationships with your tenant(s), then who knows where that friendship might take you in the future.


Rental Income Potential

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

V. Creating a Youtube Channel & Monetizing It

You can create a Youtube channel & share just about anything on it. The only criterion is that people should like it. If you are good at something, you can use Youtube to share that skill or knowledge with the audience. Youtube gives you free access to billions of users every month. Your content can be anything you like, or you're good at.

If you are a chef, you can teach recipes. If you are a musician, you can upload your music. If you sing, you can upload your songs. If you can do tricks with a soccer ball, you can upload that. If you can create funny videos, you can upload those. You get the gist. Youtube allows you to showcase your talent & whoever is your audience will find you.

How to Monetize Youtube? (As of 11 July 2021)

  • Ads on videos
  • Merch shelf
  • Premium revenue
  • Super chat & super stickers

- Ads on Videos

  • Youtube wants you to have 1000 subscribers & 4000 hours of public watch time.
  • Be over 18 years of age or have a legal guardian.
how-to-make-money-in-your-sleep-steps-towards-financial-freedom

- Merch Shelf

Here you can sell merchandise. You might have seen products right below the description box. That is the merch shelf.

  • Youtube wants you to have more than 10,000 subscribers.
  • Be over 18 years of age.

- Premium Revenue

  • Create content that a premium subscriber watches.

- Super Chat & Super Stickers

  • Be 18 years & over.
  • Be located in a country where Super Chat is available.

- Affiliate Marketing

Use affiliate links in your description to have your audience click on them & buy through your link.

Paste relevant links that your audience would like & click on.

Live Example For You To Follow

For example, I have a Youtube channel that I started just about 15 days back. I am a parent to a 3-year-old Shih Tzu & I love dogs.

My passions include communication (talking to the masses & sharing what I have learned) -- writing, video making, etc. I made my Youtube channel on dogs & give my audience any Dog-related content they could find helpful.

As I am writing this article, I already have 50 subscribers in about two weeks. It is not a lot, but it is slowly growing. Slow & steady wins the race, no?

Some topics on which I have made videos:

- Top Signs Your Dog Has Anxiety & Ways To Cure It

- 6 Life Hacks & Tips for Doggo Parents

- How Long Do Dogs Live & How To Increase The Life of Your Dog (Labrador Edition) (2021)

You can check out that channel here if you want. Would you please subscribe as it would encourage me to pursue my passion?

YouTube - DoggoWorld

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

VI. Creating & Selling Online Courses

The e-learning market is expected to be a massive $325 Billion industry by 2025.

The most recent data shows that e-learning collected $46 Billion in 2018. Due to the pandemic, a large portion of companies have moved online & education has found itself a new friend in the form of the internet.

If you have any skills that you can teach or knowledge that you would like to impart, you can create courses on websites like Udemy or Masterclass & sell them.

They work on a revenue-sharing model & may charge up to 50% revenue. However, they have massive customer bases & if your course sells, you can pocket a lot of money for a long time.

Once you put the course up for sale, your work is done. Any potential buyer can buy your course & you keep getting paid.

What can you teach?

If you are skilled at any of the following, you can create an online course around it & start selling right away:

  1. Cooking
  2. Digital Marketing
  3. Languages
  4. Design
  5. Development
  6. Marketing
  7. Photography
  8. Business
  9. IT
  10. Software
  11. Ethical Hacking
  12. Graphic Design
  13. Python

The list goes on. You can join websites like Udemy & check it out. There are thousands of options for you to choose from & you can teach anything you are skilled at.

People want to learn new things all the time & you can use your knowledge to earn some money & teach others in the process.

Things to keep in mind:

  1. Focus on quality
  2. Be comprehensible
  3. Have a good camera & lighting
  4. Try different price points & check which works best for you
how-to-make-money-in-your-sleep-steps-towards-financial-freedom

How To Earn More?

You can offer the following as upsells:

  • Live group training
  • Coaching

I bought a digital marketing course back in 2019 & still go back & watch it sometimes. I paid a $49 one-time fee for it.

You can charge the following ways:

  1. One-time lifetime access payment
  2. Subscription payment (monthly)
  3. A number of decided payments (Example - 4 or 6)

VII. Sponsored Instagram Posts

People like Cristiano Ronaldo or Virat Kohli get paid handsomely for a single post on Instagram. CR7 gets paid $2 million for a single Instagram post.

Other celebrities like Dwayne "The Rock" Johnson & Kylie Jenner make massive amounts of money on Instagram too.

I am not getting your hopes up. I am just telling you, you can get paid for posting on Instagram.

What do you need?

  • Followers
  • Quality Content

You need one of the two, or it would be better if you had both. If you have followers, it means that your content is something that people like. If you have quality content, then people ought to follow you. So it's directly related to one another.

Nonetheless, you can become an influencer & start accepting payments for posting & promoting other brands, accounts, people on your Instagram page. You can choose the amount of money you want to charge—research a little before asking an unreal amount of money with little to no followers.

If you have a lot of followers, then you have more reach. More reach means more money on Instagram. Connect to some people & ask if they want to get their brand, page sponsored.

You can send people DM's yourself or add a DM-"your e-mail" for collaboration in your bio. It is a great way to make money without putting in a lot of work. Quality content would, however, equal to more followers, which would lead to more sponsored posts.

So it is a great way to make money while you sleep.

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

VIII. Blog/Website Monetization

If you run a blog or a website, there are many ways you can monetize it. You don't have to sell products to make money actively. You can use the following passive money making methods to make money in your sleep:

- Affiliate Marketing

Affiliate Marketing is a great way to earn some extra money through your blog or website.

If you already have traffic, you can earn a huge amount of money. If you are just starting off, try incorporating this method as a way to earn some money.

- Running Ads Through Ezoic or Adsense

Sign up to Google Adsense & start running ads on your website. It is a PPC (pay-per-click) model & you can get paid whenever someone clicks on the ads.

Ezoic pays more than Google Adsense. However, a large number of people use Google Adsense & Ezoic is nowhere near Google Adsense when it comes to the number of people that use the service.

- Selling Ad Spaces to Private People/Companies

Unlike Google Adsense that runs its ads, you can run private ads by collaborating with people. You can charge a certain amount of money & run their ads on your blog/website.

- Subscription/Membership Option

You can keep your website free & have a "members only" access area for premium customers. Share premium content with these customers & charge a little money for it.

- Donations

Payment gateways such as Paypal or Razorpay allow an option to accept donations on your website. You can find many ways to integrate a donation option on your blog or website & have your genuine audience donate some money whenever they feel like it.

You can make a paid newsletter wherein you provide your e-mail subscribers weekly or daily newsletters for a fee.

You can post about brands, companies, products, or people who want to promote themselves. Charge a fee & post content about them. You can write reviews on products & tell people their pros or cons as well.

My Experience

I use all of these methods on various platforms. An easy example for you to understand is HubPages. HubPages allows us to run ads on our articles. In turn, we get paid a small amount through the number of impressions. We divide some earnings with HubPages & keep the rest.

Here is a screenshot.

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

IX. Investing in Stocks

The Oracle of Omaha, or Warren Buffett, is the most well-known stock investor on the face of this planet. He showed us the true power of stock investing.

The power of compounding & making money in your sleep ideologies are favorites of this billionaire.

You can invest in stocks & see your net worth rise. However, it is easier said than done as it requires prior knowledge, studying the stocks, the companies, the people who run the companies, their business & a lot more.

The stock market truly has the potential to make you massively rich, but it needs time.

Compounding takes time & risks are also involved. This is the only one on the list that is high risk-high return.

My Experience with Stocks

I have been investing in stocks for about 3-4 years now & have seen a handsome return. The amount of money you would consider as "handsome" would be different for each one of you, but stocks are a sure-shot way to make money in your sleep.

how-to-make-money-in-your-sleep-steps-towards-financial-freedom

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2021 Kunal Gupta

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