Deep-dive Into Passive Income Streams

Having a main job is fantastic but having a passive income that generates money for you with little effort is golden. This ensures more stability to your financial journey and can help you build wealth over time.

How do you make a passive income without initial funds?

You may be short on your finances, but you will never be short on skills. It's about utilizing the skillset at your disposal and turning it into an income.

Passive income strategies range from e-commerce stores to investing in dividend-paying stocks and bonds. And while many resources online talk about the various methods, they hardly touch on the skills required to put your ideas into motion.

That's where we come in.

Buckle up.

1. Going Digital

If you’re more into the creative arts, enjoy the chaos of marketing and business, this path may be best suited for you.

a) Creating Products

Designing online products can be a great and creative way to get started. It allows your creativity and ideas to run free using a platform like Canva, letting you pick a product you're passionate about—whether that's designing t-shirts and mugs or turning your passion for crocheting into an online Instagram store! You can also use Etsy or Shopify to simplify and streamline your business.

While this helps to build your brand and a loyal customer base, it is also time-consuming. Your chosen market may already be highly saturated with similar businesses popping up, and the competition may be high.

Skills required:

• Creativity - You need to pick a niche that works well, to design, develop, and build a brand and online presence based on what your audience loves.

• Entrepreneurship - As you are your own boss, having business and entrepreneurial skills will help advance your business and adapt to the changing market.

• Adaptability and fast learning - The digital space is ever-growing, especially for online social media stores. You should be able to grow with the trends, learn, and adapt quickly to remain in the game. Can you?

b) Provide a service

There are many services out there that act as passive income methods. One such method is starting online courses on platforms like Udemy. Why? Because they are scalable, allowing you to sell your course to an unlimited number of students. You have the freedom to design the course and update it as needed; however, you should ideally be an expert in your chosen area. It is also time-consuming, but if done right, can take you a long way.

As you craft your course, remember the SMART framework: Specific, Measurable, Achievable, Relevant, and Time-bound.

Skills required:

• Research skills — To create a high-quality, in-demand, and reliable course that would be useful and recommended to others. What is the best platform to use? Ideally, you'd want something user-friendly that includes a community forum and engagement tools.

• Technical skills — Including content creation, video production, and editing to keep your viewers engaged.

• Be passionate, proactive, and hardworking — Being passionate about your chosen niche will reflect in your videos, and it is useful to engage in community forums to show you are actively overseeing your course.

c) YouTube

YouTube may be one of the simplest, yet also the most difficult passive income streams.

Because at the end of the day, you can turn a hobby such as cycling into video content and reach a global audience, but it's a battlefield with high competition, a ruthless algorithm, and no guarantee of success.

In order to monetize your channel through the YouTube Partner Program, here are a few rough guidelines that YouTube searches for:

1. 1,000 subscribers

2. 4,000 hours watched in the past 12 months

3. Linked AdSense account

4. Sticking to YouTube's monetization rules and a clean copyright-free account

Skills required:

• Creativity — Your videos have to be unique and capture the audience in the first 30 seconds at best. Understand your market and its trends.

• Technical skills — You do not need a professional camera, but you DO need a high-quality camera, good audio, natural/decent lighting, and stability in your videos. Editing is also vital to creating engaging content and building a unique style and persona for your channel.

• Determination and hard work — At the beginning, you will have to upload consistently, maybe every day, until your channel gains some traction.

• Interpersonal skills — Building and growing your network with those who share your interests will help boost your channel.

d) Stock Photography

If you love photography and have a bunch of photos lying around, you may be inclined to continue reading. Platforms such as Adobe Stock, Getty Images, and Shutterstock allow you to sell your photographs as stock images, earning a small income along the way.

Popular photos may be sold multiple times, providing a recurring income, but at the start, there is no guarantee of sales. You may need to submit photos persistently in large volumes to create some traction. And of course, competition is high.

Skills required:

• Photography — Having a niche will help differentiate you from your competition. But having your own style of photography and photo editing will help elevate your pictures.

• Technical skills including Adobe Creative Cloud — Creating a distinctive photographic style when editing includes learning Photoshop, Illustrator, and having an eye for color correction.

• SEO / Marketing skills — Understanding keywords that are trending, the back-end of SEO with descriptions and tags will be useful.

2. Store for $

If you have extra space at home—an attic, garage, or even a basement—you can store items for others through platforms such as StoreAtMyHouse.

Interestingly, self-storage units and spaces are in high demand in urban populations. It's a way to make use of your empty space while also earning extra income on the side with a low-maintenance hustle.

However, the downside is that you are liable and fully responsible for any damage or theft. You have to ensure the safety and security of the stored items, which may become an issue if handled carelessly.

Skills required:

• A storage space

• Interpersonal and sales skills — To be able to convince your customer that your little storage space is the safest and most ideal spot.

• Management and organizational skills — If you have a larger space, it's important to manage that space effectively. Your income is tied directly to the available space.

3. Automated Dropshipping

This model focuses on running an e-commerce store without holding inventory. You sell products shipped from the supplier directly to the customer. It’s a low cost start-up with potential to scale and increase your product collection while being completely hands-off.

But competition is on the rise and there is limited power over your supplier where quality and shipment times all fall into the hands of the supplier.

Skills required?

• Interpersonal skills - You have to be a people person, build trust and a stable relationship with your supplier because their service can either make or break your e-commerce startup.

• Tech and Marketing skills - Ensuring your online store is user-friendly, with solid marketing and an easy/quick checkout process is important.

4. Rent Your Property

Now we're jumping to more advanced passive income methods. Invest in an apartment or home in a tourist location, promote on Airbnb, and watch your income grow. Regular income like using Airbnb is steady, or you can settle on long-term rentals.

But not all is easy-going, because there may be periods where your property is unoccupied with no steady income rolling in. And with maintenance fees, this could lead to a loss over time.

Skills required:

• Interpersonal and Sales skills — Can you convince your customer that your property is the most ideal for them? What helps your property stand out the most?

• Management and Planning skills — It's important to know how to maintain your property at its best for your customers and plan for unoccupied periods.

• Knowing the Law — Not essential, but hey, if you're familiar with the law in your area, this will help reduce any legal issues that may arise.

Investing into real estate is a whole other ballgame on it’s own holding a few risks to consider.

5. Invest in Index Funds

This may be one of the more popular investments for most young adults as it is an easier way to earn a passive income.

Instead of investing in one stock, you're placing your money in an index fund that spreads your money across different stocks. This is safer than placing your bets in one stock, and you are exposed to a broader market with lower costs to start with.

And the downside? You have limited control over the set of stocks your money is invested into and lacks flexibility.

Skills required:

• Investment and Finance Knowledge — Definitely a bonus if you know how the system operates, how index funds work, and generate income.

• Discipline and Patience — You're playing a long-term game, and patience is key to letting your investment grow over time.

• Research skills — Staying well-informed on the recent updates on your index fund and the stock market will definitely be beneficial.

The Bottom Line

This is just a deep dive into five methods of earning a passive income, but you can bet there are far more strategies out there, some straightforward and others more advanced as explained in our previous article at Maybe!

Each opportunity requires a set of skills but is not limited to the ones above. It all depends on how you utilize the tools you are given and bend them to your will. Your knowledge in healthcare may come in handy if you're starting an online course. And most skills can be learned, taught, and fine-tuned over time.

While each method bears its own advantages and risks, having a passive income aside from your traditional full-time job can help grow towards a more secure financial future.