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Bank account coming up (or going down) to a zero again? We’ve all been there when it feels like we’re living from paycheck to paycheck. When it feels like you have barely enough to cover rent, utilities, credit card bills, and daily expenses, let alone a few simple luxuries. It’s during these moments when the idea of how to create passive income must have crossed your mind.
Maybe you love your job and you don’t want to leave it, even if it barely pays enough for your living expenses. Maybe you don’t want to risk quitting your job to find another, considering how competitive the job market can often be. Or maybe you’re just waiting for that promotion, but until then, you have to stay put and live within your means.
What if I tell you there is a way to augment your income without leaving your job or having to risk losing it?
Yes, you can earn additional income, and you wouldn’t have to resign, or sneakily do anything other than your job during your work hours.
The answer to your money woes? Two words: passive income. And this post is a definitive guide to the many ways you can create passive income and keep your job in the process.
What is passive income?
Passive income refers to income you can earn without constant effort – which means you can earn while you’re relaxing pooside!
Simply put, passive income is income a person receives from cash flow that is earned with minimal effort. In a way, it’s the kind of income that earns itself.
Imagine earning money while you sleep. That’s what passive income is.
Fun fact: Bill Gates supposedly earns around $4 million every night when he sleeps. While we can’t all build billion dollar companies and earn that much in passive income, there are simpler ways to earn a decent amount of money that you can start now.
Before You Start: Three Myths About Passive Income You Shouldn’t Believe
- You need a lot of money to start earning passive income.
This statement isn’t necessarily true. While you will need a considerable amount of money to get into passive income sources like real estate, stocks or mutual funds, there are plenty of other ways to earn passive income. Some sources of passive income won’t require an initial monetary investment, but an initial investment of time. This is true if you decide to earn money by writing a book or creating a learning module. We’ll discuss more ideas like these in the list below.
- You only need one source of passive income.
The brilliant thing about passive income sources is that the amount you earn isn’t limited by the amount of hours you put in your income source. You can instead scale your passive income tremendously based on a variety of other factors like consumer demand.
Because you don’t have to physically work or put time for every dollar you earn when it comes to passive income, you can technically set up several sources of income and have them all earn money at the same time.
- You need to be an entrepreneur to earn passive income.
You don’t necessarily have to come up with a brilliant business idea, product or service to earn passive income. Placing your earnings or savings on retirement funds, mutual funds or other investments actually count as passive income sources.
What they earn depends on the amount of risk you’re will to take. The more risk, the greater potential gain.
Story Time: 5 Success Stories and Unique Ways to Create Passive Income and Keep Your Job
- Build an app.
Ben Kazez developed FlightTrack in 2008 on a whim thanks to a tattered, used and abused boarding pass. The app he casually uploaded into the Apple store quickly became one of the most downloaded travel apps on the platform. He was an employee at Ultralingua until the success of his app prompted him to leave his job and become CEO of his own company. That company, Mobiata, has since been acquired by Expedia.
On a side note, upon coming across this success story, I was reminded of Aviato, the fictional startup by the character Erlich Bachman in Silicon Valley. The names sort of sound similar, and they’re both about travel, and with the show being known to often getting inspiration from real-life Silicon Valley news and personalities, I wondered if this was more than just a coincidence. I’m not the first one to point this out, but there’s no way to confirm or debunk this theory at this point.
- Develop a video game.
A lot of successful passive income sources are ones that are created from someone’s passion projects. Enter Scott Cawthon, the indie video game developer and founder of Five Nights at Freddy’s. He focuses solely on his passion of creating games these days, but prior to the success of the Five Nights at Freddy’s franchise, he had to balance a day job and working on his video game ideas.
He also had to witness several of his first games ending up as flops – proof that you don’t have to hit the jackpot on the first try.
Fun fact: Scott Cawthon’s games cost $5 or less, but he’s able to earn a decent income from them!
- Start a subscription business.
Noah Kagan was Employee #30 at Facebook, but he is now known for Sumo Jerky, a beef jerky subscription business he started after brainstorming on ideas and getting reader feedback on his blog.
The most unbelievable part? When he started the service, he aimed to earn a thousand dollars in profit in just 24 hours. I’ll let you guess what happened next (or you can read about it here).
- Self-publish a novel.
Amanda Hocking’s story is probably known to every aspiring indie novelist in the world. While working in a group home for disabled people, she decided to publish her books on Amazon. She has since become a multimillionaire and has turned her passion into her main source of income.
Imagine being able to wake up every morning to do what you love – and earn millions from it! It can happen, and it can happen by first turning your passion into a passive source of income.
- Teach what you know.
If you’re worried the previous ideas on this list require a certain amount of expertise, think otherwise. And this next success story will prove that sometimes you don’t need to have a significant amount of experience or skill level to earn income.
I first came across Bret Kelly’s story while reading Chris Guillebeau’s $100 Startup. Without any publishing experience, he wrote and released Evernote Essentials, which went on to sell over 10,000 copies.
As a fan of the Evernote app, Bret Kelly quickly realized a guide for first-time users to the app didn’t exist, so he decided to write an e-book for it. The rest, as they say, is history.
He often termed his little venture as a side business, but it has since become a “legitimate business”, in his own words.
What can we learn from all these success stories?
- Don’t be afraid to start. Don’t let yourself be stuck in coming up with a world-changing idea. There’s no way to know for sure if an idea would work or not, so if you have an idea you are genuinely passionate and excited about, bring it to life and see where it goes from there.
- You’ll need to devote your time in the beginning. Remember that earning passive income doesn’t mean you literally do nothing – in fact, it starts with a doing a lot of things. Developing an app, writing a book, setting up a Subscription Business – all these require a certain amount of time investment. But think about it: you put in all the work in the beginning, and then you can take it easy after.
Of course, you won’t ever be completely without anything to do. But if a little effort over time goes a long way income-wise, and you enjoy what you’re doing anyway, what else could be better than that?
Do you have favorite passive income success stories? Let us know about them in the comments below, and as always, don’t forget to share this article with other aspiring side hustlers you know!