10 tried and tested ways to generate a passive income | by Johnny TheHandsome | Data Driven Investor | Jul, 2020

Johnny TheHandsome
(Picture by Nattanan Kanchanaprat on pixabay.com)

Financial freedom is a goal in the future, especially for the younger generations. Earn enough money without investing a lot of effort — that sounds worthwhile. Those who opt for passive income flows can effectively use the time available. There are different ways of generating passive income. Below are 10 proven ways to earn a passive income and get one step closer to financial freedom.

Invest money in ETFs and Co.

Investment is the classic way of generating a passive cash flow. With a diversified portfolio, it is possible to generate a reasonable return and at the same time limit the risk. An investment in Exchange Traded Funds (ETFs) is a promising option. Distributing ETFs regularly distribute the cash flow so that passive income flows arise. Dividend stocks or widely spread world ETFs are particularly suitable for passive income.

If you want to learn more about ETF, read my articles on Momentum ETFs and Value ETFs.

Passive income from real estate

When it comes to generating passive income, there is often no way around real estate. Since the property acts as security for the bank, financing is possible without any problems if the creditworthiness is good. The current low interest rates are ideal for starting to develop passive income through real estate. If the property is attractive and the condition of the building is satisfactory, the chances of long-term income are good. With structured financial planning, it is possible to limit your own risk. If you want to build up a substantial residual income, use the bank’s dept capital in conjunction with a small share of equity to gradually acquire several properties. This is the so-called leverage effect.

Peer-to-peer loans

Peer-to-peer loans are a popular way to get interest like a bank. Crowdlending platforms like Mintos or Bondora offer a convenient way to lend money to private individuals. The platforms act as intermediaries between borrowers and lenders. An investment in peer-to-peer loans can generate a regular cash flow of up to 10%.

Entry into e-commerce

The trend towards e-commerce continues. With an online shop it is possible to generate passive income. The automation of the entire process is crucial for a passive flow of income. Every step from ordering the goods to shipping the products is automated. Existing platforms such as eBay, Etsy or Amazon FBA help you get started with e-commerce. If you are not afraid of the initial effort, you can create your own online shop with Shopify.

Passive income via YouTube

Video blogging, YouTube tutorials and online instructions are extremely popular. YouTube grows and grows. With the right videos, it is possible to build a passive income. There are significantly more written articles than videos on the internet. The competition on YouTube is still manageable in certain niches. When the videos are created on YouTube, the basis for passive income is laid. The more often the videos are viewed in the future, the higher the advertising revenue.

Publish an e-book

E-books are a lucrative way to build a passive income. Anyone who writes and publishes an e-book doesn’t have to do anything afterwards. Every time the e-book is sold, money flows into the cash register. E-books in a niche are particularly lucrative. The publication is automated. Amazon’s Kindle Direct Publishing is popular. The distribution of your own e-book is free of charge. Amazon receives a commission for every sale.

Offer digital services

Digitalization offer far-reaching opportunities. If you want to participate in the mega trend, you can offer digital goods on the Internet. Developing apps, running online courses, or selling your own stock photos are some ways to build a passive income stream. There is high competition in the area of digital services. Those who offer unique selling points and authentically market their own offerings can make a contribution to their passive income with digital goods. Special platforms simplify the offer. On stock photo exchanges it is possible to offer your own photos without having to do extensive marketing.

Blogs and affiliate marketing

Niche blogs and affiliate marketing are another popular way to generate passive cash flow. Niche sites are special websites with little competition and an acceptable search volume. When advertising is placed, the website is monetized. The further the blog or the niche page rank in the search engines, the better the chance of receiving lucrative amounts for advertising. An integration of affiliate marketing is conceivable. It is a referral marketing, in which the site operators receive a commision if products or services were purchased via the respective link.

Rent out property

Some online platforms make it easy to rent private property. Lucrative options include renting your own car or living space. Platforms such as Airbnb for apartments or houses and Drivy for cars enable you to market your own property. In return, the platforms charge a small commission. For example, if you live long distances of the year at your second home, you can build an income stream with Airbnb and the temporary rental of the apartment.

Use cashback programs

Who does not know them? Many companies now use cashback programs to increase their own attractiveness. Anyone who gets information and uses various cashback providers can save money lucratively with minimal effort. After all, using a cashback program only requires a one-time registration. The points are then collected automatically. When paying by credit card when shopping online, a certain amount is automatically repaid. The somewhat different cashback program is Swagbucks. At Swagbucks , you don’t only get points for every dollar you spend, but also for using the Yahoo search engine or watching certain videos. It is then possible to exchange the points received for gift vouchers or money via PayPal.

Johnny TheHandsome

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