Passive Income For Beginners: 4 Ways To Make Money Work For You

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Having multiple passive income streams is the dream of many and that’s one of my ultimate goals too!

I can imagine a life not just working for money but letting money work for me as well?

Letting money work for you is one of the benefits of having multiple passive incomes.

As Warren Buffet said, “If you don’t find a way to make money while you sleep, you will work until you die.”

If that’s not enough for you to get motivated to start searching for a passive income, I don’t know what will!

We’ll be talking more below what passive income is, how important it is, and how we can achieve them.

So continue reading and finally let money work for you!



Passive Income For Beginners: 4 Ways To Make Money Work For You

passive income for beginners 2-min

Right here and now, let’s debunk the common image that’s portrayed when talking about passive income – laying on the beach while earning money or traveling while dollars enter your account.

Although there’s some truth to it, I’m here to tell you upfront that building passive income comes with effort and hard work.

Let me just reiterate.


It’s not as easy as it sounds. It’s also not as lavish as what some influencers portray.

Building passive income requires time and effort from you. It doesn’t just magically happen and it’s also not handed.

Passive income by definition means it’s a type of income that requires little effort to earn and maintain.

The term “little effort” is something I quite disagree with. There’s a point in your passive income venture that you can micromanage it because you have other people to maintain it.

But at first, it’s your hard work and effort that will make that product, business, and investment reach the passive income level.


Why Aim To Have Passive Income?

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Yeah, why should we? Shouldn’t we just work our butt offs ‘til we’re 50?

Well nobody wants to work until 50 and if you’re given a chance to stop working now, I bet you’ll grab that opportunity instantly!

Unfortunately, we don’t live in that dream world and reality is we need to work to earn money to sustain ourselves.

But it doesn’t mean we should work until 50, we can be in better financial positions if we’re smart with money and we know how to let our money grow.

That’s where passive income comes in. Passive income allows us to make money on the side while still working our 9-5 jobs.

These passive income streams make us reach our financial goals faster without demanding too much of our time in the long run. 

Getting to save time for things that makes us happy and still earn money on the side is the dream. Passive income can do that for us. 

To me, after I’m done with my 9-5, I want to focus on things that matter, whether that’s my blog, family, friends, and learning new things. But at the same time, I want to be able to make money while doing those things. That’s why I’m trying to achieve multiple streams of passive income to achieve that kind of lifestyle.


How Is Passive Income Achieved?

Think about something you frequently purchase.

Why do you buy different products from a skincare brand? Why do you subscribe every month to Netflix?

It’s because the product of these companies brings value to you. 

You always purchase skincare products because you find it helpful with your allergies. You subscribe to Netflix because watching movies and series makes you relax after a full day’s work.

People are willing to buying something or subscribe to a service frequently if it brings value to them.

Passive income is something that can give you recurring income with minimal supervision.  

To get “recurring income”, you have to build something valuable for people to make them purchase it frequently.

Below are the different ways to have passive income:


1. Rent Properties And Items

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a) Renting Out Properties 

A traditional way of getting passive income is through renting.

When we think about rent, we think about properties.

By renting a house or an apartment, you give people “value” by providing them shelter, comfort, and just a place to live in.

This is essential for people because obviously, it’s not ideal for them to live on the street. With that fact, it makes renting out properties a lucrative venture.

Back when I was studying for college, I was lucky enough to find a house that was somewhat cheap to rent. The best thing about it is that the place was walking distance from my campus. 

With it being so near the university, I thought about renting out the other rooms.. So I advertised the vacant rooms which didn’t take too long to fill out because it’s near the school.

The tenant’s rent was more than enough to pay the whole rent of the house! Plus, I ended up with some extra cash on the side! 🙂

If you’re in the same situation wherein you can rent out rooms, that’s a good way to start having passive income coming from renting!

That’s why to some property owners, Airbnb has made their business so lucrative! Property owners and tenants rid the hassle of signing papers, paying x months advance rent, checking credit scores, and having to worry about the minimum length of stay!

Getting rid of all those things allows both parties to save time and have more convenience transacting. 

This is something that I’m currently doing. I bought a house (read more here) and renting it out due to its perfect location! 🙂

b) Rent Out Personal Stuff

Rent doesn’t have to stop with properties, you could also rent out your extra or unused items. 

If you have a bike that you barely use, rent it out to your neighbor who needs it. Have a ton of books? Rent it to bookworms. Do you have unused appliances and gadgets? Rent it out to people who might use them. 

My brothers used to collect a ton of comic books and actually rented them out to kids who want to read them. This is also the first business that Robert T Kiyosaki created when he was small 😉

By renting out your belongings, you’re putting them to work. Instead of them collecting dust in your home, let them collect money for you!


2. Passive Income From Digital Products

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The concept with this passive income is you provide valuable information to potential customers. 

With all the people on the internet, all of them have a skill that they lack and would like to learn more about if given the chance – and that’s where digital goods come in.

Online Courses, Ebooks, And Audiobooks

Digital goods come in the form of online courses, ebooks, and audiobooks.

It doesn’t take much take effort though since you’re teaching something you’re very familiar with. 

The only grind in this work is creating content – structuring the lessons you’ll teach, the editing, and everything that’s involved in making quality content.

It’s a type of passive income because you can make a one-time course or product and just sell it on different sites. Once posted on sites, people can buy it anytime they want to.

The benefit of creating this type of product is you can do it in your house or bedroom! All you need is a video camera to record yourself and a computer to edit your videos. People even create courses just by recording themselves on their phones.

This passive income can tackle just about any topic under the sun. 

It can be productivity hacks, how to make a digital poster, how to draw, how to do animation, how to make budget filmmaking, how to write, how to make a business! You can even teach how to hypnotize people! (Yep, there’s an actual course for that)

Whatever you can think about that can help people learn a new skill or improve their current ones, you can create a class for that!

You can create courses and distribute it to Udemy, Coursera, and Skillshare.

There’s a big opportunity in making online courses since there’s a lot of people transitioning to learning online than the traditional classroom.

The only disadvantage of this opportunity would be when your niche is crowded. If there’s a lot of online courses about how to do animation, you have to make sure that your product is engaging and brings value!


3. Passive Income From A Digital Platform

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A digital platform could be having a website, a blog, a social media profile, and a Youtube channel.

How does having a digital platform make you money? Well if you get enough traffic to your platform, marketers are always looking for spaces where they can market their products.

Before, brands would die to have a billboard along a busy road, but the internet has changed everything. Now, companies would pay a good amount of money to place their ads on websites.

Wherever attention is, that’s where online marketers are.

a. Websites

If your website racks in a thousand visits every month, you can contact companies and show them that analytics! They’ll place their ads on your site and in return, they give you money!

Placing ads on your website is like a modern type of renting. Brands “rent out” space on your website for a bit of exposure to your followers.

b. Youtube Channel

Having a Youtube channel is also considered a passive income because when viewers still watch old videos – as long as it racks up views, it still generates money for the creator.

It doesn’t matter if the video is 5-10 years old, as long as the creator is eligible to monetize their channel, they’ll still get paid by Youtube.

c. Affiliate Marketing

Another passive income stream that’s popular is to be affiliated with brands or companies. This is what we call affiliate marketing wherein a person earns a commission if a consumer buys a product using his or her affiliate link.

It’s a type of passive income because you’re still making money on the side as long as people use that link.

I personally love affiliate marketing because it allows me to be partners with brands and products that I really use and love! 

I learned more about affiliate marketing through Wealthy Affiliate. And if you would like to more about how you can do the same, you can read my thorough review of them here.


4. Traditional Investments

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I’m sure you’ve read about stocks and bonds when researching about passive income. These are what you call traditional investments because they’ve been around a long time already.

But do you know why people still buy into this passive income even though it’s old? For the simple reason that it works! More people go into this passive income because you don’t need much money upfront unlike buying real estate. 

a. Bonds

Bonds are issued by governments, states, cities, and corporations. They issue bonds when they need funding for their projects or expansion.

You can consider bonds as loans. As investors give money to those groups, they will receive a “bond” which typically contains the maturity date and the interest rate.

There are generally three types of bonds:

i. Municipal Bonds – These are bonds that are issued by states and local governments. They issue this when they have road projects, housing projects, or anything that needs improvement in their place.

ii. Treasury Bonds – This bond comes from the US department of treasury on behalf of the federal government. The maturity date of this bond can range from months to years.

iii. Corporate Bonds – From its name, these bonds that are coming from public and private companies. 

Among the three types of bonds above, the corporate bonds are the riskiest. Because there’s a higher probability and chance that a company will go bankrupt compared to states, cities, and the US government.

But since it’s much riskier, it can also bring the highest return! 🙂


b. Stocks

Stocks are shares of a company. These shares are pieces of a company. If you buy a single share of a company that’s listed in the stock market, that automatically makes you a business owner and a shareholder.

If you’re a business partner of a company, that means your part of its growth and decline. As long as you have their shares, you’re with them when they make money or don’t.

According to BusinessInsider, the average return of the stock market over the past 10 years is at 9.2%! That’s not a bad ROI since bonds have an annual return of 5-6% while a savings account doesn’t even reach 1%!

To make money in the stock market, the stock should increase its share price to where you bought it.

For example, If you bought shares of Company A at $1 per share, and it increased its share price the next month to $1.20 per share, that’s 20% increase in investment in just 30 days!

But remember if a stock can go up that high in a month, it can also go down as fast.

That’s why among traditional investments, the stock market holds the highest risk. But as mentioned earlier, since it has the highest risk, it has the potential to yield the highest return.


c. Mutual Funds

How Mutual Funds Work

Let me just add mutual funds into the mix! 

Mutual funds became popular as early as the 1890s. But through research, I found that pooling investor money started way earlier than that. 

Mutual funds are a pool of money that came from different investors.

A mutual fund manager and an investment team then decide where to invest that fund to have the best returns.

Mutual funds are popular to many since investing in it puts all the work to the professionals. The casual investors who are busy with their jobs, business, and family don’t have to go through the process of understanding the mechanics of how the financial market works.

When there are supporters of a product, rest assured that there will be disbelievers and bashers of it as well. And it’s the same story for mutual funds.

Some people don’t like mutual funds because of the different fees that it presents.

Here are the different fees that concern some people:

i. Front-End Sales Load is a sales charge applied at the time of the initial purchase of an investment.

This fee is deducted from your total initial deposit. The front end load is paid to a “middleman” for finding you an investment that suits your needs, goals, and risk tolerance. 

ii. Back-End Sales Load is the fee you pay when you redeem the fund shares. 

A no-load fund is what some people seek because they don’t have front and back end sales load.

iii. Operating  Fees – This fee goes to the fund manager, for marketing the fund, paying the brokers, etc. It’s the fee that makes the company run.

iv. Shareholder Fees – You pay this fee when you enter and exit a fund.

You can find all of these fees in a mutual fund’s prospectus! Learning more about these traditional investments can sometimes be a headache especially when you’re not too familiar with them.

So to give you an introduction to the investments listed above and to have an idea on which might be better for you, I’ve written a post about it – Bonds vs Stocks vs Mutual Funds


Personal Take On Passive Income

The closest experience I had with real estate passive income would be the story about renting out other rooms and buying my own property.

I consider myself somewhat of a digital nomad. Wherein most of my work comes from working online and the same thing for my other income streams. I also earn money through my blogs with the help of affiliate links. I am an affiliate with Wealthy Affiliate – a company that has helped and thousands of people around the world. 

Passive income isn’t “free money”. You need to put in the hours and effort to learn more about that product for it to be considered as a passive income. You don’t just go into real estate and not know what are the different rules and regulation that surrounds it.

Investors don’t just put their money in bonds or stocks without understanding how it works and how you can make money off it.

In building websites and blogs, you don’t immediately get consistent readers, you need to bring value for them to keep coming back!

So put in the hours and effort and soon you’ll reach that passive income stream!

Which of the passive incomes above are you planning to enter? Let me know below! 🙂




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