How To Build Passive Income and Make Money
How To Build Passive Income and Make Money
Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time, these income streams start to build and can maintain themselves without putting in so much work; the fact remains, you have to work.
Speaking from personal experience, building a passive income stream can help you increase your earnings and accelerate your financial dreams.
There are many ways to build passive income, and it all depends on you to choose which one is most suited for you.
To build passive incomes, you need to own assets instead of liabilities.
Assets are anything with a value that embodies economic resources or ownership that can be converted into something of value, such as cash.
On the other hand, Liabilities are things that take money out of your pocket because they do not have an intrinsic value once you put money into them.
To start building passive income, you need to understand the various kind of assets and how to invest in them.
1. Physical Assets.
Physical assets are tangible assets and can be seen, touched and held, with a very identifiable physical existence.
Most people would remain traditional and invest in conventional assets like GEN-Z puts all time and investment into digital assets.
You should know about investing in physical assets because they are expensive, scarce and require huge capital to invest in; here are some physical assets that anyone seeking to build passive income can get started with.
1. Real Estates.
The real estate business is the process of buying, selling or renting a property, building, home or land.
Real estate can either be a liability or an asset; it depends on how you want to play the game. If your real estate does not generate income, it’s a liability; if it does otherwise, then you have an asset.
2. Buy Gold.
Gold is another physical asset that can bring you money without a hassle. Today, owning Gold can act as a support against inflation and deflation alike; it also works as a good portfolio diversifier.
Since money was taken off the gold standard, the value of every currency is likely not to be stable.
And we can see this in the current global market, as at the time of writing, Saudi Arabia is about to replace the U.S. dollar with the Chinese Yuan because they don’t trust the United States; trust me, this would affect the price of the U.S. dollar going forward.
Although the U.S. dollar is one of the world’s most important reserve currencies, it is not immune from instability.
To make a profit, buyers of physical Gold are wholly reliant on the commodity’s price rising; all you need is to buy and hold on a long term, and sell when the global market is high.
One of the most significant drawbacks is safeguarding and ensuring physical Gold because anyone who knows your gold reserve would likely come for you.
3. Start a Business.
Starting a business is one way to build passive income; the problem is that most people do not have a concrete business plan even before deciding to start a business.
You hear some success stories about new businesses instantly making tons of money, but the reality is often much different. It usually takes years for new companies to discover how to make a profit.
A profitable business doesn’t just happen; it takes so much effort to make it work. Owning a business is a form of a physical asset because you will make use of third-party labour, a physical office and many others.
2. Digital Assets.
A digital asset is anything created and stored electronically and is uniquely identifiable that organisations can use to realise value.
Examples of digital assets include documents, audio, videos, logos, slide presentations, spreadsheets and websites.
Items made by hand can become digital assets. This can be in painting or handwritten notes that become digital assets if they are scanned and uploaded to a computer.
Digital assets have become increasingly popular in the 21st century, with more people becoming getting to build passive income through them.
There are various ways to invest in digital assets; it all depends on choosing where you want to start.
1. Buy Stocks.
Stock is a share in the ownership of a company. Stock represents a claim that you are a part-owner of a company’s shares.
As you acquire more stock, shares, and equity, your ownership stake in the company becomes more significant.
As an owner, you are entitled to your share of the company’s earnings and any voting rights attached to the stock; passive income is built in this process.
Back in the day, stocks were represented by a stock certificate. This is a fancy piece of paper that is proof of your ownership.
In today’s computer age, you won’t get to see this document because your brokerage keeps these records electronically, making stocks a digital asset.
When you hear about big companies like Apple, Boeing, and Tesla and you hear how much they are worth, they did not make those profits themselves; they did so by issuing stocks at a certain point in time, so many people have bought into the vision of these companies, and in so doing become part owners.
2. Invest and trade cryptocurrencies.
Cryptocurrency, also called cryptocurrency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions.
Cryptocurrencies became mainstream after projects like Bitcoin, Ethereum was adopted globally as an alternative to preserving monetary value like Gold.
Another thing about cryptocurrency is that it allows you to invest with any amount you have, unlike Gold and another asset, where you need to have a certain amount of money before thinking of investing.
Before investing in cryptocurrencies, you should be careful not to make silly decisions.
Cryptocurrency should only represent a small fraction of your investment portfolio, most especially when you are new in the game.
Second, there are many tokens to choose from. Do your research and learn that you are in for the long-term game, not ones seeking to run off with your money.
You should also avoid shitcoins because they quickly lose value and are easily used for fraudulent purposes.
This is an excellent reason to focus on Bitcoin first—even if you’re only starting with a tiny fraction of a single Bitcoin.
3. Create or Invest In NFTs
NFT stands for ‘non-fungible token’ and refers to a digital token used to guarantee ownership of a specific asset; such assets could be anything from photos, videos and many others.
These assets are hosted on the blockchain, the decentralised network behind many cryptocurrencies.
Anyone can invest in NFT, which is accessible to anyone globally and can be transferred among people anywhere in the world.
There are two ways when it comes to investing in NFT. You can either be the creator or become the collector; both party still gets to take home some profit.
4. Start a Blog.
Starting a blog remains an excellent way to make money online despite being constantly termed outdated.
The truth is that there are so many successful bloggers making passive income from their blogs every month.
This blog that you are currently reading is no exemption because, in less than three years of running this blog, it has continued to bring in so much passive income that I could not make working 9-5.
A blog has the potential to make money every month through various methods. For example, you can earn money through running ads, selling your products and services, recommending other businesses with affiliate marketing, and more.
5. Start a YouTube channel.
Starting a YouTube channel can help you build a passive income without having to stress too much. Around the globe, more than five billion YouTube videos are watched every day.
YouTube is as popular as ever, with users spending an average of 40 minutes per YouTube session, making it one of the most engaging platforms.
YouTube can be monetised continuously using Ads, Affiliate marketing and many more.
6. Become an Independent Publisher.
Becoming an independent publisher is one way to build passive income in today’s world. For example, Amazon is the world’s #1 book retailer. Anyone can publish on Amazon, and it’s free.
Getting started on Amazon Kindle is easy as anything; all that is needed is to create a publishing account with Kindle Direct Publishing (KDP) and upload your book.
Once you publish, have it in your mind that you will compete with other authors.
At the end of 2019, Amazon had published 2 million books. And new books keep coming, at the rate of about one every five minutes.
The truth is that you have lots of competition to deal with. Anyone can self-publish on Amazon, but that does not mean you will make money.
To compete among the millions of books, you’ll need to do everything to make your book as marketable and competitive as possible.
With passive income, you can have money coming in even as you pursue your primary job, or if you’re able to build up a solid stream of passive income, you might want to kick back a little. Either way, a passive income gives you extra security.
I shared a link to a comprehensive article that addresses this question below, be sure to check it out.
Thank you, and have a wonderful day
John, Udemezue. “How To Build Passive Income Streams With Little or No Money.” Tchelete, 16 Apr. 2022, How To Build Passive Income Streams With Little or No Money