How can you generate passive income? It may surprise you, but there are plenty of ways to do that! Even if you don’t already have a few million in the bank, you can generate passive income. After all, this is not only about investing money but often also about investing time or having a good idea.

In this article, you will find ways to generate a passive income that works along with my own experiences.

What is Passive Income?

A passive income is an income for which you do not have to do anything at that moment. So you don’t have to work for one hour to get paid for one hour. When you immediately receive money for work that you do, it concerns an active income. That is the income for which the majority of the Dutch work.

For a passive income, you make no effort at the time of earning. So it may well be that you earn money while you sleep.

“I have been living as a digital nomad for three years now. That means that I combine work and travel. I spend about 8 months a year abroad. At the moment, 20% of my income is active and 80% passive. That passive income grows a little every month so that I have to work less and less (actively).”

The biggest fallacy with passive income

You can earn money while sleeping does not mean that you do not have to do anything for it. Indeed, you do not do anything for it at that time, but before you have generated a passive income, you are already quite a few working hours further.

Depending on the way of generating passive income that you use, it can take years before it is enough to live on. But then again, you are, of course, in the situation that you might enjoy it for a lifetime!

Therefore, a passive income is not for lazy people, but for people who now want to roll up their sleeves to reap the benefits in the long term. But this principle is the reason why so many people fail to generate passive income simply because it takes them too long to achieve results.

Ways to Generate Passive Income

Below I describe the different ways in which people generate passive income. I have experienced most of the ways myself. I will describe in those ways how this went to me and how you can make it a success.

Your own online product

Your own online product is an ideal way to generate passive income. When you sell an online product, you often do not have to worry about sales and handling, as you can automate all of this.

Think of online video training or your own e-book. With such a product, you have an automated distribution process, and you can, therefore, earn money without having to worry about it. You obviously need some skills for such an online knowledge product. After all, there is already enough rubbish sold on the internet.

So do not be the umpteenth to start with online training on ‘get rich quick’ if you are not rich yourself. That isn’t very pleasant and does not do your name good.

But if you do understand something, feel free to create an online knowledge product and ensure a good sales channel such as a website or social media. You got this!

“I sell training courses on my website myself. Sometimes these have already been taken up and are therefore passive income. The idea is that I have a lot of knowledge that is valuable to someone else. Training, online or offline, is just a lot of fun to do.”

I also know people who have their own video courses on how to trade successfully in cryptocurrency. They have been trading cryptocurrencies for about six years and therefore enjoyed supporting others in this.

A very lucrative earnings model when you consider that such a course quickly yields 197 euros per participant. 

However, since this is a video training, that process is also automated, making it a legitimate way to generate passive income. What is interesting about their story is how they promote online training. They do this not only through their own channel but also through affiliate marketing. But you can read more about that under the next heading.

Affiliate marketing as a publisher

For people who generate passive income without having millions in the bank upfront, affiliate marketing is probably the one they started with. Why? Because affiliate marketing is very easy to set up without even needing a product or service.

Simply put, affiliate marketing is the promotion of other people’s products based on a pre-agreed commission. As a publisher, you put links to products between your posts, on your Instagram, Youtube, Facebook, e-mail, or another channel. When someone clicks on one of those links and buys the product, you will receive a commission on it. It looks like this:

An example of such an affiliate link is if I would recommend that you use Wix to create your website (great system by the way;). If you now click on the link above and think that Wix, I like that. Then I receive a small commission from Wix with your purchase as a thank you for the referral. A top system, because you, as a buyer, do not pay anything extra for this. After all, it’s just part of Wix’s marketing budget, that commission.

Many products will not have such a high commission. 

But when you find an affiliate program with digital products, those commissions can quickly go up to 50%, and that’s when things get interesting. For example, if you recommend an online training of 100 euros, you will already receive 50 euros when someone buys it via your link. And that is without having to make a product yourself. You just need a channel where you can place the link and where a lot of people come along.

“I now earn a full-time income with affiliate marketing as a publisher. This is therefore fine for generating passive income. Especially because I don’t have to worry about it. Recommend a product but do not have to do customer service or fulfillment. I simply receive commissions simply because I link to someone.”

If you want to get started as a publisher with affiliate marketing, you will do well to read up. Placing links haphazardly will not have a major effect. It is, therefore, important to only refer to relevant products towards a relevant target group. Only in this way can you successfully earn money as a publisher with affiliate marketing.

Before I started earning my monthly 1200, – euro I was one year further. This was because I just did something at the beginning. I posted links to low-value products with a bad sales funnel. So I could send people what I wanted, but it didn’t generate any sales. If you know which programs you should and should not use and how to recognize opportunities, it will all be a lot easier.

Affiliate marketing as a seller

Generating passive income can also be done in another way. Continuing in a previous way, you can also use affiliate marketing the other way around. For example, suppose you have made a product yourself, such as video training or e-book. Then you can also choose to sell it yourself through an affiliate network. You then offer your product so that others can promote it for you in exchange for a commission.

You can imagine that if you do this right and hundreds of websites sell your products, it will go fast. You then have an enormous potential to sell your product, and selling it in massive numbers is not unique.

This is what I do myself. I also sell my training through an affiliate network and dozens of other websites. They will receive a commission per sale :). In this way, the publishers and I, as an affiliate, generate a passive income.

Start your own webshop.

Instead of inventing and designing a product yourself, you can, of course, also sell products of others through a webshop. Unfortunately, you are just not there yet. Because in this way, it is not entirely a passive income. You can imagine that you still have to store the products yourself in a warehouse and send them to the customers. It may be that someone wants to return something or has a complaint. Then you are customer service.

And an interesting trend comes along there; dropshipping. With drop shipping, you do not have the products in stock, and you do not have to ship them yourself. They are shipped directly from the wholesaler to the customer. So you are just the marketing tool to make the sale. Now you only have to hire someone for your customer service, and you don’t have to worry about your dropshipping business anymore. This way of generating passive income requires a lot of experience. Setting up a successful webshop just like that is not a breeze in a saturated market, but it is certainly possible.

Generate passive income as an author or musician

Besides an e-book on a specific subject, you can also become a writer of a real book. You can imagine that this was not done just like that. The average novel has 55,000 words, and that is quite a job I can tell you (I am still writing a hardcover book myself). But no matter how much time this takes, when it is published, it is a form of passive income when you sell it.

If music is more your thing, it can also be a form of passive income. You earn money when you put music online through many different channels. The most famous channel is the sale of your music. But that is certainly not the only one. You can also earn with your streams on Spotify. And you can even earn money from the rights to your music… 

And now I hear you think, I am not a well-known musician at all, so that will not work. Then, when you’re on the producer / DJ side, you could even start ghost producing for bigger DJs. You always earn money on the rights of that music when it is played. But yes, that for the musicians among us, when it comes to generating passive income, this may be a bit far fetched.

Earning money with blogging, vlogging or as an influencer

If you want to earn money with blogging, vlogging, or as an influencer, this can, in many cases, be passive. Although you must stay up to date with your followers, so every now and then, some work will have to be done to remain interesting.

So it is in any case possible to generate passive income in this way. You do this by, for example, allowing sponsoring. Companies then pay you monthly to promote them. Other examples of passive income in this area are selling merchandise, running Google Adsense or YouTube ads on your content, and allowing advertorials for a fee.

In addition, if you reach a lot of people through your medium, whether this is Instagram, YouTube, Facebook, or a blog, this is interesting for many revenue models. You can imagine that if you have a lot of followers, they are worth money in any way. Suddenly you are able to launch your own products and sell them. Do you understand him? Plenty of options!

Generate passive income with investing and investing

Money makes money. So if you already have a piggy bank, generating passive income is actually quite easy. Consider, for example, investing in real estate. A good return can be earned with this. But of course, you can also choose to trade in cryptocurrencies or stocks.

An average return on investment quickly comes to 6% to 8% per year. It is therefore always better to let money move than to leave it cold in your bank where the interest is nil or minimal.

In addition to these forms of investing, you can also use your money to support start-ups in exchange for shares or buying up websites that yield a profit over the years.

Generating passive income conclusion

Everyone can generate passive income. Even if you don’t have a cent to invest yet, you can already start with the above (except for the last) ways.

My own experience has taught me that generating passive income takes time, a lot of time. And that makes sense. You invest time before your work yields anything. But in retrospect, I dare say out loud that the investment is worth it anyway. Therefore, it is a good idea to start building your own passive income as early as possible. In the best possible situation, you do this in addition to a stable income that you already have.

When building a passive income, many people drop out after a few weeks or months. They don’t see immediate results and lose motivation. In fact, anyone could generate passive income, but it is good to check yourself if you have that entrepreneurial instinct. Otherwise, it is simply a waste of your time. 

Anyway. Good luck!