What is Passive Income - The basics
Passive income, maybe you hear a lot about it. But what is it really? Well, the simple definition of what's not passive income is when you trade your time for money. Work X amount of time, receive Y amount of compensation. X * Y = your compensation. This is not really satisfying in the long run.
Passive income is the opposite. You put some work into something and then it will compensate you even if you are actively working with this or not. Passive income will even pay you if you are sleeping or hanging out on the beach.
There are levels of passive income of course. Some only require investments like stocks, but others require some or all of knowledge, time and investment. What the best passive income strategy is for you really depends on your situation. Do you have a lot of time, or do you have a lot of money?
Dropshipping
Dropshipping - is it really passive income? If it's done in the right way - Yes! To be able to call it passive, you really need to outsource a big chunk of the work. Hiring a VA (Virtual Assistant) that does the heavy lifting for you is essential. However, you will have to set up the processes. Don't expect the VA to be able to do something other than what you ask them to do.
To start with drop shipping you need to set up an online store. The most common ways are either with Shopify, that is something anyone can do. There are however some drawbacks. They charge a monthly fee and additionally there are plugins that usually cost money too.
The other option to use the completely free tool Woocommerce. This is a fully-featured e-commerce solution. It can be a bit trickier to set up, but when you are starting it's also great to have a free tool to grow in. We do really recommend Woocommerce hosting at Siteground. It's starting at less than a cup of coffee at Starbucks per month.
Affiliate Marketing
Starting with Dropshipping might be tough. Having to deal with unhappy customers, deliveries that have failed, product warranty, etc. There are several things that can go really wrong. So one passive income idea I think is better is to promote other people's products and services. This is usually referred to as Affiliate Marketing. Doing this leaves the responsibility and hassle to the person or company selling the product or service. You as an affiliate marketer do not directly have any responsibility. However, with that said, you should not promote products you don't like or use. So to become a successful affiliate marketer, you should really try the product you are about to promote. For example, we proudly promote Siteground for Wordpress hosting since we use it ourselves.
It's impossible to talk about affiliate marketing without mentioning Clickbank. They are really the market leader when it comes to products to promote. It's free to sign up and if you use our link we will get a small commission here.
What is your best advice for passive income? Please comment below.