Are you tired of putting in all those extra hours – in your regular job – and getting little to no recognition for your efforts? Perhaps it is time to start earning a passive income, where you will make money while you sleep.
Can we really make money while sleeping? The answer is yes absolutely. You will not make money while you sleep just by deciding that you want to and by turning on a switch. You will have to research to find what suits you. Learn about your chosen passive income source then if you do the initial work hopefully you will reap the rewards while you sleep.
How to Make Passive Income?
Before you can make a passive income you will need to understand what passive income is. Read the following for a better understanding and it will also help you to decide if it is in fact for you.
What Is Passive Income?
Passive income is money that you make from a regular and reliable source, without actively contributing to the generation of those earnings. Nobody hires you and nobody fires you. Critically, it also helps supplement whatever other forms of income you might have. More often than not, it is money that you make while you sleep.
Passive Income and Regulatory Frameworks
The Internal Revenue Service (IRS) is just one example of a regulatory body governing Passive Income but it is probably the most famous in the world….because it is in the United States of America.
The IRS – and other bodies like it – are particularly interested in two aspects of passive income. They are property rentals and other businesses where people are not active participants but still collect earnings. Passive income is great but you cannot for one moment take for granted that there are significant tax implications.
“If you don’t find a way to make money while you sleep, you will work until you die.”
Warren Buffett
Ways to Earn Money While You Sleep
Below are just some of the ways you can make money while you are sleeping.
1. What Is REIT?
A Real Estate Investment Trust (REIT) is a company that owns a wide range of properties – all of which have to be commercially viable prospects. These properties include – but are not limited to – office space, apartments, warehouses, shopping centers, and hotels.
The real estate sector is ordinarily a tough nut to crack, even for those among us who have a little more life experience. However, being part of a REIT does present glorious opportunities to access a dividend-based income, something I will often refer to in this blog post as passive income.
In essence, a REIT is a community growing project. However, there is absolutely no reason why you cannot be a part of the action. There is nothing new about REITs.
They were first created in 1960 and have since become a prominent feature on five continents around the world. Access to a REIT is not an issue, regardless of where you come from. Sometimes it does not even matter what your position is in life.
To expand on this matter of easy access, a key feature of REITs is that they allow anybody, regardless of your position in life, to own or finance properties in a similar way that you would dabble in other industries or invest in the stock exchange.
So, in essence, you never have to actually own the whole of something but you still benefit a great deal in the long-term, granted you understand enough about the Real Estate industry.
Once you manage to wrap your head around that, you become a shareholder in the Real Estate industry, who enjoys the benefits of any regular shareholder who operates in other corporations.
Once you are in the game, this becomes very lucrative and it is money that you will make while you sleep.
2. Royalties as Passive Income
Royalty Trusts are basically where mineral producers create a statutory trust and contribute to that statutory trust a royalty interest burdening the sponsor’s mineral properties in exchange for gas and trust units in that trust.
Trusts like this are mostly operational in the United States and Canada. The profits made by a Royalty Trust are not taxed at a corporate level.
That is the basic appeal. However, that needs to also mean that the vast majority of those profits are distributed to shareholders as dividends.
You can be one of those shareholders. Those dividends are then taxed as personal income instead. So, there will still be a tax implication for you. That said, this is money that you will be making while you sleep.
Upon closer inspection, you will learn that these operations are quite similar to those of a REIT, which we tapped upon earlier in this blog post.
Invariably, your interest will be on the trusts that are publicly traded. Among the more common minerals associated with this form of passive income are oil, gas, and coal – along with precious and industrial metals.
3. Business Trusts
Linked to Royalty Trusts and REITs are Business Income Trusts, which essentially operate on the same principle – that of investing and securing a dividend return on that investment. As the name would suggest, Business Income Trusts are largely to do with individual companies.
Those companies convert large amounts of their shares into a trust capital structure. Again, the objective is to manage the tax implications. People want to and try to avoid being double-taxed. That trust generates most of its revenue from interest, which is a topic that we will tap on next.
The broad appeal with Business Income Trusts is that they tend to branch out into various sectors, which include manufacturing, food distribution, and even the energy industry.
Trusts are the big leagues and are heavily dependent on steady cash flows. A certain level of maturity is required to make the most of the passive income opportunities that present themselves in these industries.
If you are not good at managing your finances now, it would probably be a good time to learn when you venture down this route.
While it is true that you will earn money while you sleep, when investing in these opportunities, one must always be aware of the fact that a considerable amount of work actually goes into the preparation for this kind of work.
You also need to know a meaningful amount about the industries that you have opted to dabble in – especially the risks associated with them. Financial literacy is key – and do not pretend you know more than you do.
4. Bank Interest
What Is Bank Interest?
Interest is basically the cost of borrowing. It is as simple as that really. The biggest beneficiaries of Interest are certified lenders – basically banks. They lend customers money and when those customers start paying the bankers back, they pay a given rate.
The rate of interest is always determined by the monetary policy of any given country. That policy is normally drafted by a national reserve bank.
However, the intrigue does not end there. Banks can’t lend out money if they do not have sufficient cash flows themselves. They need permanent customers to support their business model. This is where you get to cash in…even if it is just a little bit.
So, when you open an investment account of any kind with a bank, you are effectively lending that bank money so it can function adequately and deliver on its lending mandate. The money you make as a return on that investment is the Interest.
The types of investment accounts that exist vary. Generally, the more complicated they become, the greater the risk. The greater the risk, the greater the return. It is in your best interest to study that detail yourself and consult an expert in the field before you make those investments.
Even then, not all the advice you get can be trusted. You must be careful. In short, the interest made hinges heavily on who is doing the borrowing and who is doing the lending and at what rate.
While there is a set national rate, banks vary across the board. Some of those annual year yields range from 0.01 percent to as high as one percent annual year yields. As is the case with REITs, bank interest is accessible to most people who have some disposable income available to them.
5. Peer-to-Peer Lending
So, we have established that banks are lenders and those bank customers also fulfill a lending function when they open an investment account at such an institution.
However, it is also often the case that some individuals do not qualify for either practice.
That is to say, banks cannot lend to them and they do not qualify for investment accounts or any other traditional means of lending and borrowing. There is a market for Peer-To-Peer lending and on the face of it is a seemingly reasonable idea.
Yes, the loans are generally unsecured but it provides a platform to access cash when you probably need it most. If you are interested in being the lender, in this case, it is obvious that the risks are high because there is little to no certainty that you will get that money back.
The great boon with that is the fact that you aren’t really being regulated – or not stringently anyway. Again, that depends on where in the world you live in. What that means is more often than not, you are at liberty to set the return rates on that lending.
If you have a firm handle on the business, you can bump into a serious gold mine here. Money that you will make while you sleep.
While there are minimal restrictions, it is probably a good idea to do some screening of your borrowers and have some grasp on whether they will be able to pay you back or not.
However, there can be pitfalls and it is important to be fully aware of them. There is little to no denying that Peer-To-Peer platforms are becoming an increasingly popular option. The experts say the global financial crisis of 2008 has contributed significantly to that increase in popularity.
Such is the scale of the phenomenon that the Reserve Bank of India (RBI) produced a consultation paper on Peer-To-Peer Lending recently. Some of its findings were fascinating and they help people determine the pros and cons that are associated with the practice.
The jury is currently out on the extent of the regulation that should be implemented and the matter is being discussed on a global scale.
Regulatory practices vary from country to country and it is important for you to know what the extent of the regulation is and the impact this could have on your passive income.
Peer-To-Peer lending has somewhat of a credibility crisis and that is why regulators do not really want to be involved with it. That could be good for you if you consider the practice.
However, it also means you need to really understand what you are getting into because there is no institution that will be prepared to involve itself in your troubles if it happens to turn out badly for you.
Nevertheless, the interest rate that you charge is effectively your profit and you wouldn’t have had to do anything to secure that profit.
6. Write Music – Royalties
BMI is among the most prominent players in the music industry, a reputation that has been built over several years. They are also among the best placed to provide insights into how royalties are distributed in the music industry.
With this company, as is the case with most other music companies, the first port of call would be to actually register by filling in a clearance form. That form can usually be filled in electronically but if you must, you can also fill in a paper form.
In addition to that, you will also be given a cue sheet, which serves to detail all the music written and what it was written for.
Now, this is not just about writing songs for consumption. It is also about writing jingles for television and radio. It is about writing commercial jingles and promotional announcements too.
Knowing how to read and write music is an underrated skill. It is actually a pity more emphasis isn’t placed on it during secondary schooling. Singing is one thing but writing music is a whole new skill set that is exceedingly difficult to replace.
If you have the time and some of the natural gift, do yourself a favor and work on enhancing your music writing capacity. This is a game you want to be a part of.
Registering your work is the easy bit. Subsequent to that you will need to submit samples of it. That includes melodies and even parodies. Note that there are some legal ramifications with the latter.
You will then work out with BMI (or any other company like it) how those Royalties are to be divided. A lot of that will probably also hinge on the popularity of the jingle in question.
If you head down this route, it will be important to pay very close attention to detail at all times but especially during the preliminary stages. The decisions you make at this stage of the working relationship can determine the rest of your career. Get legal help if you need to.
Earlier we mentioned that you really don’t even need to know how to sing to secure music royalty earnings. With BMI there is even an opportunity for spoken word material. The critical factor is that there does need to be original music in the background for most of that spoken word material.
BMI, like other companies, makes those royalty payments out four times a year. So, there would usually be a payment in January, March, June, and September. Quarterly payments and money that you make while you sleep.
7. Write a Book
Writing a book – who hasn’t wanted to write one at one time or another. The earnings from book sales are much the same as royalties from writing music. Whenever someone purchases one you receive your payment from whichever platform you choose to represent you.
There are many online and digital platforms as well as traditional hard or soft cover options. If you do decide to pursue this type of business following those who have gone before is beneficial as is an in-depth course on how to write and promote a book yourself.
Earn Passive Income Online While You Sleep
It cannot be argued that people all over the world have been making online since the inception of the “World Wide Web”.
There is no reason why anybody who wants to earn an income online cannot do so with so many business options available.
One of the most popular income sources is, of course, the passive kind where you do the bulk of the work upfront then continually receive an income for that work for a long time to come.
8. Affiliate Marketing
Generating online revenue is where the world tends to be going. In fact, the world is already there. In the past decade, the marketing opportunities that come with the territory have exploded in ways that could hardly have been imagined.
One of those avenues is affiliate marketing, an option available to website owners. If we are totally honest this is not really passive income, in the sense that you actually need to be running a successful website or blog to make this work.
The chances of affiliate marketing succeeding hinge heavily on your capacity to generate traffic for the website or websites in question.
The passive element to this is that readers of your websites are redirected to brand owners and affiliate marketers. That is the kind of thing that happens when you are asleep. It is money you make while you sleep.
You can earn income purely from redirecting somebody from your site. The experts call that a lead. However, the bigger money is to be made from actually turning that redirection into a sale or as the industry experts like to call it a conversion.
From that sale or conversation, you as an affiliate partner will then earn a commission. A commission earned for doing next to nothing.
So, just as a recap. You (as the website or blog owner) will display an advertisement or link for a company or store on your platform. One of your readers will then click the advertisement or link.
By clicking on the link, the customer is then redirected to the store’s page.
If and when the customer makes a purchase, the affiliate network that you are associated with will record the sale. A tracking link is normally added to tell them who helped secure that sale.
The store then confirms the valid sale. The transaction is then credited to you and you get a commission for it.
More information about this type of business can be found here at Income School! This is where I spend most of my time and where I learned to make my beautiful website that you are currently visiting.
9. Youtube Hacks
This sounds straightforward and I dare say it obvious but the first port of call here will be to create a Youtube account and choose a suitable channel name. It is astonishingly easy to get lost in the process. The simplest way to go about it is to self-title your channel.
That is to say, whatever your name is – you can start off by calling the Youtube channel your name and surname. If you are uncomfortable using your name then try and find a name that matches the topic of your channel.
Once you have settled on a name for that channel, you need to wrap your head around what you envisage that this Youtube channel is going to be about.
Choosing the right subject matter can be exceedingly difficult for a couple of reasons. Chief among them is that it is actually quite hard to find and settle on a niche subject. This is a highly competitive environment.
When you do eventually settle on a niche, you need to make sure that you post on that subject regularly. It is also important to be very dynamic when posting on Youtube. Post regularly but also ensure that when you do post, the viewer is likely to want to come back to your channel.
It is honestly in your best interest to post at least one video per day. In retrospect, two videos per day should really be a maximum. The more often you post, the better the prospects for your channel but do not overdo it either.
It is important to remember that this is not just about your channel but it is also about the platform that you are using. Youtube wants people to stay on their platform. The happier Youtube is, the better your passive income prospects are.
The other important aspect of Youtube influencers is that they need to engage with their audiences as much as is conceivably possible. Yes, Youtube is a streaming service but it is also a social media platform and that is something which is often lost on people.
The success of social media platforms is often determined by the level of engagement from those running that platform. If you want Youtube to be a lucrative passive income source, audience engagement goes a considerable way to realizing that objective.
It is also in your best interest to treat Youtube like a search engine. By that, we mean that you should do everything in your power to try and get you uploads found by organic search.
Now, there is no point in having that Youtube channel if you do not enable monetization.
That is something that you would do through Google Adsense. There is a threshold that does need to be met with Google Adsense on your Youtube channel, in the same way, that a threshold would need to be met when using Google Adsense for your website.
You need to have at least 4000 hours of watch time on your Youtube channel before you can get the attention of Google Adsense.
A better option will then be to start actually selling merchandise on your Youtube channel.
You do that by linking up as a Youtube partner through Teespring. The threshold for this partnership is 15,000 watch hours over the most recent 90 days.
Achieving that target could prove trying initially but in the long term, the passive income accumulated could be significant. It is a lucrative opportunity if you just manage to get your ducks in a row.
Selling merchandise on Youtube is one thing but selling products is one step better. In fact, it is probably your most lucrative passive income opportunity on Youtube. All of those products can be sold in the description of your Youtube videos.
You can either create your own products like online courses or you can sell products through affiliates.
10. Email Marketing
This is an expansion of Affiliate Marketing in the sense that it presents a viable alternative to websites and blog pages. While it is a departure from traditional marketing, there are similarities in the sense that this is an aggressive practice.
An aggressive practice that can make you money while you sleep.
To realize the objectives of this practice, the first thing you need to do is find an email software provider. Once you have selected and secured a provider, the next step will be for you to create a mailing list.
That list can be saved on a CSV file, which means you will never lose it. In addition to that, you can expand on the list as your business grows. The whole idea behind this is to get people to subscribe to your email list.
The next thing you need to do is generate leads that will help you grow your list. The next step in the process will be to set up what the experts would call an autoresponder. An autoresponder is essentially a functionality of email marketing.
When customers subscribe to your list, you can then set up an automated email that will go out to your subscriber base automatically. On your autoresponder, you will set yourself up with an email sequence.
Once you are set up with this you will start sending out broadcast emails. Broadcast emails allow you to send one email to your entire list.
Once all of the fundamentals are in place, you will then have to create something called a lead magnet. A lead magnet is something that you are going to deliver to anybody and everybody who is willing to give you their email address.
There are those out there who are more than willing to learn and accumulate information. They will give their email address out every day.
To produce the lead magnet, you can create and give away a free course for free. You can also create and give away a free ebook. The whole game plan here is to give something of value away for free.
You attract the reader’s attention by creating a lead capture page. The less elaborate you are with that, the better the prospects of you realizing your objective. Remember that above all else, your primary goal is to get the user’s email address.
Everybody that gives you their email address effectively becomes a part of your list. The first thing you need to do when you secure them on that list is to send them that free gift that you had promised them.
That gift gets delivered through your autoresponder. That is when the passivity of this exercise becomes a little more relevant or apparent.
For every delivery of the free promise, you take people to the offer. That is essentially where you hope that they will convert that offer and take up the sale – whatever it might be. The profits generated from that are normally commission based and that is the money that you get to take home. It is money you make while you sleep.
This could be your own offer but is more likely to be an affiliate offer in this case. Once you have reached this point, the business you are running can effectively be put on autopilot and you will not have to do much more from that point on. You can start making sales without doing anything.
Semi-Passive Income – Online
11. Drop-Shipping
Drop Shipping is where one creates a storefront online. You are effectively showcasing products from manufacturers. It is deemed semi-passive because you do have to place an order with your suppliers. Further, you may have to organize returns and answer customer inquiries.
You do not hold any inventory – customers order through your online eCommerce store – they pay you – after such time you will then contact the manufacturer and they will forward the ordered product to the customer.
Make no mistake it is a lot more complicated than it sounds and if you choose this type of business you will need extensive training.
12. Online Course
If you have extensive knowledge about a certain topic online courses are a good way to earn money. This form is not entirely passive because you would have to be able to your students who have purchased the course.
Another advantage is that you do not have to own and run your own website or similar business model. There are platforms available where you can have your course hosted. The platform would automatically distribute the course and all its included information once the student has placed their order.
13. Sell Products on Amazon, eBay, Craigslist, Etsy or Some Other Platform
Products are being sold all over the world every second of the day thanks to the internet. If you have products or an idea for a product why not look into selling through a platform like Amazon. Amazon does the work for you {for a price} such as accepting the order the shipping it to the customer for you.
eBay, Craigslist and Etsy are a little more hands-on for the seller, but the orders can come in thick and fast while you are asleep. Just get up the next morning and ship the order to the purchaser.
14. Mobile Applications
Just a few short years ago creating a mobile application could cost your thousands and thousands of dollars. These days thanks to mobile telephone popularity the price to have an application made for you has decreased dramatically.
“Approximately 90% of teens between the ages of 13 to 17 have access to a mobile/internet connection and 96% of Americans have a mobile telephone”
15. Get Paid for Your Photos
Yes, you can get paid for taking photos. With the ever-increasing online traffic, marketers need great images for any number of topics. Marketers purchase licenses for the use of photos from online sites that represent the photographer.
When your image is purchased you receive your royalty – one of the best parts of this type of business is that one fantastic photo can be sold over and over again with some agents.
Semi-Passive Income – Traditional Ideas
You could be after a passive business that is a little more traditional. With the ideas below, you could go it alone or invest with a partner.
16. Laundromats
Clothing will always need to be washed so coin-operated laundromats will always be in demand. Semi-passive because you do not need to be on hand 24-7 but you will need to empty coins from machines and carry out and service requirements for the washers and dryers.
If you wanted to make the business more passive you could employ someone to take care of the day to day running of the laundromat.
17. Vending Machines
Vending machines are one of my all-time favorite small businesses. Today there are so many items in vending machines the possibilities are endless.
Semi-passive because the machines do need refilling and servicing. Even this task today has been made so much easier thanks to technology.
- You will get alters sent to you when machines are becoming low on items – so no time wastage guessing and also no unsatisfied customer due to empty machines.
- Secondly, the machines take cards now so cash handling is almost non-existent in some cases.
18. Closer to Home – Rent Out Your Possessions
Home or Holiday Home Rental
Rent out a room in your home. You could do this on a long term basis, to students or to holiday renters – using a platform such as Airbnb.
You may have a holiday home or a family cabin – which you could rent on a casual basis through a rental agent or also through Airbnb.
Garage or Parking Space
If you live in a city or built-up area where parking is required by commuters why not lease them your car space or garage. If you take your car out every day it makes perfect sense to let someone else pay you to use it while you are not there.
You could advertise yourself or use one of the many applications available which become the middle man for this service.
Car
Using an organization like Turo you can make extra money by renting your vehicle out when you do not require it. Your car can also make you money through advertising. You get paid to drive around with your car wrapped with advertising.
Tools and Household Items
- Log splitters
- Chainsaws
- Extension ladders
- Party Tents
- Tables and chairs
- Utility trailers
Hobby and Sports
- R.V’s
- Campers
- Snowmobiles
- ATV’s
- Sporting Equipment (snow)
Final Thoughts
When it comes to money our views are going to vary greatly. The lives we lead where and how we earn a living are so very different so it makes perfect sense that we might all require something different.
Carry out your research and I am certain you will find the perfect way, for you, to make money while sleeping.
As always here’s to better sleep!
