For a while now I’ve been looking at alternative ways to earn money. I have a good ‘day job’, in which I think the work I do is worthwhile and important. But it’s stressful and I’ve been having anxiety that is increasingly difficult to deal with. I wanted to find a way to ‘buy back’ a day a week for my self so I could go a bit part time. I was intrigued by this idea of ‘passive income’ as the name suggests that you can earn money by not doing much. That sounded pretty great, but I wasn’t convinced it was a real thing. So I started doing some research and discovered a whole industry composed of people doing inspirational things. Who’d knew? You are just one Google search away from a world of blog posts, kindle books and YouTube videos describing all the ways in which you can earn passive income. And there are loads, but there are catches to all of them;
Owning things that make you money – so owning stock or shares in companies that pay you a dividend on a regular basis, or property that you can rent out. So technically you don’t do a huge amount for that money. But here’s the thing, unless you happen to have already been born into wealth, have recently inherited money, or have been lucky enough to win a substantial sum of money you need to work pretty hard up front to get accumulate the kind of capital to make this work. You need to invest quite a bit for the dividends to significantly contribute to your income stream. That doesn’t mean it’s not worth doing, but it’s not that passive, it’s a big investment of time and money.
Lending other people money – so making loans to people through peer to peer lending and earning interest on the loans. Again you don’t do much but ditto the above regarding the money you need to invest up front.
Advertising revenue – so if you write a blog or own a website (that people like visiting) you can then earn money by selling adverting space there. So while you don’t create the adverts or advertised products, you probably need to work quite hard to create a popular enough site to create an environment that would be attractive to online advertisers.
Writing e-books, creating online videos, online courses – lots of work here. Creating quality content takes time and effort, if you already have a day job this could be tricky.
Licences for creative content – so if you take good photos or create art of some kind you can sell this to people through online channels. It may be enjoyable, but creative works can involve, well a lot of work
Running an online business, selling things through online platforms – you may do it from your bed in you pyjamas. It’s still work.
So there seem to be lots of ‘passive’ ways of earning money, but to me most of them look more like freelancing or working for yourself. I think all of these things are great, and worth doing. With the advent of crowdfunding approaches to investing (e.g Zopa, property partner) it’s possible to start really small and build up over time. But the big secret? It’s not that passive. Folks, you just don’t get money for nothing.