One of the ways that you can revolutionize your finances next year is by looking into your passive income options. This is a type of income that you can earn even if you stop working on it. Of course, you need to do some legwork to set it up. Not only will you be investing your time, you also have to invest your money and skills in the beginning. But after that initial input, you are usually free to do what you want and this income source will keep on earning you money. Of course, you still need to check on your passive income source every now and then but it will not be the same as going to a 9-5 job so you can earn money.
The need to earn extra has never been higher than it is now. Although we are experiencing a strong and stable job market, our past taught us to never rely on one income source. That way, if your primary source of income crashes, you still have other streams that you can tap into. Not only that, our cost of living continues to rise and the income is not rising with it. At least, it is not fast enough.
According to the data from EPI.org, a typical budget of a family in a year is $49,114. This is for a family of 4 living in Morristown, Tennessee. The most expensive is in Washington, D.C. where the same family would need $106,493 to survive. Even the lowest budget is actually way above the poverty threshold in the country which is currently at $24,008.
The same site also revealed that a lot of low-wage earners are having a hard time meeting the basic needs of their families. The federal minimum wage earner only takes home $15,080. Even a parent with one child will have a difficult time making ends meet if they are earning the minimum wage.
This is why you need to include passive income options as part of your money resolutions for next year. Most of us need to work two jobs in order to get the finances needed to survive. If you have to set up two sources of income, wouldn’t it be great for one of them to be a passive income generator?
Steps to set up your passive income for 2016
Admittedly, setting up a passive income is easier said than done. But it is not impossible. You simply have to be determined to put up another source of income. Your motivation will come from your family so this is a task that you will most likely finish.
Here are the general steps that you need to follow so you can set up this source of income.
Choose how you will earn extra.
Start by choosing your product. Obviously, you cannot offer your service because that will not be passive anymore. Fortunately, there are many passive income options that will help you earn extra income. You can set up an online store that will sell products even while you are sleeping. You can write an ebook that will be sold even as you work on something else. There are many things that you can do. We will discuss specific options later on in this article.
Identify what you need to set up the extra income.
The specifics in this step will depend on the passive income that you will choose. If you will create a how-to video, you need to prepare the video camera and the tools that you will need to complete the course that you will film. If you will put photos in a photo sharing site for selling, you need your camera too. Also, you have to create an account in the site that will showcase and sell your photos. If you will create your ebook, you need to set up your account in Kindle or Amazon. Identify all that you will need so it will be easy to follow through when you are doing the actual setup of your passive income.
Determine the timeline to set it up.
Once you have the tools, it is time for you to set a timeline. You need to lay out the tasks before you so you can squeeze in this project despite your day job. After all, this is supposed to supplement what you are earning. You need to set it up in such a way that will not interfere with your day job. This will also help coordinate what things you need to prepare to complete the tasks before you. It will allow you to gauge when your passive income will start earning for you.
Commit to your timeline.
After completing the timeline (which is basically your plan), you need to make a commitment to follow it. A plan is nothing if it will not be followed. Setting up a passive income on the side can be tiring but the plan you prepared should be able to guide you through what you have to accomplish. Soon, you will find your cash flow increasing because of the rewards coming from your new source of income. Just be patient, persevering and determined to complete what you started.
Here is a video that will give you tips on how to create your first passive income product.
Options to help you earn on the side without doing anything
Now that you understand the process of setting up a passive income, it is time for you to see the different choices that you have. There are so many passive income options out there. It is important that you choose the one that is suited to your personality and your skills. That way, the effort that you will put into it will not be as tiring as it should be. After all, if you like what you do, it will not feel like work. You will actually enjoy it and earning will be a great bonus.
If you are not sure what passive income options suit your skills, here are a couple of choices you may want to consider.
Rental income. Investing in real estate can be costly but it is also something that will reward you with big money. Some people can actually retire early because they have a couple of rental properties. According to the data from RealtyTrac.com, homeownership is at its lowest point. That means more people are looking for rental properties to be their home – at least until they are able to buy their own house. Depending on where your rental property is, you can earn between $1,000 to $3,000 a month. Take note that you do not have to buy a separate house to rent out. You can convert your garage or basement into a studio apartment and have someone rent it out.
Sell an eBook. According to AuthorEarnings.com, sales of ebooks continue to rise in 2015 – although not as much as it did in 2010. The fact remains that this has potential. If there is a skill, an experience or a valuable tip that you can share, write about it in an ebook. If you believe that your life would have been better if you knew the information that you have at the right moment, then someone surely feels the same way. Help them out by providing them with the information that you are holding and allow them to reward you by paying for that data.
Set up an online store. There are a lot of ways to make money online, but only a few of them are passive. An online store is one of the passive income options that you can do through the Internet. You can set up the website and then choose a manufacturer who has the product you are selling and willing to ship the order for you. That way, your responsibilities will be focused on managing the website, showcasing the products and consolidating the orders so they will be shipped by the manufacturer. You can literally earn money even as you sleep.
Put up your things for rent. If you have tools and other equipment that you do not use regularly, you can opt to rent it out. Some people would rather rent them instead of buying one. It will be more economical if they will not use it often – just like you. Create an account on Craigslist and post the things that you can rent out.
Take note that these are only a few of the passive income options that you can choose from. There are other things that you can do. If you are creative enough, you might be able to think of a new one yourself.