Transcription
How to make passive income - 7 ways that WORK
Hey everyone. In today's video, I'm going to share with you seven different ways that you could use to make passive income and I'm currently using just about all seven of them and one or two of them have used it in the past that I no longer use and there are really two types of passive incomes.
They're passive incomes that require time upfront to build something that no longer requires your time later on and will continue to give you money and the other type is you invest money up front and then that money will create passive income for you in the future. There was really no third option where you don't do anything and get passive income sadly, there's a lot of stuff on the internet that makes you feel like that's what you could do, but that's really not possible. Most passive income requires work upfront and sometimes a lot of work upfront. But then you could reap the rewards for a long time to come and as we go through this video, and I mentioned all these seven ways to make passive income, I want to mention if it requires time, how much time it requires, how much money it requires, if it requires money and then kind of share some results with you too.
From my experience of doing all these seven things. The very first way to make passive income is probably one of the most common ways people in the world make passive income and that's my investing in stocks and taking the dividends of the stock. Now, this is totally different than investing in stocks and hoping the stock goes up and making money.
That way that's just stuck trading or investing. That's not what I'm talking about in this case. I'm talking about stock dividends. Meaning if you hold a stock, some companies. Give you a percentage every year, just for holding that stock, regardless of the stock goes up in price or goes down in price. Now the dividends per stock depend completely on which company you invest in.
So for example, as I'm recording this, if you have at and T stocks, or if you buy at and T stocks, They are paying 7% dividends. What that means is if you have a thousand dollars or if you invest a thousand dollars on by, at, and T stock, that thousand dollars, we'll pay you $70 per year. In dividends. Now the schedule on how they pay could be monthly, it could be quarterly, could be yearly.
So it really depends on the stock. Another example, JP Morgan chase, a big bank, they pay 3.6%. Apple has dividends. A lot of companies have dividends, but the only thing about dividends is a shift all the time. So at and T is not going to be 7% forever and if the stock goes down, you lose money on how much of that stock you have.
So even though you're making the dividends, you could lose money on the holding of this stock. So if you have a thousand shares of at and T and the price of that share goes down by a dollar, you do lose a thousand dollars. So that's basically how that works as far as dividends, but it's a very straightforward way to make money.
Anybody could do it, I have a different video on stock trading for beginners. So if you want to learn how to buy and sell stocks, I'll put that in the description below. And another way to make passive income is by parking your money. In high yield savings account. Now, these are typically accounts, not in big banks and they're online-based.
So for example, the one I use is called Marcus by Goldman Sachs and sadly, as I'm making this video, the interest rate is very, very low it's under 1%, but previously last year, for example, it was over 2% and that changes all the time on how much they give you. So again, if you have a thousand dollars and the interest rate is 2%.
You can make $20 a year, but as your money continues to grow, you could continue to make that interest for again, doing nothing. That's what passive income is with dividends and with parking your money in a high yield savings account, it literally requires no work, but both of those options so far do require an investment in money.
As we continue, I'll show you some other options that will require time and no money upfront. Now, the third way to make money passively is using YouTube and creating a YouTube channel and let me explain this one in a little bit more detail because there are two types of ways you could have a YouTube channel.
One I think is very active and one, I think is kind of passive for the most part and the type of channels that I've created on YouTube are on the passive side. Let me explain the difference. Some channels that require you to upload and your subscribers need to show up to watch those videos and your older videos really don't get any traction.
Those are active, that's almost like a job and you're working for YouTube and you get paid through the AdSense program. When ads run on your videos, the passive way of having a YouTube channel is by creating channels like mine that are tutorial-based channels. I have videos from three years ago that may be gotten no traction back then.
But now make me a few hundred dollars a month years later. So if I start making videos right now, yes, my channel will decrease over time in the number of views it gets. But a lot of my videos will make me money for years and years to come. So that's the difference between active and passive channels, most channels that you're subscribed to on YouTube and you keep watching. Or probably more on the active sites. So if they start making videos maybe six months to a year from now, they may get very little money from YouTube if they don't keep up with the upload schedule. But again, if you make tutorials or things that have a long shelf life sometimes called evergreen content, people are going to keep coming back to those channels early on, on this channel, I made a video on how to kill ants naturally in your kitchen.
I just had that problem. So I made a video about it and that video now has over 150,000 views and at the time where I uploaded, he only had 10 views the day I uploaded. So as you could see some videos like that can make him money for a long time to come. Again, I have resources about how to start and grow a YouTube channel.
So watch those videos, but to be transparent on what this takes is creating a YouTube channel could be done with very little money. You could shoot videos on your phone, or you could buy a mic like I have here and do voiceover tutorials. Like I started with the problem is it does take a while for a YouTube channel to make money, especially passive money.
Well over a year. In most cases, if you start with no knowledge, so know that going in, that if you're not going to commit to YouTube, You're not going to ever make it a passive income Avenue. So if that's not the way you want to operate, don't go ahead and create a YouTube channel. You really have to realize that with YouTube, you have to make 50, a hundred, 200 videos before you really see any reward, especially when it comes to the money.
The fourth way to make money passively mostly happens online and it's called affiliate marketing. Again, just like the word passive income affiliate marketing gets a very bad reputation. Because so many people abuse the system of what I feel that marketing is intended to be all that affiliate marketing is if you use a product, a service, a camera, whatever the case may be if you promote that product to a person or someone, you know, online or someone you don't know online, and that person decides that's the perfect product for me and they buy that product. That company gives you a percentage as a commission. That's all affiliate marketing is in the case and the way I use it, for example, is when I make how-to videos, I will, most of the time, if it makes sense, mentioned a product. I use to make that thing a reality. Now, YouTube is not the only way to promote affiliate marketing.
There are lots of places where you could promote it. I have an entire course on how to do this with Instagram. For example, you could do it on Instagram. You could run ads on Facebook. You could do a number of things to make this a passive income scenario with affiliate marketing. The easiest way to get started is called the Amazon associate program is the Amazon affiliate marketing program where they pay you on anything that anybody buys on Amazon, as long as they went to Amazon through your link.
So it's a great way to make money. I make quite a bit of money from that, but again, this took a long time to build over a year to make a few hundred dollars a month even, but it's very possible to start that way and then there are a ton of other affiliate programs that are like, there's again, audible by Amazon adobe Microsoft. Some of the biggest brands in the world have affiliate programs for their software and services. So I'll link some of those in the description below. So you could go ahead and check them out, but typing the company that you want to promote and then typing the world affiliate program after that on Google and see what comes up you can register for just about any affiliate program out there. Some will reject you if you don't have a phone, but some will give you a chance. Like the Amazon associate program will give you a chance. If you don't have a following. The fifth way to make passive income is also online. And this one requires knowledge and it requires time and very little money to get started and this is selling informational products or digital courses. Now, the way this works is you take whatever you're knowledgeable about and turn it into a mini-course or a full course on that topic. For example, the courses that I've created in the past are how to turn Instagram into a business or how to use Photoshop or how to use I movie for editing or how to grow on YouTube, things like that, that I have knowledge about in your case, it may be just to buy anything else.
You would turn that into a course. There are plenty of courses out there that teach you actually how to take a course and they're very valuable and walk you. Step-by-step how to do that. Now, the people that do this correctly. Make seven figures a year selling digital products like these courses. I'm not talking about doing that.
I'm talking about creating a simple course. For example, I have some courses that I host myself on my own website that I built out that take quite a bit of time and some money, and a lot of knowledge to set up. But you could use platforms like you to me.com or Skillshare and put your courses there. The nice thing is then you don't really have to drive traffic to that course.
You don't have to send people there. I mean, if you do is great, but people may find your course just naturally on those platforms because there are search platforms there for courses. Like you, to me, my Photoshop course gets discovered all the time without me actually having to send people there. I can make a few hundred dollars a month passively for as long as the course stays relevant and updated without me having to do anything.
The upfront expense is about 30 to 40 hours of your time and kind of understanding how to make a course, which again, depending on your skill level may take you quite a bit of time to learn. Well, once you do, you can make digital courses all the time and have a passive income Avenue for the future. Now, the fifth way requires a ton of money to get started with, but it's real estate investing and creating rental properties for yourself that will give you cash flow and passive income.
Now, at the beginning of the video, when I mentioned passive income in us, the IRS. Considers a couple of things, passive income, and they actually tax them totally differently. One of those things is rental income from real estate. The IRS actually calls that passive income. So as much of a taboo word that may be on the internet, it is actually a real thing that the IRS considers.
So in the case of making rental property, what do you need to do that? Well, you need to buy a property and you need to put it up for rent and you need to find a tenant and then they'll have to continue to pay you. Now if the rent covers everything, your expenses, your mortgage, your taxes on the property, and you can make what's called cashflow.
Meaning your expenses are not as much as your income and your income actually goes into your pocket. That's cash flow, that's passive income, plus the appreciation of the property over time in the case of buying real estate. So you do make passive income that way. Again, the IRS taxes differently. But this does require quite a bit of money and quite a bit of knowledge on running a rental business.
Now, I have a few rentals, but it took me in the last 10 years of buying them here and there or when I moved out of a property, not selling it, buying another one, and turning the old one into a rental property. So, if you want to learn more about that, one of the ways I learned about it was through the bigger pocket podcast and there are also books and there are also websites on this topic. So I'm not going to go further into it. But if in the future, if you want to make passive income and create cash flow for yourself, the rental game is one place to be. Now, the next way to make passive income requires time and it requires knowledge, but again, it doesn't require any money and that's by selling digital goods. Now, this is different than the informational products that I mentioned, like courses, what digital goods are and the way I've used them in the past is, for example, I create videos all the time and I shoot videos all the time and I take photographs. There are places like shutterstock.com, for example, where you could put those things.
You create those videos and whatever footage you have leftover that you think could be stock footage or stock music or stock photos could live on those sites and they'll pay you money for it ever. As long as people buy that product here and there there's a whole platform called Invitae. You could make templates for in a bottle, let's say, you know, after effects and you know how to make templates there, you know how to make website templates, you know how to make graphic templates for YouTube thumbnail.
For example, whatever the case may be. There are places on the internet, as long as you know how to create those types of assets. Where you could put them there in the marketplace and when people buy them, you get a portion of it. The next way to make passive income is by selling physical goods. And this could be very active or it could be passive.
It just depends on how you approached this. The way I approached it was there is a website called teespring.com. You can make t-shirts like the one on wearing here. So, what you do is you could create t-shirts again, I hired people to even design the t-shirt. This one, I designed myself, but the ones I actually sell, I paid someone to design those for me and what I do is I put those on Teespring. You could have a nice storefront on Teespring, and you could either promote those. If you have a YouTube channel or an Instagram following or Facebook following or you could run ads to those, or you could just leave them on Teespring and hope somebody comes across it through their search and buys those shirts from you.
Now, the way it works is, for example, if you sell a shared for $25, you could get 13 or so dollars from that in profit. So it's almost half and half on this split. Now, does this require money or time? Well, if you design yourself, it doesn't require money, but if you hire someone else, it requires a little bit of money to get those designs.
It does require time because you have to create that storefront and put those shirts up there, but it doesn't require that much time. Now, do you make a lot of money from it? Well, some people make thousands of dollars a month from it in my experience. No, you don't make it a lot of money, but for that amount of time that it takes to set it up, it's kind of worth it because it just sits there now.
In the case of selling shirts, don't sell this shirt, the shirt, your logo on it is not going to sell. I don't sell this shirt, even though this is from Teespring. No one's going to buy a shirt with my logo on it. I make shirts for filmmakers, for example, for my filmmaking channel. That's where I promote my shirts and it makes sense there. So people may buy it there. So give yourself a good chance and actually think about it. Will people buy a shirt for $25? Well, it really has to be nice and customized with a really nice design. So think about that. Before you go into the physical goods markets starting with t-shirts.
Now, the last thing is actually number eight, but I didn't really include it in this list of seven because I think it just takes too long to get to this point. But another way, the IRS in the US considers the money that you earn as passive income is if you own a business. Where you actually have nothing to do with the operation of the business, but in order to get to this point, you need a substantial amount of money and you need to be completely hands-off from the business and let someone else run the business for you.
This is the ultimate goal when it comes to making passive income. But again, it's one of those things that takes a lot of money. So if you want to franchise a McDonald's or a subway, for example, you need quite a bit of money to get there, but I wanted to mention it because it's one of the couples of ways that the IRS considers what you make passive income.
Another one, being real estate that I mentioned earlier. So it's really good to know what real passive income in the eyes of the government is and as I mentioned before, I have resources in a lot of the things we talked about in the description below this video. So, if something interests you jump in there and learn more about it.
I was considering putting Instagram as a way to make passive income, but I just made a video on seven ways to make money on Instagram and realize none of them are passive because, unlike YouTube, Instagram is not a search engine. So people are not going to find your content from two years from now. So, if you don't make content on Instagram, you don't make money.
So it's a little bit more difficult with Instagram to make passive income really. I don't know a way where you could do it. So, I didn't include that at all, but if you want to learn how to make money on Instagram, Check out the video on seven ways to make money on Instagram. But again, those are all active ways to make money on Instagram and my goal with this video was hopefully you try one of these things and see if it's for you. If you have more time than money. Do some of the things that I mentioned that only require time. If you have more money than time, try some of those investing methods like buying dividend stocks. I'm not a stock expert anyway.
So, do your research. I just personally have at and T stock, but again, don't take my advice on buying stocks. I'm just telling you some stocks pay more dividends than others. For some of the other things I mentioned, you could go back and see if it fits for you. Thank you so much for watching. I know I threw a lot at you, so if you find that useful.
Please give this a thumbs up. So more people could discover this video and I hope to see you in the next video.