Passive Income: 8 Ways to Maximize Your Profits
If you are looking to achieve financial freedom or independence, and if you are looking to diversify your income sources, passive income is the shortest way to achieve this. So what is passive income? What are its main sources? And can you really make money without effort?
What is passive income?
Passive income is the profits you make from the assets you own, such as: the return on renting a home you own, or selling intellectual property rights to your digital products. In another sense, it is the recurring profit that you achieve from making effort, money or time only once, and the profits follow after that without actual intervention from you with the least effort.
What is the difference between active income and passive income?
The types of income are generally divided into three types through which you can diversify the sources of income, according to your circumstances and capabilities as follows:
First: Active Income (Earned Income)
Active income or earned income is the income you get from your traditional regular full-time job, and is the most common type of income, and this money stops flowing once you stop working. Active income is subject to the highest tax rate of all other types of income, but it does not require you to have capital to start earning, such as income from a teacher, customer service employee, or doctor.
Second: Investment Income (Portfolio Income)
Investment income is the profit you get as a result of investing your capital in any type of business or investment, such as investing in real estate and buying and selling shares. There is no doubt that achieving this income often requires a large start-up capital.
Third: passive income
As mentioned, passive income is the money that you earn without active participation or much effort behind the assets you own.You do not need to work on a daily basis to achieve passive income, but this does not mean that you will get money instantaneously or quickly or out of nowhere, as this income will not be achieved by itself, but rather requires effort and money up front in the beginning before reaping profits.
The importance of passive income
The importance of seeking passive income is highlighted in the benefits that it brings to you, which are:
- Achieve physical security and financial freedom by gaining additional income.
- Securing yourself from job loss, market fluctuations, or an economic downturn.
- Diversify your cash flow.
- Exploit your potential and your passion to make a profit.
- Saving time and effort after succeeding in generating income, which helps you to devote yourself to your main business or to your family.
- Prepare for a retirement plan.
Types of passive income
There are many forms of passive investment through which you can generate passive income, including:
- Property flows: The money you earn from your possessions, such as renting an apartment, car, real estate, parking spaces, and so on.
- Silent Partnership: These are investments that bring profit to you as a partner participating in it with a portion of the capital or financing, without actually participating in the running of the business in a fundamental way, such as buying shares or buying an existing project.
- Intellectual property rights: They are the money that you get from selling your intellectual rights, such as selling books, videos, audio, or ready-made digital products, such as those products displayed on the Bekalika website from designs, templates, add-ons, applications, etc.
Passive Income Ideas
You can make passive income in real life, according to your financial capabilities and use your possessions for passive income as follows:
1. Create a blog
Creating a professional blog helps you to generate passive income, but it takes a lot of work and effort before your blog can generate profits. The success of your blogging project is linked to adherence to the following points:
1. Choosing the most appropriate platform to create your blog, the most famous of which is the Wordpress platform. You can use a professional WordPress developer from one of the WordPress service providers on Fiverr. And if you don’t have much time, you can buy ready-made WordPress themes from Bekalika, a ready-made digital product store.
2. Studying the audience targeted by the blog, and determining their aspirations and interests, to target them through blogging.
3. Provide exclusive, professional content that is not copied, and you can rely on some professional writers from creative writing service providers on the Fiverr platform, to feed your blog with exclusive articles of quality and compliant with the terms of SEO, to qualify your articles to rank in search engines, and thus bring more of visits and profit in the long run.
4. The more visits your blog gets, the more advertisers will be able to place their ads on the blog, which guarantees you a passive income in the future. You can rent advertising space, or start affiliate marketing for specific brands, as we will explain.
2. Affiliate Marketing
Affiliate marketing is one of the types of e-marketing that depends on providing marketing services for a specific brand of the advertiser in return for a pre-determined commission by agreement, after completing each sale through you. Each advertiser has its own affiliate marketing system that includes its own standards and policies.
You can achieve passive income by subscribing to one of the affiliate marketing programs of one of the companies or agencies that allow this type of marketing, such as Amazon or Ebay and others. One of the most prominent commission marketing programs in the field of self-employment is the commission marketing program for Fiverr.
Affiliate marketing extends to include every action a customer takes depending on the advertiser's marketing objective, such as completing a sale of a product, subscribing to a service, downloading applications or games, uploading a file, etc. The following factors contribute to your success in affiliate marketing:
1. Designing distinctive landing pages for the marketing offers you promote, as they contribute to the improvement of search engines, which facilitates the access of potential customers to the product you are marketing for. Most importantly, professional landing pages motivate customers to follow, and increase the conversion rate of the advertiser's site. Then you can sell and monetize these designs through the Bikalika store to buy and sell ready-made digital products.
2. Follow up on your advertising campaigns, to know their results through social networks and search engines, as well as follow-up competitors and study their activities for products related to what you are marketing for.Many tools are useful for you in analyzing your advertising campaigns and studying competitors, such as Optimizely.
3. Make sure that the product or service you are marketing for on commission is credible and of real quality, because building a good reputation for you as an affiliate marketer is determined by the extent to which your customers trust you and are satisfied with the product or service. Therefore, the lack of credibility will not only make customers lose trust in the brand, but also completely lose confidence in repeating cooperation with you in the future even if you are marketing to other credible brands.
3. Create an e-book
The demand for e-books is increasing with the increasing use of tablets and smartphones, you can make passive income by selling e-books. If you are an author, or if you have an experience you would like to share, or a skill you would like to teach to others, you can create an e-book and offer it for sale on the Fiverr platform, set the price you see fit for your book, and make a profit from selling it.
4. Create a YouTube channel
Creating a YouTube channel will help you to generate a lot of passive income if you can create content that will bring views to your channel, and push advertisers to collaborate with you to display their ads. There is no doubt that making a profit from a YouTube channel requires patience and effort in the beginning, but the success of it is a great source of passive income, which generates a stable income over time. So, we advise you to see how to increase YouTube channel views.
Profit from YouTube channels that have a lot of followers is achieved in one of the following ways:
- Selling and marketing products and services on YouTube.
- Subscribing to the YouTube Partner Program after achieving the terms of profit from YouTube, and allowing YouTube to display ads in your videos, and you earn for clicking and watching the advertisement.
- Contracting with sponsors and brands to promote them in your videos for a specific commission, which is similar to affiliate marketing.
- Affiliate with your channel, which means that your followers come forward to donate to your channel as a kind of support for the content you provide, which represents real value to them, and in return they get some special gifts from you, such as: watching behind the scenes or videos before downloading them, and so on.
5. Selling digital products
Digital products are those immaterial products that you can sell online as one of the most important sources of passive income. In other words, digital products are the intangible assets that you own. These products can be sold more than once, the completion of the sale does not require shipping for the digital product, and the customer receives the product immediately upon purchase. You can invest in making a digital product according to your skills and sell it through Bikalika, a ready-made digital product store, including:
- Web applications.
- mobile applications.
- Ready-made designs, such as: forms, prints, and graphics.
- Documents such as: presentations, CV, contract forms, etc.
6. Selling training courses
Use your skills and experience in any field to provide courses, private lessons or online courses, and make passive income, as you can sell the course an unlimited number of times without effort. It is indeed profitable, and worth the effort, effort and focus in:
- Refine your skills in the field in which you wish to provide training courses.
- Preparing an appropriate plan to present the educational material in a way that suits the target audience.
- Choosing the appropriate platform to deliver the training courses through, such as: Zoom or Skype.
- You can hire yourself on Fiverr, and provide remote training services, to offer your training courses and profit from them easily.
7. Selling exclusive photos and videos
The search for exclusive images and videos is increasing, as they are popular with search engines, and they can be used for many goals in the content industry in general. If you have the skill of photography and making exclusive videos, you can sell your photos and videos, and make passive income that you can rely on by displaying them on a photo and video selling site, such as: iStockphoto or Fotolia. Here are some tips:
- Take photos or create high-quality videos, so you can be competitive in the field. Use a high-definition camera, and pay attention to good lighting and sound quality. Take advantage of online lessons to develop your skills.
- Make your photos and videos more professional, by modifying them with the appropriate editing and montage programs.
- Find inspiration for the shots that make you stand out and attract customers.
Invest your audio skills and voiceover abilities to create audio content that will bring you passive income. Many people buy audiobooks to listen to at any time. You can record audiobooks and sell them. You can also create a YouTube channel based on the audio content industry, and provide distinctive audio videos on topics that attract viewers.
Tips for making passive income
It is important to heed the following tips when deciding to look for a source of passive income, so that your efforts are not wasted or drawn into high-risk fake promises.
First, beware of Ponzi schemes
Beware of being pushed by the illusion “Wealth without work!” or "Make money while you sleep!" To get carried away by promises of quick and huge returns without any risks, as most of these promises are a trap for fraud. The most famous scam that took place under the name of fast and large passive income is “Ponzi schemes”.
The name of these schemes goes back to the biggest financial fraudsters in history and his nickname “Ponzi”, and this name was associated with fraudulent investment operations, which delude investors to achieve huge, quick and risk-free returns. These operations depend on paying the profits of the first investors from the investments of the new investors, so the investment scheme takes a hierarchical form in which the investors at the top of the pyramid actually get returns, to continue promoting this fake investment, while the new investors are exposed to fraud and their money is lost.
This type of fraud still exists today, but it is formed according to the types of popular and successful investments in the market, so fraudsters take advantage of the fact that people do not know much information about them. For example, the fraudster deludes investors that he is investing their money in digital currencies or the stock exchange, and uses this to attract and defraud many people.
Be careful, you have to research carefully about any investment you make or any investor you are collaborating with. And know that passive income is not achieved as easily as these fake claims, but rather it requires time and focused effort in the beginning, and a lot of patience until you reach your goal.
Second: Don't be in a hurry to quit your job
Do not rush to leave your traditional job as soon as you start working on a source of passive income, even if you achieve some success in the beginning, this does not make you safe from market fluctuations yet, nor does it give you a comprehensive view of your ability to continue, and the suitability of passive income that you achieve to your requirements living. Do not waste your job unless you study these factors, make sure that your financial security is achieved, and ensure the continuity of negative cash flows.
Third: Constantly develop your passive income source
If you succeeded in generating continuous passive income from one of the sources we mentioned, congratulations! But this does not mean that you should completely stop working on developing your passive income source every once in a while, and develop your skills to the better, as it cannot guarantee your continued success forever in light of the constant updates that occur in the labor market. Also, the improvements you will make will enable you to increase your profit.
For example, if you are making passive income from renting a residential property you own, adding luxuries, making extra finishes and repairing damage after each tenant moves out, will enable you to raise the rent every time, and will motivate new tenants to cooperate with you. And if the source of your passive income is creating content on YouTube, then constantly developing the channel’s content, improving montage, sound quality, and designing a professional intro, will bring more traffic to your channel.
In conclusion, passive income is the safety valve that ensures your financial stability, and guarantees you the financial freedom you are looking for. The most important thing is to study the ideas we mentioned well, to choose the most appropriate ones for your circumstances, skills and capabilities.