Written by Craig Whitcomb
The pursuit of financial freedom is something many of us seek, now more than ever in a struggling economy. The basic need to live drives us to search for new and effective ways to free up time and enjoy life. Passive income emerges as a powerful tool in this search, offering individuals the prospect of earning money with minimal active effort. Often referred to as residual income, these streams of revenue can pave the way for a more flexible and secure lifestyle.
Exploring different ways to make passive income is a journey laden with valuable lessons. The search itself becomes a lesson in financial strategies, risk assessment, and the nuances of various income-generating methods. Learn the importance of diversification, understanding that relying on a single avenue may limit potential returns. It teaches the art of patience, as building substantial passive income takes time and consistent effort. The process encourages a deeper understanding of investment principles, risk tolerance, and the power of compounding. Ultimately, the search for the right ways to make passive income helps you prepare for the execution of a newly found venture that can generate life changing financial freedom.
Several ways to make passive income come to mind and we are going to discuss each one and then take a deeper dive to define drawbacks and benefits. Then we will score and rate each one to find out which ones rise to the top. As a bonus step, we will take the lowest scoring option and see if anything can be done to elevate the score…I guess the title is a bit of a spoiler! Let’s Get started.
A couple of things all of these passive income streams have in common, 1. the learning curve is steep and 2. the most important ingredient is passion. Be prepared for these two things and make sure that the option you might choose is going to be enjoyable to learn, hold your interest for the long haul and drive your passion. Just like starting any business, dedication is a must, and with a little luck thrown in you’ll be on your way to success.
Building wealth, brick by brick in real estate stands as a proven avenue for passive income, known for its ability to generate consistent returns over time. Whether you choose to invest in rental properties or participate in real estate crowdfunding, the principle remains the same: real estate has the potential to yield ongoing passive income. Rental payments and property appreciation contribute to a reliable cash flow, making real estate a cornerstone for those seeking financial stability.
Beginning the path to freedom by exploring the world of stock market investing opens the door to a number of possibilities for passive income. By strategically building a portfolio that may include dividend-paying stocks or index funds, investors position themselves to receive dividends and capitalize on the market’s long-term growth. Patience and a well-thought-out strategy are key in cultivating wealth through stock market investments.
Riding the digital currency wave on the rise. Cryptocurrency introduces a new and dynamic avenue for passive income. With concepts like staking and earning interest on crypto holdings, individuals can transform their digital assets into a consistent source of residual income. The decentralized nature of cryptocurrency and the potential for substantial returns make it an interesting option for those willing to chance the evolving landscape.
Transforming influence into income through affiliate marketing is another option. This field has emerged as one of the notable ways to make passive income. By strategically incorporating affiliate links into digital content, individuals can earn commissions when their audience makes purchases based on their recommendations. The seamless integration of affiliate marketing with content creation makes it a viable and scalable method to generate passive income.
By crafting a brand, Entrepreneurs with a creative edge can explore Amazon FBA as a means to generate passive income. By developing and selling products on the Amazon platform, individuals leverage the company’s extensive customer base and logistical support. This avenue not only opens doors to passive income but also provides an opportunity to establish a brand legacy.
Product development has not always been considered a main type of passive income, but I would argue that it is most definitely a contender. Creating and developing new products and bringing them to market can produce years of residual income with little or no effort, especially with licensing agreements that produce quarterly royalties for years to come.
As we discussed earlier, each of these options demand training and education in order to succeed. In some cases, the first attempt might not be successful but often the most important lessons are learned from a failure, which brings you that much closer to success.
But before we proceed let’s break each option down into more detail, considering some important categories like initial cost, risk level and return on investment. Also, let’s compare them and decide just how passive each option really is.
To collect the data for these different ways to make passive income, I tapped into Google’s AI with several different methods. Then I started researching to determine these final details. It’s worth noting that much of these results included large variations that were difficult to compile but here are the final results.
Investment: A proven form of passive income but demands substantial upfront investment and ongoing management.
Upfront estimated cost: $77,000 average depending on property cost (estimated 18% of average property cost in the U.S.)
Risk: Dividends and interest rely heavily on market fluctuations and economic conditions. A short term game in real estate is high risk but long term is low.
Return on investment estimated average: 12%
Investment: Can range from low high and often directly proportional to your income targets.
Upfront estimated cost: $100 and up depending on your income targets.
Risk: Stock trading can be a high-risk game with market volatility that creates the need for continuous monitoring and research.
Return on investment estimated average: 9% The average part time day trader targets 9% for return on investment. Some CD’s and high yield savings accounts today can provide half of that or more with no risk or effort.
Investment: Cryptocurrency is a relatively new player with a steep learning curve. The investment can be low to moderate.
Upfront estimated cost: $100 and up depending on your income targets
Risk: Cryptocurrency as a passive income source carries significant risks which you should carefully consider. Risk factors include market factors, regulatory uncertainty, technical issues and scams.
Return on investment average: 0 – 100% or more depending on coin and market fluctuations.
Investment: Low initial investment but requires time, dedication, technical knowledge and a continuously robust online presence.
Upfront estimated cost: $1,300 and up
Risk: Relatively low and mostly includes risking a loss of return for your time and effort. Risk factors include market & platform volatility, traffic dependence & competition, program reliability & technical snags, time commitment & legal concerns
Return on investment average: 15%
Investment: Medium initial investment but requires time, dedication, technical knowledge and continuous marketing optimization
Upfront estimated cost: $2,500 and up depending on products and quantities
Risk: Medium and includes market & platform volatility, technical and forecasting abilities, competition and time commitment
Return on investment average: 20%
Investment: Medium to high initial investment depending on complexity of inventions and level of intellectual property protection.
Upfront estimated cost: $6,700 and up depending on product complexity, manufacturing and type of IP protection used.
Risk: Medium to high due to the initial cost and success rate.
Return on investment average: 20%
As you can see from the Product Development results, this contender is coming in near the bottom of ways to make passive income. The problem with this option is the starting cost, medium to high risk level and marginal ROI which doesn’t quickly compensate for the investment. Remember this is just a rough estimate and many of us know of someone with a homerun product that allowed them to retire early. However the numbers here show this as a lower option.
Enter Remarkable Venture—a marketplace changing product development as a viable passive income option through enhanced innovative idea listings that can be licensed to innovation seeking companies. In this approach to product development and licensing, the risk and expense are lower and successful results come from the quality of your idea and the value you add to it, which can create years of truly passive income.
Why are risk and expense lower? Because patents are not necessary during the listing process so financing them can be discussed with the licensee during negotiations. Each listing has a built-in non-disclosure agreement (NDA) which can take the place of a patent. During this time the idea is actually considered a trade secret. This is a massive cost savings that allows you to spend money elsewhere. Avoiding patents also speeds up the process which is attractive to licensees. So, how does Remarkable Venture measure up as a passive income option?
Investment: Minimum initial investment depending on your strategy, complexity of inventions and speed to licensing.
Upfront average cost: $1,700 average depending on product complexity and selected strategy.
Risk: Risk is medium and must be mitigated by using a simple and strategic method using Remarkable Venture Inventing.
Return on investment average: 25%
Next let’s compare the results in the spreadsheet below.
Product development and cryptocurrency scored low and ranked at the bottom of ways to make passive income, primarily due to the high risk. Real estate and stock market investing, though established, ranked a little low as well. Real estate due to the high initial investment and stock trading due to the risk. While affiliate marketing and Amazon FBA both ranked higher, these are more hands on businesses with lower passivity and some specialty skills that you want to make sure are a good fit.
Coming in at number one with an overall score of 16 out of 20 is the Remarkable Venture method. This option also requires specialty skill but the passive aspect and decently low initial investment makes it stand out over other ways to make passive income.
Remarkable Venture transforms product development by organizing and simplifying the process and showing you how to do it with deliberate strategy, one step at a time. It also minimizes the risk by adding built-In NDA protection to your listing. Possibly the best benefit is using a marketplace that can showcase your idea in a way that resonates with those seeking your innovation.
As you can imagine these rankings are subjective and the bottom line is, choose the one that you most resonate with. Whether you are looking for supplementary ways to make passive income or a new career, there is no substitute for finding the one that you will enjoy and look forward to each day. There are several ways to make passive income but it is wise to weigh your options by studying each interesting option and making sure it’s a good fit before giving it a try. I hope this article helps you in your journey to financial freedom.
Learn more about Remarkable Venture by viewing our listings and reading the Remarkable Venture Inventing series.
Please help the community by adding your expertise relating to this article or asking/answering questions in the group discussion below. Remarkable Venture does not offer legal advice. Consult with a qualified Attorney for decisions concerning your particular needs.
