Getting paid to do nothing. It's a dream many of us aspire for. In the past, there were only a few ways to generate passive income, and they all required large monetary investments, but thanks to modern technology, the passive income dream is no longer a luxury only the rich and wealthy can afford. Here are 5 low or no cost ways to start building passive income streams right now, and the pros and cons of each method.
Infobarrel - $0
It may not come at any surprise to you that the cheapest and easiest way to start building passive income is by writing articles for Infobarrel and similar revenue sharing websites. Infobarrel publishes and places ads on your content, and pays you a portion of the advertising revenue generated by the ads on your article. It's a simple and proven business model, and is endorsed by passive income guru Pat Flynn of SmartPassiveIncome. All you need to get started is have a computer and an internet connection. It is completely free to publish articles on Infobarrel, and once you write the article, you never have to deal with it again.
Pros: Infobarrel is completely free. There are no overhead costs, payments are handled through a built-in system, and maintenance is handled by Infobarrel. All you need to do is write.
Cons: Writing is hard work. It can take a year or longer to start seeing any appreciable income through Infobarrel, and there is no guarantee you'll ever make a cent. You need to learn how to use keywords and SEO techniques to maximize your earnings.
Free Blogging - $0
The next level up in difficulty is free blogging. If there is special topic or niche on which you have unique insight and know-how, you might want to consider starting a blog with any number of the free web-based blogging services out there. Blogger, Wordpress, Tumblr, etc. If your blog becomes popular, there are a number of ways you can monetize it including, but not limited to, advertising, selling products, selling services, and donations.
Pros: Like the name suggests, free blogging is completely free. You are generally free to write about any topic you please, excluding adult and offensive content (Tumblr allows adult and offensive content to a certain extent.)
Cons: Much like writing articles for Infobarrel, free blogging is a lot of hard work and income is neither instant nor guaranteed. More upkeep is required on your end and you have to figure out how to monetize your free blog on your own. Many free blogging services do not allow any kind of monetizing whatsoever. You don't get a custom domain name, which can take some credibility away from your blog, and you have limited creative control over how your blog looks and operates.
Start Your Own Website - $50 - $300
If you have a little bit of money to spend, and are willing to do a little more work, starting a website can be a great way to generate passive income. Whatever kind of website you chose to create, there is a way to make money from it. People generate amazing passive income online through blogs, webcomics, product sales, and more. The great thing about starting your own website is that you get to write the rules.
Pros: You get your very own website, and are free to do whatever you want with it. Earnings potential is limited only by your imagination. You can create unlimited individual streams of passive income from a single website.
Cons: It costs money. Requires a certain level of technical know-how to run and maintain. Failure rate is extremely high.
Multi-Level Marketing - $50 - $300
There is a common misconception that Multi-Level Marketing companies are scams. While the basic MLM business model superficially resembles an illegal pyramid scheme, most successful MLM companies are in fact legitimate businesses. MLM is one of the most difficult, but also one of the most rewarding ways to build passive income.
The basic idea of the MLM business model is that a company distributes its product through individual representatives who engage in person-to-person sales. For each sale the representative makes, he sends a portion of the profits to the sponsor who recruited him. Every individual sales representative is free to sponsor even more sales representatives underneath him and collect a portion of their earnings as well. The goal of the individual sales representative is to have as many recruits underneath him making sales and sending him money. Over time, a successful representative can generate a very large passive income stream from the work of his recruits.
Pros: One of the cheapest and fastest ways to create a large passive income stream. Teaches you the basics of running a business and is endorsed by the likes of Robert Kiyosaki and Warren Buffet.
Cons: It is extremely hard work. Initial investment can be quite high depending on which company you represent. You cannot depend entirely on the passive income you earn or your business will fail. You must constantly generate sales yourself. Many MLM companies distribute inferior or “snake oil” type products, and you must be careful which company you represent because there is a very real risk of signing on to a fraudulent, or failing company. You may lose friends and associates with your constant sales pitching. Not a suitable earning system for introverts and shy individuals.
Invest In The Stock Market - $200 – unlimited
The stock market is often thought to be the domain of the rich and wealthy, but this is far from the truth. It is true that the benefits of investing in the stock market are amplified by having large sums of money, but you do not need a lot to start building passive income. In order to buy and sell stocks, you must open a brokerage account with any one of the many brokerage and banking companies out there such as Charles Schwab, Scotttrade, Etrade, Merrill Lynch, etc. Most companies require you to initially fund your account with $1000 to $3000 in order to buy stocks, but if you don't have that kind of money, some companies will allow you to open an account for free if you sign up for their other free services or agree to fund your account in automatic monthly installments of around $100 - $200.
Stocks can be a great way to build passive income because many stocks are actually two income streams in one. You earn income whenever the shares you own appreciate in value, and you also earn income if the company whose shares you own pays dividends. It helps to have a lot of money to invest so that you can buy a lot of a company's shares and multiply your earning potential, but if you look around, you will find that there are many strong companies with very low share prices that you can take advantage of for as little as $200. While it would be irresponsible to say that investing in stocks is risk free, the stock market historically appreciates at a rate of around 10 percent a year and may in fact give you a greater chance at building passive income than some of the other methods mentioned in this article.
Pros: Very little work involved, and only requires occasional monitoring. Truly passive income. Two income streams for the price of one. “Guaranteed” returns. Brokerage companies with higher fees give you access to a wealth of information and research from world class finance professionals and agencies to help aid you in making investing decisions.
Cons: Risky. You can lose everything. It takes time to build the monetary resources needed to become a real “player” in the stock market. Can be confusing to the novice investor.
Passive income is more than just a dream for the average person. It is a real possibility if you are willing to patiently build up your passive income streams in small increments over long periods of time. It may be years before your hard work pays off, but when it does, you'll be glad you put in the effort. There are no guarantees in life, but persistence has been responsible for more success than all the skill and luck in the world.