5 Online ‘Passive’ Income Sources That I Have Actually Tried

How much do you need to get started in 2022?

I have seen many articles that list passive income ideas that you can try today to make money online. But how many have the author actually tried?

This article will show ways to generate an income online that I have actually tried, and how much you need to get started.

A basic definition of Passive Income — a source of revenue that continues even after the work is complete, for example, royalties from a book or film.

No income is truly passive. You won’t hit the jackpot with no effort. But some income streams can generate an income passively, later down the line.

The whole idea of passive income is intriguing and most people’s dream. But the content related to this is often misleading. Most I’ve seen provide generic lists that make it sound easy. Like setting up a Youtube channel. Youtube can be very lucrative. But building an engaged audience is far from passive and often takes years of unpaid effort.

Having said all this, Below is a list of 5 ways I have made income online. They have all taken work. But on days I haven’t worked on them, I have still received income. How’s that for passiveness.

1. E-commerce

E-commerce involves selling physical goods online.

The methods I have tried are Arbitrage and Private Label.

Arbitrage is reselling products. You buy on the cheap somewhere and then sell for more on another platform.

Most consumers are happy for the convenience of next-day delivery so don’t compare prices.

I have tried both Retail and Online Arbitrage.

Retail Arbitrage involves physically sourcing goods. Could be through discounts at retail stores or garage sales, like everyone's boy Gary Vee preaches. I found this to be a really good way to make a decent margin.

The downside is it is very time-consuming as need to continuously source deals.

How can we make this more passive?

Through doing this online. Instead of running around, you find deals online.

Will still need to source products manually, but there are software and deal sheets that speed this process up.

But it would be more passive if you could source a product once right?

This is where Amazon Private Label comes in.

Amazon Private Label involves sourcing a generic item, wacking your logo on, and then charging a premium. Can keep reordering stock with no need to source new products.

However, it is riskier and costs much more to get started. Need to differentiate from the competition and invest in marketing.

One issue with e-commerce is you can run into cash flow issues quickly as often do not get paid right away and need to buy stock upfront.

Budget — With all the fees, wouldn't really bother arbitrage with less than $1k. Private labels need considerably more for stock, shipping, and marketing.

2. Social Media

Something that you are all probably aware of by now is Affiliate Marketing.

This involves marketing other people's items online and when people click on your link and make a purchase, you get a percentage of that sale.

You can do this wherever you have a presence online. One way I did this was by setting up a Facebook group.

The first step is to create an audience. Can do this through content creation and reaching out to people to join your group. Nothing passive about it at the start — but I still receive occasional income to this day, despite not actively doing anything.

Recommend only doing it in an area you are truly passionate about or you will get bored of producing content (like I did). And also, only ever be affiliated with products you have tried that you believe in. If not you are scamming your audience. Don’t be that guy.

Budget — Free, just takes time to build an audience.

3. Ebooks

I wrote an ebook about my travels a few years ago and published it on Amazon. You create this content once and do not need to look at it again. But I found getting people to actually read it is a challenge and not a passive process.

There is a lot of competition in this area. I found the only real traction I got was from doing my own marketing and very rarely received income organically.

This is the hard bit and where most content creators fail.

There is something many of us have an issue with when it comes to selling our own products. Not wanting to be judged and feeling embarrassed stop us from pushing it.

Budget — Free. Need to make a book cover, can use Canva.com. Can also get it done on fiverr.com for less than $100.

4. Index funds

This is probably the most passive income source on the list, but need to have money to start with, that has probably been earned actively.

Like most people, I invest in S&P 500 — the largest stocks in the US, such as Amazon and Microsoft. Historically, since 1957, has yielded a year-on-year return of around 10%.

Can earn money passively through the 8th wonder of the world, compound interest. — Cheers Einstein.

If you leave investment in the market and it continues to grow, can really snowball into big gains over time (if you don't touch it)

Let’s look at this scenario. Big Joe, invests $10,000 into S&P 500. He forgets he did this and leaves it for 25 years. The rate of return produces an average of 10% every year.

Based on estimates from the compound calculator below, at the end of these 25 years, Big Joes $10,000 investment is now worth a staggering $108,347.

Budget — Whatever sum you don’t need. I tend to pay in monthly installments of around $300 a month.

I would only do this if you are willing to leave the money in the long term. Markets go up and down so your investment could easily be in the red in a few month's time.

5. Speculative investments

I realize the importance of diversification and not going mad and wacking everything in crypto.

Having said that, I think they are worth a dabble (if you have money you don't need). Could lose it all, but could also make a fortune. And that would be passive AF (after initial research).

My strategy is set and forget.

Currently, as we speak in early 2022, crypto is struggling so this is really a long-term strategy. And the space is still new so no one truly knows if this gamble will pay off.

Budget — whatever you can afford to lose. There is a risk you may lose it all.

Final Thoughts

So there you have it. 5 passive(ish) ways to make money online. The idea that you can do nothing and earn money is crazy. But there is no denying some income can be generated long after you put the initial work in.

Just need to look at Medium earnings. I love seeing money come in from an article I wrote 6 months ago. The whole concept is brilliant, which is why it gathers so much attention.

But if you half-arse it, don’t be surprised if that sweet cheddar doesn't roll in. Put the work in upfront. You might be handsomely rewarded, somewhere down the line.

*Disclaimer — This is obviously not financial advice. Do not take financial advice from a stranger on the internet. Speak to a professional. For entertainment purposes only.