6 Ways You Can Earn Passive Income in 2020
If you start today, you can be successful by the end of this year
In this article, I’ll talk about 6 ways to earn passive income in 2020. You can take any of these methods, start working now, and start earning a decent return before the end of the year. If you work hard and you have some good luck, you could be earning money by the end of the month.
Before that, I want to explain why I hate the term passive income.
Passive Income Takes Work
I try to avoid using the term passive income. In the age of hustle, the term ‘passive income’ has lost its meaning. When people hear about passive income, they think about money falling from the sky.
Passive income doesn’t fall from the sky. It grows on trees. If you plant a seed today, tend to it daily then you will grow a money tree n the future.
In other words, you need to pick a way to earn passive income, invest in it, and eventually it will earn you money. Like with everything else, the more effort you put into earning passive income now, the greater the return in the future. What’s great about passive income is that the investment you make now, can earn a return for a long time to come.
Earning passive income involves making an investment now and getting the benefits of that investment later on. The investment that you make upfront is either time or money.
It’s easy to earn a significant amount of money if you start with a significant amount of money. When you have enough money, you can make low-risk investments with a low rate of return and still earn a lot of money.
Most of don’t have a lot of cash to spare to start. That’s OK — with a big enough investment of time, you can still generate a lot of passive income.
Earning passive income is worth the investment. It won’t replace your salary any time soon, but an extra few dollars every month can make your life a lot easier.
You can put this money towards something functional like a phone bill, a treat like an extra meal out, or a rainy day fund. You earned, you can decide how to best use it.
So without further ado, let’s get into it.
1. Amazon Associates
One of the easiest ways to generate income passively is through affiliate marketing. I think most people know what affiliate marketing is, but just in case:
With affiliate marketing, you promote a product or service in a piece of content, usually a blog post, podcast, or video. At the end of the post, you provide a link to buy the product. If a visitor clicks the link and buys the product, then you get a small commission from the supplier, usually in the region of 3–5%.
The most famous affiliate program is Amazon Associates. With Amazon Associates, you can provide a link to any product sold on Amazon. If someone clicks your link and buys the product within 24 hours, then you get a commission.
Product reviews are incredible vehicles for affiliate marketing. You can get started creating product reviews on YouTube, Medium, or your personal blog for free and earn money when the site starts ranking in Google.
You can provide affiliate links in any type of content. Product reviews are particularly effective though since people reading reviews are usually people preparing to buy a product. If you can be persuasive in your review, a reader will most likely click your link and buy the product.
2. YouTube Ad Revenue
YouTube is the goto platform for knowledge and entertainment in video format online.
Anyone can put videos on YouTube. With some effort, you can create and promote high-quality content. If your content generates enough subscribers and watch hours, you can monetize it. With monetization turned on, you can run ads before, during, and after your videos. The money earned from these ads is split between you and YouTube. YouTube keeps 45% and you get 55%.
Most people don’t want to get in front of a camera. That means that YouTube has quite a high barrier to entry. This also means that YouTube has relatively low competition. If you can work up the courage to put your content up and the creativity to make good content, then you have a very good chance of earning money on YouTube.
Shelby Church has written a fantastic article about how much money she makes on YouTube. It’s worth a read since it explains how much you can earn from a successful YouTube video and how the amount varies from video to video.
3. Medium Partner Program
If you’re reading this, you probably know what the Medium partner program is. Just in case:
Medium members pay a monthly fee of $5 per month. This gives them access to members-only articles and the potential to earn money through the Medium Partner Program.
Each time your article is read by a Medium member, a certain amount of their membership fee allocated to you. The amount you earn increases with time spent reading and engagement in the form of comments and claps. Medium pays out all of the money that’s allocated to you at the end of the month.
The Startup shared an article that explains how much the highest-earning writers on Medium make. If you can write well and get your content seen, you can earn a lot of money on this platform.
4. Dividend Payments
Many stocks pay a dividend.
A dividend is a percentage of the stock’s value that is paid to you for owning the stock. Usually, a dividend is paid once every quarter and is somewhere between 3–5% of the value of the stock.
Unlike with other ways to earn passive income, you need money to start earning dividends. If you have money in a savings account that you won’t need for the next few years, then its worth considering investing it in some dividend-paying stocks.
Blake has published an article explaining the mechanics of dividend investing and how possible it is to live off dividend income. If you’re interested in this method, give it a read:
5. High-Interest Saving Accounts
A high-interest savings account will earn the least amount of passive income of all the methods that I have mentioned so far. But still, it will earn income passively.
If you don’t want to create content and you don’t trust the stock market, then you should at least invest your money in a high-interest savings account.
Currently, money in a high-interest savings account will earn about 1.55% interest per year. For most people, this won’t be a lot of money but it might cover a meal or a bill.
At least, it’s 1.55% more than nothing and you can earn this passive income without any risk or effort.
Elizabeth Blessing has an article on Medium that explains why high-interest savings accounts are so much better than regular bank accounts. You can read that article here:
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