I realized I needed to start earning passive income once I was working around 65 hours a week — I needed to earn more without working more.
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Courtesy of Daphne Youree
When I got laid off from my full-time job in 2016, I decided to become a solopreneur. I had an existing business in the wedding industry that I worked on scaling. I picked up freelance writing gigs and created a range of services that spun out of my personal brand. After growing a few income sources, I realized I was working upwards of 65 hours a week. It felt like the only way to continue to expand and earn more money would be to introduce passive income streams.
Over the years, I've found a handful of ways to make money without trading my time. I've sold courses, rented out items around my house, and invested money in high-interest-earning CDs. But in 2024, I found myself eager to find a few new passive income streams.
I asked certified financial planner Jeff Rose to review my business and finances and suggest new and practical ways to earn passive income by the end of 2024. Here are his top recommendations.
One of the first things Rose asked was whether I was investing in dividend-paying stocks. When I audited my investment portfolios, I noticed that I had only bought very many of these stocks and was potentially missing out on recurring passive income.
"Dividend-paying stocks reward shareholders by paying out a perfect of their earnings, on a quarterly basis, as a token of appreciation for investing and owning their stock," Rose said.
However, getting a payout from a dividend stock isn't guaranteed and does come with risks.
"Getting paid dividends from a stock isn't guaranteed," Rose said. "The company could go bankrupt or no longer be profitable."
However, Rose said the biggest benefit of this passive income stream is that if the company is doing well and paying out consistent dividends, you're also benefiting from the stock price rising as well.
"When you look at people making money in the stock market, it's not just because the stock price is going up," Rose said. "It's also the dividend earnings on top of that. It's like getting your cake and eating it too."
I told Rose that I've always wanted to earn passive income through real estate investing but didn't have the capital to buy a rental property. Instead, I recently started putting a little money into real estate investment trusts to see if that could generate passive income.
Rose said that REITS can be a great way to invest in real estate without purchasing or managing a property. When you put money into one of these trusts, you are investing in a company that already owns real estate.
"REITs typically can bring in a higher return than dividend paying stocks, however they could come with more risk," Rose said.
He shared that this is a more volatile investment because the real estate market can fluctuate depending on many factors, like the economy or interest rates.
"While you could potentially get a bigger dividend yield than you would by investing in other stocks, the biggest risk of investing in a REIT is seeing the money you put in drop suddenly or more harshly than it could if you invested in a blue chip stock," he said.
After looking over my business, Rose suggested another opportunity that I could take advantage of for passive income is selling more digital products. In the past, I've created and sold online courses as a passive income stream. He suggested expanding and changing my offerings and selling ebooks, PDFs, or digital workbooks instead.
"We live in a world of digital products," Rose said. "Think about how to take your skills, expertise, and business services and create step-by-step guides, checklists, digital journals, or planners."
Since my courses are outdated and I've seen other people make passive income selling these types of products on Etsy, I made doing this a goal for 2024.
"The biggest benefit is that once you've created these digital products, there's minimal upkeep involved," Rose said. "However, the risk is that to earn the income, you have to invest time in marketing or have an existing audience ready and interested in buying what you create."
Rose said that if a person is eager to introduce a new stream of passive income into their life, they should first look at what skills or assets they already have that can be monetized. "Audit what you're already working with and see how you can turn it into a passive income stream."
That could include renting out items I own, creating digital products, or writing an ebook to sell on social media.
In my case, one missed opportunity for passive income that we discovered involved the traffic I'm already getting to my business website. After speaking to Rose, I decided to run Google ads on my website. After a month, I was able to bring in $390 in passive income just through those ads.
While that passive income stream will vary, month-to-month, based on how much traffic my website gets, it could bring in an extra few thousand dollars this year. As a solopreneur, new streams of income keep my business afloat and the passive ones give me time back to enjoy other aspects of my life.
