I will start this article with the answer: There is no “best” passive income source. If you get an income from a source that is truly passive and you are making a profit, that is a good passive income source. The best would have to beat the other sources with no debate, and that just doesn’t exist. It depends on your goals, your interests, and what you truly want.
But before we find out the best passive income source, first we need to ask ourselves a question: What are the popular passive income sources?
“Consistently water the sapling, and it will grow into a tree.” This refers to dividend investing, and how consistency can grow your portfolio into a true powerhouse!
Dividends are a very popular passive income source, and those that can utilize dividend stocks properly have the potential to reap BIG rewards! To invest in dividends, all you need to do is invest at least a few hundred dollars in the stock market, with a good company that pays a decent dividend. There is a lot of research to do beforehand however, and you need to make sure you are well-prepared and educated in the stock market, along with how dividends work.
If you target dividends when you’re young, you can potentially reach a six-figure income by the time you retire! And it never goes away! (Unless a company cuts its dividend, in which case you can sell and invest in another one. Hopefully, you haven’t allocated a large percentage of your portfolio to one particular company.)
How do you research dividends? You may prefer one place where you can find all of the information, and I have the solution! This website! I update this website regularly to being you news and tips about dividend investing. However, if you want to look elsewhere, I have learned from many investors: Ian Lopuch (PPC Ian) is the best dividend investor that I know of, and I look up to him a lot and go to him if I have any questions related to dividend investing. Ryan Scribner has his money dipped in many places, with multiple sources of passive income. Investing geniuses like Warren Buffett, Benjamin Graham, Peter Lynch, are all people to look up to in the stock-market world.
Real Estate is an amazing source of passive income, and it is truly passive if you opt to hire a property manager. Now, rental properties aren’t the only form of real estate, but they are the only form of passive income related to real estate. The main problem that people have with real estate is the large amount of money required to buy a house or apartment. The beauty about this market however, is that you can get a down payment of just 3-5%!
This means that if you find an $80,000 property, you can potentially get a down payment of $2400! Now you own a house or apartment. You can get a payment of a few hundred dollars per month, and pay it off faster if you have the income.
Now, it is time for my opinion. If you do not have a house yet and need a place to buy, I would suggest a multi-family home. A popular strategy that has been in place for decades, is to buy a duplex. While you live on one side of the duplex, you rent the other side out. If you get a good price for the rent, it should be able to cover the mortgage! So in this scenario, you essentially have no mortgage as long as a tenant is on the other side! Or, you could purchase a 3-unit, or maybe a 4-unit house! It may cost more, but patience wins in this scenario. If you find the right deal in the right location, you could pay for the mortgage and receive some extra money along with it!
Affiliate marketing involves online business, and allows a marketer to advertise a specific product for a company and receive a commission anytime someone clicks on the product through the link the marketer provides. In order to be a successful affiliate marketer, typically you need your own internet platform where you can reach people, and then get in contact with an affiliate program that would allow you to advertise their products!
Essentially, affiliate marketing is easy if you already have a platform. However, if you don’t have a platform, you would need to build one up first. Whether it is a website, Youtube channel, or social media account, you would need a way to connect with like-minded customers that would potentially buy the product.
Book publishing is a long-known trade that many take up as a career. However, now it is easier than ever to write and publish your own book. You can self-publish on Amazon with a quick and simple process. Once you publish your book, you will get paid everytime someone buys your book, whether it is a day after you published, or a year!
The tricky part is getting your book known. There are methods for this however, and if you figure it out, you can make big profits!
There are many, many passive income sources, and there is no best one! Choose what works for you, because any of these four income sources can grant you huge profit!