Making money while you sleep, are on vacation, or while doing all the things you love to do when you are not working: is what passive income is.
It seems like a dream, it seems unrealistic, it seems impossible. But more and more people around the world are successfully finding ways of earning passive income while they enjoy their life.
The problem with the majority of the strategies you can find online is that they sound like easy and quick ways to earn a passive income, but they’re actually ineffective. So, if you want to know about how to make a passive income from home in an effective way just keep on reading.
Dividend Growth Investing
Dividend Growth Investing involves buying shares of companies that pay continuous quality dividends, then letting the shares sit there – unless you want to buy more.
A dividend growth investment strategy is the act of investing for dividend income.
But what is a dividend?
A dividend is a cash payment to the shareholder.
A dividend is typically paid out each quarter, and its total amount is based on some factors such as profit and amount invested. The goal of this strategy is to seek out businesses that have a strong track record of rewarding shareholders through dividend payments.
So, what do you need to do?
Look for companies with a stable business model, increasing cash flow and reasonable valuations (Apple, Microsoft, Coca Cola…), and invest in these companies. There are at least a couple of options you can consider:
Mutual Funds and ETFs
A dividend ETF typically includes dozens, if not hundreds, of dividend stocks. It provides you with diversification, which means greater safety for your payout: even if a few of the fund’s stocks cut their dividends, the effect will be minimal on the fund’s overall dividend. You can buy ETFs just like you’d buy a stock, through an online broker. A good approach is to buy them regularly, to take advantage of dollar-cost averaging.
Individual Dividend-Paying Stocks
Building a portfolio of individual stocks takes time and effort. Therefore this is more complex than investing through a dividend ETF, but with this strategy, you have the potential to personalize a portfolio and find higher dividends.
You can screen for stock that pays dividends on many financial sites as well as on broker’s websites. After you’ve evaluated the stocks and decided how much stock you want to buy (keep in mind that you’ll still need diversification to lower the risks), you can buy your stock from a broker platform.
After you’ve made your investment, this method allows you to earn money in a passive way (there is absolutely nothing you have to do but to wait) and get paid every month or every quarter.
Affiliate Marketing is the process by which an affiliate earns a commission for marketing another person’s or company’s product. With this strategy, you don’t need to sell any product or service. What you need to do is promoting others’ products or services so you can get paid a commission on every sale.
Affiliate Marketing is considered one of the most effective ways to earn a passive income from home. Yet, this is not 100% passive strategy: unless you outsource the promoting activity, you’ll need to write a blog or make Youtube videos, or any type of content you can think of. These will be the content where you’ll be able to share affiliate links that your viewers can click and make their purchase.
There are many Affiliate marketing programs that you can subscribe to and start making a passive income from home: giant companies such as Amazon and eBay have their affiliate programs, but you can also promote courses, service, and more.
With this strategy, there is a little amount of work you need to do every day. The promoting activity would be your responsibility and you can have two options here: you can delegate the activity and pay the people who basically work for you a percentage of the passive income you’re going to earn, or you do it all by yourself and spend just a few hours of your days working – it would be still worth it. And if you’ll need a little bit of training, don’t hesitate to join the Wi-Fi Entrepreneur Training Center: it’s free.
An alternative and very effective way to earn a passive income from home is Lending Club’s peer-to-peer lending platform. It allows investors to diversify their assets by investing in different types of loans. The type of loans you choose will determine the return and risk exposure of your investment.
You can invest as little as 25 in a single loan. Your investment will be combined with other investors to make up the entire loan amount. You can invest even more many sticks with $25 to reduce risk exposure. By investing a small amount in different loans you can reduce the risk by default.
After making your initial investment, you will begin earning a passive income on the payments the borrower makes. As the borrower continues to pay down the loan, you receive interest payments every month. And even if you don’t plan on reinvesting your income back into the platform, you will still earn a return on your investment. Interest rates may vary and will be determined by various factors. You can collect the principal and interest amount and it’s up to you to choose whether to cash out or reinvest your funds in the Lending Club platform.
All these three ways of making a passive income from home require an initial investment. Even if you decide to become an affiliate marketer you’ll need to spend a little money at the beginning of your activity. Yet the amount of money required to start these types of activity is a lot lower than what is required to start an activity of any other possible kind. So, it may be worth it giving them a try!