“If you don’t find a way to make money while you sleep, you will work until you die.”-Warren Buffett

Passive income is income that requires little or no effort to maintain once created. It is the opposite of active income as you don’t need to continually do something for it every day, for a set time period to receive it.

1. Real estate: rental property

Buy to let is when you buy a property with the purpose of renting it out to tenants and thus making a profit. With buy to let you put down a deposit as you would when buying your own home, and taking out a mortgage for the rest. Than you advertise your property or you could get an agent to do this, and when you find a suitable tenant they’ll pay the rent which you use to cover the cost of the mortgage and than pocket the rest. You could save any surplus you get which you could use to buy further rental properties in the future or put it in a savings account so that if anything in the rental property were to break etc. you could pay for the replacement.

There are two ways you can profit from a buy to let property. One, the most obvious one is the monthly income you get, and the second is capital gains. This is because over time if house prices rise and you sell the property you could make a capital gain from selling it ie. you sell it for more than you bought it for, however this is only the case if you added value to the property for example, through renovating it or if house prices rose.

Rental property is a great passive income as you don’t need to put in a lot of work or any, everyday in order to make money from it.

On average in the UK you can expect to make around £15 000 annually from rental properties depending on the location of the property and other criteria, you can check the yields in different places and compare them to find the best places to invest in.

House prices are rising at the fastest rate since 2004, with a £5000 increase in a single month (august 2021) suggesting that there is likely to be good money to be made in terms of a capital gain. However, there are also costs like renovations and so on, you might also be unable to find a tenant so you’ll have to cover the cost of the mortgage yourself if it does happen. So there are pros and cons of rental properties so you should do your research and even ask a professional for their advice, but at the end the decision is yours to make.

2. Invest in (dividend) stocks

You can make money from stocks in two ways, one of which is dividends, this is when companies give you a part of the companies profits for being a part owner. The other is that when share prices increase, the value of your stock increases so you can sell it to make a profit, after selling it if the price drops you could buy it back again and repeat this process many times over. However this is a little more complicated so you might have to do research and study to increase your chances of success.

It is also a good idea to read up on the company before investing in it. You might also want to look for something that you believe will be successful in the future. Investing in sustainable companies might be a good idea as they are likely to flourish in the future as more and more people are becoming conscious of their actions and started caring about the environment.

However, investing in stocks might require certain skills and knowledge so before investing in it, it might be smart to do a course, these can be found for free from certain universities and charities etc. Investing in stocks is also risky, you could make a lot of money or lose all of which you invested. So whether you are willing to invest in stocks depends on your risk tolerance and whether it aligns with your morals, as some individuals are against investing in stocks due to their religious beliefs.

3. Write an eBook

You could write an eBook about something you enjoy, this could be educational or entertaining, fiction or non fiction. It could be something you are passionate about. Writing an eBook doesn’t really require any financial funding, only your time and an internet connection and a device like a phone or a laptop. You could write an eBook and sell it many times over on platforms like amazon, it is quite an easy way to make money if you like writing and you are prepared to put the time in. However, it is not guaranteed that you will make a sale and you might have to spend money on advertising it.

But if you have the creativity and time it is worth a try and with google ads you can set a budget on how much you are willing to put in to advertise it, so your ad is live until your budget runs out, so even if you don’t have a lot to spend you could still advertise your book.

4. Create a course

This is similar to the eBook idea, but its usually more on the educational side of things. For example, if you know and are good at something you can create a course in the form of a video or text or a combination of these and sell it to people on many platforms like Udemy. This also doesn’t require any financial funding other than maybe having to pay a monthly fee for using the platform you are selling your course on. This is also a great passive income idea as you only have to create it once and you can sell it many times over and over again.

5. Create a YouTube channel

Once you create your channel you could make videos on many topics that you like these could be related topics or unrelated, it depends on what you’re going for. On YouTube you can make money from views, ads but also from creating your own merch or you could create any service or good like your own course or anything. Once you have an audience you could really sell them anything and you are likely to have a high chance of selling these items and services as people are likely to feel inspired by you and have an emotional connection to you.

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