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Generate passive income in 2022: 6 ways

01 DEC 2022
READING TIME:  8  Minutes

Generate passive income in 2022
Imagine: you're lying on your couch watching your favorite series and you get an alert on your phone. It's a sale you've just made, and you're now €100 richer. That's the basis of passive income, which allows you to earn money without having to constantly invest your time, unlike what happens with your job.

Here are 6 ways to earn passive income and what you need to know about each of them:

Investing in housing


It is the most traditional, pure and simple way of obtaining passive income. Everyone is more or less clear about what buying a house to rent out entails. In a very brief way, you have to find a good home, buy it, put it up for rent and... Voila! You are collecting rent every month.

That is the essence of investing in rental housing . From there, there are always additional steps, such as a prior study of the profitability you will obtain from the property, possible renovations that need to be done, and financing.

And the fact is that most houses for rent are bought with leverage, that is, taking advantage of the financing that a mortgage allows. There are special mortgages to buy a house to rent and also mortgages to buy a house and renovate it .

Create and sell an infoproduct


Selling knowledge is also another way to generate passive income. There is a whole world of possibilities around this formula.

An infoproduct is nothing more than a training resource that can be an online course, a PDF manual or guide, or a webinar, to name a few examples.

With this type of passive income, there is an initial effort to create the product and another more or less sustained effort over time to promote and sell it. You can do this with your own blog or website, on course platforms, through social networks or ads.

The income you can achieve depends on the type of product you sell and the niche or market you operate in. For example, you can sell an Excel spreadsheet to make a budget for buying a house or to get your family's finances in order for 10 euros or an online course for 300 euros.

Write a book


In line with the passive income above, you can also start writing. Nowadays, it is possible to do the whole process on your own: writing, publishing and selling.

It requires some initial effort after publishing the book if you want it to work. The reason is that you will need some initial promotion to get sales and position it well within its category.

Investing for dividends


Investing is another way to generate passive income, although not necessarily recurring income.

When investing, compound interest will make you money without having to do anything, provided that you make the right investments, of course, because you should never lose sight of the fact that investing involves taking a risk.

If you are looking for passive income, that is, receiving money on a recurring basis in your account, the most popular strategy is dividend investing.

Dividends are the money that companies distribute to their shareholders when they make a profit. As you may have already deduced, dividend investing consists of looking for companies that distribute dividends year after year and that also increase the amount to invest in them. Those who meet these characteristics are known as dividend kings or aristocrats, to differentiate them from other companies that may distribute dividends one year and not two.

This passive income model generates profitability on two levels. The first is due to the possible long-term increases in the stock market of the shares in which you invest. The second is due to the dividends distributed, which will be the income you will receive periodically.

You can invest in dividends by choosing the companies yourself or through investment funds and ETFs that take care of the selection.

Dropshipping


Dropshipping is a business model or online store in which you act as an intermediary for a supplier who is responsible for sending the order and also for everything related to storage.

Your role in the entire business is to attract customers through your online store or marketplace. The supplier takes care of the rest, except for complaints. With dropshipping, you operate your own store and if there is a complaint, the customer will hold you accountable.

Dropshipping involves promoting your website and your store, so it is a semi-passive way of making more money.

Affiliate Marketing


This model is similar to dropshipping with one difference: you do not sell your own product, but rather you reference the products of other brands.

Here you act as a pure intermediary where you recommend a product or service and you get a commission for it.

To do affiliate marketing you only need one thing: an audience. That is, a group of people to sell to.

To reach this audience, you can use niche websites where you talk about a specific product, a general website or social networks. In fact, many YouTube channels get most of their income from affiliation.

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