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Oct 18

The Passive Income Mirage

YouTube videos and articles advertising the money you can make through passive income are everywhere online. They all promise to reveal different ways you can earn money while doing nothing. Logic and common sense would normally tell us you can’t easily make money doing nothing, but in the age of the internet anything seems possible.

What are the different types of passive income?

On our most recent show, Passive Income Exposed: 3 Ways To Actually Make Money, we covered what are probably the three most common types of passive income: real estate, blogging/YouTubing/etc., and portfolio income. We didn’t have time to cover every potential stream of passive income on the show, and we won’t be able to in this article either, but there are a few more notable ideas that we felt deserved a mention.

Airbnb

Renting out a room in your house or your apartment has become very popular in recent years, and is another potential source of “passive” income. This might not be a bad idea for some people, but beware: renting your house or apartment on a service like Airbnb still requires effort. You’ll need to keep a clean home, maintain a presence online and attract potential renters, and share your space with others. Strangers staying in your home or apartment aren’t going to take care of it like you do because it isn’t their home. There are many horror stories online of Airbnb tenants who trashed their host’s home.

Believe it or not, some people also rent out their cars just like they would their home or apartment. This is appealing to car owners because they can theoretically make money when they aren’t using their car, and it’s appealing to the car renters because they can use a car for a short period of time without going through a rental agency. Renting out your home or apartment may be a good idea, but letting a stranger borrow your car seems like less of a good idea. Rental cars are notorious for being treated badly and “driven like they’re stolen.” The risk here is probably greater than the reward.

Royalties

Royalties are a great stream of passive income, provided you create something that can earn a decent amount of royalties. Many different things you create can potentially earn royalties, such as an invention, a book, music, or other creative works. You may be able to create something great, but that doesn’t guarantee you’ll make money; anyone can self-publish a book or music today, so the market is over-saturated with content. The biggest obstacle to overcome will be making your work stand out.

Make an app

There are now over 2 million apps available for download on the App Store, and over 6,000 apps are released on the Google Play Store every day. Apps on the App Store generate about $4,000 on average, while apps on the Play Store only generate $1,125. Creating an app can be very lucrative in some cases, but many who try to create an app have no development experience and don’t know how to go about creating the app of their dreams. The lion’s share of the profits go to the most popular apps, and the average app might not even make enough money to cover the development costs.

This is by no means a comprehensive list of passive income ideas. It seems like everyday someone is creating a new scheme to earn money with doing little or no work. In reality, even passive income takes work, at least in the beginning. If you haven’t watched our show about passive income, check it out now.