Make money while you sleep…
Well for most of us, anyways.
Or maybe it’s more of a goal than a dream. Most folks are eager to dripify their finances through various passive income streams, but many don’t know where to start. Many of the TikTokers and YouTubers out there will promise you it can be done overnight, but that’s really not true.
If you want to make money while you sleep, you have to put in the work while you are awake. Especially in the early stages while you’re working to find the right opportunities, online businesses to start, building an audience, learning to write engaging content, and finding the right tools to run your online operations.
I started the DripFi blog because I wanted to create a space where I could share the truly valuable resources I’ve come across during my own pursuit of building a passive income portfolio to reach my financial freedom goals. This guide focuses on understanding passive income vs earned income, advantages of making money while you sleep, steps to get started with passive income, building your portfolio, and ideas for passive income that will make you money while you sleep.
So, if you’re eager to explore the world of passive income and want to learn how to create a stable and sustainable income stream, you’ve come to the right place. Let’s get started…
Understanding Passive Income and What It Means To Make Money While You Sleep
Before we dive into passive income ideas, let’s understand what passive income really means. Passive income allows you to earn money with minimal effort and active involvement. Unlike traditional active, or earned income, where you exchange time and effort for money, passive income works for you around the clock, enabling you to make money while you sleep.
Passive income opportunities encompass a wide range of options, such as investments, online ventures, and creative endeavors. Whether it’s generating dividends from stocks, earning rental income from properties, or royalties from creative works, passive income can be a powerful tool to build wealth, make money while you sleep, and achieve financial independence. And you don’t have to be a seasoned business professional to start earning money online, in today’s digital world, there are plenty of opportunities for beginners to start an online business.
Advantages of Making Money While You Sleep
Who doesn’t want to go to bed and get a good nights sleep because you know when you wake up your bank account is going to be larger than when you feel asleep? While that is a clear advantage of what passive income can do for you, there are also numerous other key benefits of creating ways that make money while you sleep.
- Financial Freedom: Passive income provides a pathway to financial freedom by reducing reliance on a traditional 9-to-5 job.
- Multiple Income Streams: Building a diverse passive income portfolio means having multiple streams of income, ensuring greater financial stability.
- Time Freedom: Passive income allows you to enjoy more time for yourself, your hobbies, and spending quality moments with loved ones.
- Wealth Building: Over time, passive income has the potential to grow and accumulate, creating a solid foundation for long-term wealth building.
- Flexibility in Life Choices: Making money while you sleep gives you the freedom to pursue your dreams, travel, and experience life on your terms.
- Retirement Planning: Passive income can be a powerful tool for early retirement or creating a comfortable retirement plan.
Understanding the advantages of passive income and the lifestyle you could unlock should make you even more driven to put in the work upfront to build a portfolio to make you money while you sleep.
Getting Started With Passive Income to Make Money While You Sleep
If you are like a lot of folks reading this post, you are probably either new to the concept of passive income, or in the early stages of your journey toward financial freedom via passive income streams. Similar to everything else, getting started is often the hardest part.
When I was fortunate enough to leave job at the end of 2022 to commit full-time to building passive income streams, it was a bit terrifying. Not knowing when you will get income again and the unpredictability of how much you will make is not an easy pill to swallow.
But I was ready for the challenge to make a go of it because I was comfortable in the steps I was taking. Here are those steps:
1. Assessing My Financial Situation
This is perhaps the most crucial step. You need to have a strong grasp of your current financial situation and a holistic understanding. This means being fully aware of your current income, expenses, debts, and savings. Mapping this out will give you a clear picture, and allow you to start building out your burndown chart and timeline to work within.
2. Establishing Financial Goals
Determine your financial goals and what you are setting out to achieve through passive income. Be realistic in the beginning, don’t think you are going to start making $10k a day just because you launched a Shopify store. Start with a goal of earning your first $1000 and build from there.
Setting clear and realistic objectives will help you remain focused and motivated.
3. Research Passive Income Opportunities
Once you become serious about wanting to learn how to make money while you sleep, you need to dedicate a good amount of time up front to just that….learn. The internet is an extremely valuable place full of information, but it can also be a place full of scams and get rich quick schemes you need to avoid. Take the time to find trusted resources and where you should be focusing your time. This will quickly teach you how to navigate information and avoid wasting time on things that won’t make you money in the long run.
4. Identify Your Interests and Skills
Choose passive income ideas that align with your interests, skills, and expertise. This is crucial when first starting out, because if you are truly interested in what you are creating it will keep you more engaged in the process and make it more enjoyable. So the odds of seeing it through become much higher.
5. Create a Passive Income Plan
Create a passive income plan and document it. How you document it isn’t important, you can map it out with a tool like Miro, or manage it like a project in Trello, hell just use good old fashioned pen and paper to write it down. But document it. Getting the plan out of your head and into the world is another proven way to give you higher odds of sticking to something.
Your plan should be an accumulation of all the information you gathered above to give you a clear picture of your current situation, milestones you want to achieve, and a timeline to achieve them within.
Building A Passive Income Portfolio That Makes Money While You Sleep
Early on in your journey you will want to try and find passive income opportunities that are fairly low risk. Luckily, there are several ways to make money while you sleep that aren’t extremely risky and don’t take a lot of up front work.
While the returns on these sort of investments depends on your risk tolerance and the amount of upfront money you want to put up, you’ll want to consider these four passive income streams to build a diverse portfolio that truly generates money while you sleep.
1. High Yield Savings Accounts
As apart of your passive income plan and strategy, you will definitely want to have some money set aside in case things don’t go as you had initially hoped. Putting an initial amount of money into a yield savings account is a great way to make sure that money is also contributing to your passive income earnings by earning interest every month. Check out Nerdwallet’s list of best high-yield savings account in 2023.
2. Dividend Stocks
While I don’t claim to be an investor, and certainly don’t give out financial advice when it comes to investing, dividend stocks are another low-risk, low-barrier way to start putting your money to work for you. Investing in reputable companies that offer regular dividends are a great way to start earning consistent income streams.
3. Low-Cost Index Funds
Another term for beginner investors that should be considered when attempting to diversify your portfolio is looking at Low-Cost Index Funds. These funds provide a diversified portfolio of stocks that your money will be distributed amongst, giving you a stronger chance of seeing returns on your investment. This is more of a long-term play when it comes to passive income, but certainly an option that should be looked at by anyone wanting to make money while sleeping.
Again, to reiterate, I’m not a financial advisor or expert, I just share the information I come across. If you are interested in investing but not sure where to start, you can check out this list of top investing books for beginners to learn more.
4. Real Estate Investments
Investing in real estate has become another popular way for folks to earn passive income and make money while sleeping. There are a few ways to getting started with real estate investing. There is the traditional route of buying properties to flip or rent out, but this requires a lot of up front capitol that most people can’t manage. But there has been a surge in crowdfunding platforms like Fundrise that have lowered the barrier for entry to real estate investing, and providing many more the opportunity to start investing in real estate.
Remember, when asking yourself how can you make money while you sleep, there are many options out there to consider. And it’s important to diversify your portfolio up front to give yourself the best opportunity to start building sustainable passive income streams.
9 Passive Income Ideas That Make Money While You Sleep
If you are looking for additional ways to make money while you sleep and aren’t afraid to put in the upfront work to do it, you can look at the various ways of making money online. In this section I’ll quickly highlight the nine passive income ideas I’ve been exploring the most.
- Online Courses: Remember at the beginning of this guide when I talked about identifying your interests and skills? Well, this is why. You can create and sell online courses on topics you are knowledgeable about and share your expertise to earn passive income as learners purchase your courses on sites like Udemy.
- Affiliate Marketing: Promote products or services and earn a commission for each sale made through your referral link. Once you join an affiliate program, you can leverage that company’s existing products and your audience to sell those products. You earn commissions when someone clicks your custom link and purchases that product (or service). Check out these affiliate marketing tips for getting started.
- E-book Publishing: Write and publish e-books on various platforms to earn passive income from book sales. Once published, e-books can continue generating income without ongoing effort.
- YouTube Channel: Generate revenue through ad monetization and brand partnerships on your YouTube channel. Create engaging content and build a loyal subscriber base that can generate ad revenue and affiliate marketing revenue.
- Peer-to-Peer Lending: Lend money to individuals or businesses through peer-to-peer lending platforms. Earn interest on your investments as borrowers repay their loans. While lending money to strangers may seem scary, platforms like Prosper actually make this a fairly safe way to make passive income.
- Print-on-Demand: Design and sell custom merchandise without holding inventory. Collaborate with print-on-demand services to handle production and shipping, meaning you can literally sell products and make money while you sleep.
- Mobile Apps: Develop and monetize mobile apps with in-app purchases or ads. Well-designed apps can attract a broad audience, leading to passive income from downloads and usage.
- Royalties from Creative Works: Earn royalties from music, photography, artwork, or other creative endeavors. Intellectual property can generate passive income through licensing and sales.
- Micro-SaaS Businesses: This tiny yet mighty business model is reshaping the world of software as we know it. With the help of AI and No-Code tools, building, launching and monetizing a Micro-SaaS business is a trend to look out for in 2024.
Congratulations! You’ve reached the end of the Ultimate Guide to Make Money While You Sleep: Passive Income Ideas.
Hopefully you are now armed with a deep understanding of what it means and takes to make money while you sleep, the advantages that come along with it, and a diverse range of revenue generating ideas that can build you a stable of diverse and sustainable income streams.
Remember, building passive income takes time, patience, and dedication. As you explore the numerous opportunities, be sure to stay committed to your financial goals and adapt your strategies as needed.
With perseverance and strategic planning, you’ll be well on your way to understanding how to make money in your sleep on your path to financial freedom.
