How can you sit on a beach, sipping a cocktail, and all the while, money is rolling into your bank account?
Well, it turns out this is actually possible with something called passive income. But when millions of people are chasing the same dream, things aren’t going to be easy.
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That’s why I’ve done some digging, and compiled a list of unique passive income ideas. It’s no surprise people love the idea of not working for money, but if that was the reality, then we’d all be passive income millionaires.
Although passive income doesn’t exist, leveraged income does. This is by far the most effective way to earn money long term, and has enabled me to become a millionaire.
However, it also involves various risks, upfront investments of time and money, and plenty of good, old-fashioned work. Only highly motivated people will succeed at creating leveraged income, as you first need to take a large upfront risk in terms of time and or money.
This is so that in the future, you’re able to earn more than others could only dream of. Leveraged income is money you get for creating value, and value comes from solving a problem people have.
The best problems to solve are the ones that aren’t already flooded with lots of people offering the same solution. This is known as finding blue oceans, as red ones are full of people tearing each other apart, competing for the same income.
That’s why I’ve made this list of unique ideas, so that you have a much higher chance of success.
So we’re starting off strong, but what am I talking about? Well, the other day, I was just going through Instagram stories, and I got an ad for a playlist.
I thought the music sounded perfect for focused work, so I clicked on it and downloaded the playlist on Spotify. I then thought nothing more of it, and went on with my day, as normal.
Fast-forward to the next day, and I was getting bombarded with different Spotify playlist ads. This is probably because I interacted with the first ad, and now the floodgates were open.
However, I then realized the ads weren’t being run by Spotify themselves, it was all individual people. So that got me thinking.
If people are prepared to spend money running ads, then they must be making a profit from owning these playlists. So I did a bit of digging, and it turns out I was correct.
This is a great way to make leveraged income, especially if you don’t have a lot of money to begin with. You just need to spend time putting together a solid playlist in a specific genre, gain followers, and figure out a way to make money from it.
There seems to be two main ways of doing this. I prefer the second, but you may think differently. The first way is to charge up-and-coming artists a fee for getting featured on your playlist.
When new artists are trying to break into the scene, they’re interested in one main thing, Spotify streams. This is why an engaged playlist is so powerful, as once you’ve built it, you can supply that artist with a predictable amount of monthly streams, and charge accordingly.
You can even have a different pricing structure depending on how close to the top you place their song. This is certainly achievable, and I could see you making thousands a month doing it.
However, here are the issues. It’s against Spotify’s terms of service, and not very passive, as you have to be in contact with the artists to sell song placements.
The second way is to start a Patreon. An artist can sign up to a monthly membership in return for the chance to submit their music to your playlist.
This is a lot more passive, as the money would be coming in automatically on a monthly basis, and all you have to do is review music and update the playlist.
You could easily charge $5 a month, and if you get 1000 artists signed up, you could be making 5,000 per month. This way also feels less dishonest, as you can actually pick songs you enjoy rather than taking money to put bad music on your playlist.
The best thing of all is that you can replicate the process as many times as you like, and build playlists in lots of different genres.
Merch by Amazon
One of my friends is a reasonable digital artist and has been working on many different designs for years.
He thought a good way to turn those designs into profit would be to sell printed T-shirts, so he had thousands printed, but unfortunately, none of them sold.
This was until he took a trip to Germany and displayed his T-shirts at an event. One of the designs started selling like crazy.
Unfortunately, he only had a limited supply available, and was unable to meet the demand as he had already invested all his money into the stock that wasn’t selling.
If only he’d known about Merch by Amazon, as he would’ve saved money up front and tested the market a lot faster.
Merch by Amazon is an on-demand T-shirt printing service. It allows sellers to create and list T-shirt designs on Amazon, for free. There are no upfront costs, and you get paid royalties when a customer buys your shirt.
All you need to do is upload your designs, choose the colors, and set a price, then Amazon will take care of the rest. Just think about it.
Going the traditional route means that if you have one design, and you want to sell that in three colors, and four sizes, to men and women, that’s 24 shirts, if you only do one of each.
If 24 customers call you and all want a large, male T-shirt in blue, you can only sell one. Merch by Amazon takes care of this for you, and also saves you from having to go to shows and exhibitions to find a market, as Amazon already has a huge one established.
Like anything, the more effort you put in researching customer demand,
the better you’ll do. Just remember to avoid any copyrighted content.
So this idea is clearly a lot harder than the first two. However, Selecta is one of the biggest vending machine companies in the world and they reported sales of over 1 billion in 2021, which was up 3% on 2020.
This shows that the market is growing, and the potential is huge. Before I had my own businesses, I worked as a carpenter’s apprentice, and can still remember clearly the old vending machine in the workshop.
It cost me 10 cents for a cup of coffee, a bargain! It was such a good price that the machine was actually losing my boss money, so he had a bit of a predicament on his hands.
The income wasn’t high enough to cover maintenance costs, the machine took time to refill, and he couldn’t raise the prices, as the machine was so old and no one would’ve paid the extra.
He was considering not having a vending machine, but he knew it was important for us to have hot drinks nearby.
That’s when a young guy, he couldn’t have been much older than me, walked into the warehouse and offered my boss a deal he just couldn’t turn down.
He offered to install three new vending machines in the workshop and promised to take care of all maintenance issues and restocking, as well as giving him a 15% cut of the revenue, so not only could my boss please his staff, he would also make a nice profit.
The new machines were a hit and could justify charging higher prices because of the better quality.
The guy who installed the machines later revealed that we were his first customers, and now he has a huge business with machines throughout the state all paying him passive income.
The key to a successful vending machine income is to find great locations. Once you’ve identified a few different spots and agreed a deal with the owner, you can then secure a machine that fits the customer’s needs.
There are lots of used vending machines going for low prices online, which would be ideal if you’re just starting out. You could even get a loan, and spread the payments, using the profits.
When picking things to put into the machines, it’s a good idea to think about the demand in the specific location, and slowly test out different ideas until you have the perfect mix.
After this, it’s just a case of hiring staff and expanding your empire
so you’re able to be as hands-off as possible.
Software As A Service (SaaS)
SaaS stands for software as a service. The beauty of this idea is that they often use a subscription-based pricing model, so instead of a customer paying once for your software, they pay on an ongoing basis.
This can be monthly or annually. This is great, as it gives you a predictable leveraged income each and every month, and the opportunity for explosive nonlinear growth.
My best friend decided to go down the SaaS route at the exact time I started selling physical products. He specialized in software that handled data for large membership organizations.
These clients would have 100,000-plus members so keeping track of all that data was an issue for them. At first, he decided to sell his software as a one-time purchase.
However, he always had to search for new customers. When he made the switch to a subscription-based model, he increased his average customer lifetime value, and secured reliable leveraged income.
He later went on to sell this business for multiple millions. In order to achieve success like this, you first need to pick the people your software is going to serve.
There are two main categories, businesses or consumers. Serving other businesses is often seen as the least risky, as you can make more money per client than if you’re selling to everyday people.
Once you’ve got that nailed down, you need to develop a solution for a problem. In my friend’s case, it was membership organizations getting overwhelmed by their own data.
Everything up until this point has been built upon assumptions, so this is when you need to put those to the test and build a minimum viable product, also known as an MVP.
With this, you’ll be able to conduct market research and explore different pricing models all the while you’re establishing your brand.
Now comes a hard question.
How do you actually finance this thing? Well, if your solution is good enough, then funding really won’t be an issue.
Angel investors love SaaS startups, so you could pitch for an investment, or you could use your own resources to fund the company. This is known as bootstrapping.
The internet is definitely the place to make lots of money, as its growth has been exponential. In 2020, there were 305,000 online businesses created, compared to only 13,000 in 2019.
With all these people starting online businesses, you may think the competition is going to be sky-high, and yes, it’s harder now. However, I think there is a huge gap in the market for digital products.
Just think about it. Everyone is talking about eCommerce and drop-shipping, but far less are actually selling quality digital products which have the benefit of never running out of stock, and no shipping costs, as it’s all done via the internet.
A friend of mine created a digital template system you can use on Instagram, just off the back of a problem sent in by one of her followers, who wanted to stand out.
Within a couple of hours and no more than $100, the templates were designed, and she now sells thousands of dollars’ worth every week. This all came from helping another person with their problem, and she thought that if this person needs these templates, then others would, too.
If Instagram templates aren’t for you, then you can make YouTube banners, sell stock footage, eBooks, games, email templates, or even online courses.
Now, I hold my hands up. This isn’t exactly unique, but I couldn’t leave it out. This is the truest form of passive income you will ever get.
I’ve been investing in different assets for years, such as stocks, crypto, and real estate. I like to see this as a way of really multiplying my money.
I don’t go for crazy profits, as that can often lead to people losing everything. A good example of this is when Luna crypto coin collapsed.
As soon as you can, make sure to open up a tax advantage account. This is a stocks and shares ISA in the UK, and a Roth IRA in the USA. Your aim should be to max out the amount of money you’re able to contribute as the gains are completely tax free.
A good thing to remember is to be fearful when others are greedy, and greedy when others are fearful. I know it’s a cliché saying, but it’s so true.
Now, I need to address something extremely important. People will try and tell you you need more than one passive income stream, which has some truth to it.
However, most people misunderstand what this actually means. The mistake I see people making over and over again is taking their time off an idea that’s working, and splitting their attention by trying something else.
You’ll never get anywhere if you’re one foot in and one foot out. However, I do agree with creating multiple income streams within the same idea, because as you progress, you’ll find even more ways to profit from providing value to your customers.
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