Building A Reliable Passive Income Portfolio

Passive income may not replace your day-to-day job, but it can be one of the best and most satisfying types of income. Why? The answer is simple: It barely requires labor or hard work to earn it. Therefore, passive income is a great opportunity for families and busy households to boost their wealth with minimal effort.

The IRS classifies income into three categories: Active, passive, and portfolio. But for this article, we'll blend portfolio and passive income as one category. Ultimately, passive income can be perceived as reaping without sowing income, which means that you can maintain it with little involvement.

According to a survey run by Connect Invest, 44% of Americans feel that passive income is important to their financial stability. Yet, 34% don't know where to start building a passive income portfolio or strategy, and 33% complain they don't have a starting capital. Does this sound familiar? Let's explore a few ideas to get your passive income started.

passive income
How to make passive income

I don't have the capital to get started

Sell an online course

Selling online courses on a platform such as Udemy is a fantastic idea for passive earning. Udemy lets you create a course for free once you sign onto the platform. We recommend checking the popularity of your topics using marketplace insights. It will highlight the demand for your topic and the number of courses already available.

Ideally, you want to teach something you're already an expert at. But, as a professional, you can build an online course to teach how to make the most of a specific industry tool (such as maximizing Google Analytics for web designers, for example), or how to plan complex projects using Agile methodology. Your work experience is valuable and makes a big difference.

It is worth planning the content ahead and practicing filming. Filming a video course is tough. So don't rush it, and get familiar with the different techniques for adding effects and creating extra material. Polish and edit the video until you are satisfied, and upload it to the platform.

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You may not make a lot of money at first. But each time a user buys your course, you'll accumulate an income. So, you can make money while you sleep!

Rent out your spare room/property

Are you going away for a few days or weeks? You could put your home on the Airbnb market for the duration of your holiday. It can be a fantastic way to make money while you are away.

Alternatively, if you have a spare bedroom, you could also add the bedroom to the Airbnb platform and welcome a guest. You can even offer additional Airbnb Experiences if you are staying with your guest, such as hosting a tour of the city.

What to know if you are putting your place for rent:

Ideally, you want to make sure your guest can check-in at any time. You can install a locked box with a number combination padlock to keep a key for them.

Your interior decor will also play a huge role in attracting guests. So a cozy, trendy, and charming decor can bring you big wins!

Finally, if you are away, keep a friend or a neighbor in the loop so they can help if your guest encounters an issue inside your home.

Building A Reliable Passive Income Portfolio
What's hot on YouTube? Check out trending videos for ideas.

Utilize your online platform

Can vloggers and social media influencers make money online? The answer is yes. Most make money through sponsoring and advertising. However, if you are going to make an income through your digital presence, it is something that requires attention.

So, if you already have a blog or an active social media platform, it is worth developing your content strategy to attract a bigger audience group. Improving your Youtube descriptions can bring a valuable audience.

If you are new to blogging, vlogging, or even Instagram, it is fair to say that it will take you a long time to establish your presence. Only consider this strategy if you are already active and popular online. Sharing content online is a real lifestyle commitment. So, it's not something you want to start lightly!

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I have the capital, but I don't know where to go with it

Consider crypto HODL

The best advice you can get about building a crypto investment strategy as a beginner is to keep your assets for a long period of time, as the value will slowly increase. The strategy is called hodling (inspired by a typo-ridden comment left by a user), which means holding your cryptocurrencies if you are not confident in your trading abilities. The truth is that the strategy works, even though it can take time.

But you can make holding your cryptocurrencies more valuable by starting a crypto interest account that holds and nurture the assets for you. The principle is the same: You essential park your crypto assets until further notice. But with an interest account, you can earn interests and even use it as a way to improve your financial score and creditworthiness while it grows.

Invest in property crowdfunding

Buying a property to let or flipping properties is always an option. But it is likely to require a large investment. Property crowdfunding is a much easier approach if you are not ready to invest that much time and money into building a positive return. Essentially, property crowdfunding enables many investors to come together and invest together in commercial real estate. The process means that you don't need to worry about owning, maintaining, and managing properties. With minimum investments starting from $10 on platforms such as Fundrise and $500 on DiversyFund, you can expect an annual return of up to 18%.

For new investors, real estate crowdfunding can be a unique opportunity to diversify your portfolio and earnings without needing to get involved in day-to-day management.

Invest in pharmaceutical stocks

Stock investments can be safe and highly profitable if you carefully select your stocks and plan for long-term returns. Indeed, focusing on a long-term strategy will reduce the impact of sudden highs and lows and reduce your costs significantly. Besides, investors are not the best market timers; they often react in a panic to fluctuations rather than reap the long-term benefits. Therefore, you want to focus on the long ride.

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Building A Reliable Passive Income Portfolio
Big Pharma offers many solid options for investors.

Pharmaceutical stocks have some of the best opportunities for growth since the COVID-19 pandemic. Before approaching stocks, you need to do your research about different companies and the state of their research and clinical trials. Clinical trials can be risky as a company can abandon research if the trial fails. So, if you are looking for an exclusive stock, it is a good idea to avoid early-stage biotech stocks, as significant losses can occur for the company if the clinical trial is unsuccessful. Some companies even choose to dissolve!

Another useful piece of information to keep in mind is that exclusivity is short-lived. Pharmaceutical companies that advertise revolutionary products are likely to face generic versions of the same products on the market and new therapy developments, which will affect your earnings. Ideally, a company that can afford to pay dividends is in a healthy trading shape. So, if you are unsure, turn your attention to large and well-established pharma companies such as:

  • Pfizer (NYSE: PFE)
  • Johnson & Johnson (NYSE: JNJ)
  • Bristol-Myers Squibb (NYSE: BMY)
  • Merck & Co. (NYSE: MRK)
  • Moderna (NASDAQ: MRDN)
  • Sanofi (NASDAQ: SNY)
  • Abbott Laboratories (NYSE: ABT)

Hopefully, this brief overview of how to get started and where to focus with your first investment decisions can help you develop a strategy that works for you.

For professional advice and tailored investment plans, we strongly recommend working closely with a wealth advisor. If you are currently struggling to build a starting capital and live from hand to mouth, it may be worth considering dedicated support from a financial counselor or debt management professional first.

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