Many people tend to relate passive income to the on-line world these days. They are wrong.
It is true that the internet is a great place to create businesses that generate passive income, it’s a great place to start businesses in general as the initial investment barrier is significantly lower compared to the “real” world. Not only is it cheap to launch a website but it can also have an incredibly low monthly overhead, sometimes even close to zero. The internet also runs literally 24 hours a day worldwide, creating a great opportunity by having a larger potential audience. Put all these together and you get the perfect ecosystem to launch a business with the potential to generate passive income for relatively cheap and in very little time.
Now that being said the concept of passive income is not unique to the on-line world and did in fact exist way before the internet. Nowhere in the definition of passive income does the word “internet” or “online” appears, at least not in my definition of passive income… So if you are interested in passive income and would like to start building your portfolio of passive income revenue streams but are not comfortable with websites, computers, the internet or technology in general, don’t worry, there are still plenty of strategies you can start applying today in order to create passive income revenue streams in the “real” world.
5 offline sources of passive income
This is as passive as income can get. You can hire a portfolio manager or do the homework yourself, but the idea here is simple. Build a portfolio of companies stocks, bonds, funds, etc. and invest a certain amount. After that you can just lay back and start collecting dividends. Occasionally when you identify a market opportunity or a trend shift you think will affect your portfolio’s performance you might also want to sell or by some, but other than that you just need to keep an eye on the market to make sure nothing major happens that can affect your portfolio’s performance.
Opening a business not only requires a lot of effort but also requires creativity and an entrepreneurial spirit that just not everybody has. If you have the capital to open a business but don’t want to invest much of your time a franchise might be a good opportunity for you. A franchise will basically get your own business up and running without having to make any of the tough business decisions yourself. Product, branding, marketing, protocol… all that will be given to you, for a fee.
One of the things that makes franchises really attractive is that their business model has already been proven, they also have a brand name that costed a lot of money and time to build, they will provide you with the product, train your employees and stay on top of new trends to make sure their brand (your brand too now) stays relevant to a specific target audience.
3. Renting property
This includes anything for a garage to storage space, plain residential properties or even commercial ones. If you have the capital to invest into buying a property you can then rent it out to someone who does not have that capital or does not wish to make the investment themselves and let them use your space while you receive a steady monthly check from them.
In this area there are some types of property, especially the middle range residential properties, which might give you a little more work. The occasional washing machine that breaks, the heater that doesn’t work… all these will mean a call on your phone if yours is an unmanaged property. Garages, storages and commercial space tend to have fewer of these issues. Either way renting real state has been a very stable and reliable source of passive income for many years now, after all people need to live somewhere and businesses need to sell their stuff.
4. Selling stock photography
Like with many industries these days people sometime think stock photography is something that was born with the internet. The truth is stock photography existed way before the internet and many photographers have been making a living from it for years. The way it usually works is you work with an agency who takes care of managing your photography portfolio and presents it to potential clients (magazines and other media) taking their cut every time they sell one of your images.
Now a day’s many photographers prefer to work directly with sites such as GettyImagges or iSstockphoto which take a smaller cut than agencies from each sale, but the truth is agencies have contacts you probably don’t and if you can get the favors of one you’ll probably do more business with them that on your own.
5. Write a book
If you know a lot about a specific subject or if you think you have a writer in you and an amazing story, you can write a book and pitch it to a publisher. Actually you will usually pitch an idea to a publisher, maybe a first chapter, and only write the full book if they like the concept.
If you can get a publisher to take on your book they will take care of everything after you type THE END, from printing to distribution and sales, and will regularly send you a check with a cut of the sales.
These are only a few ideas of offline business that have the potential to become a great source of passive income, however they are not the only ones and if you start thinking about it I’m sure you’ll come up with many more.
The main downside most of these strategies share, and probably other you come up with on your own will too, is that they require a large initial investment, at least when you compare them to the on-line options.
Another observation about these businesses compared to their online alternatives is that they tend to be more stable, for the good and for the bad. Chances of launching and offline business and doing OK are higher than launching a website that does OK, however hitting a home-round offline is also much harder than it is online were things like virality and social media can really send a site or product through the roof overnight. So just remember that off-line passive income revenue streams will usually stay around that 8-15% yearly return on your investment, while on-line businesses can be a complete zero or generate returns of 100% or more year over year.