Top 10 Passive Income Strategies for 2016
So 2015, was a great year in the stock market and investment realm world of creating dividend income through stocks, but 2016 seems to have been hit by the market uncertainty bug once again. What do I mean, to start off the year major stock market were down anywhere from 5-10% because the Federal Reserve was discussing raising interest rates, which in turn made everyone extremely skeptical of investing any more money in stocks, and actually selling off a large portion.
So how do you handle the uncertainty of 2016? Do you continue to invest, do you yank your money out hastily and make a pour business decision? Read on to find out how I handle an uncertain market.
1. Stock Market / Dividend Income
So if the stock market is scaring you, do your research. In 2016, there have been no signals which would identify 2016 as being another recession for the U.S. You’re wondering why everyone jumped ship however? Uneducated investors get extremely nervous when stocks fall 3-5% and if it were showing the same signs as the recession, I probably would pull my money as well, but this year was different. The recession was focused on poor banking loans, and that was a major focus, because of defaults and foreclosures, but 2016 has shown no signs of this.
So what should be your first goal? If you are new to the stock market, look for big name stocks, who may be down on their luck because of uncertainty in the overall market, not just the company itself. Identify, who is your best investment, dividend wise, and a company who you know can bounce back. During the lowest point of the market, I invested in IBM and Proctor and Gamble. Why you ask, both are long term companies, who innovate and also have the cash flow to sustain long term growth. Yes, they may not have huge dividend returns, but they are consistent and have been for years. And since the downswing, my investments in less than 3 months, have jumped to a positive 10% swing.
So even there is a down turn in a market, look at investing in dividend stocks, even if they are not huge dividend providers, knowing you will have consistent passive income for 2016 is your main goal.
2. Selling Your Stock Photographs for Cash
Photography is an extremely hard business to break into, however, there are opportunities to take something you enjoy and do as a hobby and make it a passive income stream. There are websites now who allow you to sell the rights to your photographs and earn cash. Albeit this is not a 100% to form of passive income, because you do have to do work on taking more photographs and updating your portfolio, however if you ever achieve a large selection of high quality pictures, you should be able to sit back and watch money roll in, which in turn, should earn you passive income.
If you are interested in selling photographs for passive income, check out iStockPhoto or Fotolia. Do your research on the companies and find out which one works best for you, and also look around, there are other companies as well.
3. Create an E-Book
This may sound like an extremely difficult thing to achieve, but self publishing an e-book, really isn’t that bad. You will first need to create your content, find something you are passionate about, write about it, edit it, write some more. But remember, quality is your best seller, don’t sell something you are not proud of and that doesn’t actually help anyone. If you create a low quality product then you will in turn receive low quality sales.
So now once you have created your content, create a cover for it. If you cannot create an catchy cover, find a designer to create one for you. Try Fiverr and you should be able to find someone to design a cover at a great price and also be able to give you a high quality product.
So now you have content and you have a cover, it’s time to sell. My first self publishing go to, would be Amazon’s Kindle Direct Publishing. You will need to upload your e-book, get granted approval, and then sell the living covers off of it. But don’t expect to be Stephen King in a night. You need to develop marketing strategies and ways to let people know your book is available and why they should read it. Tell your friends and family and have them help you too.
4. Rental Income
I still believe rental income will help you achieve financial success quicker if you make quality investment decisions. Using and locating a realtor who specializes in rental properties and can give you quality, sound advice. I would insist on this especially if you have not been in the market and are not super comfortable with all the numbers and market values. Some of the wealthiest people in America such as Donald Trump have invested in real estate and become successful doing it.
5. Affiliate Income
While the beginning points of affiliate income is not passive, because you need to generate the traffic to your links, adding an affiliate link to your website can be highly lucrative. You cannot count how many companies offer affiliate marketing, some of the big names like Commission Junction, have large brand name companies and offer multiple products. You can also earn from places like Amazon, and also offering digital products from places like Clickbank.
But remember, just because you add a link or banner to your website, does not mean you are an affiliate marketer, the second word of the phrase is marketer. You have to sell yourself, you have to be an expert on what you are selling. You also need to believe in what you are selling, don’t sell crap, or a scheme, sell real products that solve a real problem for you as well as your customers.
6. Peer 2 Peer Lending
This is a newer concept. This is an idea, you will be providing a loan, just like a bank, to a customer and they repay you with interest payments to get a return on your investment. But remember with loans, there is always a risk. Start with Prosper and LendingClub and see what they are offering. You do run the risk someone may default on a loan and you lose all your money.
The majority of experts agree, diversifying over 100 or more loans is a better investment of your money than one large loan. If one small loan defaults, but 99 others continue to pay interest on their loans, you aren’t losing so much money and risking a huge loss. Also with P2P lending, you need to research who you are providing a loan to. Have they looked for other financing, or what type of project are they trying to complete? Always do your research especially when providing any type of unsecured loan which is what p2p lending is.
7. Become a Silent Partner
Investing in businesses can be good and bad. Invest in a great business who has a long standing good record with great owners can be a blessing, while trying to invest in a poorly managed business can lead to losing your entire investment or worse, going after your other assets.
Becoming a silent partner with a good team can be difficult however, if you can do your research and find someone who needs money to try and complete a renovation, or build more inventory, you can get into a growing company early and reap the rewards later in life. The other nice thing? If you are silent, that means you have no responsibility to take part in the day to day operations. Hire a CPA and look over their books thoroughly however, so you can make sure everything which is promised is delivered, and nothing is being hidden in the books.
8. Certificates of Deposit
Why I do not use these as much as some people? Because I prefer to delve in stocks that return a dividend, but CD’s can be a safe and trustworthy spot to stick your money. There is one strong suggestion that I have with doing a CD’s and that is make sure you have liquid assets handy, in case you have an emergency, or want to make another investment. Do not, I repeat do not, stick all of your savings in a long term CD, and get caught with your pants down when you have a huge medical bill or home repair.
If I were going to make a large investment in CD’s, I would suggest creating a ladder set up. Having CD’s at the 1, 2, 3 and 5 year maturity marks. For the shorter time rankings, you will have lower interest rates, but less time that you will not have access to the money. Your longer term CD’s should be for a long term investment but higher interest rates, if you reach the 5 year point, and want to reinvest, do it, or you can remove the money and create another investment. Brick and mortar banks offer CD’s but the trend over the past few years for interest rates has been down hill, however online only banks like Ally have become very popular, because they can offer higher interest rates because they don’t have a physical location. So try it out, CD’s are safe and have been around for years and if you can compile a large amount of CD’s, you can create a great passive income for 2016.
9. Create a Product Idea and License it
Everyone has millions ideas running through their heads, some better than others. But everyone is always looking for the next big thing to make money and explode. Companies think the same way. They want ideas and products that can create a bang, and create exceptional sales. Not only that, these big companies are willing to pay big money, and royalties to gain access to these ideas.
So if you have the gusto and the brains to create a quality product or idea, find a company you can pitch it to. But don’t create and just sit on it and expect it to go somewhere. Ideas can expire with time, and someone may create a better or the same product you already created and beat you to the market and your time and money spent is all for nothing.
If you’ve ever seen The Shark Tank, the American Dream is to create a product and sell it to an investor and make millions of dollars, whether it be for recurring passive income, or whether it is a huge lump sum payment, but why not try your hand at creating another passive income strategy for 2016.
10. Create an Ecourse
So you are reading this now, but you have a full time job doing something else. But you want to jump into online business but you don’t have anything to sell, or feel like you have nothing to offer. But if you already have a job, what is your expertise? Are you a real estate agent, are you a seasoned banker, or do you mow lawns for a living? All of these have potential to create an ecourse to actually teach someone the skill you already have.
Maybe if you mow for a living, you can teach people how to create the perfect lawn with 10 steps, or if you invest in real estate, you can teach people how to invest in real estate. There are countless ways to teach people how to do something, you can create a website and walk people through words, or you can create videos to create your course.
So now that we have covered the new ideas for 2016 for passive income, start investing, start creating, and build up the passive income so you can sit on a beach and reap the rewards in the future.