What is a Passive Income? –Top 10 Ways on How You Can Earn Too!

What is a passive income

If you’re looking for ways to earn money, you would probably have picked up the word passive income on your findings.

Passive income is all but the rage today in the business world where everyone wants to start earning money without working and earn financial freedom.

But the question is, is it really possible?

Here’s my long-winded answer to saying YES…


What is Passive Income?

Formally, Investopedia defines passive income as “earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved”

To make it easier to understand, passive income generally means a type of income that you make without you working for it.

Sure you will need to work at first in order to set up your business but most of the time, you will be making money even when you’re sleeping.

So if you are working on a 9-5 job for example, you are not making passive income because the moment you stop working, you aren’t going to get your pay.

Passive Income is usually affiliated with investments whether in effort or money which in the long run, will make you a steady flow income every month – Definitely something everyone wants.

Whether you are business minded or not, everyone needs passive income as it is a form of security in case of emergencies, and of course for future investments that you may have but still, many people do not take want to think of this seriously.


How is Passive Income Good For You?

Why wouldn’t it?

You’ll be getting money constantly without needing to work, that is everyone’s dream!

Here are some cool benefits if you are in control of your own passive income…

  • You can quit your job – As soon as your passive income is more than your active income (The income you get if you work), you can quit your job, sit back and relax.
  • Spend more time with your family – As much as we want to spend time with our family, work always seems to be an unavoidable obstacle but with passive income, you don’t need to let work bother you and your family ever again!
  • You can help more people – Too many people are suffering today but we never seem to have the opportunity to help them. Now with your own recurring money coming into your back, you can help out as many charities as you can.
  • Capital for businesses – A lot of people want to venture into huge businesses but capital always seems to be the biggest issue for all. Some people try to solve this by working 5 to 10 years before finally being able to solve the capital issue while some others would just give up hope. But since money is coming into your bank and will grow continuously, capital will no longer be an issue for you.
  • Do anything you want! – Go on a trip to Bali, hop on a cruise to Malaysia, or exploring the deserts, what do I care, you can do anything you want. Live life to the fullest!

There are many more advantages to this but I better not keep you waiting because I’m sure you’re just dying to know of my…


Top 10 Ways on How to Earn Passive Income

Regardless of what people say, there are many ways on how someone can earn passive income today and here are some of them…

Passive Income #1 – Online Business

Wealthy Affiliate Home Page

Starting an online business is simple – You just need to build a website, choose a passion you wish to sell, promote it and you’re done!

It used to be so difficult many years back as you will need to know coding and such but now, one can easily build a website in a matter of minutes!

There is a program that teaches you this called Wealthy Affiliate and it is also the very program that taught me how to build this very website you’re looking at 😉

Though the steps for building an online business is simple, it is not really easy considering there are things you need to learn such as SEO, article marketing, affiliate marketing as well as email marketing but fortunately for you, these are all covered within Wealthy Affiliate’s online classroom.

Apart from the updated lessons, you will also get some cool tools to help you get started, free websites and an awesome community of people just as enthusiastic as you!

Some people will tell you that you need to spend more money to make money and in the case of building an online business, spend thousands of dollars to get started.

My answer to that, is that you don’t need money to make money, you only need effort.

Take a look at this…

Google search results for easy listbuilding strategies

Google search for “Easy Listbuilding Strategies Review”

At Wealthy Affiliate, you will learn the safest way to build your website like a pro without spending any money on marketing which is by ranking your post on the first page of Google (Something companies will pay you thousands for someone to do that for them!).

And I managed to rank that post in a matter of hours!

The only downside, is that it takes time (About a few months) before your website can truly lift off as there are millions of other websites being create every month which is why Google took the initiative to test if you’re serious about your website or not.

Only in the early stage of your website, will you need to produce content and update regularly but after a while, you don’t even need to do anything on your site because all your content, will remain in Google forever.

It is like opening a shop in a busy area where you don’t need to do anything, the shop makes money for you!

If you’ve been wondering how many bloggers and students can go shopping and travelling non-stop when you’re strapped with only a few hundred bucks a month, now you know why.

Starting an online business may take some time to grow, but it has the least risk of all – You don’t need any money to start so you’re not losing anything.

Building one website may not give you as much because on average, I only get around $500 – $2,000 for the first few months but it keeps growing because after one year, my website is giving me around $2,500 to $5,000 a month.

But that is just for one website, what if you have 5 websites?

Your earning potential will be more which is why I’m already working on other my next websites www.Relationshipable.com and www.KamiraEvents.com.

Still, if you have an hour to spare a day, it wouldn’t hurt to spend some of it on your site as it can go a long way to getting you some good passive income.

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Passive Income #2 – Renting Out Apartments


This is the classic way of earning money because all you need to do is buy an apartment and rent it out.

The only risks you have is that you might be charging too high that people might not want to rent, or that your tenants are the rude types of people who would trash up the place and are reluctant to pay which will leave you in quite a bit of a pickle.

If you are strapped on cash, you can make a loan but you could also start small by going to less developed areas and buy a house or apartment there which is ten times cheaper.

Still not confident on spending that much money?

Why not rent out and sell at a higher price?

This is something very commonly done by students looking for an extra money which is exactly what my classmate did.

If someone is renting out his apartment at $500 a month, you could pay for that, but NOT stay at that apartment, and rent it out at a higher price of around $700 to others.

If it is hot area where people are fighting for accommodations, you could increase the price more but bear in mind to be reasonable with the price as it may arouse suspicion, especially if your neighbour only charges $600 but you’re charging $2,000 for the same size.

Some people are very successful at the renting business that they do not need to work at all.

Speaking of rents…

Passive Income #3 – Opening Up a Fitness Gym

working out

Ever wondered how people can make a ton of money from gyms?


They rent a building, put exercising equipment there and charge for membership!

The beauty of opening up a gym is that people are usually very loyal especially if you take care of your gym environment in terms of hygiene, air conditioning and equipment conditions, and definitely better if you are the only gym around.

How gyms can become a way of earning passive income is because the way you earn money is by charging monthly membership fees and you don’t have to do anything at all!

All you need to do next is hire someone to take charge of your gym and you get passive income every month – You don’t need to pay any cost except for your rent and bills.

This is way better than opening up a restaurant!

I’m already writing my own business plan for my first every gym next year that I’m opening up around my area here in Malaysia, wish me luck!

And even if there already is a gym, a healthy competition is always better because if you spend more effort on making sure your gym is better than your competitor’s you are definitely going to grab their patrons as well!

Passive Income #4 – Self-Service Car wash

Walter White at his car wash

Ever washed Breaking Bad?

In that series, Walter White opened a Car Wash but he didn’t even work there as all he did was put his wife there and some staff.

Sure he used his drug money but you wouldn’t want to do that, would you?

The costs for starting your car wash might be a bit pricey though, as you need to think of how much you would need to pay for your land, the staff, and especially the equipment.

There is a way for you to start small however, and that is by collaborating with gas stations like Shell.

Some gas stations have an automatic car wash space where you simply need to drive in that place and the machines will do all the work from washing and soaping, to drying.

An even better idea is to open your car wash near school areas so that parents who would want to wait at that area for their children to finish class can simply send their cars for wash – They will become loyal to you, it would be like a routine for them and you will make loads of money with this!

The only obstacle for you, is capital.

But if you manage to pull this off, owning a car wash business can be a very lucrative business.

Passive Income # 5 -Network Marketing

empower network compensation plan

An example of an MLM compensation plan


It might sound like a fancy name but network marketing is actually Multi-Level Marketing (MLM).

The idea is simple – You find someone to join (Which we call referrals) and you train him or her to get more referrals in order for him to make money.

Why Network Marketing is considered a passive income method is because whenever your referral manages to close more sales, part of those sales will go to you.

It is like a chain reaction the more people join your network, the more money you get and usually, these people will have to pay monthly fees which will also result in more money going to you.

However, there is one thing you need to know about MLM which is people today have a very negative view on it.

This is because some MLM companies are too blinded by money that they continue to drain more money from you instead of actually creating a motivating environment for the referrals.

MLM is so huge that they even have presence online to grab as many sales as they can.

Still, it is not without drawbacks because these online MLM companies tend to do business unethically by charging exorbitantly high packages (Some up to $90,000 per months!) for trainings that can be found on the internet for free.

One of the biggest MLM scams on the internet is Empower Network which has a very unhealthy environment – I personally experienced backstabs and name-callings whenever I do not make any sales from my uplines.

Despite the negativity, Network Marketing is a great way to make huge passive income if done right and it is also a legitimate business too.

The only reason why people look at it negatively, is because of most of the community inside bullying each other, especially newbies and especially those who are backing out.

You know what they say about one bad apple spoils the bunch.

Passive Income #6 – Insurance Agent

I’m sure you’ve heard of companies like Liberty Mutual or Allstate insurance, even Prudential which is big worldwide – These are all multi-billionaire companies.

Insurance companies make the most money with the least cost in the business world because all they do is create a plan, do some calculations and sell.

Their insurance can work for almost anything be it life insurance or even travel insurance and the payment is never-ending as people have to renew their packages every now and then.

Sure, you might lose a bit of your money whenever your customers are eligible to withdraw them if anything happens but the case of that happening is 1 out of 50.

Out of 50 customers who apply for your life insurance regularly, how many of them will actually have a case and claim their promised money?

Maybe 1, maybe 2?

And people will keep paying for their insurance which makes it one of the best businesses that can give you passive income.

If you’re an insurance agent and you managed to close some sales, those sales will actually give you passive income as your customers will keep renewing their plans every year.

Passive Income #7 – Real Estate

Real estate is one of the most money making investments for passive income.

However, it has also the one with the biggest barriers of entry which is – a HUGE capital.

How real estate works is that you buy a building and you simply rent it out to people hence giving you your free money every month.

If you have even more money, you could build your own building to rent to others.

And you are not only restricted to houses, you can actually buy any building be it shop houses, an exhibition building, apartments as well as any plot of land that you can rent out to.

I wanted to delve into real estate but due to the huge capital barrier, I was reluctant to have a go at it.

But one day, an idea came up to me of using our old house (I just moved several months ago) to rent it to people.

If you have had experience in selling houses, you might have called this a stupid idea because normally, people usually sell their old house the moment they moved to a new one.

Instead, I told my dad to not sell our old house yet because I had a brilliant idea on how to make more money out of it.

So what I did was I actually rented out my old house for 2 years, just enough until the property value increases to almost a quarter of the price.

When it reached 2 years, I finally sold the house giving me not only the money for the full price of the house, but also some extra money from the rents and property increase.

I wanted to hold the house even longer until at least the property value doubles but it was very tiring cleaning up the house in between tenants.

Still, it only shows how much money you can make from real estate.

Passive Income #8 – Peer-to-Peer Lending

Funding circle

Funding Circle is one of the best P2PL out there

Tired of all the work you need to put in to earn money?

Why not be an investor yourself!

Peer-to-peer lending is one of the rising trends on the internet as it allows anyone to be an investor without huge capital.

If you’re familiar with the loan process, banks will usually take a few months to finally give you your loan and the process itself is tedious.

Furthermore, banks also has a minimum rate for loans which is actually HUGE as it is normally $20,000 to $50,000.

But what if someone wants to borrow $5,000 quick without going through months of tedious application process for loaning?

That’s where Peer-to-Peer Lending (Also known as P2PL) comes in!

Basically, Peer-to-peer lending is simply a form of crowdfunding.

The only difference is that the thing that you actually fund, can get you your money back plus some extras.

It may seem too good to be true, but it is working and crowdfunding is a big thing especially for startups.

It is a win-win situation for the people – borrowers can borrow money at a lower amount with lower interest rates whereas lenders can become investors even with low capital.

A few of the well-known Peer-to-Peer Lending sites include…

  • Lending Club
  • Prosper
  • Funding Circle
  • Kiva

Passive Income #9 – Forex Trading

Forex graph

An example of a Forex graph

Forex Trading can make you the most amount of money in a short amount of time, but is also the riskiest form of money-making there is.

Forex stands for Foreign Exchange which as the name implies, is the act of trading currencies.

The concept in simple, you need only to buy a currency that is at its lowest rate, and sell it when the currency gets higher, giving you some easy profit.

For example, if you buy USD when it is at its lowest for $200 and sell it when it’s rising high to $600, you make a nice $400 just like that.

However, Forex is extremely risky because one slight mistake in prediction and you lose all your money in a blink of an eye – Trust me, the pain will make you stare at the computer so long, you’d start thinking about life countless times.

It is not impossible to make money off forex however, you only need to learn and have a proper mentor.

Asking a friend who is making money from Forex to teach you is a good start because if you go to a huge classroom, it can be very hard to learn as the only thing you will be doing is looking at the graph the whole day.

[URL] A website that I like to use in order brush up on my Forex knowledge is Baby Pips and you could start your journey there too.

There is also a great forum where you can ask all you want about the basics of forex.

One rule of thumb that I can leave you with regarding Forex, is to never follow your emotions because that will lead you to use assumptions which are less accurate and can lead to a possible loss for your investment.

Passive Income #10 – Royalties

Not the Queen Elizabeth type of royalties, but the royalty fees for franchising.

Franchise royalty fees is the easiest type of passive income because you basically do nothing to get your money.

How it works is that you actually need to have a business where you can ask someone to open up elsewhere as a franchise.

So when someone opens up a franchise of your business, they have to pay a set amount of money to you as royalty fee because if they don’t, you have the right to sue them.

Franchises are normally done by established companies like McDonalds and ZARA but you don’t have to limit yourself to that.

You can basically create your own small business like a stall or something and you can ask your friends to open the same shop elsewhere.

My brother-in-law opened up a burger stall in Malaysia called Street Burger as a hobby without having any skills in culinary except cooking awesome burger patties.

But after playing around with recipes and creating more varieties of his burgers, his small stall started to become popular and crowd started coming in, so much so that  other people started to inquire about franchising.

Now do bear in mind that my brother-in-law is an engineer by trade which has no cooking skills at all except for passion in homemade burgers but if he can pull that off, anyone can.

The only possible con, is that your opened franchise might not live up to expectations as the main business.



So you see, passive income is important and there are more ways on earning some extra money now than many years back.

Building a second stream of income may sound difficult to some but nothing in this world is easy and without risk so as long as you have the will to go through with a plan, you will start making that passive income faster and bigger in return than you would have ever thought possible.

Thanks for reading, if you’d like to check out my #1 choice of passive income, click here.

Good luck!

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