Sep 24, 2022  | Tags: passive income, investing, wealth

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Heard of people making money in their sleep?

They’re also the ones on the golf course on a Monday morning while you’re stuck behind a desk!

The answer is passive income - it’s the key to living life on your own terms. And you don’t need to be a tech, digital or marketing wizard to make it happen.

Who doesn’t want to work less without compromising their lifestyle?

Sometimes, it just takes a little careful planning, a dash of innovation or thinking outside the square and an ounce of luck never goes astray either.

Here are some tried and true methods to help you cut back the working week, as well as a few more speculative suggestions that could really help you get an even better night’s sleep! 

Getting started

It’s called passive income, not free income which means you’re going to need at least one of two things - money or time.

Many passive income options need capital to get off the ground.

You know, money makes money, right?

If money’s not fuelling your passive income platform, it’s likely to be your time.

You might need to spend some considerable thought and hours into getting things off the ground and show some patience as well.

Any additional income is worthwhile and over time, that trickle, if you’ve done it right, could well turn into a torrent.

Tried and true methods of passive income in Australia

These require some kind of asset already behind you, be it money or property.

Shares - if you’ve bought a blue chip stock, this really can be set and forgotten. Shares pay dividends, usually twice a year. You don’t even have to vote at the AGM if you don’t want to.

Bonds/term deposits - they don’t generally provide as big a return as shares but interest rates are creeping up quite quickly. Bonds are normally the pick of the two.

Managed funds/ETFs (Exchange Traded Funds) - this is where you pool your money with other investors. If the investment does well, everybody wins. Some pay distributions as well as gaining in value. Buying shares in an ETF works in a similar way.

Residential property investment - rentals are going through the roof so becoming a landlord can be a very lucrative strategy. It takes a fair amount of capital, but you could leverage equity in your home and/or savings to kick off your portfolio. Strata properties may be more affordable but won’t appreciate in value as much because you don’t usually own all of the land.

Commercial property investment - not seen as attractive as it was pre-COVID with plenty of empty office space in CBDs around the country, but some sectors are still thriving. A good tenant normally provides a good return with rental agreements starting at five years with lower upkeeps for landlords.

Rent your holiday home - there’s lots of money to be made on platforms like Airbnb with short term rentals of investment properties. It’s much more lucrative than longer term rentals if you get steady occupancy. But it will probably require the engagement of property managers, cleaners etc. You could keep it even simpler and just rent a room in your own house.

Emerging passive income ideas

The internet and the emergence of new online platforms and technology have opened up countless new revenue streams. Most of these can be explored with limited financial backing but just need a little bit of imagination and effort.

Peer to peer lending - this is where you lend money privately to investors via platforms like Ratesetter that allow you to set your terms and find you a borrower.

Dropshipping business - you are the middle man scooping the cream off the cake in this online order fulfilment business. You field orders for printing, t-shirts, mugs, potentially anything, place the order and ship to the customer.

Influencer - if you’ve got a growing audience on social media plus confidence, flair and opinions by the boatloads, maybe you could jump on the bandwagon here and try your luck. Influencers earn money via partnerships and commissions from brands big and small.

Advertise on your car - taxis were onto this years ago but you can still earn good money if you’re happy to turn your wheels into a mobile billboard.

Low input businesses - these take a bit of effort but can be hugely rewarding. Think vending machines, storage facilities, maybe start a courier service or try selling digital products online.

Rent a car space - if you’ve got the spare room on your property, this can be quite a good earner, depending on where you are, especially If you are close to the CBD or a sporting facility.

Create, create, create - heard of the ‘creator economy’? Whether it’s music, literature, software or whatever, there are so many avenues for artistic types to make a good income stream online. You can chase money through subscriptions on Substack or advertising on social channels like YouTube. Some have even turned blogging into a full-time career.

Affiliate marketing - once you have a blog or a YouTube channel, you can double your money by providing links to other products and taking a cut. Keeping it on brand will make it seem like more of an endorsement than a vulgar money grab.

Get advice today

Passive income is a really shrewd way to earn money and if done well can eventually replace your active income - if successful, it could accelerate your retirement plans.

There are however traps and tricks to ensuring you don’t make any costly mistakes.

So make sure you get expert advice and make moves that fit with your overarching wealth strategy. This is where Calder Wealth Management comes in.

The team at CWM are wealth experts who can help you make the best financial decisions for your long term interests.

There really is no substitute for quality financial advice from someone personally invested in your future.

At CWM we pride ourselves on leading our clients into the future with structure, financial stability and confidence.

Contact us today to discuss all of your financial needs and concerns.

Written by Stefan Miraglia.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

CWM specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.

Contact us now.