Many of us would love to boost our income – especially recently, thanks to the cost of living crisis squeezing everyone.
A way millions of people across the UK are doing this is by finding additional sources of income to supplement their ‘main jobs’.
Utility Warehouse, also known as UW, has been investigating Multi-income individuals (‘Miis’), and how they find and manage multiple sources of income. And they’ve found that Brits could earn up to £10k a month from their side hustles alone.
And in some cases, these side hustles also generate passive income as well as up-front pay.
What is passive income?
Passive income is essentially money made passively – in its purest sense, by doing little or nothing. In a broader sense, it’s money that comes in from a source other than from working for an employer or client.
Naturally, the idea of ‘making money while you sleep’ is very appealing. In reality, true passive income either takes existing money or hard work to build up over time. But with that hard work can come a lot of rewards in the long run.
There are a few different types of passive income. Forbes splits passive income into three categories covering the above examples: investing, asset building, and asset sharing. They also give some great passive income ideas based on these three categories, which include gaining interest from investments (for example, on the stock market), earning money from owning and renting property, and earning royalties on something you own the rights of.
These methods can be viewed as truly passive, as you have to do minimal (if any) work to make this money. Other forms of passive income involve more work at the beginning of the journey, but are often more accessible to more people. After all, not everyone owns property or has enough money to invest. Some people don’t consider these options to be ‘true’ passive income as work does need to be put into them at some points of the process. But to others, it can be a viable way of building a process that will eventually result in income that’s passively generated.
Strategies for generating passive income
According to the Miis report by Utility Warehouse, there’ll be over 25 million people in the UK earning a second income by 2025. In 2023, there are already 20 million. So many are already harnessing the power of having multiple income streams. And many are already earning hundreds from home.
This is already great news, as more and more people are waking up to the fact that they don’t have to be restricted to a single salary. But not all additional income streams are passive.
To grow a passive income, your side hustle needs to be able to generate continuous revenue without additional effort. So, as mentioned in the Forbes article above, you’d need something that would pay dividends, interest or royalties.
Which method is best for you?
There’s no one-size-fits-all way of earning passive income that suits everyone. But everyone has different skills that they can make the most out of.
For example, if you’re a skilled writer, you could write a book and self-publish it on Amazon. If you’re a graphic designer, you can create your own clothing designs and set up a print-on-demand business. If you enjoy chatting to people, you can work as a UW Partner. If you’ve got the know-how in practically any area that others haven’t, you can create an online course. And so on.
None of these are ‘get rich quick’ schemes, and all involve a degree of hard work to achieve success. But by working consistently on this kind of passive income stream, you could eventually make a meaningful additional income – and even make moves towards financial freedom.
