As of 2019, an estimated 50% of the UK population (roughly 25 million people) could barely make ends meet. When you live from paycheck to paycheck, you’re financially vulnerable. Strategies to develop financial discipline will help anyone to stem the flow of expenses, but that only addresses half of the equation; hence, a lot of people are competing for additional sources of income.
Wouldn’t it be great if you could earn passive income? Property owners, for instance, only need to order an EPC and undertake some maintenance, and they can become landlords living off rent. But what if you don’t have access to that sort of means? Specific forms of passive revenue might require a higher entry cost, but others allow you to leverage your knowledge capital instead. Here’s how you can get started:
Assessing what you know
Most adults are glad to consign their days of school and constant examinations to the past. Yet taking tests can provide a benefit that many employees are missing: awareness of their strengths and weaknesses. This is especially true if your employer doesn’t invest in additional training or professional growth.
Make a list of the skills you have; these can be accrued from work or activities in which you’ve participated as a volunteer. Include hobbies or crafts you’ve been learning on the side. Give yourself an honest rating of your proficiency level. The process is similar to how you might approach a new job application. This time, you’re conducting the assessment on your behalf, not for any employer.
Aligning with demand
Armed with a better awareness of your knowledge capital, you can proceed to assess the market. Just like a sensible business startup, you can maximize your chances of success by identifying a niche. Suppose you have expertise in repairing computers because it’s your job, but you also know a lot about troubleshooting cars since it’s one of your hobbies. You could write and self-publish an e-book focusing on either of those topics.
But there are tons of free resources online which help people troubleshoot their devices, and younger demographics are becoming digital natives. That market might be exhausted. On the other hand, many young car owners are no longer comfortable working under the hood of their automobiles. Narrow it down even further by vehicle type and issue, and you can establish an audience that pays for your knowledge in this field.
Choosing a revenue model
When you work with knowledge capital to create passive income, investing your time and energy can be upfront or continuous. Upfront investments work like royalties. You create and publish your product, and then people pay for it. Each additional sale doesn’t require more work on your part. Selling stock photos, e-books, or courses is one example of this revenue model.
Other streams require more continuous effort. Maintaining a blog or podcast, for instance, allows you to monetize your website through ads and affiliate marketing. However, you’ll need to keep releasing regular content to stay relevant and grow your audience (and consequently, value). Knowing which model applies to a particular option, you can make the choice that works best for you.
By starting small, you can take little more than your knowledge capital and use that to grow your income. From there, you’ll be able to work your way up and harness even more profitable passive income streams.