On every New Year’s resolution list is an item related to money: Save more. Start investing. Build wealth. What if you can hit all these goals in one go? Yes, it’s possible through passive income streams.

In this article, you’ll learn how to earn passive income in the Philippines and why it’s worth considering.

An overview on passive income

Like every other opportunity, it’s important to understand the nature of passive income before getting your feet. For this reason, it makes sense to reflect on the three important questions below on how to earn passive income:

What is passive income?

Passive income is a type of income that requires minimal effort to earn or to maintain. The key phrase here is “minimal effort.” Because although some may sell the idea of passive income as easy money or an easy job, it actually involves work to attain.

Photo courtesy of Karolina Grabowska via Pexels

Earning income passively through stocks, for instance, would mean keeping yourself updated on industry trends. If you invest in real estate and lease out your properties, you should be able to build rapport with future tenants. Selling products online, you must perfect the product you're introducing to the market.

Hence, although “making money while you sleep” may be true in that some opportunities won’t demand too much of your time and efforts unlike an office job, don’t be misled into thinking that you’ll never have to lift a finger to earn money.

In a nutshell, this is what passive income is and is not.

Why do you need passive income?

If venturing into passive income ideas means working on top of your day job, why bother putting in the extra grind? Because when you have multiple income streams, you can secure yourself financially. You'll have a back-up for economic challenges in the future, a stash for non-essential expenses, and a boost for your savings or retirement fund.

How do you choose the right additional income opportunity?

If you're starting out with limited resources, you must be wise in choosing which passive income opportunities are worth your time and investment.

In general, you should only move forward with an idea when you know the risks involved, the requirements of the initial investment, and the potential returns.

Passive income opportunities

Now that you know what passive income is, why it builds financial security, and how to choose the right investment, explore the following ideas to help you save more, start investing, or scale up your wealth:

1. Lease out a condo.

The common route people take in their new journey to make passive income is to lease out a real estate property such as a condo.

The best thing about this kind of investment is that it appreciates in value over time. Condos located in business districts are especially profitable, as employees and business leaders will be your primary tenants.

Photo courtesy of Pixabay via Pexels

Maximize your passive income by leasing out condos in prime locations such as those near workplaces and essential establishments.

During the pandemic, employees looked for homes that would let them reach their office in a few minutes, to avoid commuting and getting exposed.

2. Convert your condo into a vacation rental.

Other than signing up long-term tenants, you can also cater to vacationers and travelers. Many people now prefer vacation rentals over hotels because they can take advantage of add-on amenities inside the unit such as a fully-equipped kitchen.

If you have a vacant property in a tourist destination, like Boracay or Baguio, turn it into a passive income source.

Photo courtesy of Artem Beliaikin via Pexels

During the pandemic, it’s just as important to give your guests the peace of mind that they’re safe in your unit. So before your tenants’ stay, make sure to sanitize and clean the space. In fact, even prior to your condo listing, prepare the unit.

3. Consider real estate investment trusts.

If you want to venture into the property industry but don’t have a large capital to buy a condo, real estate investment trusts (REITs) can be an option to earn passive income.

REITs are unique companies that own, operate, or fund income-generating properties.

Photo courtesy of Burst via Pexels

You invest in REITs in the same way that you buy stocks. The former's dividend yields are usually higher than that of traditional financial products' such as time deposits and bonds. However, it’s equally important to consider the track record and reputation of the property company you’re investing in. This is one key property investment tip all beginners should know.

4. Invest in stocks.

This is a timeless passive income idea. But especially in 2021, investing is projected to be profitable, as the stock market starts to show signs of recovery from the pandemic-induced economic crisis.

As companies bounce back, stock prices will increase. You can then sell your stocks to get better returns. On top of this, you'll be able to earn dividends from the company’s profits, which you can then reinvest into other opportunities for earning passive income.

Photo courtesy of Ishant Mishra via Unsplash

It goes without saying that you should invest in the right companies. Remember: you’ll be holding on to their shares for several years; so it’s important to check the track record of the companies you plan to invest in. Make sure they're consistently profitable and growing.

5. Open a high-yield savings account.

This is more like a "set it and forget it" investment. Basically, you just place your money in your savings account and let it accrue. The higher the balance in your account, the higher the interest it will earn. There’s probably nothing that could be as passive of an income as that

Photo courtesy of Pixabay via Pexels

Some banks’ high-yield savings accounts have an interest as high as 4% per annum. Again, it pays to compare rates from different financial institutions to find the best deal. See if your bank of choice has an online application; so you can open an account without having to leave your home.

6. Open a time deposit account.

As with a savings account, time deposits compel you to keep your money in a bank--only this time, there's a set duration when your deposit is locked in. The duration can vary from 30 to 360 days or from seven to 10 years, depending on your bank.

Photo courtesy of Pixabay via Pexels

Usually, the returns are much higher because of the interest accrued over the months or years, which sums up how to earn passive income in this asset.

The minimum required daily balance in most Philippine banks is PhP50,000. Invest in a time deposit if you have the required amount which you can afford not to spend.

7. Go into peer-to-peer lending.

Simply put, this type of investment is similar to a paluwagan, except that instead of earning from the lump sums of accumulated cash, you earn from the interest of the money you lent.

Photo courtesy of Sora Shimazaki via Pexels

Usually, peer-to-peer lending is mediated by online platforms; so it's important to compare sites and see which ones offer the best terms and excellent yield for a passive income.

It would also be good to start small, while you familiarize yourself with the system.

8. Create information materials.

If you have a compelling story or expert advice on a specific topic, write a book about it. Or, create a series of courses on it. Then, sell your book or course online. These types of e-learning materials have become in-demand, with more people motivated to learn new things amid the pandemic.

Photo courtesy of freestocks.org via Pexels

Explore different platforms, and take note of the commissions each one takes for every successful purchase.

Start thinking about marketing strategies to promote your e-book or e-course. In a nutshell, earn passive income by drumming up interest, to gain a huge following and convince people to buy your info materials.

9. Become an affiliate marketer.

If you have a website or a social media page with hundreds of followers, this is one good way to earn passive income.

Through affiliate marketing, a business pays you (the affiliate marketer) a commission for the traffic or sales generated by your online assets. These assets, i.e. social media or blog posts, contain links to the affiliate business's products or services.

Affiliate marketing has become a popular strategy when brands started pouring more funds into online marketing amid the stay-at-home orders.

Photo courtesy of Pixabay via Pexels

Aside from a huge following, you also need to create appealing yet valuable content. When brainstorming for content, make sure to keep in mind the needs of your audience. Who do you want to talk to? What are their needs? These questions should guide you when thinking of content to post on your page.

Join affiliate programs, preferably the ones that match your channel’s niche or your followers’ preferences. Then seamlessly integrate your affiliate links to your posts.

10. Build an app.

It's no secret that app developers rake in tons of money by creating a platform loved by many.

How do you earn passive income from an app? By selling it directly at online stores. You may also introduce it for free, but leave some features restricted to those who avail of a monthly subscription or a one-time purchase.

Photo courtesy of Saulo Mohana via Unsplash

Aside from these, you may also show ads, charge transaction fees, or allow in-app purchases. As people unlock features of your app, you earn your much-deserved additional income.

11. Sell stock photos.

Those high-quality pictures you took while relieving your boredom during the lockdown don’t have to go to waste. Sell them as stock photos online at popular websites such as Flickr or Shutterstock or on your own platform. You can earn passive income each time someone buys your photos.

Photo courtesy of picjumbo.com via Pexels

To increase your photos' discovery, use relevant keywords. For this, some knowledge of search engine optimization will come in handy.

12. Sell your unused/ used items online.

If your inner Marie Kondo got triggered during the lockdown, yay! Not only did you clear out some space in your home, but you could also turn your clutter into some serious cash.

Make money from your used/unused things by selling them online. Virtual is the way to go. With no physical store to man, an online shop is a perfect vehicle to earn passive income from.

Photo courtesy of Karolina Grabowska via Pexels

Choose the best e-commerce platform for your online store. Publish high-quality photos of your products for your virtual store and marketing channels such as social media. Then wait for orders to come in to start making money.

13. Create aesthetically-pleasing digital files.

Other than pre-owned items, you can also sell digital assets such as printables that you yourself created. Bullet journals and planners are two current bestsellers, to help buyers keep track of their New Year’s resolutions.

Artwork is also always trendy for homeowners who like sprucing up their spaces. If you have the skill to create these visually pleasing documents, make them available online for a quick passive income.

Photo courtesy of Jess Bailey Designs via Pexels

14. Build or buy websites.

In this venture, you earn money not just through affiliate marketing, but also through Google AdSense. Google pays you for posting ads on your website. Through your blogs, you can also become a brand ambassador, particularly if you've attained a large readership.

Companies usually collaborate with bloggers who have a strong niche, commanding loyal readership from their target audience. Again, the key to having a promising passive income in this venture is to focus on appealing yet valuable content.

Photo courtesy of Christopher Gower via Unsplash

15. Embrace your vlogging potential.

It’s no secret that YouTube pays their content creators well, especially those who amass thousands or millions of views. If you have no qualms about being in front of the camera to document your life, why not take it one step further and publish what you record online?

Photo courtesy of Anete Lusina via Pexels

Once you reach 1,000 subscribers in your channel and hit at least 4,000 hours of watch time, you'll be able to apply for Google AdSense, to start monetizing your content and earn passive income.

“Make money while you sleep.” This is the promise of passive income ideas that compel people to explore opportunities outside of their day jobs and corporate careers.

The financial security that passive income offers translates into numerous benefits: no more stressing about your and your family's financial future; being able to pursue expensive hobbies; and working whenever, wherever you want. Wouldn’t you want all these and more this year.