8 Things You Must Do To Make $10K a Year in Passive Income
Written by
Martin Dasko
Edited by
Jenna Klaverweiden
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One of the best ways to build wealth is to find a way to make money in your sleep, often through passive income. When you build passive income streams, money will reach your bank account without much additional effort. With multiple ways of earning money, you can build wealth and plan for the future. However, building passive income isn’t always simple, and there are a few steps involved.
Here are eight things you need to do to make $10,000 in passive income annually.
Research Passive Income Streams
It’s important to first research passive income streams. When doing so, you should consider what you want to earn and the time frame for doing so.
Think about whether you want to earn a bit of money — maybe a few hundred dollars — one time, or whether you want to earn income on a continual basis.
Once you know how much you want to earn in passive income, you can look for ways to make it happen. You should take some time to research different passive income options so you can pursue a path that makes sense for you.
Save Up Money To Invest In Passive Income
The next thing you must do is save money so that you can invest in passive income streams. To get started creating passive income, you’ll need a combination of money and time. If you have time but no money, you must find ways to save up.
That leads to the next step.
Increase Your Active Income
“In 2024, people have started looking more at what they are good at, or what they could become good at if they gave themselves some time to improve,” said Kate Taurina, head of the casting directors department at Allcasting. She suggested people look into online voiceover opportunities.
If you want passive income, you’ll have to focus on active income first so that you’ll have more money to invest and learn the skills you may need for some passive income streams.
What are some ways you can increase your active income?
- Ask for a raise at your day job.
- Look into the gig economy.
- Sell your stuff for money.
- Find a part-time gig.
The goal is to increase your active income, improve your savings account and have more money to invest in this area.
Invest In Building Assets That Generate Revenue
“The key is accumulating assets that pay you regularly without significant ongoing time investment,” said Emily Trevino, a business professional who co-founded Wise Insurance.
The main component of passive income is finding assets that bring in money without much effort in the future. The issue is that this often involves spending time on building the asset or investing a significant amount of capital.
What are examples of assets worth building? “Some options include building an online course, writing an e-book, creating a membership site or building an email list to promote affiliate products,” Trevino said.
These are all assets that can be built with time and effort. You’ll want to conduct enough research to ensure you’re dedicating your time to assets that could pay off since this space has no guarantees.
Be Consistent With Your Effort
“Passive income takes regular work upfront to build the assets and get them running smoothly,” Trevino noted. “For example, investing regularly to build a dividend portfolio, publishing quality content to grow an audience for a website, or continually creating new products. It takes months or years to build meaningful passive revenue, so consistency over time is critical.”
You have to remain consistent because passive income won’t happen overnight. While you’ll have to put a fair amount of effort into building your active income first, the goal is to eventually have your money work for you so that you can relax.
Reinvest To Grow Your Passive Income Streams
“At first, passive income amounts will be small,” Trevino said. “It’s important to continually reinvest some profits into expanding existing assets or building new ones.”
You have to start somewhere and then keep on building until your passive income reaches the $10,000-per-year mark. This amount may require multiple income streams that compound over time, and reinvesting accelerates the process.
Find Ways To Automate the Process
“Look for opportunities to utilize partnerships and technology to make assets more passive,” Trevino said. “Outsource tasks like content creation, use smart analytics software to help monetize website traffic, or find a co-investor to pool funds and share returns on investments.”
You want to get the right automation tools on your side so that you eventually step away and have the money arrive in your bank account without extra work.
“The right partnerships and automation can turn time-intensive assets into more passive ones,” Trevino explained.
Monetize Existing Assets
You also want to look for opportunities to make passive income from items that you already own. “You can rent out a spare room on Airbnb, rent out your car when you’re not using it or lease unused storage space in your home,” Trevino said.
The goal is to monetize existing assets so your current possessions can help you bring in money.
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