In today’s post, I will share with you 7 ways you can invest your first $1000 to make passive income in the future.
7 Ways You can Make Passive Income at Home
1. Financial Literacy
“The most important investment you can make is in yourself.” – Warren Buffet
First on the is financial literacy. You might be thinking, “why do I need to care about financial literacy?”.
You would be surprised with the number of people who do not understand about managing their finances and end up swimming in a sea of debt when they are adults.
As I started to reach my mid 20’s I was in a lot of debt which restricted my cash flow. I felt like I was stuck in the mud.
I wanted to use my hard earned money to invest in my side hustles but I couldn’t since I had to pay back my debt plus interest on top! Month after month it felt like this debt was never going to leave me.
I realised school did not teach me about saving money, distinguish between a need and a want, managing budgets, paying bills on time or planning for retirement.
Instead, they force you to learn subjects that have little value once you’re in the real adult world.
Financial literacy provides you with the information you need to adjust your lifestyle and help you create a roadmap for better financial decisions.
You can read books and blogs about managing your finances. Your local library is also a great source of information. Spend a day at your local library, you will be surprised at the content you can find for free.
You can also purchase ebooks from Amazon, online video courses and attend community college courses.
Watching videos on YouTube is a quick and cost effective way of educating yourself about finance.
Becoming a financially responsible adult will free you from debt and provide you with enough money for you to enjoy when you retire.
You can start a blog for less than $100. All you need is a domain, hosting and a simple WordPress theme. It’s a great online business model to make money online for beginners.
Decide what niche you’re interested in. It will help if you’re passionate about the content you will be creating.
You will have to do some keyword research and find out what your audience’s pain points are and how you can add value and help solve their problems.
Overtime as your blog ranks in the search engines and traffic starts to come in, you can monetize your blog to make more money. If you don’t like to write your own content, I recommend outsourcing this task to freelancers on Upwork or iWriter.
Creating your own blog is super easy. You can check out my tutorial here.
Pros and Cons of Blogging
- Business Opportunity: You have the potential to monetise your blog and turn it into a full-time business.
- Flexibility: You can work from anywhere as long as you have a laptop and an internet connection.
- Purpose: If you have a business website or e-commerce store, adding a blog and consistently updating your blog with quality content will help search engines rank your website and attract more visitors.
- Daily Journal: Great platform to document your journey and business.
- Outreach: When you create informative and engaging posts, your visitors are more likely to share your content with their friends. In return, you will gain new followers and subscribers.
- Laziness: Having a flexible workplace can often lead to laziness if you’re not careful. It’s always a good idea to have a clean workspace free from clutter and remember to take regular breaks so you’re not indoors for long periods of time.
- SEO: You will have to learn SEO and it does take time to master. There’s no point of creating amazing posts if no one is going to read them. Google is constantly changing their algorithms so its important to constantly learn new techniques to optimize your blog.
- It’s a business: If you take your blog seriously and treat it as a business, you will be able to turn it into a full time business. It’s important to always optimize the user experience on your blog by making it easier for your audience to digest content. You want your audience to stay engaged with your content and keeps them coming back for more.
- It takes time: Blogging is not a get rich quick scheme. To create a sustainable blog that will continuously make you money in the future will take time, patience and discipline. You will have to add value first by providing quality content which connects to your audience and then the money will follow eventually.
3. Start an e-commerce store
Another way of investing your first $1000 is starting your own e-commerce store.
But you’re probably thinking, “what do I sell and where do I find this stuff”?
If you’re a beginner you can do this two ways. The first method is to dropship products from a supplier individually or you can purchase items at wholesale.
For beginners who would like to sell stuff online, I recommend the dropshipping method.
E-commerce platforms like Shopify have made it super easy for beginners to set up their first store.
Pros and Cons of Dropshipping
- Low start-up costs: You only have to buy the items once you make a sale. Even if you didn’t have money to start off with, you can use a credit card to pay for the items.
- Less risk: You don’t have to worry about keeping inventory you can’t sell.
- No storage needed: You don’t have to worry about finding a place to store your inventory or warehouse expenses.
- Hands-free: All the packaging and shipping is done by the supplier. You don’t have to make regular trips to your local post office.
- Low Profit Margins: With dropshipping, your profit margins will be lower compared to purchasing items at wholesale.
- Unreliable suppliers: Your goal as a dropshipper is to drive traffic to you store and convert your visitors into paying customers. A bad supplier can take your money and not send out the goods to your customers. When you receive too many negative reviews, it can destroy your business reputation. It’s important to research trustworthy suppliers.
- Takes time: this is not a get rich scheme.
If you would like to learn how to create your own profitable dropshipping business, you can check out my eCom Elites course review here.
4. Pay off your debt!
You can’t go too far ahead if you’re stuck in the mud. Pay off your credit card debt with the most interest rate first.
There’s no point investing your money if you have debt you need to pay off. The interest you have to pay overtime will
To be financially independent, it’s important to have a financial game plan so that you stay positive cash flow.
Pros and Cons of Paying off Your Debt Fast
- Save money in interest: Taking out a loan or using a credit card will involve interest payments. The longer you take to pay off your debts, the more interest you will have to pay overtime.
- Free up cash: Having debt will prevent you from having financial flexibility. Paying off your debt off quickly will help free up some cash that can be used for a rainy day.
- Sleep Better: Knowing you have debt from month to month can drain you physically and mentally. Paying off your debt quickly will reduce your stress and anxiety. You will also have the peace of mind, knowing you’re not burdened by debt.
- Depleting Emergency Fund: Paying off all your debt is ideal, but you need to be careful where the money is coming from. Make sure you have at least three months of living expenses saved away. When you have no money left, it can be difficult to cover medical emergencies or losing a job. Using different funds: At times, you may have to dig into your savings and other funds you may have in order to keep up with debt repayments. Paying off debt early can also decrease your investment funds and opportunities.
- No Money Back: Lenders will not send you your money back if you change your mind. Once the debt is paid for, your money is gone.
- Credit Rating: Paying off your debt early can potentially hurt your credit rating. Consistent repayments is the best way to build credit.
- User Friendly: Flipping things on eBay is very easy. All you need is an item, take some photos of it, list it on eBay and configure the shipping details. You can also set the handling time to suit your lifestyle in case you would like to take some time off to go on vacations.
- Flexible: You can sell almost anything on eBay besides illegal stuff like weapons and drugs. It’s a great way to test different niches to see what your customers love to buy. I have sold products from books, clothes and electronics.
- Vast Audience: One of the best things about selling stuff on eBay is the potential to reach more customers. eBay is an established e-commerce platform with millions of shoppers looking for products to buy making it easier for you to attract new customers.
- Gain new customers: Making a sale is one of the best feelings you can experience as an entrepreneur. It’s also a great opportunity to entice your customers to check out your eBay store for repeat purchases.
- Second Chances: When you’re selling things on eBay, it gives the item a second chance. You will be helping the environment by recycling stuff but also making money in return. It’s a win win!
- Motivation: You are your own boss and you are responsible for everything that happens in your eBay business. Its very easy to be distracted and side tracked with our environment You will be required to find and list items on your store. However, if you keep practicing, you will get better and faster as time progresses.
- Time: With any side hustle, you will have to develop new skills. It will take time and patience to master these skills . You will learn how to use the eBay to list your items, how to find profitable products to sell and how to package and ship your order. Some products may sell faster than others so dont expect to make a return over night.
- Seller Fees: It’s important to understand the eBay fees that may affect your profit margins on certain items. Make sure you do some research to see how much your item has sold for in the past before listing it on eBay. You don’t want to waste your time by listing an item and later not making much profit after eBay fees have been deducted.
- Customer Service: With any e-commerce type of business, you will have to deal with answering your customers questions and resolving any problems they have with their order. There was one time I had sold a set of keyrings to a customer which got lost in the mail. Instead of the customer contacting me directly to resolve their issue, they left a negative review which affected my store ratings. When customers don’t see 100% positive feedback on your store, they are less likely to buy from you. I reached out to the customers explaining to them I have sent another set of keyrings and they should have contacted me first instead. Lucky enough, eBay was able to remove that negative feedback!
- Tracking Inventory: As your store gets bigger, you will need a process or system in place to track your inventory. Let’s not forget you’re most likely going to store a lot of your items in your own home so it’s important to keep them organized and easily accessible.
- Competition: Depending on your item and niche you’re selling in, certain products will have more competition than others. Its always a good idea to do some research before listing any items. You will have to find ways to make your listings stand out from the crowd. This can be as simple as taking better photos, improving product titles and descriptions.
6. Create an Online Course
Everyday I see a YouTube or Facebook ad promoting a new course from some expert living across the world.
Selling online courses are currently trending and is a great way of leveraging your expertise and knowledge.
Platforms like Teachable and Udemy make it super easy to create and sell courses online.
They handle most things like web hosting and payment processing so that you have more time to focus on creating awesome courses.
The Pros and Cons of selling your own course
- Revenue and Profit: You can serve multiple clients at the same time and make more money while keeping costs low.
- Engaged Learning: Being able to deliver your content in different formats can offer more educational opportunities for a wider audience. Some people learn better by seeing visuals or listening to audio instead of just reading.
- Ownership: You own and earn 100% of the profits. You can use your course as a way to reach more people and increase brand exposure. Top marketers all have their own courses and products which helps them stand out from the crowd.
- Technology Costs: Creating your own course will require the use of software and services which includes a monthly fee. You will also need time to learn how to use them.
- Marketing Costs: Utililizing your own email list to drive traffic to your course is a great way to make your first few sales. However, if you do not have an email list to market to, you will have to utilize other marketing methods like PPC advertising, guest posting, affiliate programs etc. This can easily drive up your marketing costs if you’re conversion rates are low.
- Difficult to Protect: One of the downsides of creating an online course is the difficulty to protect your course from being redistributed over the internet. There are many tools and tricks available that people can use to download your course and re-upload and sell them for a cheaper price.
- Takes Time: Creating and developing a course will take time and patience. If you’re producing video and audio content, you may need professional equipment and this can cost you more money.
- Pricing: Deciding how much you should charge for your course is not a simple task. You will have to include costs of reformatting existing material, promoting the course and profit margins need to be considered. Conducting competitor analysis is a great way to see what is currently on the market.
- Sales Funnels: Some marketers use their online course as part of their sales funnel. This leaves a bad reputation for online courses as more people are skeptical of marketers who flash their expensive cars and lavish lifestyle in their ads.
7. Affiliate marketing
Affiliate marketing is one of my favorite side hustles which I highly recommend for beginners looking to generate another income stream online.
All you have to do is, recommend products and you will make a commission every time someone buys using your affiliate link.
There are many marketplaces you can sign up to find products to promote. These include Clickbank, Amazon, MarketHealth and many more.
If you would like to learn more about affiliate marketing, you can check out my Savage Affiliates review here.
The Pros and Cons of Affiliate Marketing
- Low Cost: To start your own affiliate marketing side hustle, all you need is a domain name, hosting and a website. It’s very easy to setup your very first WordPress website which I have shown here.
- No inventory: You don’t have to worry about storing inventory or dealing with packaging and shipping. Your goal as an affiliate marketer is to drive traffic, collect leads and recommend products to help your audience solve their pain points.
- Customer service: If you’re an introvert like me, you don’t have to worry about dealing with any customers when you’re an affiliate marketer. The vendor will be responsible for dealing with customer enquiries on the backend.
- Adding Value: Becoming an affiliate marketer is a great way for you to add value back to the world. You can create content that documents your own experiences which can be shared to millions of people.
- Scaling: You can leverage multiple platforms such as social media, forums, organic and paid traffic sources to promote your affiliate programs. You can also collect emails to build your email list which you can later market to through email marketing to make more commissions in the back end. Your email list is your money printing machine so its important to collect emails as soon as possible!
- Cost effective: Your startup costs are almost non existent in the beginning of your affiliate marketing journey. All you need is electricity, an internet connection and a computer. You also have the flexibility to work from home or remotely. Compared to other business models, you don’t have to worry about hiring employees or paying for a workspace at the start.
- Secondary Income Stream: As an affiliate marketer, you don’t have to quit your day job as you grow your side projects. This ensures you have a steady which you can use to invest in your affiliate marketing projects.
- Independence: Another reason why I love affiliate marketing is the independence and freedom to do what you want and when you want. I can work on my blogs wearing my pyjamas while playing classical music in the background without anyone interrupting. Compared to a regular job with rules and regulations, you have to put up with other people’s bad habits and a loud workspace.
- Passive income: With affiliate marketing, you can make money while you sleep. One of the best feelings you can experience is checking your affiliate programs to see that you were able to generate money without lifting a finger. Passive income is possible if you put in the hard work at the start and reap the rewards later in the future.
- Slow progress: This is where most people give up in their affiliate marketing journey and often say making money online is a scam. Affiliate marketing will take some time at the start before you see progress as there is a learning curve and many skills you have to learn and master. I must admit, I was also sceptical about affiliate marketing when I first started out. However, when I made my first commission, I knew affiliate marketing was going to be my freedom from the conventional 9-5 lifestyle. It may take you months and even years before you will see any returns. The key is to stay persistent and develop the right habits that’s going to keep you focused for the next couple of years.
- Additional Costs: With any trade, you will need tools to help you run your business smoothly. This includes email marketing software and outsourcing tasks that you can offload to someone else while you focus on the important stuff that takes your business to the next level.
- Relying on the vendor: You don’t have control over the affiliate program. You will have to adhere to the vendor/merchants rules and any changes they implement. For example, changes with commission rates or removing certain products.
- Competition: Depending on your niche and industry, there can be a lot of competition created by other affiliate marketers. However, don’t let competition scare you. As an affiliate marketer, your hard work and persistence will help you get a piece of the pie. All you have to do is take action.
When you hear people talk about investing money, its either in stocks, real estate or crypto currency.
However, I find investing your first $1000 into a side hustle is more profitable and sustainable in the long run.
The key is to choose one side hustle, focus and master it before you hop onto the next.
Its very easy to be distracted and fall for the shiny object syndrome. Stick to one idea, focus and stay persistent. Your results is an indicator of how much effort you put in.
What side hustles are you currently focused on? Let me know in the comments below, I would love to hear from you!