7 tips to start earning passive income, from 3 millennial entrepreneurs
- You don’t need a lot of money to start investing or starting a business that generates passive income.
- Create a monthly calendar and work with a community to hold yourself accountable and celebrate your victories.
- You don’t need the perfect product, or know-it-all, to get started.
- Read more stories from Personal Finance Insider.
Everyone wants to make money while they sleep.
Getting started is the hardest part, especially if you feel like you don’t know the right people, don’t have enough money to make your idea a reality, or just don’t know what to do to win. passive income.
Here are seven tips for starting new passive income streams, from three millennial entrepreneurs who have earned at least six figures in passive income.
1. Start small
Tiffany James, 26, gradually invested $10,000 in the stock market in 2019, and has since earned her first million as an investor. She now teaches other black women how to generate passive income by investing in the stock market called Modern Blk Girl (MBG).
When people ask James how to start earning passive income, their biggest fear is usually not having enough money to invest. She replies, “How many times have you been to brunch this summer?” James suggests redirecting that $60 bill to an investment and watching what happens.
2. Join a community to empower yourself
James says the key to his success is finding a community to help keep him accountable. Through MBG, she and her friends can get into stocks, bonds, long-term LEAPs, and many other niche knowledge in the stock market.
James began investing with a group of black creatives who shared the same values and had similar life experiences. These relationships held her accountable and inspired her to create her own community specifically for black women, where she felt a “big sister-little sister connection.”
3. Start with what you know
Jasmine McCall struggled with bad credit for years. McCall, 30, has spent hours researching her consumer rights, disputing negative scores on her credit report and paying off her debts. She now shares her credit expertise by offering digital courses that help people improve their own credit – a passive income stream that has brought in $100,000 in just four months.
McCall started with what she knows best: how to boost her credit rating and how to hold herself accountable to credit collection agencies. With this knowledge, she was able to create a passive income stream that helps others.
4. Listen to what your community needs
McCall’s products flew off virtual shelves once she started promoting them on YouTube. Along with helping her generate sales, she was able to monetize her videos and earn an additional $3,000 per month.
“I didn’t go there with the intention of being a creator,” she says, “but there were so many additional questions that I had to keep creating content.” McCall’s understanding of the needs of her community has helped her create the most effective products in a short time.
5. Plan to refine your methods over time
Shaan Patel, 32, co-founder and CEO of SAT and ACT prep company called Prep Expert, earns $12,000 a month in passive income from selling digital courses.
Patel says he follows Malcolm Gladwell’s 10,000 hour rule, which states that it takes 10,000 hours to truly master a skill. “Do I think you have to have 10,000 hours before you start? Absolutely not,” Patel says candidly.
He adds that “a few hundred hours” should be enough to release the first version of your product. (In fact, Gladwell’s rule has been disproved.) “When I developed my first SAT course, I was probably at 500 hours,” Patel says. “But over the past 10 years, I’ve spent over 10,000 hours perfecting my lessons.”
6. Get Organized
In addition to digital courses, Patel has six other sources of income that help him earn $25,000 every year. Along with practicing as a doctor and running her own business, Patel says creating a monthly schedule to prioritize passive income is key to making this happen.
“Given my own busy schedule, I plan the fifteenth of every month to invest and find new ways to maximize passive income,” he says. During this period, Patel compares interest rates, weighs the pros and cons of different investments, and moves his money accordingly.
7. Start simple
Whether you start with $100, a flawed product, or something as basic as a simple 401(k) employer match, James, McCall, and Patel all recommend starting simple. Start investing $10 to $100 each month in an income-generating project. Even sitting down for coffee with someone you admire matters. Start investing time in researching stocks, cryptocurrencies or bonds.
Patel suggests starting small, with a high-yield savings account. “Once you get $10 or $20 interest deposited into your account, you will become hooked and look for other ways to maximize passive income streams.”