The 2 ways to build a passive income

As we wind down to the end of the year, it’s that time where people reflect on what they’ve accomplished during the year, and also what they have in their sights for the coming year. The year 2018 was a great one for me – I purchased an investment property, dumped a significant amount of money into the markets, got my bonus at work, passed Level 2 of the CFA program and started a relationship with someone special.

With so many things going on in life, one thing I’ve learnt is that you can’t get time back – once it’s gone, it’s gone for good. It’s not like money, where if you need it you can always find ways to make more. For me, passive income has not been about the money – it has been about the time I save by not having to actively work for that money. During the year, I have explored various methods of making a few bucks from selling things on eBay, doing surveys and website reviews online, streaming games on Twitch for ad revenue to even riding a bike for UberEATS.

Time and time again, I find the passive methods (or somewhat relatively passive methods) more appealing to me. In the methods that I did try this year, selling on eBay was the best because it required just a little time investment upfront in the form of taking photos of items, listing the items and then responding to any questions that potential buyers may have to be able to earn some extra cash. For maybe 30 minutes of time a week, I’ve been able to earn some decent cash – below is my latest eBay sales summary. It’s not the greatest sum of money but just highlights what is possible if you have spare junk lying around in the house and willing to sell it.

ebay sales summary q4

Other more passive methods that have stood out to me are the ones that I have essentially bought, being rental income from my investment property, and dividend payments from the shares that I have invested into. My endeavors this year lead me to believe that there are really only 2 ways someone can build a passive income stream – either put in a lot of work upfront to build it, or have a lot of money already and buy it.

Building Passive Income

If I go back to my eBay example, I can turn this into a relatively passive income if I can find, for example, 200 different items to sell (items that actually sell well on eBay of course) – I would just need to put in a whole lot of work up front researching what items to sell, taking nice photos, providing great product descriptions and listing them all on eBay. I might have to answer lots of questions but it is still relatively passive to me because once all that is done, I can sit back and collect the money as sales happen. As the store and profits grew, I might have enough to employ someone and become more hands-off with the business so that it was more passive. In fact, you can start any business and then become more passive and hands-off with it as it grows and becomes more profitable – just means that you need to hire more people.

Other examples that I can think of would be starting a YouTube channel where you may need to make a lot of videos initially to grow your viewer-base and earn advertising revenue even as people watch your videos many years from now. Putting t-shirt designs on websites like Redbubble where you get a cut of every t-shirt that sells is another example. Or heck, even starting a blog to gain a readership so that people who come across your posts years from now will continue to earn you advertising revenue.

As you can see, if you don’t have a lot of money to start off with, the best way is going to be building your passive income from scratch, and that means lots of hard work and effort up front.

Buying Passive Income

If you are a bit more fortunate and have some money to your name, then buying passive income is feasible for you. You can skip all the hard work and buy your way into it – for example;

  • Buying an investment property to collect rental income;
  • Buying shares to collect dividend income;
  • Peer to peer lending to collect interest income OR
  • Even just leaving your money in the bank to collect interest income!

As you can see, having money makes passive income very achievable and easy to obtain. The hardest part is deciding where to put your money so that it can earn you the most passive income whilst accommodating to your risk tolerances.


So in summary, what I’ve come to find this year as I look to ramp up my passive income sources in the coming year is that there is not short cut. There are only 2 ways – build it, or buy it. If you don’t have money, you have to build it. If you do have money, you have the ability to buy it if you don’t want to build it. It’s as simple as that.

What are your ways of earning some passive income? I’d like to hear about them in the comments below!


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