So how am I making passive income? Well, there’s quite a few different ways and I’ll walk you through them, but first, for the people who don’t know what passive income is; passive income is a way of making money without putting much effort into the generation of that income. In an earlier post, I went deeper into what passive income is, so if you’d like to learn more about that; please visit a few posts back. Most people are already making passive income, but don’t realize it. They are making income passively through a basic savings account by the interest money earned. It’s minimal, but it is passive income. I’d like to share some insights into how I am currently receiving higher returns through my various passive income streams in hopes of sparking some interest in you to start thinking about how to leverage passive income generation to change your future for the better.
I went to College for Film and TV Production, have ran a video production business since 2013 and have been a freelance Cinematographer since 2007, this naturally gives me an advantage in the stock footage industry, but you most likely have knowledge and skills that I don’t, so don’t be afraid to brainstorm other ways of producing passive money that I am not doing.
Stock Footage & After Effects Templates/ Motion Graphics
For stock footage, there are literally dozens of sites you can post content to and they’re all different. Some of them are very strict, some are very easy going. I currently make around $500 – $1000/month passively through selling stock footage. I have around 1000 clips online for sale in 4k and HD resolutions across 5 different marketplaces. To give you a headstart, drone footage sells well, anything with models doing lifestyle stuff sells well. Avoid anything with nature, like submitting clips of a forest. It’s been done a thousand times. There are a whole bunch of various ways to being successful at selling stock footage; the biggest thing to understand is you will need to invest in some equipment and unless you’re a professional videographer, it won’t be easy when you’re starting out. Keep at it and eventually a clip will sell. From there, try to understand why it sold and film some more!, Repeat, repeat, repeat!
Knowing one industry very well can create great opportunities in making passive income. After Effects templates are in high demand because Editors are looking for quick ways to create professional videos and a lot of the time they prefer spending $10 or $50 for an editable template that will save them 15-50 hours of work. Especially when they have a tight deadline from a client. Some of the templates I am earning passive income from are editable photo/video gallery templates, video transition templates and commercial promo templates.
Several stock websites such as Shutterstock or Videohive include the ability to sell motion graphics clips which can be computer generating from a program like After Effects, or that were created in camera. They can range from looping background videos to use behind text in an edit to element graphics used as overlays in an edit. I am currently making passive income through a few motion graphics files such as light leak overlays and video transitions.
If you’d like to learn how to use After Effects to create templates to sell online to make passive income, check out our resources page for course we have on learning After Effects.
Online Video Courses
Over the years I’ve mastered many different programs like Premiere Pro, After Effects, Photoshop and Pro Tools because of my background in media production. Online courses exploded in the last few years and the various marketplaces to post your content on has also increased. You don’t have to be a professional speaker or a professional Cinematographer to get sales through passive income, although it will absolutely be beneficial. All of my online courses stand out from the competition because they are high quality from an audio and visual perspective as well as from a value perspective. Every single one of my courses has been completely edited; all gaps in dialogue, all ‘ums’ and ‘ahs’ and any other irrelevant content was removed to produce an engaging experience for the student enrolled. The Promo course I put together is also high quality because of the film lights used, the teleprompter and the high quality mic and camera used, all put together with professional editing. The result is a high converting rate from potential students turning into actual enrolled paid students. Again, as I said above, you don’t need to be a professional though, you’ll just have a harder time outranking higher quality courses. There are many, many instructors that have created courses and been successful at it; it all comes down to proper planning. There are plenty of platforms to choose and all have different ways of displaying/promoting and working with you and your courses. Udemy, Teachables, Skillshare are just a few to name.
Affiliate Marketing
You can earn passive income without even creating a product, or investing. By leveraging other people’s work, you can earn commissions via referring their products, this is known as affiliate marketing. Most online marketplaces have some sort of program you can join where you will earn income for products you refer. Affiliate marketing can be very tough if you don’t have a following since you have no one to refer products to!
Tax Free Savings Account
If you don’t have a Tax Free Savings Account (TFSA) and you live in Canada, you need to open one. A TFSA is a savings account that you can transfer money into and when you earn interest, it is COMPLETELY tax free! The Tax Free Savings Account was introduced in 2008 and still today, many people are not taking advantage of it. When I mentioned earlier in this post that if you have money in a basic savings account, you are probably making some passive income through the interest earned from the money you have in the account. The problem is, the interest earned is taxed if you earn over a certain amount (Around $20). Whereas any interest earned through a TFSA is not taxed. You can keep all of it. True passive income. The real advantage to this is when you start investing your TFSA money into something, such as what I do in my number 5. In our first blog post, I went into way more detail regarding a Tax Free Savings Account, so if you’re interested in that, check it out!
Real Estate Investing
A few years back I started to invest all of my TFSA money into a syndicated mortgage. Growing up, I never thought I’d eventually be a real estate investor, but reading Rich Dad Poor Dad (Link on our resources page) opened my eyes into the strengths of passive income and started me down the path of using my money to make money. My investment earns me a fixed interest rate, paid quarterly that goes right back into my Tax Free Savings Account and that’s right, the interest earned is ALSO tax free and completely passive. TFSA’s have a max contribution room which as of 2017 is just over $50k. Check what your contribution room is before transferring funds to be safe as there are penalties if you contribute more than you’re allowed. The power of a TFSA is that any interest money earned does NOT affect my contribution room. So let’s say to keep numbers easy that my max contribution room is $50,000. If I gained 10% of that through interest after 1 year of my investment, then my TFSA account would have $55,000, even though my max contribution room is $50,000 for that year! Skip forward 10 or 20 years of doing this and you could have a ton of money earned 100% passively on top of your contribution room, all of which is TAX FREE! There are some people who got lucky and put their money into the right investment and have built up TFSA’s worth around a million dollars! That’s incredibly power because they have a million dollars to invest moving forward where whatever they earn from that investment is free of being taxed!
I hope what I’ve shared is useful to you. Please share the page if you think it can provide value to someone else!
All the best!
Contributor
Will Bartlett