Many online articles mistake finding an online job with passive income. I want to be clear, this article will be about how to generate a true passive income while you are on the road that don’t require to spend extended time to take care off and therefore can be considered truly passive.
This present article will be separated in two main categories to generate a passive income:
- How to use your money to earn more money passively
- How to spend time before your trip to generate money passively during your trip
Even if you don’t currently have much money, you could use the tips in the second category to make a capital and then use the tips in the first category.
The second category consist of various ideas that could be set up before a trip, so that you could rip the benefits once you’re on the road. It might not stop you from completing this passive income with an online job on top of your travel.
Since the start of the pandemic, we have settled in France after several years on the road. It has been a great time to inform myself and to slowly build an income that will hopefully stay stable while we get the chance to hit the road again.
I am not a financial advisor, and this article is not financial advice. Everything written in this article should be considered as for informational purpose only.
1st Category: Use your capital to earn
If you have the chance to already have a certain sum of money at your disposition, there are several ways you could leverage it to earn a passive income while on the road. I’ll share with you some of my favorites.
Build an ETF Portfolio
Have you heard about an ETF? It’s a simple way to invest in the stock market without much prior knowledge.
If you haven’t, to put it simply, an ETF (or exchange traded fund) tracks an index (e.g. the Nasdaq, the S&P500…), a commodity (gold…), a sector (e.g. energy companies) or another asset. It can be traded on an exchange, just like a stock, and the price fluctuates every day.
An Exchange-Traded Fund (ETF) portfolio requires very minimal management once it has been set up. It’s a great way to diversify your portfolio with very little fees.
Historical returns make holding an ETF portfolio a very interesting option, even though it’s impossible to predict the future based on the past performance.
Before setting up an ETF portfolio, I’d strongly suggest to buy a book or to inform yourself on the matter. You can have a start on Investopedia.
Have you ever dreamed about being a bank? I suppose not, but P2P lending is exactly that. You are the one lending your money to individuals or companies wishing to borrow a certain amount of money.
The interest rates will depend on the duration of the loan, the risks and several other factors. You can expect a return before tax of about 2 to 8% per year in most cases, but that could change depending of the evolution of the interest rate set by central banks.
You can also read more on the matter on Investopedia.
There are many ways to earn (and lose) money with cryptocurrencies. Some ways can be time-consuming, such as day-trading cryptocurrencies, but one truly passive way to earn an income is by staking cryptocurrency.
But what does staking mean? The short answer: Staking is a way of getting rewards for holding a cryptocurrency.
About 200 billions dollars of cryptocurrencies are being staked at the time of writing this article.
Be aware that not every cryptocurrency offers rewards. If they do, on average, you can expect a 5 to 10% return per year. This number can increase up to 100% (or even more) if you’re willing to take more risk, for instance through the Decentralized Finance (DeFi), but this is beyond the scope of this article.
To stake you’ll first need to buy a cryptocurrency. If you’re wondering where, I’d suggest to start with Binance, which is the main cryptocurrency exchange in the world. You can also stake your cryptocurrency there.
Use this link to sign up on Binance and you’ll enjoy a 10% discount on your trading fees.
I’d strongly recommend gathering knowledge on the matter before getting started. One great YouTube channel I’d suggest to start is the CoinBureau. If you’re more into books, The Basics of Bitcoins and Blockchains by Antony Lewis is a top choice.
Staking a Stablecoin
A stablecoin is also a cryptocurrency, therefore it is strongly linked to the precedent paragraph, however with one major difference.
Although the majority of cryptocurrencies fluctuate wildly 24/7, a stablecoin is a type of cryptocurrency offering price stability by being backed against another asset. This option is therefore less risky then the aforementionned.
For instance, there are several stablecoins backing the US$ such as the USDT, BUSD and USDC, or even backing other assets such as gold (PAXG is one of them).
You could earn a considerable yield while limiting your risks of seeing a price change. Surely, lending a stablecoin will provide higher returns than at the bank. You could expect rewards around 5 to 10% per year with limited risks, or much more rewards if you’re willing to take more risks.
If you’re coming from a country where your currency is often devalued against most major world currencies and ridded with inflation, exchanging your money to a stablecoin could be a great way to keep the value of your hard-earned cash safe.
Dividend Aristocrats Strategy / Live off Dividends
This passive income strategy is related to the stock market, and it’s the last one of this first category, simply because you need a high capital to make it work.
The Dividend Aristocrats are defined as companies that have increased their dividend payouts for 25 consecutive years or more.
This strategy consists of using the payouts you’ll receive to fund your travels, or to rephrase, you would just live off the dividends.
Be aware that the value of the companies’ share can be increased or decreased, therefore impacting the value of your capital.
2nd Category: Create materials
The point of this second category is to spend a hefty amount of time creating materials that will allow you to get a passive income while you are traveling. It can be set up in preparation of a future trip when you’ll certainly have more time and means at your disposition to create a valuable material.
Create an online course
Do you have a skill that you are willing to share?
Creating a course will definitely require a lot of work up-front. You’ll need to learn several skills such as how to edit a video, how to promote your course and so on, but you can be greatly rewarded later.
I created my first course around the end of 2020, and while it took me about 2 months to create, it has been steadily bringing us a small passive income. I suppose we could generate enough money to fund our low-budget travels out of 5 or 6 solid courses.
There are several great platforms where you can upload your course such as Udemy and Skillshare. These websites can be a great way to get started if you don’t have an audience yet. You’ll be able to leverage the thousands of users these platforms already have to sell your course, minus a commission of course.
If you do already have an audience, you could start promoting your course through your newsletter and cut the middleman.
Write a book
Similarly to the part above, writing a book requires a lot of work up-front, but once you’re done, it could constitute a solid stream of monthly passive income.
It is now easier than ever to autoedit your own book and sell it on various platforms, the most famous being Amazon. Autoedition is a great way to lower your up-front costs since you won’t have to print hundreds of books with no guarantee of being able to sell it.
Knowledge is power. There are many ways to generate passive income if you’re willing to spend a bit of time beforehand to set it up.
I’m a big advocate of buying books to inform yourself on these money matters. Financial education should be an important topic, simply because if you’re able to generate an income passively, you’ll have more time to spend on your hobbies and other personal activities. Work to live, never live to work is one of my motto.
And you? Do you have any idea you would like to add to this article? What’s your favorite way to get a passive income?