If you want to achieve financial freedom, then the first thing you need to think about is setting up a passive income. Although passive income is touted as easy money, it requires a lot of time and effort to set it up. Having a passive income and active income at the same time can give you freedom and flexibility. In this article, we are going to highlight best ways to make passive income UK.
What is Passive Income UK?
Passive income is a form of income you earn from income-generating assets or investments and you don’t need to continuously work to earn it. You continue to earn a passive income when you are sleeping or even when you are on vacation. It provides unearned residual income with minimal time and effort. It gives you freedom and flexibility and can even help you take early retirement.
Best Passive Income Ideas UK
The following are some of the best passive income ideas in the UK that you can venture into.
1. Invest in Stocks
Buying shares or stocks is a great way to earn passive income in the UK. Shares and stocks can earn you high dividends. Besides, apart from shares and stocks, you can also invest in gold and cryptocurrencies. You can buy these assets when their prices are low and sell them when their value is increases.
The main challenge in this type of investment is panic among investors. When the prices of these assets start to fall, many investors rush to sell off their assets before prices fall further and wipe out their portfolio. You shouldn’t panic, but instead, hold the assets long enough until their value increase enough to earn you a profit.
Read more: Invest in stock market UK for beginners.
2. Rent Out Property
Renting out property is the other best passive income United Kingdom. It is capital intensive, but its returns are high and it is a long-term investment. Alternatively, you can start an Airbnb business without owning property. Once you have rented out your property, you can start earning a steady monthly income.
3. Start a Blog
A blog is also among the best ways to make passive income UK. To get started, you just need to choose a niche and then offer quality content to your audience. When starting a blog, you need to buy a domain name and hosting. Once you have a blog that is up and running, drive traffic through SEO and social media marketing. You can then monetize your blog through affiliate marketing, Google AdSense, sponsored posts, and book deals.
4. Start a YouTube Channel
YouTube is a passive income stream UK through sponsored videos and advertisements. Create videos that people want and enjoy watching. You need to create great content and upload videos consistently. This way, you can get many people to subscribe to your YouTube channel and also get more viewers.
Once you meet YouTube eligibility requirements, you can start making money through advertisements, and sponsored videos, while you also review and sell your products.
5. Try Robo-investing
Robo-investing is some sort of investment where you use an app or an online bank to save. It is software that helps you automate your investment. The software asks you some questions and then provides you with suitable investments. The software also manages your investment.
It is worth noting that utmost care is needed before starting Robo-investing since there are risks involved and you can make a loss. You can try platforms like Moneybox or Moneyfarm. You can choose cautious, balanced, or adventurous levels of risk.
6. Peer-to-Peer Lending
Peer-to-peer lending involves lending money to a borrower through a third party. You can use p2p lending platforms like Zopa, Funding Circle, or Lending Works to lend money to third parties. You earn a passive income through interest rates from the money you have lent out. However, these loans are insecure and borrowers can default in repayment.
7. Venture into Airbnb Business
If you have some extra space or house, you can start an Airbnb business. You just need to furnish your house and then register on Airbnb. Travelers can make bookings online and spend at your property. Airbnb will then pay you an income from travelers’ bookings. You don’t have to advertise your Airbnb business. Once you have listed your property on Airbnb, they take care of the rest.
8. Earn Interest from Savings
You can also earn a passive income UK through interest from savings. The best way to earn meaningful interest rates is through fixed-rate accounts or bonds. These are accounts where you lock your money and can’t access it for a specified period. The longer you lock your savings, the higher the earnings.
However, if you urgently need the money, you can access it, but you will have to forfeit the interest you would have earned, or pay an early withdrawal fee. You can avoid this by investing in a high-interest rate current account.
To minimize risk, diversify your portfolio by investing smaller amounts into multiple loans. Also, analyze historical data of the borrowers to see if they have a record of defaulting in loan repayment.
9. Rent Out Useful Items
If you have some useful items like a bike, car, truck, or boat, they can be a good passive income UK. If there is an item you own and don’t use frequently, instead of letting it lie idle, you can rent it out and earn a passive income. Earnings from such items can supplement your income.
Read also: Passive income vs active income.
10. Create an eBook or an Online Course
An eBook or an online course are some of the best passive income UK. They are becoming increasingly popular. You can educate people on your area of expertise. Once you are done creating an eBook or an online course, you can sit back and start enjoying passive income when people buy the eBook or sign up for your online course. Both of them require time and effort to create.
Summary of Best Passive Income United Kingdom
How to earn passive income UK? The above are some excellent passive income ideas in the UK. It requires time and effort to set up a passive income. But once it is up and running, it requires minimal effort and you don’t have to work continuously to earn a passive income. A passive income is an excellent way to supplement your regular income.