Do you ever lay in bed thinking about how you can find true happiness in your life?
While happiness is different for everybody, I would argue most of you are looking for time and financial freedom. You want to do things you are passionate about and spend time with people you care about.
You don’t want to wake up every day dreading your day job and you don’t want a boss directing your life.
Luckily for you, the world we live in today has made it possible for you to achieve financial and time freedom through the power of business and the internet.
You have to take risks, spend money, and acquire the knowledge to earn income outside of the standard day job.
This article is all about giving you the knowledge of the best business models to earn an income. You might consider some of these income-generating models to be passive, active, and even side hustles.
While some of these are definitely more passive than others, all can be started as a side hustle and scaled into a full-time gig.
If you play your cards right, you will be able to generate enough money where you never have to work for somebody else again and obtain that much sought-after time and financial freedom.
1. Dividend Income Model
- Passive Ranking: 10
- Time-Horizon: Long
- Money Required To Start: $1
What is dividend investing?
Dividends are paid to investors for owning stock in the company. No matter how much stock you own, some companies will pay you a certain percentage just for owning the stock. This is a way for companies to reward investors. Not all companies pay dividends but many do, it really depends on how they operate.
How Dividend Investing Works
Say for example you own 1 share of Company A for a price of $100 and they have an annual dividend yield of 2%. As a result of simply owning a share, Company A will pay you $2.
Typically companies pay dividends on a quarterly basis, but some pay monthly or semi-annually. If Company A follows the standard, you would get 50 cents every 3 months.
As time goes on, companies will try to increase their dividends to keep shareholders happy. Believe it or not, some companies have been increasing their dividends each year for the past 50+ years.
Companies that have increased dividends consecutively for 25+ years are called dividend aristocrats. Companies that increased annually for the last 50+ years are known as dividend kings.
Why Dividend Investing is a Great Money Making Model
Nothing is more passive than dividend investing. You simply invest money in a basket of companies and start earning cash flow in the form of dividends instantly.
Many people like to make investing complicated, but if you just follow the market (S&P 500), history has shown you can get about 7% annually in returns on your money after inflation when looking at the long-term.
Some years will see very high returns and some years will leave you questioning why you invested, but the key thing is to think about the long-term.
How To Get Started
Investing has never been easier to get started than right now.
There are so many great platforms available allowing anybody to get started with as little as $1. My favorite investing platform is M1 Finance because they offer fractional shares it’s very intuitive to use.
Decide upon your investing strategy and link your bank account to the investing platform. Once linked up, you can transfer money almost instantly.
There are other great options as well such as Webull and Robinhood. If you want a comprehensive review you can check out my article for the best investing apps.Dividend_Income_Infographic
2. Affiliate Marketing Model
- Passive Ranking: 7
- Time Horizon: Long
- Money Required to Start: $200
What is Affiliate Marketing?
Affiliate marketing is a concept where content creators drive sales to a product/service in exchange for a commission. A popular method is for bloggers to post links within their articles to products/services that are beneficial to their audience.
How Does Affiliate Marketing Work?
Content creators post links to products and services that their audience can use to sign up.
Imagine you are interested in creating a website and are looking for a great web host to get started.
You might stumble across a blog article ranking some of the best web hosts on the market that provides some great information. After reading that article, you might be ready to pull the trigger and purchase a web host to launch your website.
Now you have two options, sign up by going directly to the web host or use a signup link from the article you read. Both options will get you the same result, the only difference is that the content creator will receive a commission if you use their signup link because they are referring you.
To successfully implement the affiliate marketing model, you must understand the three interacting parties.
- The person who is seeking information
- Content publisher giving information and posting the link
- Product/service creator
Let’s break each one of these down to give you better insight into affiliate marketing.
1. Consumer Who Is Seeking Information
Why does anybody read blog articles and watch YouTube videos? They are looking for something of value. Most of the time, people are looking for a solution to solve some sort of problem/question they have.
Consumers don’t just click on links and make a purchase for no reason, they need to see the value first.
Once consumers are hooked on the product/service as well as the content creator, they will be more willing to make a purchase.
Not all consumers realize they are purchasing via affiliate links so it is good practice for content creators to make it evident.
It’s important to note that there is no extra cost for consumers to sign up through affiliate links.
2. Content Publisher
Blogs and YouTube videos are the best ways for content publishers to promote content and post affiliate links.
The key for content publishers is to post high-quality content that provides substantial value to consumers. If you build it they will come, but you have to build it right.
The other aspect for content publishers is finding great products/services to link to.
I recommend beginning with products that are relevant to your website and products you know are great. Readers won’t be happy if you link to a product that sucks. Furthermore, content publishers must ensure they follow the terms and conditions set forth by the product creator.
After being accepted as an affiliate partner, there may be some requirements to meet in order to receive payment.
Some companies require their affiliates to bring in at least one sale per month in order to remain in the program. For the stricter requirements, it is a good idea to build a larger following before placing those affiliate links to increase the odds of conversion.
3. Product/Service Creators
Companies are responsible for paying affiliates who bring sales.
In addition, companies must deliver the actual product/service to the consumer who purchases it. Most companies with an online presence have some sort of affiliate program available that affiliates can apply to.
The application process is relatively straightforward and approval can be instant.
Why Affiliate Marketing Is A Great Money Making Model
Affiliate marketing is extremely scalable which makes the money-making potential to be extremely high.
Undoubtedly, gaining a following can be a slow process, but once you have the audience, the money will flow like water. If you treat your blog or YouTube channel as a business, you can build an audience extremely fast.
As long as published content is high quality and updated periodically, the earning potential from a single post or video can be in the tens of thousands of dollars.
How To Get Started
Pick a niche that has a high earning potential and one you are interested in.
Once you have a general idea of what your content will be focused on, purchase a domain name, and launch a website.
I recommend Bluehost for domain purchasing and web hosting because it’s reliable, low-cost, and easy to use.
If you are looking to scale fast, consider outsourcing aspects of content publishing. One person running the entire operation isn’t feasible.
My biggest word of advice: Just get started.
It’s easy to get into the habit of worrying about what happens if you fail. If you don’t try you will fail 100% of the time.
Release some good content and take it from there. The more you post the more comfortable you will be and the better the content will be.
3. Amazon FBA Model
- Passive Ranking: 5
- Time Horizon: Short-Medium
- Money Required To Start: $500
What Is Amazon FBA?
Fulfillment by Amazon is a service where sellers ship products directly to Amazon’s warehouses and Amazon will list the product online and handle fulfillment.
Amazon FBA is awesome because sellers don’t have to take time building a website or brand.
As long as you can get the product to Amazon, you have a high chance of making sales due to the popularity of the eCommerce giant. Products can be sourced anywhere, but a popular method is to source products from Alibaba because they are cheap and can generate good margins.
How Does Amazon FBA Work?
The model is fairly simple and can be broken down into six points.
1. Create an Amazon Seller account
In order to utilize FBA, you must first create a Seller account.
You can choose the “Individual” plan where you pay $0.99 per sale which is great if you are just testing the waters. The other option is the “Professional” plan that costs $39.99 per month. The Professional plan is great if you plan on selling more than 40 items per month and comes with many more features.
I recommend going with the Professional plan because in the long run your margins will be better.
2. Source a Product
You must first do product research and decide on a product you want to sell.
This is arguably the most difficult part of FBA because there are millions of products to choose from. You can choose a white-label product or sell an already known brand.
A few common places to source goods from include Alibaba, direct from wholesalers, retail stores (discount sections), and even your own product creations.
To be honest, you can source a product from anywhere, just ensure you can build a relationship with the supplier so you can easily place orders in the future to keep your FBA product in stock.
3. Send it to Amazon
It is very important to have a shipping plan for your product because you want the shipment to Amazon to be as smooth as possible.
You need to inform Amazon of the barcode, quantity of units, and the product dimensions.
If purchasing wholesale items, it is possible to send them directly from the wholesaler to Amazon’s warehouse but you run the risk of the product not being correct. I would recommend having the product shipped to your location first so you can perform a quality check.
4. Consumers Buys Product on Amazon
Amazon is one of the largest marketplaces in the world which is good and bad.
Good in the sense millions of people browse Amazon each day meaning the chance of your product being noticed by somebody is fairly good.
The downside is the amount of competition on Amazon. You may have to market your product well on external websites and take unique photos.
While it’s true there are many sellers on Amazon today, you can still get your piece of the pie. Critics claim the market has been saturated for years on Amazon, yet everyday people continue to make thousands of dollars when they play their cards right.
5. Amazon picks, packs, and ships the product
Once a customer places an order you don’t have to worry. Amazon handles the entire fulfillment of your product and even deals with customer service.
The reason this model is so great is that sellers don’t need warehouses to hold inventory, Amazon does it for them. Once you make a sale, you are essentially home-free.
6. You make money
Congratulations, you sold an item on Amazon! This is a big milestone and if you continue to source great products your earning potential will grow.
Amazon pays directly to your bank account every 14 days. You can check all payment details in your Amazon Seller account.
Why Amazon FBA is a Great Money Making Model
Outsourcing and reach.
The main draw factor of FBA is that sellers don’t have to worry about the post-sales phase. Get a consumer to make a purchase and you are good to go.
Don’t worry about purchasing a warehouse for holding inventory, packing up the product, and customer service. There are a lot of up-front costs to do this yourself and with FBA it’s already done for you.
The other great aspect of FBA is the presence of Amazon itself. Millions of people search Amazon every day which means the odds of your product getting noticed is very high.
How To Get Started
If you are serious about FBA, I would recommend sourcing a product first.
Even before you sign up for a Seller account, browse for products and find a way to make them unique and valuable. Once your product(s) are chosen and you have a plan, create a Seller account and get to work.
It is very daunting to purchase products and manage the shipping but don’t worry, you can do it. There are countless guides and support on the overall process.
Don’t get discouraged if a product fails to sell, perhaps try a new marketing tactic or a new product all together.
4. Rental Property Model
- Passive Ranking: 6
- Time Horizon: Long
- Money Required To Start: $20,000
What is Rental Property
Real Estate renting is one of the oldest money-making models in the world and continues to be lucrative for investors.
People pay a property owner to use their property for a given amount of time.
Property can range from a house, apartment complex, commercial office space, warehouses, and much more. The form of property I will focus on here is related to a house because it’s more feasible for the average person.
How Does Rental Property Work
Renters pay landowners a monthly fee to use the property.
A lot of people choose to rent because it’s easier and there isn’t a big commitment. Renters simply pay a monthly rate and don’t have to worry about fixing the property when it breaks.
The biggest downside of renting is the lack of ownership. Month after month people pay but they don’t actually own the property.
Owners on the other hand collect rental income but are responsible for fixing and maintaining the property in most cases.
Buying property can be daunting at first because houses require various types of work such as painting, drywall, electrical, and plumbing to name a few.
You can choose to get down and dirty and do the work yourself to save money or hire it out. Either way, rental income is steady as long as you find somebody to rent.
Why Rental Property Is a Great Money Making Model
The world population is growing and the amount of land remains the same. Each year there is a higher demand for property and people are willing to pay higher prices.
Rental income is generally consistent and very passive if you choose to outsource the management. Just imagine when the first of the month arrives and you receive another $1,000 check.
As you get more experience and enough income, you can purchase multiple properties and see endless amounts of cash flow every month.
Aside from monthly income, real estate tends to appreciate in value over time. 10 years down the road if you decide to sell you can receive a great amount of profit in the form of capital gains.
How to Get Started
Save, save, save! Learn, learn, learn!
Real estate investing is great but to actually own property requires a down payment. Down payments are typically around 20% so if you are looking at a $100,000 property expect to have $20,000 in cash.
If you are tight on cash right now, consider borrowing money from family and friends.
Apart from the down payment, you will need some cash for renovations if you plan on sprucing up the property to get a higher rental income. There is much to learn in the field of real estate investing as well.
You must learn how to evaluate a property, screen tenants, manage tenants, and maintenance. In the beginning, you will most likely have to hustle and do a lot by yourself but overtime you can outsource many aspects.
5. YouTube Model
- Passive Ranking: 3
- Time Horizon: Medium-long
- Money Required to Start: $100
What Is the YouTube Model?
If you don’t know what YouTube is then you must be from a different planet. Welcome to Earth my friend!
YouTube is a popular video platform where millions of content creators post videos about anything you can think of. In the past decade, YouTube has evolved greatly and content has become very interesting and high quality.
Content creators can make tons of money through advertisements being shown on their videos. YouTube is somewhat passive because old videos can continue to generate income.
However, creating new videos on a frequent basis requires a lot of time to create and edit. YouTube is very scalable because subscribers increase exponentially over time if the algorithm is right.
How Does YouTube Income Work?
YouTube income is based on advertisements being shown on videos. The more subscribers a channel has typically means the revenue potential is greater.
Different niches tend to bring different amounts of revenue regardless of subscriber count. YouTube channels in the finance niche, for example, can earn a high income with fewer subscribers due to the nature of the content.
On average, YouTubers can earn anywhere from $3-7 for every 1000 views.
Why Youtube is a Great Money Making Model
The scalability of YouTube makes it one of the best money makers on this list.
By scalability, I mean the growth of subscribers over time. Everybody starts with zero subscribers and getting to the first 1,000 is a lot of work.
The next thousand will be easier because word will spread and your content will naturally get better.
How to Get Started
Hit record and upload.
Making a video is incredibly easy today because nearly everybody has a smartphone with a decent camera. As long as you have a camera and an internet connection you are good to go.
Creating higher quality content takes a bit more time and requires more expensive gear such as a good camera, lighting, and editing software.
Get started with what you have and slowly get the equipment over time to increase your quality.
6. Dropshipping Model
- Passive Ranking: 7
- Time Horizon: Short-Medium
- Money Required to Start: $100
What is Dropshipping?
Dropshipping is a retail method where the store selling the product doesn’t actually hold the product as inventory and ship it to the customer.
Instead, a third-party supplier holds inventory and fulfills the order. It is a very popular eCommerce method that has taken off recently because anybody can start, a store can be set up in a matter of minutes, and it’s very passive.
How Does Dropshipping Work?
Successful dropshipping is built largely on sourcing a product that adds value to consumers and good marketing tactics.
Start by sourcing a product from a dropshipping supplier such as AliExpress or Doba. Once a product is found you can list it on your online store through Shopify or WooCommerce and start making sales.
From a high-level point of view, this is how dropshipping works. You can get much more complex by ordering a product sample, taking your own photos, and creating unique marketing ads to drive more traffic.
Why Dropshipping is a Great Money Making Model
If you are looking for a relatively low-risk and passive income business idea then dropshipping is a good fit.
You don’t need a warehouse to store the product and you don’t need to deal with shipping to customers.
The low barrier to entry is what makes dropshipping attractive to new entrepreneurs. Just imagine opening your laptop in the morning and getting a notification that you made 10 more sales while you were sleeping.
How to Get Started
As mentioned above, the first thing to do is source a product and perform market research to determine if the product is a good fit for your target market.
The biggest mistake most drop shippers make is by jumping in blindly without a plan.
Arguably one of the best places to source a product to sell is AliExpress. AliExpress is a large online retailer based in China where many vendors list products you can browse through to add to your store.
You will see similar products from multiple vendors so you want to make sure the vendor has good ratings.
Once a product is sourced you can add it to your Shopify or WooCommerce store and upload product photos. Photos are a critical part of dropshipping because most sellers will use the default photos from AliExpress.
If you want to stand out you need to order a product sample and take your own professional photos. You can also check the quality of your product by ordering a sample.
Once the product is listed on your store with your desired markup, you can begin making sales.
Essentially a customer enters their payment and shipping details on your store and that information gets sent to the product supplier who then ships directly to the customer. If the product makes some serious sales you should consider working with the supplier to add your own brand to the product.
7. Facebook Ad Model
- Passive Ranking: 7
- Time Horizon: Short
- Money Required to Start: $0
Source: Laptop Empires
What is the Facebook Ad Model?
Believe it or not, you can make a lot of money by running Facebook ads for local businesses.
Most people see Facebook purely as a social media platform. While that is true, Facebook is a very powerful advertisement platform local businesses can utilize to get more customers.
The only problem is that local businesses don’t always have the knowledge or time to run ads. This is where you come in with your social media marketing expertise and pitch to run Facebook ads for a recurring monthly payment.
You can design, run, and test various Facebook advertisements to drive customer traffic in exchange for some nice income.
How Does the Facebook Ad Model Work?
In principle, this model is really simple. You pitch to various local businesses that you can drive more customers to their business by running ads on Facebook.
If they accept, you can get to work by accessing their Facebook Business Manager and initiating ad campaigns.
You choose the campaign objective based on the needs of the customer (reach, conversion, etc.) and design a graphic, photo, or video and launch the campaign.
Let the ad sit for a while to get measurable results and consult with the customer to see if their traffic increased. If the results are good, the local business will most likely hire you on a recurring basis and pay you well for doing it.
A good starter rate is $500 per month + ad spend. As your experience rate increases, you can demand over $3,000 per month for each client!
Businesses would most definitely pay you $3,000 per month if you are bringing in $15,000 worth of clients to their business.
Why Facebook Ads are a Good Money Making Model
The best type of income is income that is recurring.
If you are able to generate good results for businesses, there is no reason you can’t bring in over six figures per year with minimal time invested. The most time-consuming aspect is acquiring a new client when you first start but after you have some experience and client references it should be no problem.
The next most time-consuming aspect is thinking of an ad strategy for the client to meet their needs. Once you hash out a strategy, you then design the ad and measure the data.
Most Facebook advertisers spend only a few hours per week doing actual work and the remaining time is purely spent watching the ad run. In essence, the Facebook Ad model has the potential to generate large amounts of recurring income with less time invested.
How to Get Started
Begin by familiarizing yourself with the Facebook ad terminology and platform.
The best starting point is to take Facebook Blueprint Certified courses. There is a wide range of courses to take and in the end, you will get certified by Facebook.
Being certified is a great selling point to clients and shows that you have the expertise to run ads for their business. It would also be helpful to get photo editing and design software such as Adobe Photoshop and Illustrator.
There are many lucrative business models to generate enough income so you can live the life you truly desire. Gone are the days of working the 9 to 5 day job and feeling miserable every day.
Whether as a side-hustle or full-time gig, any of the money-making models above are great ways to get started on your path to financial and time freedom.