The majority of millionaires have upwards of three income streams. If one income source dries up, there’s always another to fill the gap. But even if you’re not quite aiming for millionaire status, multiple sources of income are still a great way to make yourself more financially secure.
It’s clear that having multiple income sources is beneficial, however, there’s the issue of how to create them. You could take on various regular jobs, but that’s one sure way to burn out fast. There’s a better way, and it’s called passive income. In fact, passive income is a big source of income for a lot of wealthy people.
Put simply, passive income is a type of recurring income you generate without active involvement — you earn it without an ongoing investment of your time and effort. It’s important to clarify the “passive” element though.
Many people equate passive income with zero work, but the truth of the matter is that creating passive income requires upfront work. Also, depending on what your passive income source is, you may occasionally need to do some work to keep earning money.
It’s also worth noting that passive income is different from portfolio income. While you can earn both incomes non-actively, they are not quite the same. Passive income sources — like the ones we’ll cover in this article — come from rent, royalties, limited partnerships, and other businesses in which a person is not actively involved in. On the other hand, portfolio income comes from dividends, interest, and capital gains.
Now that that’s out of the way, let’s have a look at some passive income ideas you can start implementing to make money in Uganda.
Monetize your skills
Today’s digital world has proven that information is power. If you are skilled in a certain area, you can start making passive income.
- You can use your knowledge of a particular subject or discipline to create a course on Udemy or other massive open online courses (MOOC) providers.
- If you’re good at photography, you could sell your photos on sites like Shutterstock. Your passive income will increase as you keep cashing in on a single photo that’s sold to various customers.
- YouTube is the fourth most popular social media platform in Uganda, and there’s lots of potential to make money. On average, YouTubers make between $3 to $7 per every 1,000 video views. You can start earning money by developing lessons and distributing them on the platform, or you can tap into your creative side and share entertaining content. Consider how Ugandan comedian Anne Kansiime makes an estimated UGX 27 million every month, according to TechRafiki.
- If you’re a good writer, you can self-publish on Amazon and set yourself up to receive royalties. Alternatively, you can get into blogging. As a blogger, you can make passive income in several ways, for example, through affiliate marketing, ads, or sponsored content. You can also create your own digital products (think e-books, photos, courses) and sell them on your blog. For some inspiration, you can check out Diary of a Muzungu and Watchdog Uganda; two of the many Ugandan blogs doing well.
No matter the idea you go with, do keep in mind that you will need to put in some work to get it off the ground before you can start enjoying passive income.
Invest in property
When people talk about earning passive income from properties, they are usually referring to traditional rental portfolios where you buy real estate and rent it out to earn money. However, this method is semi-passive in the sense that you still have to be available to maintain the property, take care of repairs, and address any problems tenants may have.
To make your investment fully passive, you can work with property management companies — there are several of those in Uganda. As a passive real estate investor, your job is to provide the money for the investment. You don’t have to be involved in the day-to-day management of the property.
The prospect of investing in real estate and making money off rentals is appealing, but it’s not necessarily for everyone. If the idea of buying a property seems like too big a leap for you, you could try renting out your property for short periods on Airbnb.
Putting your property, (whether it’s an entire home or just a single room) on Airbnb can be quite rewarding. For instance, if you’re in Kampala, you could earn over UGX 100,000 per night renting your apartment.
Become a silent business partner
Finally, if you’ve always had that entrepreneurial streak in you, but don’t have the capacity to run a business, you could invest in an existing business as a silent partner.
A silent partner is a business partner who is only involved in the business through their capital investment into the business. If you become one, you won’t have to make business decisions on a daily basis.
The ability to enjoy a passive income stream without having to constantly monitor the investment is perhaps the biggest advantage of being a silent partner. That said, you will still be able to give your thoughts on how the business is run, and if the business suffers some losses, you will also share in those.
Managing your passive income the smart way
Building passive income streams will help improve your financial security. It may even put you in a position to escape the paycheck-to-paycheck lifestyle, giving you more freedom to pursue your passions and build wealth over time.
Nonetheless, it’s important to remember that none of these ideas will give you financial stability or make you wealthy overnight. You have to let your income compound over time, and this takes research as well as a solid long-term plan.
It’s also a good idea to think about how you will manage your money as you increase your income streams. Handling money from different sources can get tricky.
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