The Daily Telegraph - Saturday - Money
‘How I earn thousands – with little effort’
In theory, passive income can boost your pension pot or buy a holiday without much effort – but don’t quit your day job, writes Amelia Murray
The dream for many is to earn as much money as possible for the least effort – spending their time with family or on the beach. Instead of trading your time for a wage, as with typical jobs, people who earn a so- called “passive income” do so with minimal input.
More people have taken on “side hustles” – secondary jobs, often linked to hobbies or experience – since the pandemic. Some 43pc of adults in the UK have at least one side- hustle, according to data from comparison site Finder. It is a broad term, and includes a variety of different activities. For example, renting out a room, driveway or entire property could be considered as earning passive income, as is investing in index funds.
Those with a more entrepreneurial spirit could consider creating and selling digital assets, such as templates, courses, ebooks or even knitting templates. Some take stock photos, selling them on sites such as Getty; others have uploaded sounds such as white noise to Spotify, taking a (very small) payment every time they are streamed – which eventually adds up.
But experts say the concept of passive income is misleading, as it often requires lots of work to get started.
Catherine Morgan, a financial planner and coach, says: “The allure of making money in your pyjamas, with nothing but the soft click of a mouse or the gentle tap of a smartphone screen, is like a modern-day fairy tale.
“But before we can all throw in the towel on the day jobs, behind every seemingly effortless passive income stream is a backstory filled with hard work, late nights, and probably a fair share of caffeine.
“It’s less ‘set it and forget it’ and more “set it, nurture it, tweak it, and then maybe forget it for a bit”.
Morgan says she has generated more than £1m in revenue from creating digital assets that teach women how to have a better relationship with money.
However, she warns people to tread carefully. “Venturing into the realm of passive income with the idea of quitting your day job is unlikely to be financially sustainable in the beginning. Start your passive income journey as a side hustle. It’s a safer way to dip your toes in the water while still having the security of a steady income.”
‘I want to do the least amount of work with the highest payout’
‘My ebooks will create a retirement pot’
Bakery owner and author Reshmi Bennett makes about £1,000 a month passively selling children’s baking 50% books and recipe downloads. She tests out the recipes as part of her day job and works on the books in her spare time.
While it takes about two months to finalise each book, including collaborating with an illustrator, once it’s uploaded onto Amazon, Bennett, 40, says it “sells itself ”.
Bennett’s venture into self-publishing was by chance. During the pandemic she wrote and designed a baking book for her son Xavier’s fourth birthday about them making blueberry muffins together. She posted it to her Instagram, which at the time had 55,000 followers, and the inquiries flooded in.
Bennett, who lives in Farnham, Surrey, made it available to order on her website; the next morning she had more than 750 orders for the £10.50 book.
She says: “The book was designed so it was just a case of printing more. But I still had to package them and send them out – which was not passive enough for me. I want to do the least amount of work with the highest payout.”
So in May last year she uploaded Xavier and his Magical Blueberry Muffins onto Amazon as part of her Storybakes series. She now has five books listed on Amazon. The ebook version is sold for £4.50, of which she earns £2.92, and for every £7.99 paperback, which Amazon prints and sends, Bennett gets £1.54.
However, she says she would be scared if it was her only income. She says: “I’m glad I don’t have to rely on it. We don’t have pension savings so this extra monthly income can hopefully build us a retirement pot.”
‘Extra income means I can contribute more’
Daisy Ferns created a passive income stream at the end of last year when she reached “a ceiling” in her earnings as a baby sleep consultant.
Ferns, 37, did not have the capacity to take on any more clients nor did she feel she could raise her prices.
So instead she spent four months designing a self-paced online course to train others to become baby sleep consultants.
It costs £ 2,995 for a place on the course and so far she has 21 students.
However, the mother of two, who lives in Derby, says the term “passive income” is somewhat misleading.
“There’s lots of work to do at the start and I spend about four-and-a-half hours during the week supporting students,” says Ferns.
She adds: “The extra income means I can contribute more to my family, such as paying for a trip for us all to Lapland.”
‘I am aiming to work just 10 hours a week’
Natalie Stanton is using her 11 years’ experience as a local government environmental health officer to create a video course in food hygiene. As The Safety Expert, she makes between £200 and £500 a month selling it to businesses, but says it takes up a lot of her time and she still works part-time as a food safety consultant.
Stanton, 36, who lives in east London with her husband Stefan, 36, says her aim is to create enough content that can be repurposed to enable her to reduce her working hours to 10 a week.