5 Best Passive Income Streams to Help You Travel the WorldOther Passive Income Ideas
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Have you ever dreamt of pursuing a life of financial freedom that enables you to travel wherever you want?
I’m sure many of you have felt the same lull of going into an office day in, day out, doing the same thing over and over again.
After four years of working and seeing the wonders of the world during a month-long solo Europe trip in 2014, I realized how much life I was missing out on, and I wanted to see what else was out there.
I was tired of the rat race and the idea that we are supposed to work until we’re too old to enjoy life to the fullest. I wanted to know if there was another way.
I randomly came across the idea of being a digital nomad, and I realized that was something I wanted to do.
I wanted to leave my full-time position and travel the world for at least a year.
Why I Became a Digital Nomad
Before the whole journey, I knew that I didn’t want my excursions to break the bank and kill all of my savings.
I wanted to actually build passive income streams and be financially responsible.
I wanted to continue growing my income sources and building my nest egg. I knew that if I wanted to retire early, I had to be smart with my finances.
By becoming a digital nomad — able to work anywhere in the world from the comforts of my own laptop — I would be able to continuously build up my nest egg.
But while doing that, I wanted to build passive income as well, rather than just working for “the man.” If I could combine passive income online businesses with the digital nomad life, that would be the ultimate dream.
So I started doing a lot of research around the digital nomad life and the realm of passive income online businesses. I studied more than 20 different books around investing and entrepreneurship. Plus, I started following blogs and podcasts — something I hadn’t done before.
The more I studied, the more I realized there are many ways to make money online. And if I managed to build these income streams, they could change the course of my entire life.
I dreamt of a life where I wasn’t dependent on working for money. Instead, I’d have money work for me.
Passive Income = Freedom and Time
That’s why I started building these passive income streams. I wanted freedom and time to do the things I loved.
In 2016, I quit my job as a marketing manager at a tech startup to travel the world for two years as a digital nomad. I started traveling all around Europe, Asia, and a bit around Canada and the U.S.
I worked from cafes, and when I felt like it, I walked around the city and lived the local life.
I was able to balance my hustles with my desire to see the world. And by the time December 2018 rolled around, I hit a personal milestone of $6,000 in passive income that month.
All of this wouldn’t have been possible without the wonders of the internet.
5 Best Passive Income Streams That Allowed a Digital Nomad to Travel the World for 2 Years
Nowadays, there are so many ways to make money online, and the opportunities are continually increasing as new platforms and tools come out. These things make it so there’s no excuse not to look into alternative income sources.
In this post, I want to talk about five of my best passive income streams that allowed me to travel the world for two years and even save money in the process.
Buy-and-Hold Rental Property
My first passive income stream was created back when I purchased my first rental property at age 22. You might be surprised that I was able to buy this property at such a young age.
In reality, I was lucky enough to have a wonderful brother who supported me! To afford the 25% down payment, my brother and I split the payment. I slowly paid him back and put the house under my name.
The idea for buy-and-hold rental properties is that you find a cash-flowing property to buy and rent out to tenants. This rent covers your mortgage, homeowner’s insurance, and property taxes. Any more you earn is put into your pockets as passive income.
Cash Flow Tips
It sounds great, but you’ll need to make sure you run the numbers on which properties can help your cash flow.
Some of the risks include home damages, vacancy, and depreciation. But if you do it right, you’re looking at massive profits!
To help make sure your property can positively cash flow, you’ll have to research whether there’s crime in the neighborhood, what schools are nearby, how much nearby properties rent for, what the current market rate is, and so on.
The great thing about buy-and-hold rental properties is not only do you make extra passive income, you can also make a lot through appreciation of your property.
For example, say you purchased a property at $200,000 and cash flow $300 per month on it. If your property appreciates to $300,000, you’ve essentially increased your net worth not just by the passive income from the monthly rent payments, but also from the amount of equity you now have in the home.
There’s a reason why many successful entrepreneurs invest in real estate.
Once you’ve gotten your foot in the door with buy-and-hold properties, there are other strategies for making money through real estate investing, including flipping, investing in syndications, commercial investing, and more.
Some of these strategies can make you big bucks, and sometimes you don’t even need to use your own money if you partner with other investors. You can profit a lot just by getting into the industry.
Etsy is another one of my main passive income sources.
I sell digital downloads on Etsy — more specifically, Photoshop and Microsoft Word templates. Digital downloads entail digital files (like .psd, .jpg, .doc files) that you put on the platform that people can download for personal or commercial use.
By selling digital downloads instead of physical products, I’m able to get many benefits including:
- Not needing to store inventory
- Not having to ship products to customers
- Being able to pocket most of the revenue as profit
Once you list on Etsy and upload the digital files, they’re there forever. People can purchase and receive their files automatically.
I started with this platform because I had a bit of a graphic design background working with Photoshop software. I knew I had the capabilities of designing digital templates for people.
I also found Etsy to be one of the only marketplaces that support digital downloads. The platform is also constantly growing, with millions of active sellers and buyers on the platform.
I have been selling on Etsy for years. By consistently adding new products and learning how to rank on the Etsy marketplace, I was able to make Etsy a strong passive income stream for myself.
You learn by experience, and starting your own shop can teach you a lot about e-commerce and building your own business!
I make affiliate marketing commissions on my blog, Digital Nomad Quest. I also created a niche site that proves affiliate marketing can make you decent amounts of passive income per month.
In fact, many successful YouTubers and bloggers make a large chunk of their income from affiliate marketing streams.
With affiliate marketing, you’re promoting other people’s products. The product owners supply you with specific links you’d use to promote these recommended products. And every time people buy from your links, you receive commissions.
What I love about affiliate marketing is it’s a win-win for everybody. It’s great for you, the owner of the product, and the customer, since everyone gets what they want.
The owner of the product receives another avenue of marketing as well as the profits from product sales. The affiliate marketer receives commissions. And the buyer gets a product that fits their needs as well.
One of the strongest ways of making passive income with affiliate marketing is by building trust among your follower base and recommending products of value (that you’ve used or currently use). You create content around these products through blogging or YouTube videos.
And by demonstrating the value that comes with the products, people may buy through your link, especially if you’ve helped them immensely.
Affiliate marketing is one of my favorite ways of making passive income. If you don’t have the creative capacity to build your own products, you can simply redirect people to resources and recommendations and make money that way. It’s easy and beneficial for all parties!
Amazon FBA (Private Labeling)
Fulfillment by Amazon is quite popular with digital nomads. If you’re particularly interested in e-commerce, this avenue can be great for you.
With Amazon FBA, you work with manufacturers to create your own products, private label them with your own branding, and ship those products to the Amazon warehouses.
Then, you list these products on Amazon so they’re available for purchase. Rather than shipping these products yourself when you get orders, Amazon ships and fulfills your orders for you!
In this way, Amazon FBA can become pretty passive after you’ve found winning products. Your manufacturers can continually ship new products to the warehouse. And you can automate a lot of these processes by hiring virtual assistants who will order products for you.
Merch by Amazon
Merch by Amazon is a print-on-demand service where anyone can upload art to be printed onto apparel and sell it. It’s probably one of the most passive of passive income strategies because you don’t even need to deal with customer support.
Merch by Amazon income comes in royalties, and Amazon actually handles all of the customer support for you. All you have to do is upload a design that you want printed on merchandise — think hoodies, shirts, and sweatshirts.
This custom merchandise is then listed onto the Amazon marketplace. Whenever you get sales, Amazon will actually print your design onto the merchandise and fulfill your orders for you.
It’s an awesome feeling when you’re getting sales while hanging out with friends or relaxing on the beach.
These five passive income streams have been making money for me to this day.
It took a while for me to build my passive income streams. They could have supported me if I wanted to continue traveling for life.
When I first started out, it helped a lot that I was visiting countries that were cheaper to live in. For example, Chiang Mai cost only around $600 per month in expenses (including airfare, accommodations, food, entertainment, and more).
Because I strategically chose the countries I stayed in, I was able to have a lot of fun, go out to eat every day, visit tourist attractions, and still save money after my two-year excursion.
Being a digital nomad actually helped facilitate building my passive income streams. I was able to cut down living expenses and put money back into my business (San Francisco rent can amount to $1,500 or more even with roommates).
Building passive income streams is neither easy nor a get-rich-quick scheme. It takes time and a lot of consistent hard work. It also requires execution and action to build up passive income.
Many people don’t start because they’re afraid of failure. But that’s how you learn the most about how to build your businesses. You learn from mistakes and figure it out as you go.
Passive income has really given me a lot of freedom and removed the idea of ever being “stuck.”
We all have opportunities; we just need to seize them. Combining passive income streams with a life of location independence can allow you to live a life of your dreams, following your passions, and seeing the world.
She quit her job in 2016, traveled the world for two years as a digital nomad, and ended up building more than 10 passive income streams. Now Sharon teaches others how to do the same through her blog and YouTube channel. Outside of work, Sharon likes creating music and playing video games.