Top 5 Ways How to Create Passive Income in the UK
Passive income is a gold mine that can make your life surprisingly easy-going and stress-free. Since it doesn’t restrict your time and location, you can make money without challenges from wherever you are (even if you’re currently not in the UK). It makes sense since you can improve your financial situation and start to build your wealth with minimum effort. And in some cases, you can create passive income literally by doing nothing.
Whether goals you’re trying to achieve, developing a steady passive income stream is the first step toward financial freedom. With a stable money stream, you may reach any goal you have made better and faster. Passive income will also bring you much more freedom to pursue your passions. Here is a brief guideline for those interested in creating passive income in the UK.
What is Passive Income?
Let’s start with the definition of passive income. When we talk about it, we usually mean the profit a person gets with little (or even zero) effort. You can generate ‘passive’ money from investing, buying, selling, or even creating. Some people (mainly large investors) use a passive income stream for beneficiation. And for some individuals in the UK, it is a stable side hustle. No matter how you treat it, creating passive income is your brilliant chance to get the money ball rolling.
In a nutshell, a passive income stream is earnings derived from any legal enterprise in which you’re not actively involved (and that’s why we call it ‘passive’). For instance, this category includes profit from investing, rental property, bank deposits, or even creating some intellectual property (just like books or music).
What is the Best Way to Create a Passive Income Stream in the UK?
So you have decided you’re in a deal. How to start? First, you should find your personal way to build a profit stream that will make you financially stable and independent in a short time. We made a list including the top five ideas you can take your sights in to start your own ‘passive’ business with little effort.
- Cryptocurrency cloud mining.
- Investing in the stock market.
- Rental properties income.
- Creating and selling digital products.
- Joining the affiliate programs.
#1 Cryptocurrency Cloud Mining
Since cryptocurrency has become a number one trend globally, many people choose Bitcoin mining as a profitable way to make passive income. Crypto enthusiasts can use several different mechanisms to earn digital money. As traditional crypto mining and investing in Bitcoin are too complex and super expensive, cloud mining is the best alternative to establish a revenue stream (especially if you’re a newcomer).
In general, cloud mining is a technology that allows to mine BTC and make cryptocurrency without installing and maintaining any equipment. When you purchase a cloud mining contract, you’re remotely investing in mining processes that are done from facilities installed in industrial data center parks. In fact, it’s the best way to earn Bitcoin by leasing computing power from third-party companies (so-called cloud providers) located in the UK or anywhere.
Why is cryptocurrency cloud mining the best thing for those trying to make a consistent passive income stream in the UK from scratch? Purchasing and operating Bitcoin mining equipment is a big challenge nowadays since that process has become extremely difficult for ordinary people in the UK. Cloud technologies are available literally for everyone, including students and beginner cryptocurrency investors.
By purchasing cloud mining contracts and renting hash power from third-party blockchain companies, you mine crypto coins without equipment and specific knowledge. And that’s your first step on the road to making a passive income stream. For most crypto miners, it’s not just a side hustle but also a high-grade revenue created with small investments. It also brings flexible possibilities with a lot of alternatives for UK residents.
Since the state of income and money safety are strongly dependent on the chosen provider, you have to research to find a trusted company worthy to invest in. We found a couple of legit providers in good standing you can be interested in.
- SHAMINING is a trusted cloud mining platform that provides crypto investors since 2018 by offering several types of hash contracts with 143%+ profitability rates. It’s a safe and secure way to make passive income for both crypto-savvy investors and beginners without engineering and cryptocurrency skills. The company is registered in London and works under the license of the UK.
- GMiners is the other Bitcoin cloud mining provider from the UK with several offers for everyone who wants to earn income from mining cryptocurrency. The cloud hash platform enables users from different countries (including the UK) to lease a hash power generated from their industrial facilities in Iceland, Georgia, and Kazakhstan. Over 70% of the electricity the company buys for its data parks comes from renewable energy sources such as wind generators and solar panels. The current profitability rate starts at 143% (and that’s surprisingly high for beginners who start earning a passive income from cryptocurrency in the UK).
#2 Investing in Stock Market
Many people across the world are still choosing to invest in dividend stocks to build passive income. By investing in stocks, you act as a shareholder in global companies that pay cash dividends out of their profits on a regular basis. The more stocks you buy, the higher passive income amount you get. You can decide to pocket your money or reinvest in additional shares to make extra income.
Since the investment in stocks is actually not related to any activity (except the initial investment process), we mark it as a good idea for making real passive income. And it is also one of the most profitable passive forms of income (along with cryptocurrency investment technologies like crypto cloud mining services). You also can invest in Bitcoin and other popular digital coins to earn money and run the passive income stream.
#3 Rental Properties in the UK
If you’re not a real estate professional, rental properties could be a good idea for passive income. The scheme looks pretty simple. But in fact, it is not that easy (since you might have a lot of money to invest at the starting line). You should purchase suitable real estate first, and it’s not the best idea for those who want to launch a passive income stream but haven’t raised a significant amount to invest yet.
Also, remember that being a landlord in the UK is usually not totally passive (since it requires consistent effort, especially when you’re getting started). To keep your business and passive income account afloat, you have to continuously maintain and upgrade your property. Plus, landlords in the UK typically should invest too much time researching their rental property options before buying and advertising them to new tenants.
Before anyone even thinks about getting income from purchasing and renting out real estate in the UK, they are required to do market research in the local area (and it also takes a lot of time and effort, especially for the beginners who try to launch passive income streams). After you finally select a suitable property to make money from, you have to do the math by calculating the average cost of utilities in the area where you want to buy a house or an apartment. The income state strongly depends on the monthly mortgage payments, property taxes, as well as the type of landlord/homeowner insurance.
While calculating the estimated income, you should also not forget about maintenance and upkeep (because landlords in the UK are fully responsible for maintaining the real estate and making sure all the utilities and systems are successfully running). The average amount you should pay annually for maintenance and upkeep is up to 1% of the property’s total value. As you can see, the rental estate can bring you a good passive income in the UK. However, you have to be ready to make a significant investment to get that ball rolling.
Another idea that could help you establish passive income in the UK is a short-term rental. You can join the Airbnb community or similar services to rent out your space and earn passive income. Also, if you have a spare room (or even an empty parking space in your current location), you can rent them out and get your monthly income with little effort and zero investments.
#4 Selling digital products: online courses and e-books
If you’re good at creating e-books or e-courses, you have a real opportunity to make an income from selling your digital products. Since the global pandemic has started, online classes are increasingly popular as many people in the UK and abroad are ready to purchase them to educate themselves in many different fields, from nutrition and yoga to foreign languages and IT. Creating and selling online courses as an income source is a kind of ‘smart’ passive income since it’s a win-win model for both creators and their customers.
A great digital product worthy of a premium price (and higher state of income) requires the creator to make a solid investment in effort and time upfront. However, that idea allows for building a steady income stream so you can strengthen and increase your projects with minimum effort.
How to create a dignified digital product for a large audience in the UK to get regular income? First, you can focus on a specific topic and explore it as deeply as possible. It’s always better to use trusted sources and engage a variety of teaching methods, including webinars, quizzes, videos, and audio lessons. When the product is done, and you’re ready to start promoting it, try to foster a deeply engaged community around your course and its topic. Feel free to use numerous Facebook groups and Reddit communities as tools to promote your digital product.
The next big thing for passive income is writing e-books. You can sell them online via Instapages or landing pages (as well as remote the product using subject-related web platforms from the UK and other countries across the globe).
#5 Affiliate marketing
Finally, a good way to build passive income for website owners and bloggers from the UK is by joining the affiliate program. In short, affiliate marketing is the process by which affiliates get a commission for promoting products and services of third parties on their websites (and income could be really high). To join an affiliate program and earn passive income, you should have a website or well-promoted account on Instagram, TikTok, YouTube, etc.
On one hand, the concept of getting passive income by promoting third-party products under affiliate programs sounds like a top. But in fact, it won’t bring you any income if your website or Instagram account is not that popular and good-promoted. If you’re a beginner without at least a couple thousand followers, affiliate marketing is probably not the best idea to build a passive income stream.
Frequently Asked Questions about Passive Income
In the bottom line, we answer a couple of common questions readers usually ask about passive income and how it works in real life.
Does It Really Mean ‘No Work’?
It depends on the method you choose to get profit. First, you should know any concept of passive income does require some amount of work in one way or another. The good news is that the bulk of the work is done at the start of your project. And in most cases, you will start to get your money stream within just a few months. So the amount of work and effort involved varies based on the particular passive income strategy and tools you chose.
How Do You Pay Taxes on Passive Income?
You should know a couple of things about the current taxation of passive income in the UK. There are several sets of rules and exceptions that apply depending on the particular nature of the income. The tax treatment in the UK strongly depends on the individual circumstances of each person. It also may be subject to future change in any case. Take our advice to consult a tax advisor in the UK before getting involved in any activity to build your money stream.
Final Word about Passive Income
So talking about ‘passive’ income, we mean the income that comes from a business in which you are not actively involved. The most prominent ideas that are currently breaking all records are Bitcoin/cryptocurrency cloud mining, investment in dividend stocks, rental property, affiliate marketing programs. Those who look for steady and profitable side hustle also can earn passive income from several digital sources (such as blogs and YouTube channels, sponsored posts on social media, e-books, and e-courses). Many investors choose cryptocurrencies as a stable, profitable, and definitely promising way to get passive income.
Generally, any concept of passive income stream implies a kind of ‘set it and forget it’ mentality. While at the same time, some ideas of passive income still require particular activity from the person who manages them. If you’re in the UK and interested in the highest paying income, take your sight on cryptocurrency investments (especially crypto cloud mining contracts) that can bring you a good profit within a short time with small investment amounts.
Is creating a passive income stream a good idea for you? In a nutshell, it definitely is. The steady income stream allows you to use the money to make even more money. Put it another way, you put your money to work instead of yourself – and you win in the end. Passive income is the best idea for those who dream of financial freedom and independence.
However, beware of uncertain, and obviously fraudulent schemes that can bring you not money but a lot of trouble. Joining the scam or fraudulent schemes and pyramids will end up costing you money.
Also, you should think twice and weigh the estimated returns associated with chosen passive income methods against potential losses. Always keep in mind all kinds of investments for income involve certain financial risks. If you’re unsure about your opportunities to make passive income, take some time to research and educate yourself about fundamental financial planning.