5 smart strategies to earn passive income

In today’s unpredictable job market, having multiple streams of income is becoming increasingly important for financial stability. However, finding the time to juggle a full-time job and a side hustle can be difficult, if not impossible. This is where passive income comes in. By creating a passive income stream, you can earn money without having to constantly trade your time for it.

This means that you can continue working your full-time job, pursuing your passions, or even taking a well-deserved holiday while your passive income stream continues to generate revenue. It does require some research and start-up investment upfront, but the potential benefits are well worth the effort. Let’s explore some smart options to build passive income and unlock the power of financial freedom.

Selling digital products

If you have a creative streak, why not monetise your skills and expertise by creating and selling digital products? Digital products like ebooks, online courses and software applications have become increasingly popular. They offer the convenience of instant access and can be sold to a global customer base without the need to manufacture physical stock.

You can also make use of free or low-cost software (like Canva, Microsoft PowerPoint and Adobe Spark) that allows you to choose from a variety of templates, graphics, fonts and colours to create visually appealing, professional designs for your digital products. If you have digital design skills, these could be anything from digital planners, printable worksheets and checklists to social-media templates.

Once you have created your product, you can simply upload it to an e-commerce platform like Etsy and sell it worldwide.


Investing your money is the most popular way to earn passive income. Fixed-deposit accounts are a low-risk option that offer a guaranteed interest rate higher than that of a regular savings account. Relative to other forms of investment, however, the returns on these accounts are fairly low and they may not protect your money from inflation adequately.

Another option is to invest in the stock market, where the potential returns can be higher, but which comes with more risk. If you are managing your own share account, this requires more research, and you will have to master the art of buying when prices are low and selling when the prices are high. However, a simpler way to get exposure to shares is by investing in a unit trust that buys and sells shares, and that is managed by a professional on your behalf.

Most shares pay dividends on a regular basis. Dividends are a pay out of a portion of the company's profits to shareholders. This can provide a steady stream of passive income, but only if the company performs well.

Regardless of which investment route you choose, do your research and consult your financial adviser to decide on your risk tolerance and financial goals before making any investments.


Investing in real estate – residential, commercial or both – remains one of the most popular ways to earn passive income. Renting out investment property allows you to receive a steady flow of income, which you can use to fund your lifestyle or towards further investments – like buying your next property. That said, it’s not an entirely risk-free investment. Vacancies or non-paying tenants who won’t vacate can harm your returns significantly.


Drop shipping is an attractive idea because you don’t require a lot of start-up capital to get going


If you want property to remain a strictly passive investment, you might choose to engage a property management company to handle the day-to-day responsibilities. This means you need to earn enough income on the property to pay for the management services and still give you a decent return on the investment, but this strategy will save you the hassles of rent collection and property maintenance – which is your responsibility as the landlord, not your tenants’.

The key is to ensure that you do your market research beforehand. Getting a prime location will allow you to ask for higher rental. Speak to your relationship banker to see if you qualify for a home loan to kick-start your journey as a landlord.

Affiliate marketing

Do people trust your opinion? Do you find that friends and family often come to you for advice before they buy something? If so, affiliate marketing could be a great way to turn your recommendations into an income stream.

To become an affiliate marketer, sign up for an affiliate marketing programme offered by products or services that you believe in. You will then be able to earn an income by promoting these goods and services. The company will provide you with an affiliate code or link, which you can then share, and whenever it is used to purchase a product, you will receive cash back.

If you have a popular blog or a strong social-media following, you can use these platforms to promote the brands that you are affiliated with. Brands often give customers a discount when they use affiliate links or codes, so it’s a win-win result for all parties involved.

The great thing about affiliate marketing is that you can sign up for as many programmes as you like – but check the T&Cs first, as some brands may consider it a conflict of interest if you sign up with a competitor.

Drop shipping

You may be wondering, ‘What is drop shipping?’ It’s pretty simple – drop shipping is simply selling a product at retail price that you bought from a supplier at a wholesale price and keeping the profit. That’s pretty much how any business works.

The difference is that you don’t need a warehouse of stock to make sales when you’re drop shipping. When a customer purchases a product from your e-commerce store, the order goes directly to the supplier, who then ships directly to the customer. This means that you don’t have to do any work other than setting up an e-commerce store for the products you’d like to sell and marketing the store.

Drop shipping is an attractive idea because you don’t require a lot of start-up capital to get going. You only pay a supplier after a customer has paid you.

Build sustainable wealth with passive income strategies

Once you’re set up to earn passive income, don’t forget to declare your additional income to the South African Revenue Service on your tax returns. In addition, try to invest and save as much as you can, because you never know when your financial circumstances could change.