Passive Income: 5 Ways To Invest Small Amounts Of Money (From $500 To $0)

If you think you must have a lot of money before you can start investing to generate passive income, think again, because in this post you will find 5 different methods through which you can invest your money with amounts as little as $0!

Disclaimer: I am an engineer. I have nothing to do with finances and I do not give any financial advice. Thank you.

Many people are aware that they should invest their money to be able to secure their future and create a better life for themselves and their families.

But many people also assume that in order to be able to start investing and create a passive income source for themselves, they need to have a lot of money first, and that is a wrong perception.

If you really want to start investing and create some passive income sources for yourself, you can start investing right this second. Even if you have $0 in your bank account.

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Investing if you have anything between $500 and $50

1. Mutual funds

Investing in a mutual fund is like investing in a large group of stocks. The money is pooled from multiple investors to invest in these assets.

Many mutual funds require thousands of dollars as a minimum investment, but there are some that can be as low as $50.

What you will need to do to know if this is a good fund for investment or not is to track this fund’s performance over the years to see its pattern and how and when the rates of interest are affected.

You would also want to pay attention to the annual fees deducted from your account and compare it to the interest you would be getting to make sure that the fees are not too high.

While investing a 50$ in a mutual fund, where maybe your annual interest would be something around 7%-10% for most funds, does not seem like much of profit maker, if you can manage to increase this amount over time, like maybe add $50 every month to your profile, this would create a much better profit over time.

You may also want to read this breakdown of how studying the history of a certain fund and investing something as little as $500 can make you more than $520,000.

2. Real estate crowdfunding

Real estate crowdfunding is defined as an online pooling of capital from investors to fund mortgages secured by real estate, such as redevelopment of distressed or abandoned properties, equity for commercial and residential projects, acquisition of pools of distressed mortgages, home buyer downpayments and similar real estate related outlets.

So for someone who is looking to invest a small amount of money, there are a number of crowdfunding websites that work on connecting investors to these kinds of projects that need funding in exchange for a profit from the project.

One of the most well-known real estate crowdfunding websites is Fundraise where you could start with only $500 to invest in real estate and start gaining annual profits. For similar real estate online investing options check this article.
You can also find crowdfunding websites that would accept investments for as little as $100.

The above options are mostly available for US residents only, though. For European countries, you can check the options listed here.

I haven’t been able to find ones that would accept funds from other countries (specifically Egypt since this is where I am), if you happen to pass across one, please let me know in the comments.

3. Retirement account

A retirement account is a form of individual retirement plan, provided by many financial institutions, that provides tax advantages for retirement savings.

In the US, there is the 401(k) which in most cases is available for employees through their employers, and the good thing about this is that you can actually decide how much money you would like to have deducted from your salary to put into this account.

You also get to choose the kind of investment you would like to have your money put into. Investment options available include individual stocks, mutual funds, and ETFs. You can read more about the benefits of this plan here.

So if you do have that provided through your job, you already have an investment going, you should just decide how much of your salary you would like to deduct to make for a better long-term profit.

However, if you don’t have a retirement account, you probably should. You can start your own retirement plan by following the steps in this article.

Here, in Egypt, it’s not the same process. Because what employees get is mainly a pension. It is a fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.

So I would suggest starting your own retirement plan through any of the available insurance companies. I am more inclined to registering with ones that are advertised through banks, I don’t know if this makes any difference integrity-wise or security-wise, but it’s just a personal preference.

Some well-known examples include AXA (through CIB) and Allianz (through Emirates NBD). Some of these plans you can start with as little as a 600-pound payment per month.

Investing if you have $0

Now let’s say you don’t even have a dollar/pound to spare, you literally have no money, can you not start an investment that can bring you passive income?

Of course you can!

4. Airbnb

This is a company that facilitates tourists’ stay in a country by providing them with an online service to rent apartments, rooms, and hostel beds, etc, for the short period of their stay.

The best thing about Aribnb is that you don’t need to have a spare house to be able to make money renting, you can simply rent a room in the house you already live in and gain income with literally no extra cost on your part.

What you will be required to provide your guests with will all be things that you already have in your house which are the basic amenities for living.

You can read more about the requirements here.

One other great thing about Airbnb is that even if you don’t have a spare room at your place, you can still make money with them through providing an experience instead.

This is not exactly a passive investment; however, I couldn’t bring up Airbnb and not mention it, since you will be making really easy money.

An experience, as defined by Airbnb, is an activity designed and led by inspiring locals. They go beyond typical tours or classes by immersing guests in each host’s unique world. It’s an opportunity for anyone to share their hobbies, skills, or expertise without needing an extra room.

So, offering an experience can be anything from cooking them traditional home made dishes to taking them on special tours in places they wouldn’t be able to reach on their own, and many more examples.

This would be an easy and fun way to earn money. If you want to learn more about how you can easily make money with Airbnb, you can read this article I published earlier Passive Income: How To Make Money With Airbnb 

5. Use your skills

If you have certain skills that can be put into use (or are willing to learn) this could be a great source of passive income for you. But what kind of things can you create that would help you generate passive income?

5.1 The world of design

Design can be in more than one form. If you are a web designer, for example, you could create and sell website themes. You can find here the best markets where you could sell your themes.

If you’re a graphic designer, you have various options to make money, you can design and sell book covers, or printables that you can provide as PDF files (downloadable material) such as calendars and planners, or even create print-on-demand designs for notebooks, T-shirts, and mugs, etc..

5.2 Photography

You can make money simply by taking photos and putting them up for sale on the various websites available such as iStockphoto or Shutterstock.

All it takes is the camera which is already in your phone, given that most smartphones at the moment have a good camera quality, and a few videos, like this one, to help you take good photos, and probably some passion for photography in the first place.

5.3 Create an online course

Another option where you can make passive income is if you put together an online course. If you have a particular skill or an expertise in any field, you can put together a course material and upload it as a series of lessons on a teaching website. And every time someone enrolls in this course you get paid.

There are plenty of websites available where you could create and sell such course. Teachable is one great example where you would also find resources and a lot of useful material to help you create a professional looking course.

5.4 Write an ebook

The last and probably most time consuming option (maybe it’s a tie with the online course) on this list is to create an ebook.

This can be something as simple as a how-to guide to walk someone through using a certain device or create something DIY or anything else that you think someone might need help with and is not already available or that you think you can deliver in a better and easier way.

Or you can create a more in-depth book where you share extensive information through your knowledge and experience in a certain topic. Check this list of websites to see where you can sell your ebook.

You can also find more details on how to make money online in Passive Income: 5 Online Businesses That Work

Till next week, happy days!

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Online Business: My Experience with 5 Print-on-Demand Platforms

Things you need to know before you start selling on print-on-demand websites; plus some tricks on how to promote your products and make sales.
Platforms discussed in this post are Zazzle, Redbubble, Cafepress, Threadless, and Printful.

Attention! Before getting involved with Redbubble, please read this update first.

Online business can be considered as an active income and a passive income option. And there are various methods to run a business online. I went through 5 of the passive income ones in last week’s post 5 Online Businesses That Work.

In this post, however, I’m discussing the method I have tried so far which is selling products online. I tried several websites and here I will be sharing the pros and cons through my experience with Zazzle, Redbubble, Cafepress, Threadless, and Printful. (You can jump to Zazzle’s section to skip the intro.)

For starters, I’m not a professional designer, far from it actually, I’m just someone who enjoys playing with images and fonts. I discovered this sometime in the fall of 2016 when I was thinking of a gift to get for a specific someone; and I have a bad habit of putting an insane amount of thought into gifts (that’s why I only buy gifts to very few people in my life, because it can get really overwhelming).

So, I thought instead of buying a normal gift or asking someone to make me something, I was going to customize that gift myself. I only found that option on Zazzle and so I created an account there and started working on that design. That’s how I realized I enjoyed the process.

But this part of my life was a bit tricky on a personal level; around that same time I had a very bad fight with that person and they were out of my life, which happened 2 days after I had quit a job that I thought was my dream job (the copy editor one), and things at home started going south as well. So, all in all, my life was a wreck at that point. And the two things that have kept me sane through that time were my new-found love of design and National Geographic (yes, the TV channel. It served as the soundtrack of my life for a few months).

Now back to Zazzle!

Zazzle

On Zazzle, you upload your design and create each product separately and they have a huge selection of products to choose from. You can watch this video to see the steps on how to create designs there.

I loved it in the beginning when I was just designing stuff and customizing products, and I found the interface really attractive, so I created my first Nightingaled store there.

But then when I went through the process of setting up a payment method which was early 2017, I realized it was not an easy process.

If you are not a US resident, Zazzle requires filling out a tax form (which requires a lot of information and a lot of reading) and sending them requests and waiting for acceptance so that you are approved for a payment (or not!).

Also you need to have made sales first before your application is even considered for approval or rejection– something they don’t mention anywhere and I had to figure that out after going through the whole process (twice) and eventually being told “sorry, we cannot consider your application because you haven’t made sales during this current year yet” (although I did make sales the previous year.. That money is still stuck there.)

Yes, many people did it, of course! So, it’s not impossible, but I didn’t feel like it was worth all the hassle for me; especially when I found there are other platforms that provide the exact same thing minus the hassle!

Redbubble

Before getting involved with Redbubble, please read this update first.

I started looking for other alternatives. I did a quick research and Redbubble along with Cafepress seemed to be on close level to Zazzle’s popularity and variety of products. But I decided to go for a Redbubble Nightingaled store.

I liked its interface; although it took me a while to get used to it because it’s quite different from Zazzle’s, but now I have come to really love it.

You upload a single photo that goes onto all the available products, but then you have the option to customize each one separately or upload a new photo for a certain product. You can read more about how to upload your designs to fit each product here.

Though one of the best things about it is that you can actually get your money! There is no hassle in the transaction procedure even if you are not a US resident. Getting paid there is as easy as adding your Paypal account; no restrictions, no applications to fill, no extra fees, no minimum threshold to transfer your payments (unlike Zazzle where you need to have $50 USD before they would transfer or you can request it with an extra fee).

So, with Redbubble, as long as you have a verified Paypal account, you will get paid regardless of how much money you make or on which side you are on the planet. (Life can be so much easier if we want it to be!)

The real effort in this type of business lies in two things:
  1. Coming up with the design ideas 
  2. Promoting the shop/products

Coming up with designs can be tricky for some people sometimes because:

A. they don’t want to be copying other people, but they also want to make something that sells, so it needs to be something that is “viral” or “trending” to get the attention and

B. they think they don’t have enough talent, and for this one I will say, you don’t have to have talent, I don’t have talent and people still buy my stuff (some of them), so don’t worry about that part you just need to practice a lot and try your best to make it look like something YOU would buy. That’s what I try to do.

“Practice is a talent.

Perseverance is a talent.

Hard work is a talent.”

Abhinav Bindra

As for coming up with ideas, I don’t stress over this much, because I initially started this whole design thing for fun, so I try not to lose that. Whatever inspires me or whatever I feel like creating today, I will create it and add it to the shop, and cross my fingers that someone somewhere will have the same taste as mine and decide to buy it. (Not the most brilliant business strategy, I’m sure.)

When it comes to promotion, though, it can be challenging at first; especially if you do not already have an audience or connections or dedicated followers/fans (as it is in my case). However, I am still reading articles and books and trying to learn about it from other sellers and people who managed to succeed in this industry.

Four tips on promoting:

When it comes to promoting an online business, the first obvious step is to do so through social media; however, it is better to create dedicated social media pages to the shop and not promote through your personal accounts.

I created pages on both Facebook and Twitter. I also started an Instagram and Pinterest ones, but I haven’t really used them much yet.

Which brings us to the second tip, that is, it’s much better to focus on just one or two social media websites and try to grow on them instead of using all of them at once, because each of those platforms have their own techniques and certain strategies to grow on them. So, it can be too much to try them all at the same time.

Honestly speaking, though, I’m a bit lazy in this department. I’m not that active on the shop’s social media pages, not as much as I should be if I want to turn this into a source of income.

But I have noticed something that is really worth paying attention to, even though I’m not active, I don’t have many followers, and I don’t get any interactions yet, I do make sales! And that’s not even the surprising part, when I checked the traffic history to my shop (another brilliant feature on Redbubble), almost half of it is through social media! That blew my mind.

What I did to move from flat-line sales as you can see below to a few sales per week (and sometimes few sales per day, if I’m lucky) was become more active, as in upload new designs to the shop; and every now and then I’d share the new ones on Facebook and Twitter (again, with no interaction whatsoever).

A graph of my sales on Redbubble from Dec 2017 to Nov 2018.

The fact that I am making sales and getting traffic to my shop with a very minimal effort on my part is a very good indicator that this can definitely turn into a profitable means of income, if I pay it more attention.

So, the third tip from here is to remain active, upload new designs and promote on regular basis, regardless of the interaction rate you get or the number of followers you have. And I assume this should only be until one grows a dedicated audience.

Recently, I have decided to try other POD platforms as well, because the fourth tip is in order to make proper sales, it is best if you have your designs spread around many print-on-demand platforms not just one. Besides the exposure your products/brand will get, you can also benefit from each one’s offers and discounts which helps in attracting customers. So I went ahead and tried a few other ones. (Though I haven’t managed to do much with my shops on those other websites yet; I’m still getting used to them.)

CafePress

This is an equally popular website to Zazzle and Redbubble. It also has a variety of different products to have your designs on.

When you upload your design on CafePress it adds it to all the products available (like Redbubble) but with much less (if any) ability to customize on each product separately.

You can get paid through your verified Paypal account; however, there is a minimum threshold of $25 for transfer. Also, there is a required tax form to fill for non-US residents who wish to get a discounted tax rate, but it is not mandatory to get paid.

The other downside is that this one is not available for all countries. You can use the website and add your products and all, but when you come to set up a payment method, you may not find your country listed. There is a specific list and mine was not among them; therefore I would not have been able to get paid if I went ahead and made sales on this one.

Threadless

I initially thought this one is focused on clothing products like t-shirts and hoodies, but when I set up my shop there, I found they have a wide variety of other products to select from. And it is also similar to Redbubble in that you upload one photo that goes on all products but then you have the option to customize each one separately before publishing it. You can check out this guide to learn more.

On Threadless you are also paid through your Paypal account with no minimum threshold or any extra fees. US residents, however, are required to fill a tax form first.

The cool thing about this one is you can order samples of your products, and because you are the designer you get the product at a discounted rate; so you only pay for the base cost. You also get free shipping when you order for more than $20 within US and $50 anywhere else.

There is only a tiny drawback for me which is they do not watermark or protect the uploaded designs, so they are available for anyone in their full resolution copy, unlike with Redbubble where they give you options to protect/watermark. However, after you upload and edit the design, you can replace the original image with one that you watermark yourself without affecting the design on the products, so there is a workaround for it.

Printful

This one’s process is a bit different as you don’t just set up a shop on their website. First, this one gives you the choice to sell your own physical products (and use their warehouse) or use the print-on-demand service to sell your designs on their products. Of course I went with the print-on-demand option. When you go with that option, you will need to merge an already set-up online store to your Printful account.

Here’s how it works:

  • I set up a Nightingaled store on Shopify (they have a 14-day free trial so I figured I’d try it).
  • I then logged into my Printful account and chose to connect it to my newly-created Shopify store.
  • After that I would start uploading my designs on the products on Printful (they have plenty).
  • Then sync those products to my Shopify store (this can be set to sync automatically)
  • People can then navigate products on my Shopify store, place an order, and make a payment.
  • The order is automatically sent to Printful who prepare and ship the product.

Printful then bills me with the production and shipment cost. These costs are already clear when you set up your product so you can set your prices based on the margin you would like to get after the cost is paid.

For example, they charge $10 for a T-shirt. So, I can set a price of $15 for the t-shirt on my Shopify store, so that after paying Prinful fee, I would still have $5 profit.

The good thing here is that you are only charged after you make the sale. So, no upfront cost (except of course for the cost of your actual Shopify store which starts at $29/month). But you have plenty other options to choose from when it comes to choosing a platform to merge with Printful. I just decided to go with Shopify as a start because I was curious to see how it works.

The other thing that I really loved about Printful is how you can literally create your own brand.

  • You can add your own logo printed on the products and the payslips the customer receives (for free!).
  • They add their address for return, but add your store’s name not Printful, so to the customer they are dealing with your brand only.
  • And you can also send flyers along with the product (which come at an extra cost).

And that’s only what I managed to figure out so far, but this is an amazing feature! You are creating an actual brand with products shipped with your name on it when all you really do is just upload designs on a web-page!

Besides Shopify, the other platforms you can use include ones like Etsy, Amazon, eBay, and more. They either require you to pay a subscription fee (like Shopify) or a commission on sales. You can read about the prices for each one of the platforms on this comparison page.

I can sum this up by saying that to me the most convenient platforms I found so far are Redbubble, for a free platform, and Printful, for a paid one. I am actually thrilled I found out about Printful, but I still need to decide which platform I will be using with it.

I will be posting about this topic again in a few months to share my progress and any new tips I gather along the way. As for my next post, well, let me surprise you this time.

Till then, happy days and happy new year!