8 Ways to Earn Passive Income

How to earn Passive Income
As I was inside a McDonald's store the other night to attend a workshop, I noticed the trash bins in front of me (an introvert personality was with me that night that I'd rather notice the trash bins than the people coming).  

I was just amazed with the terms they used to describe the garbage: residual and recyclable. Poof! An idea struck me.

How about writing an article about the difference of having residual income and linear income?
Residual income, or more commonly known as “passive income”, is income that is continuously generated even after your initial work (and time) have been completed. This income is normally in form of dividends, royalties, profits and interests earned. In short, passive income means that you still earn money even if you already stopped from working.
Linear income or “active income", on the other hand, is income wherein you work for money from a specified period of time. This income is normally in form of a commission or salary. In short, if you don't work, you don't get paid. It's as simple as WORK-INCOME-WORK-INCOME-WORK-INCOME....WORK-INCOME.
Going back to residual income, it is when you continue to get paid even after the required work is already done.  The income comes from building something or acquiring assets that will continue to pay or pay for you.

How To Build Passive Income
First, remember the word “leverage”, as it is the main idea about how you can earn passive income. You must be able to leverage other people’s time, money and work in order to earn a passive income. Remember that it is not passive income when you still do most of the work, because that is otherwise considered an active income. It's passive when other people do the work or spend their time to do the work for you. 

Tony Tan Caktiong doesn’t run any of the 998 Jollibee stores he owns (that's not even including Chowking, Greenwich, Mang Inasal and Red Ribbon), but he keeps an eye over them to check if these stores are doing well with the help of store managers and franchise owners. I doubt if he ever visited any of the Jollibee stores in your province. His employees do.
Tony Tan Caktiong Jollibee
To earn passive income, you need to create or acquire something that people will continue to buy or pay for on a regular basis long after you’ve created it.

Now that you understand how passive income works, it would mean not much if you have no idea how to create one. So let's take a short dive on how to earn passive income years from now..

Ready? Blow the trumpets!

1. Royalties from intellectual property rights such as a book you wrote, a software or an app you developed, a photograph you took, a technology you invented or a song you recorded. If a company, such as a publisher for your book or Viva Records for your song, agrees to pay you a percentage of each copy of your work sold in the future, that's called passive income.


2. Become an actor and earn passive income from each of the movies and TV shows you made each time they run. Sadly, a film shown on a bus and all pirated copies sold don't count. Sigh. 

Be an actor

3. Buy or build a commercial or residential building, condo unit or other properties that can give you passive income through rentals.

4. Open an investment account with financial institutions that you shall pay for 5 or 10 years and then pays you residual income for X number of years after maturity in the form of interest, profit sharing or dividends.

5. Find a good cooperative where you are qualified to join and become a member. You will earn residual income in the form of dividends that the cooperative gives to all its members. However, most cooperatives only give dividends once a year.


6. Find a legit and good network-marketing or MLM company and create a solid organization. Just keep in mind that the products that your company sells are of good quality and value and that they have strong market demand that people will be willing to buy or pay for in the future. Just bear in mind that the company should earn profits from its products and NOT through recruitment.

7. Run advertisements or affiliate links from your blog or website. This means that any sales made from the link originating from your blog or website is paid a small percentage (usually based on the amount of the purchase made). Just make sure that your domain name exists and you have good traffic or unique visits.


8. Become an insurance agent and earn both active income (thru commissions) and passive income while sharing financial advocacy to help change lives of thousands of Filipinos who need your service. Let the commissions from every single client getting a policy serve you for five to ten years!

insurance agent

Your Turn
The list are just some of the many ways you can do to create residual or passive income, and yes, there are many more ways! Your eyes (and mind) have just been opened and reprogrammed.

Now that you understand what linear (active) and residual (passive) income both means, which would you rather have?

PisoandBeyond Which type of income do you want more? Receive cool updates like this when you subscribe to PisoandBeyond!


  1. Is it networking companies like royal and uno etc... is one good example of passive income?

  2. Nice list Jeff. More and more Filipinos are getting aware with the difference of active and passive income. One way to build passive income generating machines are online businesses and/or activities. Let me share these 25 legit ways to make money online in the Philippines. Some of them can be turn into passive income. THanks!


  3. Great post! Really insightful. I have not monetized by blog in any way, I didn’t even know where to begin. but you’ve given some helpful tips.

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