Taylor Swift has made an absolute killing since the pandemic started. She released not 1, but 2 entire albums while many of us were struggling to get through our days. But it’s 2021 now and the vaccine has shown us the light shining at the end of the quarantine tunnel. There’s finally some hope that 2021 could be a great year.
With our renewed optimism, many of us have set goals that include increasing our income in 2021. Even if you didn’t explicitly set a goal to make more money this year, I’m sure you’d be totally cool with doing it. To help you out, I’m going to tell you how you can use Taylor Swift’s 2020 revenue strategy to start making more money for yourself.
And don’t worry, I’m not going to tell you to work harder or be more productive. Quite the opposite, actually. I think we could all use a little less stress right now, so I’m going to tell you how to apply what Taylor did in quarantine to make more money with less effort in 2021. AKA some great ways to generate passive income.
What is Passive Income?
First, let’s define what passive income is. Passive income is income that requires little to no effort to earn and maintain. This blog post is a great example of how passive income works. I take time to research a topic, write a post about it, edit it, make the graphics, and then post it. After that, I just let it hang out on the internet and hope people (like you) read it and enjoy it. If enough of you do, I can make money through ad revenue, affiliate links (some of which are included in this post FYI), and by getting people to sign up for my courses. After doing the work on the front end, this post can continue to generate income for me for years to come with minimal work to maintain it in the future. That’s how you make passive income. Work on the front end, then income generation on the back end.
Passive Income Ideas
Now that you know what passive income is, here are some easy ways to start making it using examples from Taylor Swift’s quarantine experience.
Monetize Your Talents
Covid screwed up Taylor’s plans for 2020 just like it did for the rest of us. She had to postpone her Lover tour, which probably would have made up a significant portion of her earnings in 2020. Many musicians make the bulk of their earnings from touring, so I’m sure this dealt quite a blow to Taylor’s income projections. This didn’t stop her from making a killing last year though. She found a way to use her talents in quarantine to maximize her profits.
I’m not a die-hard fan of Taylor’s music, but she is an incredible businesswoman. Her ability to seize an opportunity and capitalize on her talents is unparalleled. Like I mentioned earlier, Taylor released not 1, but 2 albums in 2020 after her tour was canceled. The first of these albums, Folklore, became the first album to sell over one million copies in the US last year. In fact, it was the only album to do that in 2020.
Even though Taylor’s tour was canceled, she leveraged her talents to still achieve incredible success. She has always been heavily involved in the production of her music, so instead of calling the tour cancelation a loss, she went full force with her talents and produced and sold a ton of music during quarantine.
How to Apply It
We all have talents that we can share with the world, and get paid for. If you can’t come up with one of your talents off the top of your head, take a second to think about what people are always complimenting you on, or asking you for advice with. Is it your outfits? Cooking? Professional advice? Whatever it is, you’re probably the go-to person in your friend group for at least one thing. That thing could be your moneymaker!
If you’re an incredible cook, maybe you start a blog and post your favorite recipes, or offer a cooking class on a site like Teachable. If you’re dominating the corporate world, you could start a blog or YouTube Channel with tips on interviewing, meeting techniques, and how to set yourself up for advancement opportunities or negotiate raises. The list of possibilities is endless.
Once you have a website, course, blog, or YouTube channel set up, there are lots of different ways you can make money with your content. You can run ads, do affiliate marketing, and create and sell your own products. All of these allow you to do some heavy lifting on the front end by writing posts or creating courses and then sit back while the money flows in.
Don’t forget the key to this is to start generating passive income though. If you’re a great artist, you may be thinking, YES! I’m finally going to start offering custom art on Etsy! But slow down. Offering custom art means that you have to actively make a new piece of art for every customer. This will generate additional income for you, but it will be active income because you have to do a lot of work to maintain your revenues. Instead of offering custom artwork, you could offer prints of some of your favorite pieces. This way, you can spend time creating one piece of art, and rather than selling it once, you can continue generating revenue on it by selling additional prints. That’s how you turn your talent from active income to passive income.
Sorry to burst your bubble, but Taylor isn’t listing any of the extra rooms in her mansion on Airbnb. What she is doing though, is using what she already has (her house) to make more money (hacking).
If you’re not already impressed enough with Taylor’s album Folklore’s success, here’s another reason you should be. Taylor didn’t just release her album normally. She took that shit to the next level. She released Folklore to streaming services, and as a CD, vinyl record, and cassette tape. And that’s not all. She released her CDs and vinyls with 8 different covers. Some fans literally bought 8 of her CDs or vinyl records so they could get every cover. There are no bonus tracks, or extras on the albums either. They all have the exact same songs on them. Mind. Blown. If that’s not incredible consumer hacking, I don’t know what is.
How to Apply It
Taylor took something she already had, her album, and got fans to buy the same album 8 times. One thing you already have that you can use to make more money is your house.
Many of us have extra bedrooms in our houses. Maybe we have a guest room for when friends and family come to visit, a future kid’s room, an extra office, or a basement with a separate entrance. Most of the time these rooms are sitting empty, so why not put them to good use?! List them on Airbnb or VRBO and turn them into money-making machines. (If you don’t own your home, check with your landlord about this first.)
Most of your work will be done on the front end when setting up your listing. Then you just need to manage the bookings and watch the money roll in. If you want to do even less work, you can hire someone else to do all of the room cleaning for you or even to manage the entire process if you want to be totally hands-free.
If you really want to increase your passive income from there, you can consider buying an investment property. The hardest part about buying your first investment property is that you must put down 20% unless you live in one of the units for at least a year. House hacking by living on your property for a year makes it an owner-occupied property, so you can put down less than 20%. The ability to put down less money upfront can get you started with your first investment property much more quickly.
One of my goals for 2021 is to buy my first investment property, and the book Hold has been absolutely phenomenal in helping me understand how to get started. It takes you step-by-step through how to build your team (accountants, realtors, etc.), narrow your search area, and determine if a property will provide you with a positive return on day 1. If you’re interested in making passive income by buying an investment property, I can’t recommend this book enough.
Passive Income Ideas to Avoid
Now that we’ve discussed some ways to make passive income, here are some popular passive income ideas out on the internet, and why you should avoid them.
Investing in Dividend Stocks
Unless you have a shit load of money to invest, you’re not going to make much from dividends. Technically yes, dividends do provide passive income, but with an average dividend payout of around 2.5%, you’re not going to make much unless you have a lot of money invested. For reference, if you have $100,000 invested, you’ll only make $2,500 a year with a dividend yield of 2.5%. That’s not much.
On top of only making small potatoes in passive income from dividend stocks, using your dividend payments as passive income will significantly reduce your future returns. Dividend stocks tend to increase in price less than growth stocks, but the best way to see significant growth in your dividend stocks is to reinvest your dividends. If you’re using your dividend payouts as income, you’ll be stuck with the limited growth dividend stocks typically provide.
Getting Cash Back and Points On Purchases
Let’s just get this out of the way. Saving money on purchases is NOT passive income. I see this advice on so many passive income suggestion lists and it’s absolutely ridiculous.
It’s a great idea to earn points by using credit cards or to get cash back on purchases by using Rakuten, but these are ways you can save money, not make more of it. Have you ever gone to the grocery store and thought, “OMG these beans are $1 off! I just made passive income!”?
I doubt it. Because you didn’t. You saved $1. Credit card points and Rakuten do the same thing. They’re great ways to easily save a few bucks, but don’t let the internet fool you into thinking you’re making passive income. When you use your credit card or Rakuten your income stays the same, you just spend less.
Finding ways to make passive income is one of the best ways to level up financially. The most amazing part about passive income is that you already have a lot of what you need to make it. The 2010’s Artist of the Decade, T Swift, has this concept down. By monetizing your talents and hacking what you already have, you can quickly and easily start generating passive income. Just remember, if it requires you to put in consistent effort it’s not passive income it’s active income, dividend payments are tiny, and saving money isn’t the same as making money. Oh, and never buy 8 of the same album in different colors.