Before the list, let’s make sure we’re on the same page with regards to what passive income actually means.

Most passive income is not literally passive. 

Some effort is needed.

If it doesn’t explicitly require effort upfront, it will require money which itself has to come from effort (unless it’s inherited of course).

What’s unique about passive income compared to income from a 9 – 5 job for example is that in the case of the latter the effort you have to put in day-in and day-out is basically the same in order to make roughly the same amount of money. 

On the other hand, with passive income, after the initial investment of time or money, only a relatively small amount of effort is needed to maintain this income.

The fake gurus that try to sell you on the idea of completely effort-free income are typically full of it.

Now let’s get started with our list…

1. Dividend Stocks 

This is perhaps the most obvious and easiest way to earn passive income.

Dividend stocks are stocks that make distributions to shareholders from the profits they earn.

Dividends are not interest because there is no loan involved. You don’t receive dividends because you are a lender, you receiving them because you are a shareholder. Additionally, the payouts are discretionary. This means the company’s management can decide to discontinue these payouts whenever it wants.

The trick here is to find Dividend paying companies that are halal and are not going to discontinue their dividends or fall in price.

The website you’re on reviews stocks and provides comfort levels investing in particular stocks from a halal perspective.

We also created a portfolio which holds a bunch of dividend paying stocks that have passed our business, financial and ESG screens and therefore we think are Halal to invest in.

Keep in mind, when you invest in a portfolio of stocks, dividend-paying or not, your principal is at risk.

2. Write a paid article.

This is a choice that should be especially appealing for Muslims because the prophet peace be upon him said: 

عن أبي هريرة -رضي الله عنه- أن رسول الله -صلى الله عليه وسلم- قال: إذا مات ابن آدم انقطع عمله إلا من ثلاث: صدقة جارية، أو علم ينتفع به، أو ولد صالح يدعو له

 رواه مسلم

The prophet peace be upon him said: When a person dies, their deeds are over except from three sources: An ongoing charity, knowledge that is useful, or a righteous child that prays for them. 

Narrated by Muslim

Regardless of passive income, writing a useful article, that is widely read and shared, may provide you with passive hasanat (good deeds), even after you’ve passed away.

Something you write may change the trajectory of someone’s life for the better.

In fact the reason I started this blog back in 2015 is that I wanted to leave something behind that was useful.

The very first article I wrote: “Insurance in Islam: 5 objections ended” on March 10th, 2015 still gets views to this day.

How cool is that!

When you start writing, the challenge is to accept that very few people are going to bother to read in the beginning.

When I started writing, the only people reading were my family. Even then sometimes I would have to remind them to read my articles.

Now that I have written hundreds of articles on Islamic finance, I have a bigger audience and with the same amount of effort spent per article my impact is multiple times what it was when I started.

The key to becoming a good writer, like becoming a good anything, is to do it alot.

Fortunately, we live in an age where it’s never been easier to monetize your writing.

Medium and Newsbreak are examples of websites that pay freelance writers and there are many others like them.

If you’re interested in Islamic Finance and related topics, this blog will also pay you per published article as well as a performance fee depending on how well your article does. That said, very few submissions actually end up getting published. I personally review everything that gets published and I’m very picky about what makes the cut.

As far as how much you can expect to earn from writing, if your first article allows you to buy a cup of coffee, you did great.

Medium often publishes stats on how much their writers are earning, generally speaking:

  • Around 50% of people who published at least one article in the previous month earn money.
  • Only about 5% of publishers earn more than $100 per month.
  • And around $30,000 is the most a writer earned in any month with the most successful article earning around $10,000.

On a per pageview basis, from what I was able to gather from different sources online, you can expect to earn $5 – $15 for every 1000 views of your article.

That said, you can earn much more than this if you add to your writings the next thing on my list of Halal passive income ideas which is:

3. Affiliate Marketing

This is where you partner with a company to promote their product and in return you get a commission for every sale you help make.

The M1 finance dividend portfolio I referenced earlier is an example of an affiliate link. 

If you use it and actually invest money in the Halal Dividend Pie we created, we’ll get a commission.

Affiliate Marketing is a great way to be useful to your audience through recommending a product that you like while making money in the process.

It can be a fantastic source of passive income if you have a social media presence and an audience that respects your opinion. 

Affiliate marketing can also be a great compliment to your written articles.

If you write an article about budgeting, you can add an affiliate link to your favorite budgeting app and potentially get paid if your readers use the link. Even better, your readers will actually be grateful that you saved them the hassle of trying to vet the app for themselves.

The name of the game with effective affiliate marketing is to never, ever, recommend a product that you’re not a fan of or wouldn’t use yourself.

Never betray the trust of your followers. Aside from being unIslamic, it’s really bad business.

4. Create an Online Course

Are you good at something? 

Do you have some specialized knowledge that others may be interested in purchasing?

You may actually have this type of knowledge and not know it.

For example, let’s say you are very disciplined about making and sticking to spending budgets.

What’s your process? What tools do you use? How do you stay disciplined?

Make an awesome course about it. 

You don’t have to sell it for $1000 a course. 

Can you make something good enough to warrant a $20 dollar price tag? 

If you do and you’re able to sell your $20 course to 20 people a month, that’s $400 per month.

Oh and if you’re writing articles, drop a mention of your course in your articles.

Today, it’s easier than ever to create your own online course and sell it.

Udemy and Teachable are examples of services that will host your course and there are many others like them.

Like articles and affiliate marketing, making a quality course may earn you money for multiple years with relatively little effort from you after the course is made.

Just as with affiliate marketing, make sure you’re only selling something that you are convinced with. If you provide a crummy course that isn’t that useful or is basically stuff that you can find with a google search, you’re going to lose your customers’ trust which is ultimately your greatest asset.

When done right, many people have been able to generate thousands of dollars per month from their online courses.

5. Pay Off Debt

When you settle your debt, it’s like finding money. You always had it, you just never had access to it.

If you have a debt payment of $1,000 per month and you settle this debt, your disposable income just rose by $1000 per month.

You shouldn’t have any interest-bearing debt in the first place by virtue of it being haram.

If you do for whatever reason, don’t dwell on the choices that got you there, focus on the solution. Make it a priority to get out of debt as soon as possible.

Paying interest is unlike any other expense because with normal expenses you’re getting something out of your expense; a good or service.

With interest you might as well be burning your money cause you’re getting nothing for it.

There is nothing closer to straight up burning money than paying interest every month.

Remember a dollar saved is often a lot better than a dollar earned because you don’t have to pay taxes on what you save.

If you have interest-bearing debt that you’d like to refinance and you live in the United States, check out my company fundmebff.com, we offer income-based financing that is free of any interest.

Hope this was helpful. Leave a like if it was.

Now go make some halal money.

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