What if you were making money just by existing? Getting extra money while you’re on vacation. While you’re parenting. While you’re at work. Even while you’re sleeping. Believe it or not, these financial goals aren’t out of reach; there’s a way to make money without the slog of a 9-to-5 job tethering you down. (Unless of course, you’re into that sort of thing.)
The amazing secret to extra money coming in? Passive income.
Read on to find out more about how these amazing revenue streams can change your life and set you closer to financial freedom.
What Is Passive Income?
Passive income is a personal finance term that refers to any income that continually comes your way after minimum initial effort. This means that yes, it takes some initiative to get it started (and you might not earn much money at first), but once you have a passive income stream set up, extra money will continue to flow in – sometimes in a trickle, sometimes in a flood.
But what most people don’t realize is there are basically as many sources of passive income as you can dream up. And while some might need a larger initial investment of time or money than others, there are many passive income sources for people with little money.
Is financial freedom one of your financial goals?We’ve rounded up a list of 19 passive income ideas that will show you the wide range available, get you that much closer to your financial goals and hopefully provide you with some inspiration to find one that suits your interests, level of risk tolerance and lifestyle.
How To Make Passive Income: 19 Passive Income Sources To Unlock Your Life
And now it’s time to dig into to the wide range of passive income opportunities you might consider pursuing. Realize that each has its risks and rewards, so don’t hesitate to conduct adequate research before diving in.
This term refers to earning a commission for marketing the products of another person or company. You showcase the product to others, and you earn a commission when they buy from you through a specific link. One of the most common type of affiliate marketing today involves being an “influencer,” which are those social media stars who promote a product on their posts and get paid when a follower clicks. But you don’t have to be a celebrity to succeed in affiliate marketing. Your local hair salon might pay you to promote their hair products or a clothing store could outfit you so fellow fashionistas will find out more about the outfit you’re wearing.
Renting Your House On Airbnb
Going out of town for the weekend? Why not let someone stay in your home while you go? Airbnb has revolutionized the lodging industry, as many travelers much prefer staying in a home instead of a hotel. So, it makes sense to create passive income that can pay for your vacation. And if there’s a big event going on in your area such as a festival or college football game, you could purposely leave (even stay with a neighbor) in order to make your home available and earn big bucks that can finance your next vacation or make a dent in your mortgage.
Crowdfunding Real Estate
Want to invest in real estate without the huge down payment or a high net worth? Check out Fundrise, a fintech platform that allows you to make a minimum investment of $500 to $1,000 (along with some required fees) in one of four portfolios. They then invest the pooled assets into commercial and residential properties and offer a return based on performance.
Using Google AdSense
If you have your own website, you can become a Google AdSense partner. This means they place ads on your website for you, and you’re compensated every time someone clicks on your ad. The reason this particular program is a great option is because Google selects the ads for you and makes sure they are relevant to your site. That way, they’re more likely to be of interest to your visitors.
High-Yield Savings Accounts
With this passive income idea, you’re literally making money by doing nothing except having your money sitting in the bank. The right bank, that is, as in one that offers a high-yield account. The amount of passive income will depend on the rate of return they offer and how much money you’re able to park in the account.
Real Estate Investing
There are a number of ways to invest in real estate; in fact, owning your own home is technically real estate investing. But there is an abundance of other opportunities including flipping houses (buying houses for a cheap price and fixing them up to sell at a profit) and having tenants. With real estate investing, the goal is to earn residual income, which is the income you receive after you’ve deducted your personal debts and paid your expenses.
REITs (Real Estate Investment Trust)
REITs are another way to invest in real estate. These entail investing in a group of real estate assets. You’ll own shares of commercial properties such as office buildings, apartments or malls in the same way you’d own shares of a company’s stock.
You have a story to tell, don’t you? That’s the beauty of blogging – you can write your thoughts down and share them with the world. Having a well-trafficked blog opens up a host of passive income opportunities including affiliate links, AdSense ads and other ad types such as CPC ( cost per click) or CPM (cost per 1,000 impressions, based on how many people see your ad).
Got a way with words that are spoken rather than written? You’re in luck, because podcasts are all the rage right now. You can make passive income with a podcast in many of the same ways as bloggers do – by offering affiliate links and advertising.
If you have a special skill, there’s probably someone who will pay to learn it. Creating an online course allows you to generate the information once and then earn repeated money from it. This will give you a lot better return than teaching a class in person or tutoring, both of which require your participation each time. Some ideas for online courses are computer skills or DIY skills. A good way to figure out if you’d be a good candidate to create an online course is to think about what people ask you about all the time. There’s your superpower that would translate well to a course.
You might already know about stocks, which means you buy a share of a company. With many stocks, you only make money when you sell them, hopefully at an appreciated price. But with a dividend stock, the company takes part of its earnings and sends them to investors each year in the form of a “dividend.” In “up” years, it’s like being paid just to own the stock.
Peer-To-Peer (P2P) Lending
We already drive our peers places and let them use our homes – lending them money was just a matter of time. Using platforms like Lending Club and Prosper, you can help out others who need a loan but don’t want to use conventional means. When investing in peer-to-peer lending companies there’s a chance of default, meaning the person who took out the loan stopped making payments. As with any investment, there is risk involved in peer-to-peer lending. Fortunately, many platforms have strict underwriting standards that decrease the likelihood of defaults.
Get paid just to use an app or a credit card? Sign us up! With some of these programs, signing up is literally all you have to do. For example, when you shop through Ebates, you make a cash-back reward for purchasing items you were planning to buy anyway. In addition, you can make your restaurant reservations in select markets through Seated to earn gift cards. And of course, credit card rewards points can be a bonanza. Just make sure you pay off your bill each month or you could rack up more in interest.
Got a funny take on life or a comical pet? You too might be able to earn money from a YouTube channel just like all the famous YouTubers you’ve heard of. Once you get a certain number of subscribers and hours of video available, you can look into the YouTube Partner Program to find out the steps to monetize your channel.
Wrapping Your Car
We’re serious! Companies will pay you to let them put an ad on your car that will be visible as you drive around. Of course these ads will be anything but subtle, but it might be well worth it to use that extra money to fill your gas tank or upgrade your stereo.
Yes, you’d have to occasionally visit the machine to restock it (and – the good part – empty out the money!), but this passive income stream can otherwise be very low maintenance as you make money off of snackers.
Assuming that they have consistent traffic, websites can regularly generate revenue off ads, online courses, products, affiliates and more. Instead of spending countless hours building a website from the ground up, you can buy a pre-existing site that’s already producing income. Using online marketplaces like Flippa.com you can select from hundreds of websites for sale and choose the ones that match your needs. A newly purchased site can generate passive income for you as-is, or you can improve the site with your own content for a greater potential profit.
Landlording is a popular passive income stream as it provides predictable returns and can be very fulfilling. Don’t underestimate the commitment of landlording, though. Being a landlord can require a high initial investment and there’s nothing passive about getting a call in the middle of the night because your tenant needs a lightbulb changed. In addition, rental properties take significant upkeep, and some repairs are expensive. Consider paying virtual assistants to manage the work so you can collect passive income without extensive labor.
While it may not sound as sexy as rental properties, buying and selling raw land can net you a larger return with less effort provided you have enough capital to get started. To turn this into a passive income source, you can purchase raw land and then owner finance it. As with landlording, hiring virtual assistants can save you a lot of time. Otherwise you’re stuck with the task of finding the properties, making contact with potential buyers, and completing any due diligence. While investing in raw land may take some effort and time up front, it can potentially be one of the best passive income streams out there.
Ready To Get Started With Your Passive Income Dream?
It’s true: Passive income isn’t a get-rich-quick scheme. But while setting up sources of additional revenue is usually not a lot of work, you’ll need to devote some money and time at the beginning of the process to lay the foundation of meeting your financial goals.
Passive income, like any investment, requires thinking beyond the short term. Remember the old adage that if it sounds too good to be true, it probably is. That might come into play a bit, and certainly most of these passive income ideas aren’t easy. However, with some initial investment or time and/or money, you can be making money with multiple income streams. The goal is to think beyond today and determine how much it will make tomorrow. Long-term thinking is the key to understanding how passive income can bring financial freedom.
So whether you want to use passive income to supplement your cash flow or to entirely replace your full-time job, consider how you can layer multiple strategies and build a cascade of revenue streams that will earn you money day and night, putting you that much closer to your financial goals.
The bottom line is, if you’re able to take the initial leap, you’ll be on your way to creating passive income while you sleep. And who couldn’t use some extra money?
What are your favorite passive income streams? Let us know in the comments below!
Remember, everyone’s financial situation is different and it’s best to speak with a licensed financial expert or advisor before making any major financial decisions.
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