If you are burned out from your 9-to-5 job, which, let’s face it, isn’t really 9-to-5 anymore, or you want to earn some extra money with little work, then it’s time to look at passive income.
What Is Passive Income?
Passive income is money earned while doing little work, usually after an initial investment of time or money. Collect royalties from book sales. Purchase a business then hire someone else to manage it. Make real estate investments. Or combine several income streams to diversify.
It is not a get-rich-quick scheme. At first passive income is a great way to build up an emergency fund or a nest egg as a supplement to your full-time salary. After a while it may become your full-time salary!
Check out these ideas for legitimate passive income strategies and dream about what to do with the extra money.
1. Write a Book
Write a how-to book about a topic you already have expertise on. Or a romance novel or a sci-fi adventure. Publishing it on Kindle is easy, then for additional sales create an audiobook and consider a print-on-demand service like CreateSpace for a paperback edition. Some people make one book available as a free download, then write more books that customers pay for. This stream integrates well with others listed below, like product design, online courses, and YouTube videos for additional income.
2. Peer-to-Peer Lending
Services like Lending Club allow investors to fund small, short-term loans with up to 10% interest. You can start with as little as $25 but you’ll have better luck if you diversify, investing small amounts in several different loans.
3. Rental Property
From short-term vacation rentals like AirBnB to long-term housing, a spare room or a second home can produce additional income. Hire a property manager and a cleaning crew to be even more hands-off.
4. Product Design
Certificates of Deposit (CDs) are low-risk investments that produce money over longer terms. It may take years to see a profit but see one you will. They produce a higher return than most checking and savings accounts without much more risk.
6. High-Dividend Stocks
Get in on the stock market with some high-dividend stocks. Services like E*Trade and Ally Invest can get you started. If you don’t want the work of day trading, choose a few good stocks and let your money multiply over time.
7. Buy an Established Business
A profitable business can be anything from a blog to a laundromat. Buying one that’s already established takes a lot of the work off your plate. Managers and employees may be in place, too, so all you have to do is invest the money.
8. Crowdfunded Real Estate Investing
Real estate investment doesn’t have to take a lot of cash upfront thanks to services like Fundrise and Rich Uncles. For as little as $5 you can pool your money with other investors and wait for the income to roll in.
9. Online Store
An online store can sell items you create or source yourself, but then may have to also manage storing and shipping yourself, or it can be a link you set up between consumers and a manufacturer or warehouse that stores and ships the products. Sites like Shopify can help you set this up.
10. Monetize a Blog
Advertisements and affiliate links bring in money when readers click. Create a blog to advertise products from your other passive income streams or one about a topic you’re passionate about. If you don’t want to write the content you may hire someone to do it for you. Then check out services such as Amazon Associates, Rakuten, and Google AdSense to monetize your site.
11. Write an Online Course
Use some of your expertise to teach others. This is a popular income stream for anyone from personal trainers, who create meal plans and workout videos, to financial planners, who create materials for clients. Have some content available for free then charge for upgrade plans. Try out Teachableto get started.
12. Cash-Back Shopping
Loads of services like Ebates, Swagbucks, and Earny provide cash back or coupons when you shop at your favorite stores. Remember to only buy the products you’d be buying anyway or else you’re not saving as much money.
13. Robo-Advisor Investment
14. Rewards, Points, and Cash-Back Credit Cards
Many credit cards offer cash back, rewards, or points on the purchases you’re making every day. If you like to travel, the rewards and points can be used for hotels and airfare, helping you save money and get to your destinations for less.
15. Lead Generation
Create a website that puts customers in touch with local services they need, anything from realty, carpentry, house cleaning, baby-sitting, or dog grooming. Businesses will either pay to advertise on the site or they’ll pay for the leads you give them when prospective clients contact you.
16. YouTube Videos
Whether you have a skill to teach, products to review, or simply enjoy creating entertainment, start a YouTube channel and make money from the ads at the top of your videos. If you’ve written a book, use YouTube videos to have author readings. People will watch the ads and then hopefully go buy your book, too.
17. Start a Business or Buy a Franchise
This one takes a lot of work to get started but you can eventually hire a manager to take over the regular tasks and be as hands-on or as hands-off as you’d like while you collect the profits.
18. Rent Your Car
Rent the outside of your car for ad space with a service like Carvertise or Wrapify or rent the whole thing to other drivers through Turo. If you have a truck, FluidMarket puts you in contact with those who need one for moving.
19. Silent Partner
Be an angel investor for a start-up or an established business in need of capital. The owner and manager handle day-to-day operations while you get money back on the profits. Start at AngelList to find opportunities in your area.