Passive income is a term used widely these days. Nearly every other ad online or social media is “sit on the beach all day and get paid”. Passive income ideas that actually work is something many would love to envision working for them. The truth is many entrepreneurs do make a real living doing just that. However, unlike many would have you believe, it does take some work. Educating yourself is the best way to learn what and how to make it happen for you.
Before you can make money with a passive source of income, you have to know what passive means. Passive income is income that comes from a source that requires minimal output by you on a daily basis, the “make money while you sleep” example. Whereas, active income is exchanging constant work and time in exchange money. For example you get up every morning and go to work for 8 hours. That’s active income.
Most of people well off, and the rich have learned to use these types of income streams as a way of increasing their wealth. They have assets that work for them. Assets that are continually producing income even when their not actively putting their personal time into managing them. These assets can be anything that is used as a source of income such as a property that is rented out for more than it costs the owner to maintain, resulting in a profit.
There are numerous ways to make passive income a reality. Some of them are safer than others and some offer ways to make more than others. As with all financial decisions its best to seek out professionals to help you get where you want to get to. Here we will talk about several possible options.
Investing in Dividend Paying Stocks
When you buy a stock in a company, not all will pay you a dividend on their profits. Most make or lose money when a stocks price goes up or down while they own it. A stock is a share in ownership in a company. Basically lets say a company has 1000 shares and you own 100 shares, you have a 10% stake in that company. Realistically most corporations are broke down into many more shares and many different types of shares. How it all works can get quite confusing and that’s why most people hire professionals that can help us along the way when it comes to investing in them. For our purposes we want to look at the dividend paying stocks. Companies that pay dividends based on the amount of stock you own in that company. Dividends are a portion of the profit that company makes paid to you that you can then reinvest.
High yield Savings Account
While not a sexy investment, a high yielding savings account is a safe way to earn a bit of additional income on money you have. Many banks have savings interest rates both of 2% now. While your potential for large returns on your investment isn’t there, it’s a safe alternative if you don’t wont to risk your money in the stock market or other investments, but still earn a profit.
Peer to Peer Lending
Peer to peer lending is another way to invest extra cash. Like it says, your lending money to others in return for a promised rate of return that you decide. Many online platforms now exist as the middleman for such transactions such as Prosper, Lending Club, SoFi, and Upstart. The same as buying stock, there is risk so be sure to research your best options before investing.
Real Estate Investing
Crowdfunding Real Estate
Crowdfunding real estate is where you put your money together with others and invest in properties. There are many companies out there that facilitate transactions like this. This allows you to invest in multiple properties at the sometime and doesn’t require you to actively engage in the upkeep, maintenance, tenants or overall management of the properties themselves. Companies such as Fundrise, Cadre, and RealtyMogul specialize in these types of enterprises.
REITs or Real Estate Investment Trusts are similar to the crowdfunded model however you are investing in a company instead of a property directly. These corporations own and manage many properties and you are investing in shares of a company much like stocks.
Individual Rental Real Estate
Another way to invest in real estate is to buy a home, apartment complex, land, or commercial property directly yourself and lease it out. This type of investment can be more profitable but also requires more insight yourself. You are responsible for the day to day management and upkeep on your properties. A way around this and to keep your investment passive, would be to hire a property manager or property management company to oversee your properties. This would lower the amount of profit you would receive from it but would also punt the work of day to day oversight to someone else.
E-commerce is huge these days. If your selling something, you almost have to have some sort of online presence. A way to produce income that is passive, or a least mostly passive, would be drop shipping. Drop-shipping is where you setup a website or marketplace store, and when someone purchases your item you you contact your supplier for that item, complete the purchase from them, and they ship it direct to your customer. You then keep as your profit the your selling price minus what it cost you. You make less than what you would have if you stocked the item and shipped it yourself but you save the time and hassle of having to do it, thus it’s a more passive business model. Another way of doing this would be to use Amazon’s FBA program. Where they let you ship items direct to their warehouse and they handle the packing and shipping when the item sells. Using FBA lets you take advantage of the Amazon Prime service.
You may also want to checkout some of our other posts on Making Money Online:
- Make Money Selling on Amazon
- 18 Jobs You Can Do To Make Money From Home
- Tips for Selling on Etsy
Other Online Enterprises
The internet has opened up the potential to sell nearly anything to nearly anybody. Enterprising entrepreneurs have found ways to make an income off of virtually everything these days. While operating an online eCommerce store is one way to make a living, it is far from the only way.
Make and sell eBooks. Ever hear of Amazon Kindle? People will buy books online on virtually any topic. While it takes a bit of time and some practice to do it right, writing and self publishing eBooks has made many writers a good income. Write about a topic you know well. An industry your in, or know a lot about. You can even write fiction or short stories. You my not get rich, but you could possibly pull in a nice side income. The beauty of eBooks is once you have it written, its done, and you can realistically make money off of it for years to come without any additional work.
Teach a Course
The same as the eBooks, people are hungry to learn something new. Successful entrepreneurs have learned to teach courses on virtually anything. DIY projects, quilting, cooking, pretty much anything you can imagine, you can find an online course on. Take something you have a grasp on and put together a online course on it. Just like the eBook, once it’s uploaded and the upfront work is done, it can produce income for years to come. Look into Udemy, a platform for teaching and learning or Teachable, software that lets you teach courses through your own website.
Sell Printables or DIY Plans on Etsy
Take a look at whats selling on Etsy. Artwork and designs, planners, and calendars, that can be bought and printed instantly are huge sellers. Plans to build things or how to’s thayt can be downloaded as soon as there bought. These are examples of passive income once you have the completed and uploaded to your Esty shop
Don’t like writing? You can make videos and post to YouTube. Review sites, How-To’s, to just being stupid. YouTube videos have been quite profitable for some folks. Upload content people want to see and get paid from the ads that run along your videos.
Blogging takes work. It’s not a get rich quick scheme and it’s on ongoing business. However, it can make money while your not directly working with it. Affiliate marketing, running ads, selling products along side your content, etc. are all ways bloggers can make money.