There are many different income streams to choose from, especially when it comes to making money without having to lift a finger. Who would have thought that you might be able to earn extra income while sleeping? Passive income is the most common solution to do just that. Even if it sounds too good to be true, there are many ways to create passive income streams. Read on to learn more about the different types, amounts invested, and the time you may need to invest in your passive income stream.
What is residual income?
Passive income is derived from projects that may require preparatory work, but you can make money for little to no maintenance. Creating various passive income streams could be a creative side project that easily earns additional income.
Take, for example, writing an eBook. If your passion is fitness, you can create a downloadable eBook training plan. You can focus on your social media audience or your LinkedIn connections to invest in your program. Over time, you can advertise your eBook. However, since you have already created the product, you no longer have to worry about creating new products. Since these types of "products" are classified as sales, they are mostly taxed.
Outside of eBook and online courses, you can also rent, invest, or sell your art work with passive income. If you are ready to invest and need additional information, visit our brokerage page. Read on for a more detailed description of passive income ideas, or skip to the infographic.
18 ideas for passive income to earn money while sleeping
Earning passive income can be a big step for everyone. Regardless of whether you are in high school, college, or your career, you should consider investing with reasonable returns, or use your passion and monetize it. And luckily, there are many different options, both safe and risky. In either case, you can choose what works best for you and set up your bank account for the future.
1. Consider buying index funds
Index funds are usually a mix of stocks and bonds tailored to a specific financial market. In most cases, you can easily diversify your investment portfolio. That way, if an investment goes south, you can have other options to fill the gap.
professional: As a rule, these investments are less risky and have a low initial investment.
Con: As with most low-risk investments, profits can be slower. Not to mention that most people lack flexibility when trying to withdraw money.
2. Check stocks with high dividends
For those who want to try investing, high dividend stocks may be right for you. High-yield dividend stocks are those that have a higher return than the reference average. While this type of investment has higher returns, it can be a little riskier. If you are considering this option, be sure to read the fine print and calculate your potential earnings.
professional: High dividend investments usually lead to a higher rate of return. This rate could help add to your annual income more than other options.
Con: Some high dividend stock gains are limited to a certain amount and involve a higher investment risk.
3. Research Money Market Investment Funds
For money market mutual funds, these can be relatively stable short-term loans. Money market mutual funds are highly stable short-term debt instruments. The aim of this investment is to make money with interest. These investments can be secured by high-quality company or bank papers.
professional: The result of these investments can be low risk, but can also be easily liquidated.
Con: Income can be low and fees may apply.
4. Pay off some debts
An easy way to invest in residual income is to make larger payments on your outstanding debt. Over time, you could spend hundreds or even thousands on debt interest. If you are looking for different areas of investment, you should pay off the debt first.
professional: If you take care of your debts, you can build up your credit. Not to mention cutting long-term investment payments and freeing up your budget.
Con: With this option, you technically don't make any money, but save money over time.
5. Examine real estate opportunities
When you're ready to settle in an area for about three to five years, investing in a house can be an interesting topic. While renting can be fairly easy, your payments don't add to an investment. Instead, by buying a home, you can make monthly payments for an investment that could make you money if you sold in the future.
professional: Your residential investment could increase in value over time.
Con: You may need more maintenance and repairs than renting your home. In addition, your home may not always add value.
6. Consider peer-to-peer loans
If buying a home is out of the question, consider peer-to-peer loans. With peer-to-peer loans, you are offering your money to someone else. This could be for a friend to start a business or even buy an urgently needed car. They can pay you a monthly payment plus interest without having to contact a financial institution.
professional: Since you take out the middleman, this can be a quick investment option with monthly returns.
Con: This investment option can be uncertain and it may be best to involve a lawyer before entering into a contract.
7. Examine the rental of unused space
Since travel has become a sought-after commodity, you may not use your home as often as you normally would. Instead of leaving it empty, you should rent out your unused space. There are many online rental options that you can use to easily list your home for rent.
professional: You have the flexibility to publish and restrict rental dates whenever you want.
Con:: This option can take some time and work to learn and build consistent short-term tenants.
8. Add to a high yield savings account
If you're in high school or just starting your investment journey, you may just want to start. Consider contributing to a high-yield savings account. This way you can earn higher interest than normal on your payments. Once you've practiced this for a while, you can start looking for other ways to invest that saved money.
professional: You may have the flexibility to contribute as much as you like and take it out at any time.
Con: These gains may be lower for most low risk investment options.
9. Use cashback rewards
Since we're all spending money on what we need, check out various cashback reward cards. Cashback reward cards will pay you back a percentage of your purchase over time. This may be a good option for those who don't have much time or money to invest right away.
professional: In most cases, cashback cards have sign-up bonuses that can increase your earnings.
Con: Over time, these cards can charge you a certain amount each month or year to get and use your card.
10. Integrate affiliate marketing
If you are at the heart of entrepreneurship, you can consider affiliate marketing. In affiliate marketing, you earn a percentage for products or services that you recommend. For example, if you have a large number of followers on your blog, talk about products or services that you love. Sign up for affiliate marketing platforms to create custom links. The links you follow and from which you bought can increase your commission income.
professional: Most of the time these links stay active as long as your post is active. With these purchases, you can still make money years after publication.
Con: Your income is not guaranteed. If you have a strong follower base, you may have more potential to earn more commissions.
11. Take pictures to sell online
Consider turning your passion into your residual income. If you would like to take photos and videos on weekends, you should offer them for sale online. Many people are looking for new pictures and videos every day. You can also sell these images as long as you have published them online.
professional: If you have an abundance of pictures or videos, you may be able to earn a reasonable amount for a “passion” project.
Con: Some stock image websites charge commission rates and other fees for selling your work on their website.
12. Write and sell an eBook
If you have a story to tell or a skill you want to share, you should write an eBook. This can be done in several forms and you can have full control over it. For example, you can create a fitness eBook that lists all of your favorite exercises. You may need to keep up with the re-promotion of your products to place them in front of those who may not have seen them.
professional: You have complete control over your story, message and pricing.
Con: If you don't have a strong and loyal following, sales may slow down.
13. Place items for sale online
Over time, there may be articles that you no longer use and that you know still have a monetary value. You can sell these items on eBay, Amazon, Poshmark and various other websites. The only downside is that you may have more maintenance than other passive income ideas.
professional: You can sell what you want, whenever you want, for how much you want.
Con: Depending on the seller platform you are using, you may have to pay seller fees or commission rates.
14. Create an app
For creatives looking for a larger project, building an app may be the top priority. If you've found an opening in the app market over the years, you may already have an idea of what you want to create. With the endless number of online video tutorials and learning guides, you may have the right tools on hand.
professional: Your investment option is available with just a few mouse clicks. You also have full control over your creation and list price.
Con: You may have to go through a rather steep learning curve. Not to mention that creating this curve in advance can take a long time.
15. Create an online course
Similar to an eBook, you can create an online course. Especially for those of you who have mastered certain skills, this may be perfect to demonstrate. You can create an online course on any topic, from creating a blog to starting a side business.
professional: You can use your authority in a specific area and have full control over the value of creation and sale.
Con: Here too, there can be a steep learning curve. Not to mention that you may have to plan a lot of time in advance to do your best work.
16. Design and sell t-shirts
If you like taking photos or creating unique designs, stick them on a t-shirt and sell them. There are many platforms on which creatives can publish and sell their artworks. If you are interested in art, you should buy the supplies to make your own. Once you've added your creative touch, sell it online to benefit from a hobby with a sideline.
professional: This can be a fun and creative way to increase your residual income over time.
Con: You may need to consider the upfront costs for purchasing your materials. At the same time, you incur the costs of outsourcing and you have to take care of the maintenance.
17. Start a blog
Creating your own website can be the basis for many different passive sources of income. You could create a blog, increase your fan base and increase your income through sales. You can create your own eBook, online course, or even your designed t-shirts to sell everything on one platform.
professional: Building a website has relatively low initial investment rates. Depending on the design, this can be done in a few hours to days.
Con: Online platforms require consistency and updates. Not to mention that your followers don't accumulate overnight.
18. Become a freelancer
Are you looking for the flexibility to travel, work from home and create your own schedule? Freelancing can be a good option. Most of the time, you can choose the projects you want to work on, when you want to work, and who you want to work with. In addition, the connections you make can have a lasting impact on your career.
professional: You are the sole owner and can earn as much as you want.
Con: You may have inconsistent earnings and it may take a while for your brand to build.
If you're looking for ways to build your wealth, creating passive sources of income is an easy place to start. If you start early enough, you may earn more than you would have thought for a few years. Check out our infographic to find out which passive income passion project suits you best. Then see how much time and money you may need to start this new investment adventure.
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