Four Really Simple Passive Income Ideas
Have you ever wished you could make your work start working harder than you do?
This is the concept that money at work, never sleeps, but keeps earning you more money, even while you off from your full-time job. If you want to truly have a nest egg at retirement, then you need to start earning money in the form of passive income.
Make money from passive income? The idea sounds like something right out of a late-night infomercial. But these ideas are the very income producing ideas the wealthy use all of the time to build their wealth.
Passive income is not a get-rich-quick scheme, and you are unlikely to earn millions in passive income, but even a small stream of extra revenue can make a major difference in your life.
WHAT IS PASSIVE INCOME?
If you are like 95% of Americans, you either work at a job or own a business that requires your presence to earn a living. You have to actively earn your income. You more than likely can’t just take a month or two off to go on vacation and still earn your normal salary.
Passive income is the opposite; you earn an income even if you are not present. Your presence is not required to earn money, at least, not after the initial setup.
Now don’t get me wrong, there is some work upfront you have to do to get your passive income streams started. It may require an upfront time or financial investment. But it pays dividends down the road, as you’ll be able to profit from that income stream for years to come with little to no effort afterwards.
Take these methods as examples.
DIVIDEND PAYING STOCKS
Your first option is to invest in stocks of companies with a long history of paying dividends. These are known as “Dividend Growth Stocks” and it is what I have used to grow an increasing stream of income. A few select stocks have paid dividends for over 100 year. Dividends are how companies share profits with shareholders, usually for a fixed dollar amount per share of ownership.
These companies tend to be in excellent financial health, making them good long-term investments in general, but it's the recurring dividends that will serve as your main source of incoming revenue. You can even let someone else do this work and simply choose a dividend-based mutual fund or exchange traded fund.
REAL ESTATE INVESTING
There are a ton of investors who have bought real estate for the potential of receiving a rent check every month. Do it right and you will be able to live off of the rental income month after-month.
Rental Real Estate
Real estate has been a staple investment for decades, and for good reason--demand is always going to exist. Buying a rental property will allow you to pay for the mortgage with the rent your tenants pay you, hopefully leaving you enough left over to earn a reasonable profit.
This is one of the main ways many people build passive income. Buying a duplex or triplex and residing there alongside tenants who can (hopefully) cover the mortgage.
Real Estate Investments Trusts or REITs
If you want to get into real estate investing but don’t have enough capital to get started or don’t want the hassles of managing rental properties, a Real Estate Investment Trusts is an excellent alternative to earn passive income.
Just as a mutual fund buys a portfolio of companies, a REIT buys a portfolio of real estate. You can get started with as little as $5,000.
They buy commercial, industrial, or residential real estate. The owners of the REIT are then paid part of the profits from these investments in dividends.
There are 2 distinct advantages to REITs. 1. By law, an REIT must pay 90% of its earnings to shareholders in a dividend 2. Investing in REITs gives you an additional layer of diversification.
A really simple way to get into REITs, is with an Exchange Traded Fund (ETF) that in turn buys shares in REITS. For low cost, go with Vanguard.
BUILD A BUSINESS
Some people create a business because it’s their passion, while others build businesses to create a stream of passive income in the future. If you can build an amazing team alongside you that can run the operations with little to no supervision, you have yourself a nice passive income stream. The key is to be able to outsource every aspect of your business.
Though this will require significant upfront research and some significant cash, you can also consider buying up some existing profitable businesses.
CREATE AN ONLINE PRODUCT
Many of my friends have authored and sold eBooks on Amazon and other platforms, others have sold courses, and some have even sold spreadsheets or worksheets they created.
You can also publish e-books on a subject you consider yourself an expert in. There are no strict rules to follow here, but you will need to do some research on your target market and competition before following through. Once posted, even charging a few dollars per download can be highly profitable for you in the long run.
If you like crafts, you can make money selling them on sites like Esty. If you don’t have time to keep making more items for your Esty store, find others who will help create your craft items.
Start a Blog
There are plenty of people who start blogging to make money, and creating products to sell is a great way to turn that income into passive income, as you don’t need to be there to sell it!
People can search for the solution they’re looking for, and hopefully your product comes up in the results. They click on it, read about it and maybe they decide to buy it. Boom – there’s a sale in your bank account, and you could be sleeping on a beach somewhere halfway across the world.
If you already have a blog in place, or some other means of attracting traffic to your website, you can use advertising to generate a solid stream of income. As long as you get a few thousand visitors a month, even a single display ad could help you earn a few hundred to a few thousand dollars in extra revenue.
While there a million apps already created, if you have an idea for a useful app you could earn thousands of dollars. The key is connecting with someone who can write the code for you, perhaps as a partner.
START WITH PASSIVE INCOME AS YOUR GOAL
You don’t need to be a millionaire to create products online or invest in the stock market. You just need to be able to manage your money intelligently. Start with the goal of generating passive income, and work your way up. Come up with ideas you can implement, consider how much time you’ll have to spend on the project before it earns any money, and figure out whether or not passive income is right for you.