Do you wish to save some extra bit for your retirement or want to generate a side income without much effort and investment? You can think of some passive income ideas.
- What is Passive Income?
- How to Generate Passive Income?
- 1. Blogging
- 2. Peer to Peer Lending
- 3. Paid Surveys
- 4. Starting a YouTube channel
- 5. Investing in Dividend Stocks
- 6. Affiliate Marketing
- 7. CPC (Cost Per Click) Ads
- 8. Selling Information Products
- 9. Real Estate Crowdfunding
- 10. Rental Income
- Final Thoughts
What is Passive Income?
Passive income is the money generated without actively working. It is also called residual income which comes from the use of the existing assets. You can earn regularly from a source other than an employer or a contractor. However, the money will not magically drop on you from the sky. You’ll have to make an effort to build a steady cash flow.
How to Generate Passive Income?
You must be wondering about how to make passive income. There could be two ways of generating passive income:
By Investing Cash
If you have idle cash with you then think of doing an investment. No effort is required in this case. Examples-
- Opening a high-yielding savings account
- Investing in crowdfunded real estate
- Investing with a robo-advisor
- Giving the room on rent in your house
- Buying a property
- Investing in dividend-paying stocks
- Peer-to-peer lending
- Building a CD ladder
- Buying an already-profitable blog
By Investing Time and Effort
You can also create passive income with no money. It requires a lot of manual work with little or no cash. You’ll get higher returns in the long run. Examples-
- Affiliate marketing
- Starting a YouTube channel
- Starting an advertising agency
- Creating and selling an online course
- Building an e-commerce website
- Selling stock photography online
- Putting your car to work for you
- Writing an e-book
Let’s go through some of the ways you can adapt to generate a smart passive income.
If you’re thinking of how to make a passive income with no money investment then blogging is your answer. You don’t need to invest anything to start a blog. Write something you’re passionate about and make your writing interesting so that it catches the attention of the public.
A blog is like your own website where you can write on whatever you like. In the beginning, it will seem like you’re just making a side income and nothing else. It requires time and sincere effort to get the blog recognized and appreciated by all.
Blogging can be very profitable and once popular you can earn in six or even seven figures each year from your blogs. More the traffic more successful the blog will be. Gain knowledge about SEO and Google search algorithms in order to drive traffic. The older blogs are automatically ranked much higher by Google on their search results. You should know how to promote your business online to make a good passive income.
2. Peer to Peer Lending
It is known simply as P2P lending, a concept where a community of people over the internet offers loans online. The interest rates are impressive in comparison to that offered by banks. The government and banks are not involved, instead, a third-party intermediary like Prosper.com, LendingClub.com, Upstart, Streetshares facilitates the transaction.
P2P lending involves almost no risk (the only risk is the risk of default) and an assured return of around 10% per year. In this respect, you can say it’s better than investing in the stock market where the returns fluctuate. Also, it is a great way of diversifying your investments. It is advisable that you reinvest the interest to build an income.
3. Paid Surveys
Thinking about how to make passive income online? There are numerous ways out of which we just read about P2P lending, another one is doing paid surveys online. There are few websites which pay for doing surveys for them.
The survey is done on products, brands, and all kinds of things. There’s nothing lot to be done here and you can easily utilize your free time for making money.
4. Starting a YouTube channel
YouTube is a great way to transform your hobbies and passions into a potential income stream. Create your own TV shows, podcasts, or vlogs. It may happen that you don’t get views and subscribers initially. But don’t lose hope as it might take months before you get your first view and if the video goes viral then no looking back for you.
You can monetize your YouTube channel by allowing advertisers to place ads at the start of the content. You earn cash when you get a certain number of views. YouTube is a very popular platform today where people are making their entire living out of their YouTube channel only. You can film makeup tutorials, travel guides, unboxing videos and what not.
5. Investing in Dividend Stocks
If you purchase the stocks of a company you’re entitled to get the profit share in the form of a dividend from time to time. The initial investment is required in this case. You can also invest in ETFs and others like Fundrise and Lending Club. The annual return can go up to 15%, 20%, or even 25% if you chose the right stocks.
Also Read: How to Protect your Online Business?
6. Affiliate Marketing
It is quite a new concept where you first need to have a platform, a website which you’ll use to promote other companies i.e. ‘affiliates’. You are paid a commission when someone purchases the product or signs up for a service using your affiliate link. You can take the help of social media to build your affiliate business.
Amazon, eBay, Awin, and ShareASale are well-known affiliate partners. You’re paid only when the users click on your link and buy something.
7. CPC (Cost Per Click) Ads
In the case of affiliate advertising, you’re paid only when someone clicks on the link and purchases or signs up for something. But in case of display ads, you’re paid on the basis of the amount of traffic and eyeball you get on the ads. As soon as the ad is clicked you’re paid. It doesn’t matter whether the purchase is made or not.
8. Selling Information Products
You can sell information products like e-books, audio or video courses online. There are sites such as Udemy, SkillShare, and Coursera through which you can sell these. You can have a very good income stream if you plan well and market your products nicely.
9. Real Estate Crowdfunding
What if you want to own a property. The first requirement is a huge sum of money. And if you want to own more properties, you require more money. However, it is not possible to invest that much amount at once.
So what is the solution? Forget about real estate investment! No, now you can invest in properties virtually starting with a lesser amount of fund. There is a real estate investment trust (REIT) which pools money from different investors and is managed by professional real estate investors. The money is then invested in real estate the returns are disbursed back to the investors. Fundrise is an example of REIT.
PeerStreet is one such platform where you can invest as little as $1000 in buying properties. You can go through the investment details and review the owners of the project as well. The returns you receive out of your investment can be as high as 15%. It’s a great way to diversify your portfolio.
There is no risk involved as in case of dividend from stocks. The stock market can crash but real estate prices always soar higher and higher. It’s a great way of earning a passive income and is a great opportunity if you’re looking to do a long term investment.
10. Rental Income
If you have space you’re not using rent it out to earn a handsome passive income. There are websites like Airbnb where you can list your space and set your rental terms yourself. However, there’s always a risk keeping strangers in your home particularly if you’re not there. Airbnb has come up with the solution and provides up to one million dollars of insurance in case of a mishap. There’s a rating system so that you can see the renter’s reputation before renting.
You can also look at the rents of similar rentals in your area to get an idea of how much income you could make and determine the average prices for weekdays and weekends.
You can even check out Nate O’Brien’s 5 Ways for making $7,200 A Month:
There are plenty of opportunities available if you sincerely wish to generate a passive income in the long run. Sooner the better so as soon as you’ll start your investment you’ll lessen your chances of regret later.