What is Passive Income?
Passive income is where you get paid over and over again for work that you did once.
I now have multiple income streams that are passive, many of which are included below.
Passive Income Ideas
By choosing the right type of passive income, you can invest your time the way that you want to. It is a way of buying back more time.
There are so many opportunities out there to make residual income in network marketing.
However, this is NOT one of those “things.” These are legit ways for you to make money while you sleep with something that fits your passion, experience, or skill-set.
1. Invest in Real Estate
Real estate can be a great way to make money while you sleep.
However, I decided to buy a couple rental properties in my early twenties and I had a much different experience. I had a tenant who was late on his rent consistently, I had a hot water tank flood the first floor, and I even had to evict said tenant.
It was not as glorious as I thought it would be.
Since it costs so much to purchase a home, I decided to check out crowdfunded real estate instead.
Many of the platforms out there require you to be an accredited investor, which means you need to have a net worth of $1,000,000 or make over $300,000 per year (if you are married).
Since that was not the case for me, I decided to look for other, more accessible options.
I like it because it yielded a higher return then my initial traditional real estate experience and I no longer have the headaches of actually having to manage the properties (or the people).
2. Dividend Income
Dividend income is money paid to shareholders of stocks in the form of cash in your bank account. Dividend-paying stocks are especially enticing for those wanting to make a living with passive income, as they will get payouts each quarter or so. Even Warren Buffet historically is a fan of dividend-paying stocks.
If you are going to go this route, make sure that you educate yourself and pick solid stocks so that you can depend on for dividend income for years to come.
3. Peer-to-Peer Lending
Peer-to-peer lending is when you loan other people money who don’t qualify for traditional financing.
Initially I tried a higher risk option called LendingClub, however, even in the conservative portfolio of loans I only made 4.54%.
One unique thing about them is that your money is liquid, so you can take it out at anytime.
This means if for some reason you need your money back, you are able to access it quickly and easily.
4. Get Out of Debt
The less money you’re paying in interest to creditors, the more money you have in your pocket each month. Getting out of debt quickly can increase your income even more because you’re no longer paying interest to creditors each month.
One way to speed up your debt payoff is to lower your interest rate. If you have high-interest debt that you want to get a lower interest rate on.
5. Open a High-Yield Account
Are you looking for a low-risk way to make income passively?
Then look at opening a high-yield savings account with an online bank.
CIT Bank that pays 19 times more than traditional banks and they are currently are paying up to 2.30% which is unreal.
They have a $100 minimum to open and there are no monthly service fees.
While this won’t make you filthy rich, it will be a safer way to make consistent income and not lose your money since they are FDIC insured.
6. Rent out a Room in Your House
Do you have an extra room that you rarely use? Why not rent it out to someone looking for a short-term rental on Airbnb. Millions of people use Airbnb to find a place to stay instead of staying at a hotel, sometimes even for months at a time.
You can hire a maid service to clean and prep the room after a guest leaves. If you hire a property management company, then this will eliminate work on your end and make it truly passive income.
My friend Steve and his wife make over $1000 per month renting out their spare bedrooms
7. Write a Book
Once the initial work of creating the book is done, selling books can be a great way to produce some serious residual income.
I wrote a book called You Can Retire Early. I get a 10% royalty for every book that gets sold.
Once your book is available on a site like Amazon, you could receive a check each month for doing absolutely nothing. Note that spending some time developing an effective marketing plan is vital. Obviously, the more time you spend marketing your books, the more money you’ll make.
8. Affiliate Marketing
If you have a website already then this is a no-brainer. Some people are making over $50,000 per month like Michelle who teaches others how to make money online with her course Making Sense of Affiliate Marketing.
If you don’t have a website, you can start one for less than $3/month. That’s the price for getting a website host – a company that stores your website on servers so it can be viewed on the Internet.
Affiliate marketing can be a great way to make money from home. All you need is a computer and a website.
Going the affiliate route is awesome because when people click on the affiliate links on your site, you receive a commission at no additional cost to them.
All they have to do is purchase a product or service and you get the credit for it.
9. Create a Lead Generation Website
Another way to make passive income is to create a lead generation website. Lead generation websites exist to give referrals to local businesses.
So, let’s say you created a lead generation website that focuses on real estate. You’d use the site to educate people about home ownership. Or, you’d educate them about real estate investing.
Within the site you’d have links where people could contact you to learn more. When someone contacts you, you refer them to a real estate professional in their area.
The real estate professional would pay you for the lead. It’s a warm lead and not a cold lead, so professionals would be more willing to pay.
You could also make money by having advertisers on your site. Note that you would have to understand SEO (Search Engine Optimization) rules in order to make the site successful. Getting your site at the top of search engine pages would be vital to success.
10. Sell Products on Amazon
Do you shop on Amazon? Most of the world does too.
Did you know that you can sell your own products on Amazon and have them even ship the products for you? I actually have a friend who has done really well with this as he makes six figures per year selling his own products online.
11. Create an Online Store with Drop Shipping
With the explosion of eCommerce, drop shipping has become very popular. Here’s how it works: you create an online store that offers products from certain manufacturers.
A person visits your site and orders a product, and then your system sends the order to the specific manufacturer. The manufacturer then completes the order by shipping it directly to the customer.
One of the cool things about this type of business is that you do NOT need to order inventory. The customer pays for the product; you collect the profits, and the manufacturer stores and ships the products to the customer. It’s as simple as that.
If you’re interested in starting a drop shipping business, consider using a platform like Shopify to build your online store.
They even have a 14-day free trial that you sign up for here.
12. Create an Online Course
Online courses can be a great source of passive income. Here’s how they work: you create a value-packed online course that helps solve a problem or fills a need.
The course can include videos, e-books, and emails with pertinent information. Customers sign up to purchase the course, and your system automatically emails them everything they need to access the materials.
You get money for the price of the course that you created. A platform such as Teachable can do all the heavy lifting for you when creating your course.
13. Create YouTube Videos
Everyday regular people like you and me are making money on YouTube. Each time someone watches one of your videos, ads can appear, and you can make money from those ads. The key to becoming successful with YouTube is building a large enough subscriber and viewer base.
It can take a lot of time up front, but once your videos are live there is potential for you to make passive income from each video indefinitely.
Granted you probably will not make a living off of just a few videos. Be prepared to make over 100 videos if you really want this to take off.
14. Start a Business and Have Someone Else Run it
Owning a business can be a good passive income source. The key is in having the right people running the business for you. Whether it be through the purchase of an existing business or opening a new business, your great business idea can be a viable source of passive income.
Do you want some creative small businesses that you can start for under 100 bucks? Then check out the $100 Startup by Chris Guillebeau. These are all verified businesses that grew to over six figures per year. And they all started with very little money up front.
15. Buy a Vending Machine Business
A successful vending machine business can be a great way to make passive income. The key is to find the right places to install your vending machines. Check with smaller brick and mortar businesses. Contact those that have over 100 workers in the building on a daily basis, and see if they need vending machines.
Another key to vending machine success? Ask those workers what items they prefer to have in the vending machine and then stock accordingly. Once again, if you want to reduce the amount of time that you are involved, consider hiring someone to stock the machines for you.