Passive income is the holy grail of financial freedom. It is what sets people up for retirement without worry or stress. The interesting thing is that it doesn’t require a lot of effort to start earning most of the time. In this article, we will share top passive income ideas that you can explore with your spare time and money.
What is a Passive Income?
Passive income is defined as income you regularly receive, with little effort required to maintain it. The money from passive income streams keeps coming in, even while you are sleeping or spending time doing other things. It is very different from the active income you get from a day job or business that takes a lot of your time and work.
Top Passive Income Ideas
The top passive income ideas have two things in common. They are easy to do and also have a massive audience willing to pay for your product or service. However, some passive income opportunities might require a great deal of time dedication to generate income. But that is okay. You can always start slow and work your way up the income ladder.
1. Rent Out Extra Space in Your Home
If you have unused space in your home, consider renting it out to tenants. This method can be a great way to make some extra money and build equity simultaneously. Of course, you will need to do your research to find the right tenant. However, you can also use Airbnb or any other online rental platform to find tenants for your space.
2. Rent Out Your Car
Renting out your car by app is another great passive income idea. This will require little work on your part but will generate significant returns over time. People will book your car through apps like Turo for short-term rentals and you can set your own rates. Likewise, you can rent out your parking space. That option is perfect for people who live in big cities where parking is at a premium.
3. Sell Digital Products
Digital products range from online courses to art prints and embroidery patterns. The possibilities are endless as long as you have a product that people want to buy from the comfort of their phone or laptop without having to go anywhere else. You can sell your digital products in online marketplaces like Amazon, Etsy, and eBay.
4. Invest in Rental Properties
This requires some cash investment from you and it may not be for everyone. But adding a rental property to your investment portfolio can be a great source of passive income. You can buy rental properties, for example, and collect your rent income each month from tenants. Plus, your renters basically pay your mortgage payments, meaning your rental income is off the charts.
5. Utilize Real Estate Investment Trusts
If you want to get into real estate but can’t afford initial cash required, you can consider investing in a REIT. A REIT is a term for a real estate investment trust or company that operates, owns or finances income-producing real estate. They can be publicly traded on an exchange or privately held. The beautiful thing is that you can invest in them just like any other stock. Also, you don’t need a lot of money to get started with REITs.
6. Practice Peer to Peer Lending
This type of lending is quickly becoming one of the easiest ways to generate passive income. The process allows you to take out a loan from an investor instead of a traditional bank. You can expect to earn decent returns. But, of course, with the higher returns comes a significantly higher risk too.
7. Drop Ship
This is another business opportunity that can be set up relatively easily and doesn’t require a lot of ongoing work from you. With drop shipping, you wll partner with a supplier who will ship products directly to your customers on your behalf. All you need to do is create an account with a dropshipping platform and list the items that you want to sell.
8. Become a Social Media Influencer
You don’t have to be famous to become a social media influencer. This could involve starting your own blog or YouTube channel, building up a large following on Twitter or Instagram, or even creating a popular Facebook group. Once you have established yourself as an authority in your field, you can start charging for sponsorships and advertising deals.
9. Publish an Ebook
One of the best ways of earning passive income is by publishing your own ebook. This can be a great way to share your knowledge and expertise with the world, and it can also be a lucrative source of revenue. You can self-publish on Amazon or through other platforms. In addition, you can even create an online course based on your ebook content.
10. Start Your Own Podcast
Aside publishing an ebook, another great way to make passive revenue is by starting your own podcast. You can talk about any topic you want, share your original thoughts and insights, and even sell advertising or digital products. If you are looking to start a podcast, you can start by downloading an app like Anchor to start recording your own podcast, or you can use free services like SoundCloud or Spreaker.
11. Invest in Dividend Stocks
Dividends can be a great source of passive revenue, and the best part is that you don’t have to do anything other than buy shares in solid dividend-paying companies. This requires some work from you as you have to look for stocks with a history of paying dividends. The dividends can be reinvested into more company shares, or you can take the cash and do whatever you want with it.
12. Pay Off or Reduce Debt
Yes, you read that right. One of the best ways to earn passive income is by eliminating debt. There are two ways you can tackle your debt: Through balance transfer and pay down or refinance or consolidate. If you can get your debts paid off or reduced, then you will be able to pocket all of your monthly payments rather than spending them on interest and fees. This will help free up a lot of extra money that would otherwise be going towards things like credit card minimums and car payments.
Most of the passive income strategies on this list accelerate your financial goals tremendously. Therefore, if your goal is to eliminate debt, then you can use one or more of the strategies to pay it off.
There you have it!12 different passive income ideas to get you started earning money. Choose one or two that interest you and give them a whirl.
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