Great Ways to Generate Passive Income
Earning income passively is a dream for most people, since it essentially means you make money without putting in a significant time investment. Most sources of passive income will require time and some money to get started, but if successful, these opportunities can generate income for you long-term and without your direct involvement. (See also: 4 Reasons Why Everyone Needs Side Income)
Here are some great ways to generate passive income.
Create a Product
You can earn passive income by creating a digital product, whether it is an e-book, audio file, video, or some type of presentation, and then sell it over and over again automatically. Once the initial creation of your product is complete, the sales of the product become passive if you set up an automated system to deliver prospects to your sales page, collect payment, and send out their purchased product.
Other opportunities for passive income by creating a product might include writing a physical book and getting it published — ongoing sales of your book are earned passively. Some people become television writers, and when their series is picked up for reruns, royalties earned are considered passive income.
As a website owner or publisher of a popular e-zine, magazine, blog, or newsletter, you can sell advertising space. While you will have to do the initial legwork to create a successful website with a large following, once established, advertising revenue is a passive income opportunity where other business owners will pay you to include an advertisement on your website or in your newsletter.
Own a Business
When people think of passive income, chances are they will immediately think about an online business of some type. The internet makes it possible to start and run a business with low start-up costs and low overhead expenses — which means more profit in your pocket. It also creates opportunities for automation, and anything you can automate provides a potential passive income stream.
While it’s often easier to break into the world of passive income online, passive income is not limited to the internet. Any business you own can generate passive income for you if it is established the right way. If you hire people to fulfill the day-to-day activities of your business, your business should generate a profit after all the expenses are paid. The profit you receive as the owner of the business is passive if you aren’t directly involved in the daily operations.
Become a Landlord
People who own apartments or commercial space earn passive income through the rent payments they receive from their tenants. You receive the payment every month simply because you own the property; and you aren’t exchanging a direct service or time for the rent payment. There are of course, responsibilities that come with being a landlord — but many people find the experience rewarding and a way to establish consistent income without directly trading their hours for dollars.
If buying a property to rent out is out of your comfort zone, you can start on a smaller scale and rent out an extra room in your home, your garage, or even your driveway. Park at My House will tell you the “value” of your driveway and help connect you to people looking for a place to park near event venues or who just need a place to park their vehicle in your area.
A variety of social lending opportunities online allow you to earn a return by helping fund other people’s loan requests in peer-to-peer lending. Your total investment in the peer-to-peer lending site is generally divided up across multiple borrowers to help reduce your risks, but your money helps others gain the money they need, and you benefit by earning a return on the investment in the form of interest. Two of the more popular social lenders include Prosper and Lending Club.
When saving your money in a bank, take some time to compare savings accounts to earn as much interest on your money as you can. If you meet minimum balance requirements, you can also earn interest on money saved in a checking account. Earning interest on your money is a passive way to increase your income, so you may as well take some time to discover your highest earning potential.
You can also build an income investing portfolio to create passive income while growing long-term investments. You may include a variety of investments from dividend stocks to CDs, bonds, and annuities, with the goal of earning money quarterly, semi-annually, or annually without having to sell the investment.