To truly develop a passive income stream, time, hard work, and concentration are needed. The good news is there are plenty of passive income ideas for everyone out there.
Popular with the entrepreneur crowd and scammy marketers, the term “Passive income” has been thrown around a lot in recent times.
Passive income is an excellent source of additional cash flow. With the COVID19 pandemic throwing many Americans’ jobs into disarray, passive income has filled the gap for an unexpectedly laid-off, especially those with passive income.
Building assets through passive income is a brilliant method of saving enough capital to fulfill retirement objectives.
According to research, an average millionaire has more than seven sources of income. In addition to their primary source of income, most millionaires have established secondary sources of income.
But What Exactly Does Passive Income Mean?
Passive income is a source of recurring revenue that doesn’t depend on sustained effort. Passive income is income earned with minor or with no continuous effort.
The income is not proportional to the time physically put into acquiring it. The intriguing thing is that it can be generated even when sleeping, creating some free time.
In a set-it-and-forget-it kinda fashion, you expend some time and energy to create the source, and it rewards you with steady cash flow (or trickle) without further work on your part. The cash keeps coming in whether you’re sleeping, binging on Netflix, or climbing the Himalayas.
Or, even dead.
Here is One Great Example of a Passive Income Idea
According to data from SoundScan, Michael Jackson sold 13.228 million albums in the five years following his shocking death in 2009. More than he ever sold in the last 13 years of his life. Not too bad for a dead guy.
The King of Pop didn’t have to be around for that cash to drop. Income couldn’t get more passive than that.
You may not have the blazing talent of Michael, but nothing is stopping you from creating products that continue to pay you for a long time.
List of 13 Passive Income Ideas to Explore in 2021:
With a passive income, you’ll buy more time for yourself to pursue what truly matters. You’ll increase your revenue, and in due time, you won’t have to be tied to a desk, helping someone fulfill his dreams while yours wither and dry up.
Let passive income be your mantra this new year and for the next ten years. To this end, I’ve compiled a list of 13 passive income ideas to stimulate your creativity.
Investing in Crowdfunded Real Estate Investment
Investing in real estate lets you earn income passively. But it requires a lot of money and effort upfront to get it going.
This is the earliest form of passive income and typically involves buying properties or investing in REITs. However, crowdfunding adds a modern twist to this passive income model, which doesn’t require as much money or effort to get started.
Crowdfunding has grown increasingly popular over the years. It’s a way a group of people can pool money together for a common goal.
In real estate crowdfunding, you contribute cash, along with other investors, to fund a specific real estate deal. You are then entitled to some sort of income distribution or a share of the profit from a successful sale.
Why Real Estate Crowdfunding is Such a Great Passive Income Idea
The attraction with crowdfunding real estate investment is that it lets you jump on potentially lucrative deals (which may have been impossible winging it alone) with relatively little cash.
Returns are impressive and most concluded crowdfunding deals earned an average annualized return of 14%.
Crowdfunded real estate investment allows you to dabble in real estate without the headaches of dealing with tenants, maintenance, and other issues landlords face.
The sponsors do all the heavy lifting, from identifying property investment opportunities to vetting them to closing the deal.
All you need do is get on to one of the numerous crowdfunding sites and place your investment.
Some of the most popular Crowdfunding platforms are:
Take Fundrise for example; Fundrise’s Starter Portfolio lets you start investing in real estate with just $500. You can take advantage of a REIT’s increased stability and potential for high returns (real estate investment trust).
The initial investment will yield a 12.25 % return, according to performance analyses. Fundrise-style investing, but with a $5,000 minimum commitment.
Discover Peer-to-Peer Lending
Peer-to-peer (or P2P) lending is a way of lending money to borrowers who may not qualify for loans through banks and other traditional lenders.
Here, you can lend someone money at a competitive rate, and the borrower repays with interest.
The rate of return could be as high as 6% making P2P lending one of the best sources of passive income – better than any money market fund you can find.
All you need to do is have enough funds for investing and create a diversification strategy. You can select the borrowers yourself and spread your invested funds to reduce your risks.
Peer-to-peer lending is powered by lending platforms that connect lenders and borrowers. This eliminates the cumbersome protocols encountered when borrowing from banks. The platforms do not lend any money but act as facilitators for a fee.
Here are Some Peer-to-Peer Lending Platforms to Consider:
Lending Club is the first peer-to-peer lending platform and still one of the best. Consider joining the Lending Club for a higher-than-average return on investment while also feeling like contributing to society.
The Lending Club uses the money to help people get financing to start a business, consolidate debt, or pay for medical treatment.
Open an account and deposit at least $0.01 to get started. Start building a portfolio by investing as little as $25 in a variety of loans.
Make money by collecting borrowers’ monthly payments as they repay their loans. Reinvest the gains or withdraw them.
Investing in Dividend-paying Stocks
The oldest and most successful method of generating passive income is to invest in dividend-paying securities. Assume purchasing Colgate-Palmolive stock. When buying stocks, expect the price to fluctuate over time; however, they compensate for each share.
Dividends are cash payments made to shareholders of a company out of their retained earnings. Investing in dividend stocks is one of the easiest ways to earn passive income.
In essence, you are being paid for owning a part of a company. You can choose to reinvest your dividends to purchase additional shares and earn more.
The essential skill to learn here is finding dependable companies who have a valuable product or service, plenty of cash, and little debt. And in this age of automation and AI, investing in dividend stocks is as simple as opening an account with an online broker.
There are several online brokers with features tailored to suit investors at various levels of skill and experience.
Some of the best include:
Selling Stock Photos
If you have a flair for photography, you can readily turn your talent into cash. You can create passive income by selling your photos on stock photography websites.
The best part? You don’t have to undergo any training or buy expensive equipment to get started.
High-quality images with good composition, lighting, and color will often get good sales.
Once you shoot your photos, you upload them to the stock photo site, set up metadata, and your work is done.
You start earning whenever someone buys your image, usually for commercial use.
While it may not turn you into a billionaire overnight, stock photography is a terrific way to earn a side income passively.
You’ll continue to earn royalty off each sale for as long as they are hosted on the site.
Here are some of the most popular Stock Photo websites:
Self-Publishing an eBook
E-books are books in a digital format. They are available for reading online on devices such as Amazon’s Kindle, iPads or phones, mobile applications, and personal computers. Furthermore, in today’s world, the internet makes it easier to reach a million readers worldwide.
Share expertise on a specific subject by doing research and make money from it, then writing ebooks is the way to go. Gain a passive income by writing how-to guides or tutorials or by compiling a set of recipes and converting them into an ebook.
You can write a book in your area of specialty and publish it yourself – thanks to technology. Although it requires a significant input of time and energy upfront, you’ll be guaranteed a passive income as the sales of your book kicks off.
But not just about any book will do. To make money from your efforts, you must write a book people will want to read.
What you need to do is to start marketing your book before sales start to roll in. As more people become aware of your book and buy, amazon will then begin to promote it for you.
Some of the best self-publishing companies are:
Creating or Developing an App
There’s literally an app for everything these days and your smartphone is probably choke-full of a diverse range of apps. What if you could be the one whose app people pay for and download?
Creating an app and selling it on the app store can provide you with a residual income for a very long time. You don’t have to write a line of code if programming isn’t your thing.
If you have an idea for an app, you simply hire a programmer to develop it for you.
You can find App builders from the following Freelancing sites:
Selling Products on Etsy
Etsy is a fantastic marketplace for creatives. It allows you to sell uniquely made products to a ready market.
While physical products such as jewelry and handcrafted items are popular on Etsy, you can also sell digital products. And this is where you can make passive income, unlike physical goods, which will require physical inventory and some continuous efforts to keep going.
Once you register your work on Etsy, you can sit back, fold your hands and watch the sales come in.
Some of the digital products you can list on Etsy for instant downloads:
- Wall arts
Getting Into Affiliate Marketing
Earn money by promoting a product through affiliate marketing. Promote a product that is high quality on the internet. There are so many ways to get started as an affiliate.
In Affiliate marketing, you partner with a company to receive an agreed commission for every sale you make on their products.
If you own an established blog or website, selling other people’s products for a commission is the perfect passive income source for you.
What makes this income source particularly attractive is that if you have a large following or audience, you already have a considerable list of prospects interested in the products.
All you have to do is attach a unique affiliate link to your article, Facebook page, or Twitter bio, directing them to the sales page. When they make a purchase, a percentage is credited to your account.
There are thousands of affiliate programs across diverse niches with products to choose from and start promoting.
Work directly with a company or via the following affiliate networks:
Creating an Online Course or Guide
Skill and knowledge in a particular field facilitate making money by employing the skills acquired over a long career.
Make money by teaching others valuable knowledge or skills. If you have superior knowledge or experience on any topic – how to do something, how to make something, how to fix something, you can create a course or guide sharing that knowledge.
The best part about this passive income opportunity is that it will continue earning as students enroll after completing the course’s initial work.
Your course could be in the form of video lessons, PDF files, or a combination of both. You can offer it for sale on your site or reach out to bloggers in the relevant niche to sell it on their websites.
You can create online courses for a more straightforward way to get your content in front of others. You can teach just about anything from algebra to guitar lessons.
You can use the following online course teaching platforms:
Renting Your Space
You can rent out your apartment, home, or spare room for a fee, of course. You make money on space you own but do not use. While it may require some work upfront to spruce the place up and clean up after your guest leaves, otherwise, it’s pretty much passive income.
Rent out an empty bedroom on Airbnb, decide when the room is available.
Determine the regular rate and rules are for visitors. While on vacation or out of town, renting out the entire home on Airbnb is a great way to make money.
Although it may seem strange to entrust room to strangers, Airbnb offers up to a million dollars in insurance if something goes wrong.
There is also a rating system that allows checking the renter’s credibility before renting the room.
These rental websites let travelers get accommodation cheaper than standard hotel rates. They’ll get a percentage for their listing services, typically 3 – 5% on any booking.
List your space on these rental platforms:
Improving Car Efficiency via Ridesharing Apps
Driving is another everyday activity for earning a passive income. While running errands, why not pick up a passenger or two?
Earn money by driving a car and transport passengers to their assigned destinations.
Make money by driving around with ads on the vehicle. When on vacation, traveling, or just working a regular workday, earn money while the car is idle.
Using an app like Getaround, earn thousands of dollars by renting a car when not in use. Getaround car owners also get the best parking spots in town, a $50 monthly credit to rent any vehicle they want, and $1 million in primary insurance coverage.
Here are other ride-sharing apps to make the most of your vehicle:
Make Profits from Simple Online Tasks
Redeem vouchers regularly and earn money and earn points Swagbucks allows earning points by shopping at online places.
Bonus points are earned by watching videos on various topics. Make money by searching the internet, and taking surveys by doing everyday online tasks. Others will pay you for a broader range of tasks such as checking email and playing games,
The points are exchangeable with gift cards or cash via PayPal.
Some sites will make you money by doing everyday online tasks, but it also pays for a broader range of tasks than Swagbucks, such as checking email and playing games.
In general, the concept and reward mechanisms are nearly identical. Some of these sites even reward you with bonuses once you signed up.
Some of the most popular sites to received rewards are:
A High-Yield Savings Account
Savings accounts at online banks are also offering enticing interest rates. It is not capital from which to build a fortune, but it is unrestricted cash. Some of these high-yield savings accounts are considered a win-win because there are no monthly payments.
Most high-yield savings account offers the best savings account rates in the market. They also offer no minimum opening balance requirement when you open an account.
Here are some of the best banks that offer these accounts:
Last Notes on Passive Income Ideas
Passive income sources necessitate an initial investment and much nurturing. Although it might be tempting to choose several passive income ideas to get started, stick to one first. Before moving on to the next step, master the first one.
Choose a passive income idea, make a strategy, and stick to it until the revenue stream becomes a reality. Add the income sources to different portfolios, and it will help increase earnings significantly and achieve financial goals.
These 13 passive income ideas are just a few of the several opportunities and ways you can make money passively this new year. You just have to look around you and leverage any creative skill you have. Note that these passive income ideas require a significant amount of work, money, or time upfront – they are no get-rich-quick schemes.