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Passive income is the dream, right?
“If you don't find a way to make money while you sleep, you will work until you die.”
But honestly, what is passive income? Is it money earned for doing nothing?
That's what some people seem to think, but if it were that easy everybody would be sitting on a
tropical island right now sipping pina coladas.
That means it could take you an entire year (or longer) to set up a passive income source,
but after that, it could generate revenue for years without much maintenance.
It doesn't mean that passive income requires little to no effort to achieve. If someone tells you
otherwise, run the other way.
Now, does this mean that in order to create a passive income stream you need to neglect your
family and friends and start working 80 hours a week? No. You can if you want, but you don't
have to.
Why?
Because some passive income sources are easier and quicker to set up than others. Some require
a lot of money, some require a lot of time, and some require both.
That's why I've split the passive income ideas in this article into 5 different categories:
1. Get Started With Passive Income Investments (Good for people with money but not a lot
of time)
2. Generate Passive Income With Real Estate (Good for people with money and a bit of
time)
3. Create Your Own Passive Income Sources (Good for people with a lot of time but not a
lot of money)
4. Rent Out Your Stuff to Generate Passive Income (Good intro into passive income)
5. Other Passive Income Sources (Won't earn you a ton, but they're easy)
As you go through each category you should get an idea of what suits you best.
1. Robo-Advisor
By far the easiest way to get into investing is to use a robo-advisor.
A robo-advisor invests your money for you, automatically. You simply choose how much risk
your willing to take, and the robo-advisor takes it from there.
But what about the fees?
Luckily with most robo-advisors, the fees aren't too bad if you consider the convenience a robo-
advisor brings. The average fee for a robo-advisor is anywhere from 0.25% to 0.9% per year.
That means if you have $10,000 invested you're going to be spending anywhere from $25 – $90
per year on fees. That's a pretty small amount to pay for the convenience and awesomeness of
having your money invested for you automatically. It's also a lot cheaper than a traditional
investment advisor.
WEALTHSIMPLE
I've been using Wealthsimple for a few months now and it's been great. Signing up was a breeze,
my investment account transferred over smoothly and the customer service has been excellent so
far. I highly recommend Wealthsimple as a robo-advisor.
BLOOOM
Annual fee: $10
Minimum account balance: $0
Blooom is the best (and pretty much only) robo-advisor for managing your 401k. When you sign
up they'll show you the current health of your 401k and then tell you how you can optimize by
cutting hidden fees and improving diversification.
Get your free 401k check-up with Blooom.
Investing in dividend-paying stocks is a great way to earn passive income, but there is a fair
share of risk involved as well (just like any investment). For example, companies can lower their
dividend yield, or stop paying dividends altogether, which can cause the stock price to drop
rapidly.
That's why, just like with any other investment, you must always do your research.
Just because a stock is paying dividends doesn't mean it's a solid investment.
You can earn passive income through these sites by acting like the bank and lending your money
to people who need it. The amount of interest you earn on your money will depend on the
borrowers' credit score.
Learn more:
LendingClub
Prosper
To simplify:
$100 in your bank account may be able to buy 100 bananas today, but next year it might only be
able to buy 95 bananas.
Now I'm not saying you shouldn't save money, that's ridiculous. Instead, you should save your
money in a high-interest savings account so that you can beat inflation.
There are several different savings accounts you could sign up for, but I always
recommend Wealthsimples high-interest savings accounts.
5. Certificate of Deposit
A certificate of deposit (or CD) is a relatively safe investment opportunity offered by banks and
credit unions. How they work is simple:
You give your money to the bank for a specific period of time, and you get more money back
when the time is up. The bank or credit union will tell you exactly how much money you'll get
back when you apply.
The catch is that the money you put into a CD will be locked up until the term is over. If you
withdraw early, you'll be penalized and you might actually end up losing money.
If you want to get started, here are some of the best and most trusted real estate crowdfunding
companies:
Fundrise
Prodigy Network
Realty Mogul
Realty Shares
7. REITs
Another way to get into real estate investing without all the risk of doing it on your own is
through a REIT or Real Estate Investment Trust. A REIT is a company that owns or
finances income-producing real estate.
When you invest in a REIT you get a share of the profit produced by the real estate the REIT
owns (a bit like a dividend paying stock). These profits typically come from rental or interest
income.
REIT Basics
But won't I have to deal with tenants and property repairs? How is this passive?
Property managers. They are your key to passive income. If you can find and hire a good
property manager, you are golden. They'll handle the property management, and you can focus
on finding new investment opportunities.
Learn more:
8. Start a Blog
Blogs blogs blogs. You see them everywhere, and you're reading one right now. They're one of
the best ways to create a massive stream of passive income online.
1. Advertising
2. Affiliate marketing
3. Digital products
4. Physical products
5. Services
Of those 5 different blog monetization methods, the first 3 can make you money without your
presence. People could be reading your blog earning you advertising money and purchasing
products all while you're sleeping or walking your dog. How awesome is that?
9. Affiliate Marketing
Affiliate marketing involves selling someone else's product for a percentage of the commission.
For example, Amazon offers a popular affiliate program where, if you direct a customer to
Amazon and they make a purchase, you get a percentage of the sale.
This is definitely most effectively done with a blog or a Youtube channel, but there are other
ways to do it, too.
For example, Facebook is a popular place to post affiliate links, just make sure you're not
spamming. The key to affiliate marketing is to always provide value.
Some other ways you could promote an affiliate offer would be to post in forums or use pay per
click advertising.
This may seem like a daunting task, but think about it:
An eBook may take some months to create, but once it's finished it can be sold over and over
again with no physical presence required.
If you decide to write an eBook, there are two popular publishing routes you can go down:
Kindle publishing – This is the easier route and it gives you access to Amazon's Kindle users.
The downside is that you won't make as much money as Amazon takes a cut of all your sales.
There are other publisher platforms as well that work similarly to Kindle.
Blog publishing – If you go this route you'll have to learn how to set up your own website, but it
will be worth it as you get to keep 100% of the profits. You can also build your own audience
with a blog and monetize them in other ways, or with more eBooks later on. This route will most
likely be more profitable in the long run.
The key to making a good online course is to do your research. Before you start creating a
course on anything, make sure there's a demand for it.
To start:
Think about your current skills and what you might know that people would pay to learn. Try to
think about what people ask you to help them with, or the things you do for fun.
If you really can't think of anything, find something that you'd like to learn and create a blog
around it. By writing about it regularly on your blog you'll start to become an expert in your
chosen niche and you'll be building an audience of potential customers at the same time.
Learn more:
Udemy
Teachable
12. Dropshipping
Drop shipping is when you run an online store but you don't hold any product.
If this is your first time hearing about this, it probably sounds a bit silly. How is it possible to run
a store with no products?
Well, there are products, they're just with the suppliers. When a customer orders a product from
your store, you put the customer's details into the supplier's store, and they handle the rest.
That's the basis of how dropshipping works, and it's generally risk-free because you don't have
to purchase a product until someone actually orders it.
Learn more:
DropShipLifestyle.com
Isn't that mind-blowing? He's just one example too, there are many other YouTubers making a
good living just from Youtube ad revenue.
Well, the average Youtube ad revenue is $2 per thousand views. That means if you have 50
videos each getting 1,000 views per day, you're making $100/day. On top of that, there are a lot
of other ways to monetize a Youtube channel such as sponsored videos or merch.
In order for all of this to work though, you need to be willing to make videos. Choose a topic
that interests you and get to work!
The way it works is simple, you upload your photos to a stock photo site, and each time someone
downloads one of your photos you get paid.
Since content marketing is so huge, there are millions of photos downloaded every day from
stock photo sites. That's potential money in your pocket!
Shutterstock
iStock
Gettyimages
People rent from Airbnb all the time looking for better rates than hotels, and you'd be surprised
at how much money you can earn just by renting your place out a couple times per month.
It's free to list your room on Airbnb, so give it a shot. Airbnb will even give you an estimate on
how much you can earn from each rental.
Worried about the risks? Don't be. Both Turo & Getaround screen every renter and cover you
with insurance and 24/7 customer assistance. Both platforms are completely free to use as well!
Ready to list? Head over to Turo or Getaround (or both) and start generating passive income with
your car.
Parking in some areas is getting ridiculously expensive. Luckily for us, that means opportunity.
You can make some extra cash passively by renting out your driveway, garage, or parking spot
to drivers in need. This works especially well if you live in an area where parking is hard to
come by.
You can rent your space out either daily or monthly, and you control the availability as well.
In order to become a driver you'll need to have a car that's 2008 or newer, and you'll have to be
someone who does a fair amount of driving. Those in busier areas will get more advertising
offers since advertisers want to show their ads in specific places.
Here are the top two companies for car wrap advertising:
Carvertise
Wrapify
Ebates is a cash back app/service that can get you large amounts of cash back on purchases
at over 2,000 stores. Also, if you download the Ebates browser extension, you'll get notified
whenever cashback is available, making it super passive and easy.
You can also attach your credit card and get cash back while you shop in-store without even
thinking about it.
You buy something and a week later it's being sold for a lower price. How frustrating.
This actually happens all the time but 90% of the time we don't even notice the price drop. That's
when Paribus comes in to save the day.
Paribus tracks all your online purchases and if it notices a price drop, it will contact the store and
attempt to get you a refund… for free!
So for example, if you purchase a basketball online from Walmart for $10 and a week later it
drops to $5, Paribus will contact Walmart for you and get them to refund the difference. How
sweet is that?
Yes. Trim can contact your service providers (internet, cell phone, car insurance, etc.) on your
behalf and negotiate your bills to a lower price automatically. It's pretty cool.
If Trim successfully negotiates your bill and gets you a better deal, they take 33% of the savings
(eg. if they save you $10/month for 12 months they take $40). If they aren't successful, it won't
cost you anything.
You download an app to a device (desktop, smartphone, or tablet), and earn passive income each
month just for having the app installed.
Each device you connect with Survey Savvy earns you $5/month and you can connect up to 3
devices. That means you can earn up to $180/year in passive income.
Walking is something you've already got to do every day, so why not get paid for it?
Download Sweatcoin (or read my full Sweatcoin review to learn more) and you can start earning
rewards – and even cash – while you walk.
For example, if you buy a coffee for $1.50, the app (whichever you choose) will automatically
round up your purchase to $2.00 and invest the $0.50 for you.
This may not seem like much but it really adds up! Best of all, you won't even notice the money
leaving your account.
Final Thoughts
Although many internet marketing gurus like to promote passive income as this magical, make
$10,000 fast while you sleep sort of thing, that couldn't be further from the truth.
Most passive income ideas are very long-term, and if you don't stick with them until the end
you're not going to see very good results. That's why I encourage you to pick one that interests
you and get started on it today. Not tomorrow. Today.
The earlier you start, the more time your asset has to grow.