I worked a traditional 9 to 5 job for many years and eventually I got burnt out. I knew that I wanted more freedom and the idea of passive income became very appealing. I had heard of many people quitting and replacing their full-time job with passive income, but I had no idea where to start.
This pursuit led me to start this blog where I now make over $6,000 per month, however, this is not the only way to make residual income.
What exactly is passive income?
Passive income is where you get paid over and over again for work that you did once. I have multiple income streams that are passive, many of which I will mention below.
Passive Income Ideas
By choosing the right sources of passive income, you can invest your time the way that you want to instead of the way you have been spending it. Passive income 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 Crowdfunded Real Estate
Real estate can be a great way to make money while you sleep. However, because it costs so much to purchase a home, using a crowdfunding platform to invest in real estate debt can be a more affordable option.
If you want an easy, low-cost way to invest in real estate, consider using a company like Fundrise. You only need $500 to get started, and they have three main eREITs to choose from.
You can also consider checking out Realty Shares which is one of the largest crowdfunding companies around today. While most deals require at least $5,000, they occasionally offer properties with a $1,000 minimum. The cool thing about Realty Shares is that you get to hand pick the property you invest in.
Want to invest in a specific hotel or a certain apartment complex? They allow you to do just that.
Right now you can use the promo code Partner100 to get $100 bonus for signing up.
Keep in mind that there are risks to investing. It is also worth noting that we do have an affiliate relationship with RealtyShares.
2. Dividend Income
Dividend income is dividends 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 your dividend income for years to come.
If you don’t have an investment account, check out Ally Invest because trades are as low as $3.95.
This low fee is awesome because most brokers charge around $10 per stock trade.
3. Peer-to-Peer Lending
Peer-to-peer lending is when you loan other people money who don’t qualify for traditional financing. With investment returns often in the 6-10% range, investing money with a company like Lending Club can get you much higher income results than a typical savings or money market account.
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One cool bonus with Lending Club is that they also give investors a chance to earn award miles while investing. Investors with up to $100,000 in LendingClub can earn one award mile for every $1 they have invested.
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. Talk about a simple form of passive income. Getting out of debt quickly can increase your income even more because you’re no longer paying interest to creditors each month.
So if you have high-interest debt that you want to get a lower interest rate on, check out Credible as that have rates as low as 4.99% for refinancing your credit card debt.
Oh yeah, and they will give you $50 if you are approved, to sweeten the deal even more.
5. Open a High-Yield Account
Are you looking for a low-risk way to make passive income? Then look at opening a high-yield savings account with an online bank like CIT Bank that pays 22x more than traditional banks. The currently are paying 1.55% which is unreal.
The yields are much higher than most local banks but still come with FDIC insurance. 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. Write a book
Once the initial work of creating the book is done, and you’ve spent some time developing an effective marketing plan, selling books can be a great way to produce some serious residual income.
I wrote a book called You Can Retire Early and 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. Obviously, the more time you spend marketing your books, the more money you’ll make.
7. 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. There are millions of people using Airbnb to find a place to stay instead of staying at a hotel, sometimes even for months at a time.
While this is not entirely passive income, it can take a little upfront work but, the returns can be amazing. If you end up giving this a shot, consider getting a maid service to minimize the amount of time you spend on transitioning from one guest to another.
8. Affiliate Marketing & Ads
Here are two basic ways to make money with your website. If you have a site already then this is a no-brainer. Some people are making over $50,000 per month like Michelle who created Making Sense of Affiliate Marketing.
Affiliate marketing can be a great way to make passive income because when people click on the affiliate links on your site, you receive a commission at no additional cost to them when they purchase a product or service.
A second way you can make money is from advertisements that appear on your website. The most well-known way is through Google Adsense. However, MediaVine is the one I use and tends to pay a lot more money for views and clicks when compared to Adsense.
9. Get Cash Back on Shopping You Already Do
You have to shop anyway, so why not get cash back on things you’d normally buy in the first place? I use a site called Ebates that will pay you $10 just for signing up and, it is free.
With their double cash back specials, you can double your passive income earnings if the right items go on sale.
The key to shopping sites like this is to commit to buying only what you normally would purchase and not buy things just because they are on sale.
10. 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, orders a product, and 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 have twice as many templates as their competitors, and they even have a 14-day free trial that you sign up for here.
11. Start a Business and Have Someone Else Run it
Owning a business can be a good passive income source, provided you’ve got 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.
For some creative small businesses that you can start for under 100 bucks, check out the $100 Startup by Chris Guillebeau. These are all verified businesses that grew to over six figures per year and started with very little money up front.
12. 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 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.
13. Create a Mobile App
If you are a bit techie and can come up with some unique ideas for mobile apps, or improve upon an existing app that will help people make their lives better, you may land yourself a great source of passive income.
Every app on your phone is making money for somebody, somewhere. For instance, Joel Comm made over $1Million from his iFart app.
We won’t even talk about the ridiculous money that Angry Birds brought in.
While these are the exceptions, there are plenty of people making thousands of dollars per month with their mobile apps.
14. Rent Your Car for Ad Space
How would you like to make money just for driving your car and not have to pick up any passengers? By allowing companies to place advertisements on your car windows, you can earn a few hundred dollars each month simply by driving your car around town.
Check out Carvertise to see how you might be able to make passive income by wrapping your car with an advertisement.
15. Buy a Laundromat
Here’s another turnkey passive income business idea. Many cities have established laundromats that are available for sale. Here is how it would work: you buy the already existing business, make sure that you have someone to manage the day-to-day operations, and then “soak up” the profits.
The reason why you would want to buy an existing one and not start one from scratch is that the startup costs are pretty high. Commercial washers and dryers are not cheap, so it makes a lot more financial sense to buy an already established laundromat than starting from ground zero.
16. Bond / CD Laddering
Bond and CD laddering involves owning several different bonds and/or Certificates of Deposit that mature at several different times during the year and taking the profits from those investments as cash income during the year.
Although many CDs and bonds might not earn as much of a return as a Peer to Peer lending investment, bonds and CDs also generally come with little to no risk, ensuring a solid income source on a regular basis.
17. Rent Your Stuff
Thousands of people every day are looking to rent any variety of items. Craigslist can be a great place to advertise your items for rent. Here are some ideas of products that you could rent out: extension ladders, party tents, tables and chairs, utility trailers, log splitters, chainsaws, snowmobiles, and ATV’s.
You can even rent out your car when you are not using it with a company like Turo.
Just make sure that you have a proper rental agreement signed by both parties, get paid in cash beforehand, and get a current photo ID and secondary proof of address in order to protect the property you’re renting out. For extra peace of mind, consider requesting a security deposit as well.
As you can see there are a ton of ways that you can make passive income. Hopefully, this list has helped you narrow down which source of income is best for you. So if you’re tired of the traditional way of making money, implement a few of the passive income strategies above so you can start working less and making more money while you sleep today.
**The information contained herein neither constitutes an offer for nor a solicitation of interest in any securities offering; however, if an indication of interest is provided, it may be withdrawn or revoked, without obligation or commitment of any kind prior to being accepted following the qualification or effectiveness of the applicable offering document, and any offer, solicitation or sale of any securities will be made only by means of an offering circular, private placement memorandum, or prospectus. No money or other consideration is hereby being solicited, and will not be accepted without such potential investor having been provided the applicable offering document. Joining the Fundrise Platform neither constitutes an indication of interest in any offering nor involves any obligation or commitment of any kind.