One of the key lessons we’ve learned through the COVID-19 crisis is just how quickly things can change. Many people found themselves suddenly losing their job or their hours cut significantly. As a result, paying rent or mortgage, putting food on the table, and keeping up with bills became a challenge to many affected people.
The ability to have multiple income streams came into focus to help cover everyday living expenses became more important. When you make passive income, it’s even more beneficial because you’re earning income while you work your regular job. That gives you the security of knowing that you have income coming in if you want to cut back on your hours or find yourself unexpectedly losing your job.
Passive income streams are also a great way to help save money for other goals or pay down debt. Whatever your financial goals may be, passive income opportunities are income streams that you should consider.
What Is Passive Income?
Passive income is any other way to make regular earnings outside your work as an employee or contractor. When you’re looking for multiple streams of income ideas, passive ways to make money are ideal. That is because you do a lot of work upfront to build that income stream, but it typically takes little to keep it up after that effort. So the best passive income will come when you’re committed to putting this effort towards your goal.
It’s not a “get rich fast” approach or something that you generate solid income without this up-front approach. Depending on what type of passive income you’re making, some work will need to be done to maintain it as a revenue generator.
For example, if you’re renting property to make money, you need to do a regular maintenance process for the property.
Creative Passive Income Streams
Passive income ideas require one or both of the following:
- An upfront investment in time
- An upfront financial investment
As mentioned before, passive income isn’t a way to make income without doing anything. Therefore, you need to have at least one of these elements when coming up with passive income ideas to try. There might be certain limitations based on your situation. For example, not everyone can afford to buy a rental property, so that might not be your passive income source for you until you have more money to invest. However, if you want to start a dropshipping business, you could afford to host a website to sell your products.
Look at passive income opportunities that line up with what you’re able to invest from a time and money perspective. That will help you succeed in your passive income endeavors.
Best Ways to Make Passive Income
Ready to learn about some creative ideas to make money? Consider these ways to make passive income described below.
Sell Information for Revenue
You can make passive income by selling information that others will wish to purchase from you. Some of the most popular formats of this information come from a video or audio course or an e-book. This information could be anything that there are people out there that want to learn, which you are knowledgeable about.
For example, if you are a graphic designer, you could create a course on using Adobe Photoshop. Or you could turn your hobby of painting or taking photography into a course to teach others the basics.
If you decide to sell a course, you can sell it by creating a website and marketing it through your network or social media. Many people use Udemy, SkillShare, and Coursera, which are platforms for courses that others can find your work and purchase to sell their courses. E-Books platforms are also available, and you can also sell your e-book on Amazon’s marketplace.
Another way you could sell your content is by giving away some of it for free. The “freemium model” strategy involves demonstrating your expertise in the area (i.e., using a video platform like YouTube). This method will attract others who are interested in the subject to view your content and make them more inclined to purchase more detailed information from you later.
As you may have suspected, making money by selling these information products requires a lot of legwork to happen. First, creating that course or e-book will require a lot of time to put together. Then, after creating the course, you need to put work into marketing it, so others know it’s out there. But once all this effort has been, it can become one of the best passive income investments you make.
Buy Dividend Stocks
The best passive income source for those with money to invest can be found by purchasing dividend stocks. Buying dividend stocks is truly a way to earn passive money while you’re sleeping or going about your day. To find the stocks that cut the biggest dividend checks, you’ll need to do a lot of research. First, you need to make a list of stocks that have shown significant dividend history over time. Then, invest in the ones with the highest returns, and you can buy a ton of.
You’ll need to invest quite a bit of money to make a solid amount of residual income over time in dividend stocks. For example, if you’re buying a stock that is $50 per share and has a history of generating 5 percent dividends, that’s $2.50 per share.
Some people have built substantial money through dividend stock that’s been enough to retire from. You can do this too, even if you don’t have a lot of money up-front to invest. Putting what you can when you will help you reach this goal.
Or you can start building a portfolio of dividend stocks to provide another stream of income that’s outside your day job. To get started with making money with dividend stocks, open up an account with an online brokerage. Make sure that the platform offers free trading so you can invest without paying fees. Sometimes these online brokerage platforms will even offer a special bonus to give you a free stock pick for signing up.
If you’re worried about picking the right stocks, try buying exchange-traded funds or ETFs. These are investment vehicles with a mix of stocks, bonds, or other assets that trade like stocks. Purchasing ETFs allows you to diversify your earning and generate a solid income stream, without needing to spend a ton of time evaluating different companies.
Get into REITs
If you don’t have enough money to buy that townhouse down the street, why not consider a real estate investment trust? REITs are companies that own and manage real estate. They pay little or no corporate income tax because of their special legal structure and can pass the majority of their income to their shareholders.
You can think of REITs as a lot like purchasing stocks from the stock market. You can purchase REITs on the stock market. You pay the price of a share in a REIT, just like you would a stock. Then you are paid a dividend based on how the REIT performs.
REITs are especially great if you want to build your dividend income. Look for REITs that have a record of increasing their dividends, and you’ll find one of the best passive income investments you can make.
Just like with dividend stocks, you’ll need to do homework to find suitable REITs to invest in. It is riskier to own individual REITs than some other investment vehicles. Some ETFs invest in several different REIT stocks, which help mitigate this risk. You still get a good payout without having the concerns of good and bad economic times.
Place Advertisements on Your Car
When you’re looking for creative ideas to make money, sometimes all you need is a good car ride to get your mind going. Or you could simply earn a little extra money to drive around the city. There are specialized advertising agencies that will “wrap” your car with ads that you could earn a few hundred for each month.
You’re already putting those miles on your car to take you to work, go to the grocery store, and other errands. So you need to spend some time getting your professionally wrapped, which is both safe for your car and free to do.
These agencies are typically looking for people who have newer cars. You should also have a clean driving record. Some may require that you download their app and evaluate your driving habits before you get any advertisements placed on your car. They use this data to find out where you’re driving and how many miles so they can match you with the right advertisers.
Rent Out Things You Own
When you’re building multiple streams of income ideas, sometimes you don’t need to look much further than your own house. For example, if you have a spare room, pool house, or another space in your home that you don’t use, you can start renting it out.
Getting a roommate can help defray your mortgage or rent expense each month, so you have more money for other things. If you’re not too keen on having a roommate, consider renting out your space during weekends or weekdays. This way works well if you travel out of town a lot for work or have another place to stay during the weekend.
Airbnb is one of the most popular places to list your property and start earning money fast. Listing your place doesn’t take too much work, and you’ll need to keep it clean after guests, but otherwise, it is as passive as you can get.
Another thing you can consider renting out is your car. Do you work from home or rarely leave home on weekends? List your car on a car rental site like Turo and earn money instead of leaving it parked on your driveway all day.
Peer to Peer Lending
Borrowers who don’t usually qualify for traditional loans from banks might receive a loan through P2P lending. With this type of lending, you can choose the borrowers you want to lend to. You can also spread your investment amount out so that it minimizes your risk.
By lending your money, you can get repaid the principal amount plus interest. Thus, making money through P2P lending enables you to earn higher returns for your investment than CDs, money markets, and other alternatives.
Keep in mind that this type of passive income is on the riskier side. There is no guarantee that the people who borrow from you will be able to pay you back.
If you want to try out P2P lending, check out PeerStreet. This lending platform is used by borrowers who wish to get into real estate.
Buying Rental Properties
A great way to earn monthly income and create another cash flow is through renting property. If the day-to-day management of these properties doesn’t appeal to you, then you can find a property management company to do it for you. That will make this even closer to being a completely passive income source.
The internet has made it easier to invest in real estate properties. You can find potential properties by searching for them online.
If you want to invest in single-family homes, try looking at Roofstock. They allow you to find and purchase cash-flow positive single-family rentals at the comfort of your home.
Another option is getting into larger developments like multi-family or commercial properties. It would be best if you considered becoming a limited partner in these types of endeavors so that you don’t have to do the work while you get to enjoy the income and tax treatment of regular real estate ownership.
Investing in farmland is another form of real estate investing. While it’s not as attractive as other real estate types, it offers a consistent source of income. Additionally, renting farmland is less volatile than other types of real estate investing.