Are you looking for passive income ideas so that you can start making more money? Learning how to make passive income streams can significantly change your life by helping you earn more money and diversifying your income.
Building passive income is something that I’ve been working on for the past several years. See, I want to continue to bring in an income while being able to focus on other goals of mine, like doing more hiking or biking (which will most likely never generate income). I also want to diversify my income so that I’m not too reliant on one source.
For me, finding passive income ideas is great because I can focus more on life instead of business, and I can do it while continuing to earn a great income.
Unfortunately, many people think that passive income simply isn’t real, that it must be luck and not work, that you’re a trust fund kid, or something else.
But, that’s not true at all! All of the passive income ideas in this article are real ways to make money.
Now, that doesn’t mean that earning passive income takes literally no effort (it’s not a get rich quick scheme) – there’s probably going to be some effort to get the passive income stream started, and perhaps some effort to maintain it for years to come.
It can take time or money to start on most passive income ideas, but that investment is worth it.
If you want to learn how to start earning passive income, below are different passive income-related questions you may have. We will discuss what passive income is, the positives of earning passive income, passive income ideas, and the hard work that goes along with it.
What is passive income? Is it possible for the average person?
To start off, we should probably answer the question “What is passive income?”
Passive income is when you are able to make an income that doesn’t require a ton of work to maintain.
You, of course, need to do something in the beginning to start earning the income. That work can be either a time or financial investment. But, after most of the leg work is done, income continually comes in without much effort from you.
There might be a little maintenance here and there after you set it up, but overall the passive income stream should continue to operate on its own.
Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it is FREE.
What are the positives of learning how to make passive income?
Passive income is great. Some of the positives of earning passive income include:
- You can make money with little work to maintain it. This is a huge positive of passive income! Who wouldn’t want to find an income source that didn’t take much work to maintain?
- You can diversify your income. You want to diversify your income because one source of income may not last forever, and you may be able to lessen your risk by having multiple income streams.
- You can do what you love while still making money. This will help you to always have money for your bills and other necessities.
- You can retire and feel a little more comfortable knowing that you’re still bringing money in.
- You can start a family, and earning passive income can help you devote more time to your family since you may be able to work less.
- You can travel extensively and enjoy wherever you are exploring. Passive income can support you while you travel.
As you can see, there are plenty of reasons for why you may want to find passive income ideas.
Why should I have more than one source of income?
Do you ever feel too reliant on one source of income?
Maybe you are afraid that one day you will lose your job or that something will happen to your main source of income.
The beauty of starting one of these passive income ideas is that it allows you to diversify your income. This means you won’t have to worry as much about one of your income streams having a bad month or completely disappearing – you’ll be earning income in other ways and be prepared.
By diversifying your income with multiple income streams, you will have a backup plan, you may be able to retire easier and earlier, and so on.
What are the best passive income ideas?
Passive income sounds great, right?
You are now probably wondering exactly how to make passive income? Some passive income streams may require more set up than others, and some are riskier than others.
Each of the ways below have their positives and negatives so definitely do your research.
In this article, I’ll be outlining various passive income ideas:
- Affiliate marketing
- High yield savings accounts
- Rental real estate
- Rent out a room in your home
- Write a book
- Start an online store
- Create an online course
- Shop at cash back websites
- Earn credit card rewards
- Pay off your debt
Out of all of these passive income ideas, this one is my absolute favorite.
That’s because I regularly earn around $50,000 a month through affiliate marketing alone.
Now, it’s not always the most passive. But, I am able to earn income while I’m on vacation, have no internet, am sleeping, and so on.
Earning affiliate income is something that I’m extremely grateful for, especially lately. We have been so busy and I haven’t spent as much time on the business as I would normally like. Having this passive income source allows me to keep earning when I don’t have as much time for my business.
See, even though I am spending less time on the business, I am still earning a great income each month and this allows me to focus on a better work-life balance.
As you can tell, I’m a very big fan of affiliate income. It’s something that I enjoy due to how passive it can be. It makes full-time traveling much more enjoyable when I know I can bring in an income while having fun seeing new areas.
But what is affiliate marketing?
Affiliate marketing is when you try to earn money by placing an affiliate link on your website, social media account, etc. and have people purchase a product through your link.
An affiliate is a person or business who promotes a product or service offered by other businesses, and you become an affiliate when you promote an affiliate product. And as an affiliate, you are given a special link that tells the company that a customer came from your site.
An example would be Amazon book sales, where you link to a specific book on your website and try to get people to purchase the book through your affiliate link. Amazon and other companies want quality affiliates under their belt because they want all the help they can get to promote the products and services they are selling.
If you get someone to sign up through your affiliate link, the company rewards you for promoting their product.
This is what is known as a conversion, and it’s when a person completes a specific action designated by the affiliate program. It may be when someone enters their email address on a company’s website, when they make a purchase, fill out a form, or some other action through your affiliate link.
You can share an affiliate link with your audience in many different ways, such as:
- By adding an affiliate link to your blog (you can do this by inserting a link within a blog post, page, email, etc.)
- Promoting it on social media
- Sharing it in a podcast or webinar
- And more!
I recommend checking out my online course for bloggers, Making Sense of Affiliate Marketing. In this very informative course, I share the exact strategy and tips I use to earn over $50,000 a month through affiliate marketing. If you’re a blogger, then you need this course.
If you want to learn more about affiliate marketing, I recommend getting the free guide 10 Easy Tips To Increase Your Affiliate Income. With this time-saving cheat sheet, you’ll learn how to make affiliate income from your blog. These tips will help you to rapidly improve your results and increase your blogging income in no time.
High yield savings accounts.
This is probably the easiest of these passive income ideas to get into, yet so many people skip it!
High yield savings accounts are a great way to grow your savings, but most people have their money in accounts with low rates. Unfortunately, that means many of you are losing out on some easy cash!
If you’re like most people, you probably don’t even know what interest rate you’re getting on your checking and savings accounts. You were probably told the percentage when you opened your account, but that could have been years ago.
If you’re looking for a free checking account, as well as a higher than average interest rate on your savings account, look no further!
With Betterment Everyday, you can start earning 2.39% with a balance as low as $0.01.
That’s all great news for the average person who doesn’t have a really high account balance – a high yield savings account like this is really valuable for everyone.
How does that compare to the national average savings rate? It’s a very sad 0.09%. That is a HUGE difference from what Betterment Everyday is offering. If you are only getting 0.09%, then you are losing out on easy, passive money.
Savings accounts at brick and mortar banks are known for having really low interest rates. That’s because they have a much higher overhead – paying for the building, paying the tellers, etc. Betterment Everyday is an online option, which means they have lower costs, then passing the savings on to you.
Over a 10 year period, that same savings balance with a 2.39% balance would earn you an additional $2,390, whereas a savings account with an interest rate of only 0.09% would earn you a mere $90.
Your money is just as safe in a Betterment Everyday account as it is with a brick and mortar bank. You’re just earning more interest, which is something that everyone wanting to learn how to be rich can take advantage of.
Betterment is just a great place to save your cash and earn high interest on it, whether that’s your first $500 toward a rainy day fund, your $2,500 tax refund, your savings in general, a down payment for your next house purchase, or money you’re saving for your next vacation. It’s money you’re earning with no risk, and that’s a great feeling!
To get started and open a Betterment Everyday account:
- Signing up is super easy. Simply click here and sign up.
- If you join the waitlist for Betterment Everyday Checking, they will boost your Betterment Everyday Savings Account rate to 2.39%.
See, super easy!
Read more at How To Earn Over 20x The National Savings Rate.
Rental real estate.
I don’t have rental real estate, but this is one of the passive income ideas that we have been thinking about lately.
Earning rental income each month would increase our cash flow. It would likely be a steady stream of income we earn every month. Plus, we may even be able to earn significantly more for the property when we sell it years later.
But, not everyone considers rental real estate passive because your rental property might not always be rented out, and it takes work to maintain the property.
However, if the rental property is in good shape and you have good renters, then there may be little work that needs to be done in order to continually bring in an income. This does become even more passive if you outsource the property management duties and home maintenance tasks.
Here are two great interviews I did with two people who are active in rental real estate:
In these interviews, you’ll learn:
- How they each got into real estate investing.
- How they were able to afford so many rental units.
- What they look for in a rental unit.
- The types of property they invest in.
- How much time and money it takes to invest.
- How they manage rentals that aren’t in the same part of the country.
- Their worst renters.
- The sacrifices they had to make to make this all possible.
Rent out a room in your home.
While you may not want to buy rental real estate properties, there are other passive income ideas that are similar.
And, that is by renting out a room in your home.
We had several roommates when we lived in a house, so I am very familiar with this source of passive income.
While renting a room in your house most likely will not make you rich, it may earn you a good amount of side income. I know of a few people who rent out many rooms in their home and have been able to pay off their home completely due to this.
And while this is a little less passive than having a roommate, renting out a room in your house (or your entire house) on Airbnb is another similar idea.
There is a little more work involved in making sure the room is always clean and ready to stay in. But, if you live in a touristy area, this can be a great way to earn some side income that feels pretty passive.
I recommend reading A Complete Guide To Renting A Room For Extra Money.
Dividends from your investment portfolio.
This is one of the best passive income ideas that many take part in. It does take some money to start, but this is something you can work on even if you don’t have much money to start.
Here’s how Investopedia defines dividends:
“A dividend is the distribution of reward from a portion of the company’s earnings and is paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property, though cash dividends are the most common.”
By investing in dividend paying stocks, you may be able to earn a sizable passive income with very little work needed to be done. This one of the riskier passive income ideas, because there is no way of knowing exactly which stocks will earn money and what the stock market will do over time.
Learn more at How I Became A Successful Dividend Growth Investor and How To Start Investing For Beginners With Little Money.
Even though it isn’t super passive, especially in the beginning, it’s one of my favorite passive income ideas. But, it is a lot of hard work and can take up pretty much all of your time when you are first starting.
However, as discussed above, there are ways to make your blogging income more passive (like earning affiliate income), so that you can have more freedom.
Learning how to start a successful blog is no easy feat. If it were easy, then everyone would be doing it!
That being said, one of the best things I’ve ever done in my life is learning how to start a blog.
Blogging completely changed my life, and it’s funny to think that I literally had no idea what blogs were until I started one in 2011.
So, even if you have no clue how to start a successful blog, you can do it! And, I’m about to tell you how.
Here’s How To Start A Successful Blog In 10 Steps.
I also have a free How To Start a Blog Course. With this free email course, I will show you exactly how to create a blog easily, from the technical side (it’s easy – trust me!) all the way to earning your first income and attracting followers.
Here’s a quick outline of what you will learn:
- Day 1: Reasons you should start a blog.
- Day 2: How to determine what to blog about.
- Day 3: How to create your blog. In this lesson, you will learn how to start a blog on WordPress. My tutorial makes it very easy to start a blog.
- Day 4: How to make money blogging.
- Day 5: My tips for earning passive income from blogging.
- Day 6: How to grow your traffic and followers.
- Day 7: Miscellaneous blogging tips that will help you be successful.
Write a book.
While writing a book is definitely not easy, it may become passive income after you’re done with the writing and have finished launching your book. But, this is one of the passive income ideas that takes very little work to continue bringing in income for months and years later.
For example, I interviewed my friend Alyssa to learn how to make passive income by writing a book.
Alyssa self-published her first book and has sold more than 13,000 copies.
She is now earns over $200 a day from her book – $6,500 last month alone!
Alyssa is the author of the best-selling book A Beginner’s Guide to Living in an RV, a book about how anyone can start traveling full time in an RV.
She is also the creator of From Blog To Book, a course that will help you write, launch, and market your first book. I’ve already signed up for the course, and the expertise she shares is absolutely amazing. Some of the modules in her course include:
- Mapping Out Your Book Content
- Strategies for Writing Your Next 30,000 Words
- Where to Publish Your Book
- Tutorial: Getting Your Book on Amazon
- Design Your Book Cover
- Set Pricing for Your Book
- Create Your Marketing Plan
You can check out her super informative course by clicking here.
Another really great interview I did with someone about earning passive income from book sales is How to Make Money Self-Publishing Short Romance Novels on Amazon.
Start an online store.
Yes, you can start your own online store, and you don’t need to have tons of experience or a lot of money to do so. Many people start with no background, which means that if this is one of the passive income ideas you are interested in, then you should definitely read on.
I had the chance to interview the creator of E-commerce and Prosper, who explains exactly how to start an online store and make extra income.
Jenn is a corporate mom turned e-commerce store owner and blogger.
She started her online business a little over three years ago, and since then, she has developed and grown three successful online e-commerce stores earning an average of $19,000 per month.
She is super successful despite only spending around 5-10 hours per week on her e-commerce business.
Her course E-commerce and Prosper teaches you exactly how to start an online store. She reveals her successful rinse and repeat formula to students in her course. It’s the same formula she uses to earn an average of $19,000 per month. In her course you will learn:
- How to start an online store.
- Winning e-commerce success tools.
- How to turbocharge your e-commerce success.
- How to start making money in THREE days.
Learn more about this at How Jenn Makes Over $10,000 A Month With Her Online Store In Less Than 10 Hours Per Week.
Create an online course.
Creating a course is not the easiest of these passive income ideas, but it can be a great way to earn an income around the clock. Most of the work is done in the very beginning, and then there is some maintenance along the way to keep the course updated, help students, and so on.
I created Making Sense of Affiliate Marketing, my first online course, in July of 2016. After three years, I have earned over $1,00,000 from it.
This was without any webinars, Facebook Lives, any guest posts, a “launch” period, or anything else. It’s an evergreen course that has mainly spread through word of mouth.
Most people are completely shocked to hear this, because when most people think about running a course, they think of an intense sales period with a huge team and lots of live videos.
However, my course has pretty much just been me, no big promotions or videos.
This doesn’t mean that creating my first course came easy to me.
Creating an online course is a lot of work, no matter how you do it, and I decided to create my courses on my own terms. I want to be comfortable with how I develop and run my courses and make sure they fit with the rest of my business plan.
Don’t get me wrong, videos and a big launch period can be great for others, but for me, I wanted something a little simpler and something that reflects who I am.
I was very nervous when creating Making Sense of Affiliate Marketing. It was the first product that I’ve ever sold, and like all online course creators, I was afraid that no one would want it.
Learn more at How I’ve Made Over $1,000,000 From My First Course Without a Big Launch.
Shop at cashback websites.
This is not one of the passive income ideas that is going to earn you a lot of extra income, but it’s an easy way to earn a little money back while shopping how you normally would online.
Cashback websites like Ebates give you a percentage back of every purchase you make when you shop through one of their partner stores. The money you earn is passive because you aren’t doing any extra work to shop like you normally would.
Here are some examples of stores and the percentage of your purchase you can earn back:
- Walgreens 6%
- Amazon 5%
- Macy’s 6%
- Gap 8%
- Kohl’s 3%
Those are just a few, and these stores and the cashback amount changes from time to time. There are even stores who offer in-store cashback or a dollar amount back on certain purchases.
Learn more at Use Ebates For Free Cash Back And Get A Free $10 Cash Back.
Credit card rewards
This one might seem a little different, but I still think it can be passive income as you may earn income from using credit cards just like how you usually do, as long as you normally use them responsibly.
Travel rewards credit cards are extremely popular right now. I’ve been interested in and using them for a few years, and it seems like everyone going on a vacation is talking about them these days.
Note: You can find your own travel reward credit card here.
I absolutely love travel rewards cards. In fact, I’ve gone on many extremely affordable vacations due to travel rewards credit cards. I’ve also received lots of free cash back, they’ve allowed me super cheap first class flights, and more.
Actually, a couple of years ago Wes went on a 3,000 mile sailing trip in Europe, and when he was done, I was able to use travel rewards to book a last minute flight back to Arizona (where I was with the RV). He was able to sit in business class on a 12.5 hour flight (from London to Los Angeles, I believe) and it cost less than $100 after points. It would have cost even less if I booked it more than just a few days ahead of time. After a month on a boat sharing a bed with another crew member, we wanted to get him a roomier/comfier seat, and our travel rewards credit cards made it super affordable!
The credit card companies aren’t just giving away points and cash back because they are nice, so I’m sure you’re wondering what the catch is.
This is how they work – credit card companies offer these great bonuses and rewards because they are hoping that you’ll become a loyal customer. They know that having more customers means they’ll be able to make more money, which they make in various ways, such as:
- Interest charges
- Taking a percentage of each transaction when you use your credit card at a store
- Annual fees
- And more
So, credit card travel rewards aren’t a scam or a myth. They are part of how credit companies gain new customers, earn more money, and are only a reward if you use your cards responsibly (always paying your balance every month!).
I wrote a whole blog post on this subject here – Are Travel Rewards Credit Cards a Scam?
Pay off your debt
I know this doesn’t sound like the rest of the passive income ideas on this list, but the truth is that your debt is costing you money. With student loans, credit card debt, and/or a mortgage, you may be spending thousands of dollars a month on your debt.
But the part that’s really costing you is the interest, and the longer you have your debt, the more you pay in interest.
Wiping out your debt relieves some financial stress and can feel like you are earning a raise. You then have more money to put towards other things on this list, like purchasing rental properties or dividend earning stocks.
Now, I know that debt is something that many people have, and I know that it is something that is very difficult to get out of. And, debt can be useful – you can use it to buy a house or get through college. But, that doesn’t mean you have to live with debt forever.
Focusing on paying off high interest rate debt first, like credit cards, is one of the best ways to start. After you eliminate that debt, you’ll have more to put towards paying off other types of debt.
Is it difficult to earn passive income streams?
As you probably noticed in each of these passive income ideas, starting a passive income stream is not always going to be the easiest. There will most likely be a lot of legwork that needs to be done in the very beginning.
Some of these passive income ideas take time, some take money, and some of them are easier than others. If they were all easy, then everyone would be doing all of them!
Passive income through any of the passive income ideas above may require hard work but it is attainable.
Earning passive income is definitely not a way to get rich quick. In order to build your passive income stream, you may have to sacrifice sleep, work multiple jobs, and more. Passive income usually requires a lot of hard work in the beginning, but then simple maintenance afterwards.
If you want it badly enough, though, earning passive income can be well worth it. If you do it right, you may be able to earn an income well into the future so that you can focus more on doing what you love and less on what you’re doing to earn an income.
Are you interested in any of these passive income ideas? Why or why not?
The post 12 Passive Income Ideas That Will Let You Enjoy Life More appeared first on Making Sense Of Cents.
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