Making money while you sleep. Has a nice ring to it, doesn't it?
After reading books like "Rich Dad Poor Dad" and "4
Hour Work Week," I became obsessed
with making passive income. Whenever someone needs additional income, the
stereotypical suggestion offered is to “get a part-time job.” But what if you
don't have the time or energy to put in all those extra hours? I know I didn't.
Plus that wasn't as appealing as making money while I was trading time for
money. For that, you may need some passive income ideas — ways to make money
with little investment of time and effort on your part.
Here's a list of quite a few passive income ideas, so it's likely
that you'll be able to find at least two or three that will work in your
situation.
1. Try
out index funds.
Index funds provide you with a way to invest in the stock market
that is completely passive. For example, if you invest money in an index fund
that is based on the S&P 500 Index, you will be invested in the general
market, without having to concern yourself with choosing investments,
rebalancing your portfolio, or knowing when to sell or buy individual companies.
All that will be handled by the fund which will base the fund portfolio on the
makeup of the underlying index.
You are also free to choose a fund that is based on any index that
you want. For example, there are index funds set up for just about every market
sector there is — energy, precious metals, banking, emerging markets — you name
it. All you have to do is decide that you want to participate, then contribute
money and sit back and relax. Your stock portfolio will then be on automatic
pilot.
2. Make
YouTube videos.
This is a venture that is growing rapidly. You can create videos
in just about any area that you like — music, tutorials, opinions, comedy,
movie reviews — anything you want . . . then put them on YouTube. You can then
attach Google AdSense to the videos, which will overlay your videos with
automatic ads. When viewers click on those ads, you will earn money from
AdSense.
The keys will be to create compelling videos, to promote those
videos on social media websites, and to create enough of them that your income
will be coming from multiple sources. There's a good bit of work that goes into
creating videos, but once a video is done it can become a completely passive
cash flow source for a very long time.
Don't think you can find success with YouTube? You sure can. Emily Eddington used her love
for makeup and YouTube to quit her full-time job. She has received
over 66 million views on YouTube. This former morning news anchor took her
passion — makeup — and turned it into a phenomenal success.
3. Try
affiliate marketing and make sales.
This is a passive income technique that is better suited to people
who have blogs and active websites. You can sign up to promote certain products
or services on your site, for which you will be paid either a flat fee or a
percentage of the amount of the sale completed. This isn't as hard to do as you
might think, since there are thousands of companies in the world who want to
sell their products in as many places as they can. You can find affiliate
offers either by contacting vendors directly, or on dedicated websites, such as ClickBank. It's always best if the product
or service is one that you are either very interested in or is highly relevant
to your website.
4.
Put your photography to work on the web.
Do you like photography? If you do, you may be able to convert it
into a passive income source. Photography websites such as Shutterstock and iStockphoto can
provide you with platforms to sell your photos. They may offer either a
percentage or a flat fee of each photo that is sold to a site client. In this
way, a single photo could represent a cash flow source since it can be sold
again and again. You simply need to create your photo portfolio, put it on one
or more photo platforms, and then the activity becomes completely passive. All
the technicalities of the photo sales are handled through the web platform. And
yes, that's me in a stock photo you can purchase from iStockPhoto.com. My good
is a photographer and has uploaded a few hundred photos to their platform and
makes a good residual income from it.
5. Purchase high dividend stocks.
By building a portfolio of high dividend stocks, you can create
regular passive income at an annual rate that is much higher than what you get
on bank investments. Just as important, since high dividend stocks are stocks,
there is always the potential for capital appreciation. In that way, you can
earn passive income from two sources — dividends and capital gains. You will
need a brokerage account to purchase these stocks and
complete the research needed.
6.
Write an ebook.
This can be a lot of work upfront, but once the ebook is created
and marketed it can provide you with a passive revenue stream for years. You
can either sell the ebook on your own website or offer it as an affiliate
arrangement with other websites that provide content related to your ebook.
7. Get
cash-back rewards on credit cards.
There are credit cards that provide cash-back rewards ranging
anywhere from 1% to 5% of the amount purchased. You're going to be out shopping
and buying anyway, right? Rewards will give you an opportunity to earn some
passive “income” (in the form of reduced outgo) from doing what you would do
anyway. We recently started being mindful of collecting reward points on our
cards especially since we like to travel. In the past year we've been able to
use our reward points to pay for 9 round trip flights and few nights in a
hotel. Now that's what I'm talking about!
8.
Sell your own products on the internet.
The possibilities here are endless
— you can sell just about any product or service that you like. It could be a
product you have created and can manufacture on your own or it could be digital
in nature (such as software, DVDs, or even instructional videos). You can set
up a dedicated website for this product or service, unless of course you have a
website or blog already in place. Alternatively, you can also sell it on an
affiliate basis, either by offering it direct to websites and blogs related to
your product or service, or through a platform such as ClickBank.
9.
Invest in real estate.
This probably falls more in the category of semi-passive income,
since an investment in real estate is always at least a little bit of an active
venture. Still, once you have a property that is established and fully rented,
it's mostly a matter of managing the property and keeping it performing well. Additionally,
there are professional property managers who can manage your property for you,
usually for around 10% of the monthly rent. This professional management can
make the investment much more passive, but will take a bite out of your cash
flow.
According to Brandon Turner, an active real estate investor and
co-host on the popular BiggerPockets Podcast, The key to success with rental
properties is buying smart. Not every property is going to provide a good
return or prove to be passive. Understanding how to analyze potential real
estate opportunities is
incredibly important. As the old adage goes — you make your money when you buy!
Another benefit of investing in rental properties is the loan pay
down. If you obtain a loan to buy the property, each month your tenants are
paying off part of the loan. Once the mortgage on the property has been paid
off, your cash flow will increase dramatically, allowing your mediocre
investment to skyrocket into a full-fledged retirement program. It wouldn't
take many paid-off properties to provide a pretty great, and mostly-passive,
future for you and your family.
10. Buy
a blog.
Thousands of blogs are created every year, and thousands are
either completely abandoned by their owners sometime afterward. If you can buy
blogs with a reasonable amount of web traffic — as well as a demonstrated cash
flow — it could be a perfect passive income source. Most blogs
employ Google AdSense, which provides a monthly revenue stream based on
ads that Google places on the site. There may also be affiliate programs
generating additional revenue. Both income sources will be yours once you
purchase the blog. From a financial perspective, blogs usually sell for 24
times their monthly income. So if the site generates $250 a month in income,
you can likely buy it for no more than $3,000. Translation: a $3,000 investment
will buy you $1,500 per year in cash flow. You may even be able to purchase the
site for less than 24 months' earnings, if the site owner is particularly
anxious to get out. Some sites have good “evergreen” content that will continue
generating revenue even years after the site has gone silent.
Bonus tip: If you were to buy such a site, and then to
reinvigorate it with fresh content, you may be able raise the monthly revenue
enabling yourself to sell the site at a later date for substantially more than
what you paid for it. Finally, instead of buying a blog, you might want to create your own blog.
You can make some money either way!
11. Pay
off a credit card (or two or three).
Reducing a fixed expense is the financial equivalent of creating
passive income. This is certainly true when it comes to credit cards. Let's say
that you owe $10,000 on a credit card, on which there is a monthly payment
equal to 2% of the balance, or $200 per month. By paying the card off, you'll be
free up $2,400 per year in cash flow that would've gone to the monthly
payments. That's like getting a guaranteed 24% return on a $10,000 investment.
Good deal?
12.
Write a book and collect royalties.
Much like writing an ebook, there's a lot of work upfront. But
once that's done, and the book goes into the sales stage, it becomes a
completely passive venture. This is especially true if you can sell the book to
a publisher who will pay you royalties for the distribution and sale of the
book. You'll get a percentage of each sale made, and if the book is fairly
popular, the royalties could be substantial. Just as important, the royalties
can continue flowing for many years. Mike Piper from OblivousInvestor.com did
just that. He wrote a book, Investing Made Simple, which was
sold strictly on Amazon. He had decent success with the first book that he
created an entire series of book. Those books now net him over 6 figures per year.
Not too shabby.
13. Set
up a website selling a product.
If there is a product that you are particularly knowledgeable
about, you may be able to sell it on a dedicated website. The technique is
similar to what you would use for your own product, except that you will not to
be concerning yourself with product creation, but only with the sale of someone
else's product. You may even find after a while that you are able to add other
products that are related. Should that happen, the site could generate
substantial revenues. If you are able to have the product drop shipped to
customers directly from the manufacturer, you won't even have to get your hands
dirty. That may not be 100% passive, but it's darn close.
14.
Invest in real estate investment trusts (REITs).
In #10 we talked about investing in real estate. But let's say
that you want to invest in real estate, but do it in a truly passive way. You
can do that through a real estate investment trust. This is something like a
mutual fund holding various real estate projects. The fund is managed by
professionals, so you never have to get involved. One of the big benefits of
investing in REITs is that they typically pay higher dividends than stocks,
bonds, or bank investments. You can also sell your interest in a REIT anytime
you like, which makes it more liquid than owning real estate outright.
15.
Become a business silent partner.
Do you know of a successful business that needs capital for
expansion? If so, you can become something of a small-time angel investor and
provide that needed capital. But rather than offering a loan to a business
owner, you instead take an equity position in the business. In this way, the
business owner will handle the day-to-day operations, while you will act as a
silent partner who also participates in the profits of the business.
16.
Become a referral source.
Every small business needs referral sources in order to maintain
sales. Make a list of small business providers that you use on a regular basis
and feel you can recommend to others without reservation. Then contact the
owners and see if they have any kind of cash referral offers available. You can
do this with accountants, landscapers, electricians, plumbers, carpet cleaning
services — the list is endless. Keep a list of these businesses, and be ready
to refer them to your friends, family and coworkers. You can earn a fee on each
referral just from talking to people. Don't overlook referral programs at work
either. If your company offers a referral bonus for either new employees or for
new customers, then take advantage of that plan. It's easy money with virtually
no work.
17.
Rent out unused space with Airbnb.
Airbnb is a concept that has only been around
for a few years, but it has exploded around the globe. Airbnb allows people to
travel all around the world and to stay in accommodations that are a lot less
expensive than traditional hotels. They do this by staying
with participating Airbnb members who rent out part of their homes to
travelers. By participating in Airbnb, you can use your residence to
accommodate guests and earn extra money just for renting out space in your
home. Paula Pant, cubicle renegade AffordAnything.com took a stab at making
extra money renting out locations exclusively through Airnbnb. Her Airbnb
experiment netted her an extra $19,000 in revenue and 1 police
visit! How much you will make will depend upon the size and condition of
your home and your location. Naturally, if your home is located in a high cost
city, or close to a popular resort, your income will be much higher. It's a way
of earning money on space in your home that might just be sitting empty
otherwise.
18.
Build an app.
Apps can be an incredibly lucrative income source. Think about how
many people today have smartphones. Come on, it's just about everybody! People
are downloading apps like crazy — and for good reason . . . Apps make
people's lives easier. Whether it's an app that helps people put together nice
pictures for their blog or an app that keeps track of tasks, there are
helpful apps out there for everyone. You might be asking if there are so many
apps out there, why would you want to attempt to create an app? Isn't there a
lot of competition? Well, yes, but fresh, creative ideas can win. If you can
come up with something unique, you can make quite a bit of money. Simple — yet
unique — apps can be pretty passive. Don't know how to code? No problem.
First, you can learn. Check out Nathan Barry's success in his inspiring
article, "How I Made $19,000 on the App Store While Learning to Code."
Nathan also put his design expertise to work in an ebook teaching others how
they can design their own apps. Second, you can hire a developer to build
your app based on your idea. This could end up being an expensive option,
although it will probably yield a professional-looking app.
The end result is an app that has the potential to make you some
relatively passive income. Don't downplay the idea to build an app — it's a
good one!
19.
Create an online course.
Everyone is an expert at something. Why not create an online
course about your passion?
My buddy Ramit Sethi at IWillTeachYoutobeRich.com is an expert at creating online
courses. He has made an insane amount of money selling his lessons. Most people
would be happy making a fraction of what he makes online. There are a number of
ways you can produce and host your own online course. One very simple way is to
use a website like Udemy.com.
Udemy as over eight million students and is a great way to get your content in
front of others for their consideration. Once you create an online course, it
can work for you while you sleep! What do you put in your online course? Good
question. You can add video lessons, checklists for completing steps you
recommend in your video lessons, small ebooks to supplement the lessons, audio
files for people listening while traveling, informative interviews with
like-minded experts, and a whole bunch more! In fact, you can create several
packages at different price points. Some people will want everything, so you
can include ‘the works' for the highest price point and then have two lower
price points so that you can receive the largest possible volume of orders.
20.
Make an online guide.
If writing articles or creating videos isn't your thing, and you
want to make money online, try creating an online guide. A good example of this
comes from Pat Flynn's website, SecurityGuardTrainingHQ.com. On the
website, he has a map of the United States that allows someone to click on any
state to see the security guard requirements for that state. By
providing specific information in a guide-like format, you can make money
through some of the means already addressed: advertisements through Google
AdSense, affiliate links, and even memberships you can sell from your online
guide. It's a fantastic idea!
21.
Outsource most if not all of your business needs.
If you're spending too much of your time on an existing business
running it yourself, why not outsource most if not all of your tasks? Yes, it
will require you to give up some control, but in many businesses it's the only
way to free up your time so you can focus on other tasks that will result in
more income. If you don't want to hire employees, consider hiring freelancers
who work as contract laborers. Look for freelancers with a strong work ethic
who provide quality results.
Here's a list of tasks that you might want to outsource:
Bookkeeping
Writing
Web design
Editing
Task management
Social media marketing
and so much more!
Yes, many people can turn their existing businesses into passive
income businesses. As long as the main product or service isn't something only
you can do, you can transform your business into a passive moneymaker.
22.
Make money for tasks you'd do anyway.
Yes, you can make some money doing some of the things you're
already doing.
For example, InboxDollars allows you to make money by playing
games, shopping online, searching the web, and more! Swagbucks also
allows to make money doing similar activities. It's amazing. Take advantage of
these websites and make some extra money! I've purposely provided a long list
of passive income ideas in the hope that there is something on this list
for everyone.
Source: http://www.businessinsider.com/ways-to-earn-passive-income-2015-12
