First and foremost, what is passive income? Everyone has their own understanding but in a very layman term, Passive Income is the income that keeps coming while you are asleep or on a vacation. Passive income is a very important step to be wealthy and everyone should learn this in personal finance.
Think about a business setup that you do not have to actively manage but can still earn you handsomely. It is a way to make money while sleeping and most wealthy people have such settings in place. This sounds like a dream plan but looks around, most businesses set up with the same mindset. This is a holy grail way to achieve financial freedom. I have outlined some basic passive income ideas you can start yourself right now. So let’s get into them one by one.
Start a Blog or a Website for Passive Income
Starting a blog or a website on something you have passion about is the best way to start passive income. This is because you can provide more unique and easy to understand content. You know about your passion, hobby and when you have a passion for something it is easy to make them explain.
Once you have you have multiple ways to monetize it. You can add Google Adsense or add some affiliate products to it. There are other types of ads as well other than AdSense.
High Yield Dividend Stocks for Passive Income
High yield dividend stocks are another good way to make passive income. Although you need some capital to invest, some knowledge, some luck and a lot are of patience. We are talking about building wealth with stocks who gives quarterly dividend. Like the great stock investor, Warren Buffet does, if you can buy a premium stock at a discounted price you are in for a win in the long run. These stocks give dividend and you have options to cash it out or re-investing which gives even more dividend income. This is the power of compound interesting.
Peer to Peer Lending for Passive Income
Peer to peer investing is somewhat new but many are investing and making some good money. There are companies like LendingClub and Prosper which allow you to invest your money to lend others. basically you are providing loans to others and benefitting from the interests. You can filter through lots of options and provide a loan to whom you think will give you most return while keeping your capital safe.
Online Real Estate Investment
online real estate is also fairly new. This is for investors who can not get their hands directly into classic real estates like buying, selling, repair, rent, and flipping. Fundraise is a new concept which lets you invest in real estate as you are investing in the stock market. Here this company invests in many real estate projects to buy and renovate properties. It lets you earn appreciation money as well as monthly rent income. Fundraise claims for about a 6% average annual return.
High Yield Savings and Cash Deposits
This is a classic way to make extra income. It is basically just saving money but in accounts that provide a higher return than normal savings accounts. Money Market account is one of the options which gives more return than a savings account. Cash deposits are another option. Cash deposits lock your money for a limited period of time but you can see it as a savings account that you do not need in day to day life.
Write a Book for Passive Income
Writing a book is similar to opening a blog or a website. You need to make sure you articulate your ideas in a way one can easily understand. Once you have the content ready, you can either create a book yourself or get help from others who can help you write. Nowadays there is software available that can combine your content and make it a book.
Youtube Channel for Passive Income
Youtube channel is a very effective and entertaining way to make passive income. Just like how you can start a blog with something you have passion about, you can create videos for something you like. All you need is a good camera, nowadays mostly all smartphones come equipped with a high-quality camera. Make sure your channel is engaging to people which helps you increase the subscribers. Once your channel is established and has a certain number of subscribers, you can start making passive income through it.
Sell a Digital Product for Passive Income
A digital product can be anything from an eBook to a course, a software or an app. If you are good about something that can help others, good chance you can make money through it. If one is skilled in a process, has experience in it, you can make it a course that can teach others the same.
Invest as a Silent Partner
If you have good capital to invest, and you are not in a position to invest directly, manage your investments then you can choose this path. it is a good idea to invest with someone who is already in business in which you want to invest.
Sell Your Space
Selling your space is like more like renting your extra room, Airbnb is gaining popularity nowadays which lets you rent out your extra room for a night or more. It is like a single hotel room. One can provide some more facilities such as an extra couch, tv channels, nice view, clean and quiet room, service, etc. If you are providing better service and customers give good reviews, Airbnb will rank you higher which will give more chance your room will be in demand. Take a look at this, who knows you can make money online using Airbnb.
Is It Possible to Passive Income in Reality?
Yes, it is really possible, but this needs to be treated as a business. Like any business, it requires lots of dedication, passion, and involvement. Once you set it up, it is your passive income, but to reach there, you need to work.
So these were some passive income ideas if you are looking got any other topic, please look at our Personal Finance Tutorial.