Passive Income is money received from a venture on some sort of routine basis, with little effort required to maintain the cash flowing in. Passive income is not money for nothing, however. Most types of passive income take some degree of effort to establish. However, once you’ve successfully launched a passive income stream, it is relatively easy to maintain it, and the additional funds could dramatically alter your financial status. And few things are as rewarding as watching money flow into your bank account while your hands are idle. Since the hardest part of earning passive income is getting started, here are seven great passive income ideas to consider investing your time and effort in today.
1. Rent Some Space
The easiest way to use what you have to earn passive income is to rent out some of the space you either own or are leasing yourself. You could rent out a room (or a floor) in your home, or storage space in your garage. You could also sublet a room in your apartment. You can even use a service like airbnb to rent out your property for short periods of time when it is convenient. Depending on your location, rentals can be a relatively lucrative passive income stream.
2. Get Cash Back Rewards on Credit Purchases
Yes, you can earn passive income by using your credit card. If you have to use a credit card in your business or just use credit cards for many purchases, make sure you are using one that provides cash back rewards. Cards that do so reward cardholders with anywhere from 1-5% “cash back” – in either direct monetary reimbursement or through application to your credit card balance – based on card use. The key is to find one that rewards cash back on items that correspond to your lifestyle. If you continually make significant numbers of credit card purchases on grocery items, for instance, you will want to have a card that provides the highest percentage of cash back rewards for the those kinds of purchases. You will also need to ensure you pay your card balance off completely each month; otherwise you negate your cash back rewards with interest expenses.
3. Lend to Peers
Another way to earn passive income is to lend money to people and collect interest. You can do this directly, by drawing up a loan contract and lending to an individual or a business. In the age of the Internet however, there are now other high tech options to consider. Peer to peer (P2P) lending sites, like Prosper and Lending Club, allow investors to pool resources and provide loans to borrowers who may have trouble obtaining them from conventional financial institutions. P2P lenders take some of the legwork out of finding borrowers, and they also allow you to start out with a small initial investment, too; you can begin providing loans on Lending Club for as little as $1,000.
4. Earn a Dividend
When it comes to investing in the stock market, you can win or lose betting on a stock to rise in value. Or you can take the safe bet, and buy shares of stocks paying a steady and high dividend. There are few things easier to earn than dividends from a reliable stock. There are lists of good stocks in this category that make it relatively easy to find one that is right for you. There are also many stocks with dividend reinvestment plans (DRIPs), which allow you to automatically purchase additional shares with your dividends in lieu of collecting payments. This can allow an initial modest stock buy to build in value over time, and help you painlessly accrue shares to generate the passive income target you have set for yourself.
5. Real Estate Crowdfunding
Much like it transformed lending, the Internet is revolutionizing real estate investing now as well. It is easier than ever to earn passive income from online real estate investment trusts, or eREITS. Companies like Realty Mogul, Fundrise, and Realty Shares let investors buy into the commercial real estate market for as little as $1,000 in many cases, from which they can earn a significant return. While there are always risks with any investment, the minor amount of cash required up front by most eREITs allows investors to limit their level of risk, and also provides them an opportunity to earn passive income in commercial real estate they would not otherwise have.
6. Design an App – and Sell it.
Every single day there is a new hot app in your smartphone’s store that is selling fast. And millions of others that are moving off the shelves at a modest pace as well. If you’ve got a great idea for an app, designing it and selling it in an app store is a terrific way to passive income. If you have an idea but lack the programming skills to build it, that is not an insurmountable obstacle. You can hire a programmer to do all of the technical design work, there are many out there willing to do so. Once your app is developed and in the store, you can literally make money while you sleep. You can also generate additional passive income if your app can run advertisements, bringing in marketing revenue on top of app sales.
7. Get Creative
If you possess artistic talent, you can find a way to generate passive income with it. Creating something, and then finding a venue where the items can be sold is a bread and butter passive income technique. However, artisans are no longer limited to selling their creations in specialty markets, or to a limited pool of wholesalers; the Internet has opened up a whole new world for the creative class. Artists can create their own online stores to sell what they create, for example, or use established sites to help market their goods. One such site, Café Press, is a great resource for graphic designers. eBay Stores also provide an established venue and excellent support to get your goods to market as well.
While some passive income plans, like credit card rewards programs, are truly easy money, most require some sort of investment. The initial investment may be significant amounts of time to nurture the idea, or seed money to get the idea off the ground. Many of these passive income ideas need both, and a few require the investor to possess some artistic skills as well. Nonetheless, if you think you are disciplined and patient enough to establish passive income, these seven ideas offer considerable promise. Research the ones that appeal to you the most, put your time and effort into one of them, and start earning money on a passive income stream today.