Passive Income

What if there was a way for you to earn money while you slept? Doesn't that sound like a dream come true? Even the most devoted workaholics have a limited number of hours in the day. If only you could get paid multiple times for something you only did once—how that's passive income works! The ability to generate multiple income streams is now easier than ever thanks to technological advancements. We're no longer constrained by the constraints of a traditional 9-to-5 job, and financial independence is at our fingertips. Even if you already have a full-time job, passive income can help you improve your financial situation.

So, how do you go about doing it? Building a passive income will take some effort at first, but choosing a method that plays to your strengths will yield the best results, and it can even turn into a fun hobby! Do you have a talent for photography? You can sell your photographs on stock photography websites. Or perhaps you've always wanted to make an investment. With the help of a robo-advisor, you can learn how. Whatever your strengths are, we've compiled a list of 35 different ways for you to generate passive income and build your wealth.

What is Passive Income?

We've already covered the fundamentals, but let's go over them again. Passive income, in a technical sense, is money earned from an enterprise in which a person is not actively involved. Passive income is taxed by the IRS in the same way as active income (money earned from performing a service), but in a slightly different way.

Why You Should Establish a Passive Income Stream?

If you've heard the expression "don't put all your eggs in one basket," you'll know that it applies to almost any aspect of your life, including—and especially—your finances. Aside from the fact that retirement is becoming an increasingly elusive goal, no one has guaranteed job security, so by diversifying your income, you can feel more secure about saving for the future. Being financially secure will make you less likely to incur credit card debt and will make you happier.

How To Make Passive Income?

There are four main ways to generate passive income: investing money, investing time, renting out items, and getting paid to do things you already do.

Invest Your Money

1- Use a robo-advisor to invest. A robo-advisor is a digital platform that provides algorithm-driven financial planning services to clients by collecting information about their financial situation and goals.

2- Invest in stocks that pay dividends. Dividend-paying stocks are an excellent way to accumulate long-term wealth because you receive a portion of the company's earnings simply for owning the stock.

3- Purchase a rental property. Have some extra spaces that you're not using? Rent it to a long-term tenant or capitalize on the rising demand for short-term lodging by listing it on a room-sharing website.

4- Take part in crowdfunded real estate. Real estate investing has a high financial barrier to entry. If you aren't quite there yet, consider a crowdfunded real estate venture in which you can invest in a small percentage of real estate.

5- Purchase a Real Estate Investment Trust (REIT). REITs are companies that manage income-producing properties across a wide range of industries. They are traded on major stock exchanges, allowing anyone to invest in a real estate portfolio.

6- Purchase royalties. Music royalties are calculated as a percentage of the proceeds from the sale or use of a song. Even if you're not a musician, music royalties are frequently auctioned off and will send you a monthly check.

7- Invest your money in index funds. Index funds are similar to mutual funds in that selections are made by an asset management company rather than a portfolio manager. This type of investment is an excellent choice because it is relatively hands-off and has a low turnover rate, resulting in lower transaction costs.

8- Make yourself a silent partner. A silent partner's sole responsibility is to provide capital to a business. Because silent partners are rarely involved in operational roles, it is an excellent source of passive income.

9- Invest in digital currencies. At the moment, cryptocurrencies are teeming with opportunity, and it is possible to earn a passive income simply by holding certain cryptocurrencies.

10- Begin using peer-to-peer lending. Find a borrower online and begin peer-to-peer lending—a simple way to lend money to businesses and individuals. You can earn more money than if you did the same thing through a traditional financial institution.

11- Create a high-yielding savings account. Consider opening a high-yield savings account if you already put money into a savings account on a regular basis. This type of account provides a secure way to earn a consistent income.

Start a Side Business

12- Create a mobile app. Create an app if you have programming skills and an original idea! The app marketplace is rife with opportunities for all types of apps.

13- Create (or purchase) a blog. You can start a successful blog with a little entrepreneurial spirit and a lot of creativity—it just might take a little time. Prepare to work hard at first, but your efforts will be rewarded more than once through multiple revenue streams such as advertising, sponsorships, and affiliate marketing.

14- Marketing through affiliates. In addition to having a blog, there are several ways to use affiliate marketing. Although a large audience is advantageous, some local businesses also provide a word-of-mouth referral programme for referring friends and family to their establishments.

15- A business idea can be licensed. If you have a great idea for a business or product but don't have the time to launch it, consider licensing it. Companies interested in your idea are willing to pay royalties in exchange for the right to use it.

16- Purchase a vending machine company. You've probably never considered who owns all those vending machines, but the vending machine business can be a lucrative passive income source! Once you've found the right location, hire someone to restock the machines for you, and you've got yourself a business.

17- Begin by house or pet sitting. This is a hybrid passive/active income source, but if you're going to be sitting at home doing nothing anyway, why not get paid to do it somewhere else? For a little extra money, watch someone's house and pets while they're away.

18- Begin a YouTube channel. Although the YouTube space is competitive, there are few start-up costs. Ad placements and sponsorship opportunities can help you earn a sizable passive income if you're passionate about your chosen niche and provide value to your viewers.

Monetize Your Creative Skills

19- Your photos should be licensed. Consider selling your photos to stock photography websites if you have a natural eye for photography. Once you've been approved, you'll earn royalties every time a customer downloads one of your photos.

20- Create t-shirts or other items. Create eye-catching graphics for e-commerce sites like Zazzle or CafePress to use on a variety of products ranging from t-shirts to mugs. Production is handled, and you will be paid a commission on the products sold.

21- Make a website template. If you consider yourself an HTML whiz, designing and selling website templates for bloggers or e-commerce sites could be a great way to supplement your income.

22- Offer graphic design files for sale. Even inexperienced graphic designers can generate a passive income by creating and selling graphic design files such as icons and templates of various types.

23- Create an eBook. Do you have a story you'd like to share? Writers no longer have to wait for a drafter's attention before releasing their work. Self-publishing an eBook will earn you a lot of residual sales if you market it well (think social media).

24- Music should be licensed. For the musically inclined, licensing music, particularly instrumental tracks, can provide a good passive income while also assisting companies or video creators in need of high-quality audio.

25- Offer digital art files for sale. Design a piece of art or photography and sell it as a digital download for a lower price to reduce overhead costs and supply chain logistics. Many people are looking for low-cost ways to furnish their homes and would gladly print the art themselves.

Teach

26- Make an eCourse. An eCourse can be about anything you're interested in. Do you know a lot about digital marketing? Make an eCourse! Are you an expert in bird watching? Make an eCourse! There is an audience for whatever you are passionate about.

27- Create a video course. Video course topics, like e-courses, have an infinite number of options. Video as a medium provides a more personal connection and a different way to learn, making it a viable option as well.

28- Offer a lesson plan for sale. If you're a teacher, you can earn a passive income by selling your lesson plans to other teachers online. You're already doing it, so why not share your expertise?

29- Create an online manual. You can write a guide if you are an expert in your field or have in-depth knowledge of how something works or how to fix something.

Get Paid for Everyday Activities

30- Sign up for credit cards that offer cash back. Many credit cards provide some form of cash back benefit, but finding one that provides the most rewards for your lifestyle is the key to maximizing your return.

31- Advertise on your vehicle. Some businesses will pay for ad space on your vehicle. All you have to do is drive around, which you're probably already doing!

32- Take part in research studies. Earn money by allowing researchers to track anything from your shopping habits to your sleeping patterns. If you feel comfortable sharing this information, it can be a great source of passive income with little to no effort.

33- Rent out a room in your home. Rent out an extra room in your house if you already have one. You can supplement your income by providing simple hospitality.

34- Shop at cash-back websites. Shopping through websites that offer cash back rewards can be just as effective, if not more, than couponing! Simply go about your normal shopping routine to earn rebates on your purchases.

35- You can rent your belongings. Do you have a jumble of equipment in your garage that you rarely use? It's for rent! Most people only use specialized equipment for lawn care or home improvement projects once. You'll make some money, and others will be able to use your tools for a fraction of the price of purchasing them outright.

It's not easy to start a side business or figure out how to invest your money when you're short on time, but the payoff is well worth it. The money you earn from passive income will undoubtedly put you well on your way to meeting your financial objectives and bringing you one step closer to true financial freedom. Find out where you stand financially if you're wondering how your finances currently stack up.