Who does not dream of making money without having to lift a finger – or at least do as little as possible so that money still flows into your account every month?
The web is overflowing with ads on how you can earn thousands of dollars in a few hours and even become rich in just a few months. However, if something sounds too good to be true, unfortunately, it often is.
Still, there’s a lot you can do to make money without getting a regular extra job or wearing yourself out in any other way. The solution is called passive income.
A passive income is a source of income that doesn’t require physical labor. In other words, it’s an income you have available in your money account in addition to your regular salary if you even have one.
You may be wondering what kind of passive income you can create for yourself? Some options suit most people more and some less. So, in this article, we look at certain passive income ideas that could be a good investment of your time and can bring you money.
Start an Online Shop
Starting your own eCommerce business can be a great way to build passive income streams. By starting an online shop, you can sell products that you are interested in. Nowadays, you do not have to develop the products yourself and be responsible for a warehouse. Instead, you can sell other companies’ products and build an online store just by using your home computer.
For example, you can try affiliate marketing where you market other companies’ services or products and earn commissions every time a visitor makes a purchase. The commission can be either a fixed amount or a percentage of the total purchase price.
Another alternative is dropshipping, a business model that involves you selling goods directly from the wholesaler to the end customer. This way you do not have to worry about deliveries, shipping, and expensive storage costs. Marketing of the products can either take place via your online store or from well-known marketplaces such as Amazon.
Consider Stocks
One of the most natural ways to build passive income is by investing in long-term good dividend stocks. This is probably also the least risky strategy with equities.
By building a portfolio of stocks that are good dividend stocks, you can get a regular cash flow. Good dividend stock companies are those with a good history and those that boast long-term expected earnings growth, strong cash flows, low debt-to-equity ratios, and industrial strength. They are profitable but only distribute part of the profits and have a tradition of raising dividends annually.
It is becoming increasingly common for companies to distribute several times a year. It is possible to invest in stocks so that you receive a dividend every month. In the beginning, you may want to reinvest the dividends to create a bigger money flow. But you can also let the dividends become a passive income in your budget.
Invest in Real Estate
Properties provide excellent opportunities for stable investments and a passive income. Namely, buildings are durable and generally increase in value over time. The income comes in the form of rental income from apartments or premises.
In comparison with shareholdings, however, investing in real estate requires some work in the form of care and maintenance (unless you hire a property manager, of course). In addition, a fairly large initial capital is required to buy the property itself.
Rent Out Your Garage or Extra Room
If the idea of rental income appeals to you but you cannot afford to invest in new property, you could always consider renting out an extra room in your house or unused garage space. This way, you can earn a lot of extra money a month, especially if you live near a big city.
Before you rent out your garage or room, you should sign a proper contract to avoid misunderstandings, which can turn out to be costly. There are ready-made leases you can download online and customize.
Passive income from renting also means some maintenance, such as lawn mowing, snow removal, and minor repairs. Many landlords can, however, lower the rent slightly in exchange for the tenant taking care of these things themselves. In this way, it is possible to create a completely passive income.
Peer-To-Peer Lending
So-called P2P loans are a relatively new trend that is growing rapidly. This means that borrowers and lenders meet on a platform that mediates loans. For everyone involved, it means better conditions.
Lenders generally have access to a new market and better interest rates than most bank accounts. Borrowers get another player to compare terms on.
The money you lend through the platform will be divided into many different loans. This is so that your risk is as small as possible. You can usually choose between the interest and the repayments you receive to be reinvested and build up a larger capital. For those looking for passive income, the return instead constitutes a good cash flow.
Final Words
Creating extra revenue only brings benefits. By creating a passive income, you can build extra financial security for yourself and your family. The above ideas for passive income can help you make more money when times are good and keep you afloat if you run into a financial crisis.
