I worked a traditional 9 to 5 job for many years and eventually I got burnt out. I knew that I wanted more freedom and the idea of passive income became very appealing. I had heard of many people quitting and replacing their full-time job with passive income, but I had no idea where to start.
This pursuit led me to start this blog where I now make over $6,000 per month, however, this is not the only way to make residual income.
What exactly is passive income?
Passive income is where you get paid over and over again for work that you did once. I have multiple income streams that are passive, many of which I will mention below.
Passive Income Ideas
By choosing the right sources of passive income, you can invest your time the way that you want to instead of the way you have been spending it. Passive income is a way of buying back more time.
There are so many opportunities out there to make residual income in network marketing. However, this is NOT one of those “things.” These are legit ways for you to make money while you sleep with something that fits your passion, experience, or skill-set.
1. Invest in Crowdfunded Real Estate
Real estate can be a great way to make money while you sleep. However, because it costs so much to purchase a home, using a crowdfunding platform to invest in real estate debt can be a more affordable option.
If you want an easy, low-cost way to invest in real estate, consider using a company like Fundrise. You only need $500 to get started, and they have three main eREITs to choose from.
You can also consider checking out Realty Shares which is one of the largest crowdfunding companies around today. While most deals require at least $5,000, they occasionally offer properties with a $1,000 minimum. The cool thing about Realty Shares is that you get to hand pick the property you invest in.
Want to invest in a specific hotel or a certain apartment complex? They allow you to do just that.
Right now you can use the promo code Partner100 to get $100 bonus for signing up.
Keep in mind that there are risks to investing. It is also worth noting that we do have an affiliate relationship with RealtyShares.
2. Dividend Income
Dividend income is dividends paid to shareholders of stocks in the form of cash in your bank account. Dividend-paying stocks are especially enticing for those wanting to make a living with passive income, as they will get payouts each quarter or so. Even Warren Buffet historically is a fan of dividend-paying stocks.
If you are going to go this route, make sure that you educate yourself and pick solid stocks so that you can depend on your dividend income for years to come.
If you don’t have an investment account, check out Ally Invest because trades are as low as $3.95.
This low fee is awesome because most brokers charge around $10 per stock trade.
3. Peer-to-Peer Lending
Peer-to-peer lending is when you loan other people money who don’t qualify for traditional financing. With investment returns often in the 6-10% range, investing money with a company like Lending Clubcan get you much higher income results than a typical savings or money market account.
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One cool bonus with Lending Club is that they also give investors a chance to earn award miles while investing. Investors with up to $100,000 in LendingClub can earn one award mile for every $1 they have invested.
4. Get Out of Debt
The less money you’re paying in interest to creditors, the more money you have in your pocket each month. Talk about a simple form of passive income. Getting out of debt quickly can increase your income even more because you’re no longer paying interest to creditors each month.
So if you have high-interest debt that you want to get a lower interest rate on, check out Credible as that have rates as low as 4.99% for refinancing your credit card debt.
Oh yeah, and they will give you $50 if you are approved, to sweeten the deal even more.
5. Open a High-Yield Account
Are you looking for a low-risk way to make passive income? Then look at opening a high-yield savings account with an online bank like CIT Bank that pays 22x more than traditional banks. The currently are paying 1.35% which is unreal.
The yields are much higher than most local banks but still come with FDIC insurance. While this won’t make you filthy rich, it will be a safer way to make consistent income and not lose your money since they are FDIC insured.
6. Write a book
Once the initial work of creating the book is done, and you’ve spent some time developing an effective marketing plan, selling books can be a great way to produce some serious residual income.
I wrote a book called You Can Retire Early and I get a 10% royalty for every book that gets sold.
Once your book is available on a site like Amazon, you could receive a check each month for doing absolutely nothing. Obviously, the more time you spend marketing your books, the more money you’ll make.
7. Rent out a Room in Your House
Do you have an extra room that you rarely use? Why not rent it out to someone looking for a short-term rental on Airbnb. There are millions of people using Airbnb to find a place to stay instead of staying at a hotel, sometimes even for months at a time.
While this is not entirely passive income, it can take a little upfront work but, the returns can be amazing. If you end up giving this a shot, consider getting a maid service to minimize the amount of time you spend on transitioning from one guest to another.
8. Affiliate Marketing
If you have a website already then this is a no-brainer. Some people are making over $50,000 per month like Michelle who teaches others how to make money online with her course Making Sense of Affiliate Marketing.
If you don’t have a website, you can start one for less than $3/month.
Affiliate marketing can be a great way to make passive income because when people click on the affiliate links on your site, you receive a commission at no additional cost to them when they purchase a product or service.
9. Get Cash Back on Shopping You Already Do
You have to shop anyway, so why not get cash back on things you’d normally buy in the first place? I use a site called Ebates that will pay you $10 just for signing up and, it is free.
With their double cash back specials, you can double your passive income earnings if the right items go on sale.
The key to shopping sites like this is to commit to buying only what you normally would purchase and not buy things just because they are on sale.
10. Create an Online Store with Drop Shipping
With the explosion of eCommerce, drop shipping has become very popular. Here’s how it works: you create an online store that offers products from certain manufacturers. A person visits your site, orders a product, and your system sends the order to the specific manufacturer. The manufacturer then completes the order by shipping it directly to the customer.
One of the cool things about this type of business is that you do NOT need to order inventory. The customer pays for the product; you collect the profits, and the manufacturer stores and ships the products to the customer. It’s as simple as that.
If you’re interested in starting a drop shipping business, consider using a platform like Shopify to build your online store.
They have twice as many templates as their competitors, and they even have a 14-day free trial that you sign up for here.
11. Create an Online Course
Online courses can be a great source of passive income. Here’s how they work: you create a value-packed online course that helps solve a problem or fills a need.
The course can include videos, e-books, and emails with pertinent information. Customers sign up to purchase the course, and your system automatically emails them everything they need to access the materials.
You get money for the price of the course that you created and automation does all the heavy lifting for you.
12. Create YouTube Videos
Everyday regular people like you and me are making money on YouTube. Each time someone watches one of your videos, ads can appear, and you can make money from those ads. The key to becoming successful with YouTube is building a large enough subscriber and viewer base.
It can take a lot of time up front, but once your videos are live there is potential for you to make passive income from each video indefinitely.
Granted you probably will not make a living off of just a few videos, so be prepared to make over 100 videos if you really want this to take off.
13. Start a Business and Have Someone Else Run it
Owning a business can be a good passive income source, provided you’ve got the right people running the business for you. Whether it be through the purchase of an existing business or opening a new business, your great business idea can be a viable source of passive income.
For some creative small businesses that you can start for under 100 bucks, check out the $100 Startup by Chris Guillebeau. These are all verified businesses that grew to over six figures per year and started with very little money up front.
14. Buy a Vending Machine Business
A successful vending machine business can be a great way to make passive income. The key is to find the right places to install your vending machines. Check with smaller brick and mortar businesses that have over 100 workers in the building on a daily basis, and see if they need vending machines.
Another key to vending machine success? Ask those workers what items they prefer to have in the vending machine and then stock accordingly. Once again, if you want to reduce the amount of time that you are involved, consider hiring someone to stock the machines for you.