Passive income ideas are a great way of generating wealth without having to put in all the hard work that active income requires. Passive income ideas are income-generating models that make you money even if you stop actively working on it, after putting in the initial work of setting it up. It is what is generally referred to as “making money while you sleep.”
However, some passive income ideas require little work to keep the income stream flowing. There is even a growing list of people who are resigning from their active jobs and taking on passive income models as their main sources of income due to the freedom and money they offer. This article covers a list of 10 great passive income ideas that can help you generate wealth.
This is a great passive income idea that can make you some hustle-free money on the side while you sleep. A dividend is defined as profits shared by a company to its shareholders. Thus, a dividend stock is a stock that yields profits (dividends) regularly which is then distributed to investors/shareholders regularly.
This passive income idea can be risky so if you don’t know the types of dividend stocks and how to select them. There are three types of dividend stocks to look out for when you’re “stock hunting”.
These stocks have a lower than the average yield of the S&P 500 index. The S&P 500 index measures the stock performance of the 500 biggest publicly listed companies in the US. So, if an average stock in the S&P 500 index yields 2%, any stock that yields dividends below 2% is classified as low-yielding. Picking a low-yielding stock in the passive income idea is less risky, however, you need to be extra patient.
These stocks yield dividends between the value of the average yield of the S&P 500 and 1% higher. For example, if the average yield of the S&P 500 is 2%, any stock that yields between 2% and 3% can be termed as a medium yielding stock. If you want a steady stream of income and growth, then consider subscribing to this passive income idea.
These are stocks that yield more than 3% of the average dividend yield of the S&P 500. High-yielding stocks are higher than the inflation rate. If you want to make more money in the short term, at the expense of steady growth, then consider high-yielding stocks.
You can also lend money to governmental institutions or private companies through bonds. All you have to do is buy a bond issued by an institution seeking to raise funds and sit back while money rolls into your bank account. This passive income idea is less risky and more rewarding and a great way to start building wealth.
Generally, dividend stocks and bonds are among the best and safest passive income ideas on the market today. You can count on GuardianWealth to help you build passive income through high-yield dividend stocks and bonds.
This is one of the hottest passive income ideas currently. You can just create a channel on YouTube on any topic or niche of your choice and start making money either through the YouTube partner program or from sponsors. This passive income idea costs little to nothing to start but can be very rewarding if only you’re passionate about your niche. The keywords to being successful in this passive income idea are passion and patience.
Just like YouTube, creating a blog can make you some money. You gain revenue from Google Adsense or direct sponsors. Just find a niche that you are very good at and passionate about and write about it. This passive income idea needs a lot of time and patience, especially in the early stages. This is because you need to build a strong presence/brand and attract a huge following which can be time-consuming, but worth it. You can employ marketing experts to help you market your channel or blog, but that may cost you a lot of money. This passive income idea is very rewarding in the long run, if only you don’t give up. You can also take up the task of marketing your blog/channel if you have the expertise. A Simple way to market your blog/channel is through social media. Many people have made a fortune from using this passive income idea, so can you. Just give it time and effort.
This passive income idea is filled with scams so you have to tread with caution. The idea is simple; allow advertising agencies to run their adverts on your car at no cost to you, for a monthly fee. All this passive income idea requires is that you have a good car, great driving skills, and a perfect driving record. To make money, you have to register with the company, then you’re given a specific time and distance to cover either daily, weekly or monthly. As mentioned earlier, there are a lot of fraudsters exploiting this passive income idea, therefore we will provide a few tips on how to spot such fraudsters and avoid them.
The first and most important tip is to run away if the money their offering is too good to be true. If the advertising company offers you huge money in this passive income idea then it is highly probable that it is a scam.
Another tip is to check if there is a screening process in place. Legitimate advertising companies using this passive income idea have a thorough screening process for their drivers. So, if you come across an advertising agency wanting to use your car for their services and have no strict screening process, then just walk away.
Lastly, if you are asked by an advertising agency to send some money to them before they sign you on, that is a red flag. No legitimate agency using this passive income idea will ask you to send a signing-on fee. If you’re asked to send them money to cover the advertisement costs, don’t do it.
Investing in REIT is another great passive income idea that can generate a good sum of money. However, you need to conduct careful research and analysis before you invest. REIT means Real Estate Investment Trust and it is into financing profitable real estate. The profits made are then shared with investors. REITs are sold on the stock market, and just like stocks, you need to be prudent in choosing the right ones if you want to succeed with this passive income idea.
Tip: To decrease risk, do not pick individual REITs. Instead, pick an ETF that is made up of a group of REITs.
REITs are similar to dividend stocks we discussed earlier. They pay dividends to investors regularly. Generally, this passive income idea is in three forms.
This type of REIT invests in profitable real estate and shares the dividends with its investors. Equity REIT makes its money from the rent paid by its clients.
The second type in the REIT passive income idea is the mortgage REIT. It operates just like a mortgage. It lends money to property owners and benefits from the interest charged on the loan.
The third type in the REIT passive income idea is a cross-breed of Equity and Mortgage REIT, known as Hybrid. It invests in both Mortgage and Equity REITs and makes money from both.
As stated earlier, this passive income idea comes with its associated risks, and if you don’t know what you’re doing, you may end up losing all your money. So, make sure you do thorough research or speak to your financial advisor before investing in this passive income idea.
One of the best passive income ideas on the market today is affiliate marketing. By now, you may have heard of affiliate marketing and may have even tried selling some products but you’re yet to enjoy the benefits. Don’t worry, just like every profitable venture, it takes time, patience, and practice to succeed in this passive income model. We’ll share a few tips on how to be a successful affiliate marketer, but, first, what is affiliate marketing? It is a passive income idea that allows you to sell products for companies and earn a commission. Successful affiliate marketers make thousands of dollars a month, which is not bad for a passive income idea. Affiliate marketing works in three simple steps:
Select a niche that you have passion for and lots of expertise if you want to succeed in this passive income idea. For example, if you love marketing and you want to blog about it, choose a specific niche under marketing, maybe, social media marketing.
Once you’ve chosen your specific niche, create content that would pique the interest of your readers and add value to them. The surest way to attract and retain an audience with this passive income idea is to produce easy-to-read and highly informative content. Do not try to sell, rather provide useful information.
Always engage with your audience. Be ready to answer any question your audience might have or give additional information where necessary. Make sure you form a bond with your audience. This passive income idea requires a lot of people skills, so make sure you develop some.
You can also make some money by lending money to people who might need it. This passive income idea comes in two forms. First, you can go the traditional way of lending directly to people and charging them interest. You then make money from the interest when your money is returned. Alternatively, you can register with a peer-to-peer (P2P) lending platform.
Several websites are into this passive income idea and they operate in one of two ways. The first way is to distribute your money among several borrowers. The other way is to give your money to just one borrower. Some websites allow you to set your own interest rates. You can also agree with your borrower on the interest rate. This passive income idea is very risky since the loans are not insured. But it is a very rewarding venture if you find a good platform with credible borrowers.
Another lucrative passive income idea is the writing of an ebook or creating an online course. This passive income model has blossomed in recent times due to several factors.
Online courses can be taken at any time and any speed, unlike offline courses where you need to commit to a specific time and speed. This allows employees to upgrade their skills while maintaining their jobs.
Most online courses allow students to study in the comfort of their homes making this passive income idea a very attractive one.
This is probably the most exciting aspect of this passive income idea; it is relatively cheaper. And you can still get the equivalent level of tuition you’d have gotten had you enrolled in a school made of brick and mortar.
These factors and many more have created the demand for online courses. So all you need to do is just spend some time writing a course that you are familiar with. You can then sell these lessons or place them on market places where they can be purchased. This is a great passive income idea because money rolls into your bank account each time your coursebook is purchased.
An Ebook follows the same passive income model. You write the book and you can either self-publish it or give it to a third party to publish it for you. You can then begin to rake in some cash once your books are purchased.
This is another tremendous passive income idea that will generate money month after month. In this passive income idea, all you have to do is create a website that provides highly valuable information at a premium price. To access that information, members will need to pay some money. You can attract members by first providing high-quality information for free and then ask them to subscribe to your website for a fee if they want more of the same content.
To succeed in this passive income idea, implement these few tips.
There are other factors you can implement to help you make money in this passive income model, but these are just the basics. The key takeaway is to provide your members with content that’ll keep them hooked and coming back for more. And with a vast amount of information available today on the internet, you already have all the resources you need to be successful with this passive income idea.
This passive income idea seems straightforward and simple. Just rent out your property to people who might need it and make some cool cash on the side. If you have available space in your home, you can register it with a marketplace like Airbnb to facilitate the rent. This passive income model ensures that you effectively utilize available spaces in your home.
If you also travel a lot and will want someone to occupy your home when you’re away, you can rent it out, instead of paying someone to take care of your property in your absence. Under this passive income idea, you get to set your own prices and determine how much you want to earn. Depending on where your home or property is located, you can earn thousands of dollars a month. If you live near a popular vacation resort or tourist attraction site, then you will strike gold with this passive income idea.
This passive income idea is great for graphic designers. As with other passive income ideas, it takes time to build wealth, so you have to be patient. With this passive income idea, you don’t need to worry about the available market, production, cost of production, and shipping. All you are responsible for is the design. The marketing, selling and distribution of your design is handled by a third party at no extra cost to you.
One of the most reputed internet companies into this sort of passive income model is Amazon. Under the Merch by Amazon program, you simply create your beautiful and eye-catching design and upload it. Amazon then creates a product page for your designs. When buyers purchase the items that have your designs, you are paid royalties. This passive income model requires that you have, at least, basic visual arts skills to produce compelling designs.
Several other passive income ideas are available to you. However, not all of them will suit you or your set of skills. So, make an honest evaluation of your skills and personality and choose passive income ideas that’ll fit them. If your chosen passive income model fits a skill that you’re passionate about, then you are on the road to success.