Making money sleeping or eating mimosas on the beach is a dream for many of us (and even those who say it’s probably not lying!). But is it really possible to get rich without lifting a finger?
With these nifty passive income ideas, you’ll take one step closer to the life of your dreams – with all the money you need to fund it!
What is “passive income”?
Before we dive into the best passive income ideas based on your lifestyle and talents, it’s worth taking a moment to establish what we really mean by passive income, as this phrase is often misused or misused. interpreted.
While passive income is not a magic money-making tactic that will make you rich without a job, it is a way to maximize returns so that you can work less and less hard over time. In other words, over time the effort decreases and the benefits increase… That’s good, isn’t it?
A good example of a passive income stream is the purchase of a rental property. While it takes work and effort to find the right property, manage the legal side of things and prepare it for tenants, plus a financial investment in terms of the mortgage and surety once you’ve done that. you can earn money with minimal effort. Of course, there may be property inspections and tenant changes to deal with, but most of your time as a landlord will benefit from passive rental income.
Basically, passive income is a long term decision that involves short term rewards. If you’re willing to devote your time, skills, and money to your goal of generating passive income and potentially enjoying early retirement, you could earn thousands in the long run.
What is not passive income?
As we have mentioned, passive income is often misinterpreted and taken for ancillary activities. If a side activity or a second job is a great way to increase your sources of income, unless it works in a way that allows you to move up further and further (while making more and more money) , then it’s not really passive.
Your passive income is not …
Your job: The idea of a passive income stream is to increase your regular income or allow you to retire early. Your main job is not a passive income stream.
A side activity: while a side activity can generate passive income, it is most often an example of active income because it requires your attention and effort to maintain it. However, if your side activity takes you back in time without losing weight, it could turn into passive income over time.
Consulting – Consulting is a great side job or online activity if you have a specialized topic that you can share with the world, but it’s not a passive income stream. If you want to generate passive income through coaching or counseling, you need to grow your practice with other people who could support the practicality while you step back and enjoy the benefits.
Investing for speculation – You will often hear people tout investing in the stock market as a source of passive income. However, we don’t agree that investing for speculation is one of the best passive income ideas for one simple reason … Stock appreciation is not income. That said, investing in stocks that pay high dividends is an example of passive income because it gives you a steady injection of income without you having to do anything.
A good tip for determining if an investment is passive income or appreciation / speculation is whether you will see a cash return in the form of dividends (passive income) or if you only get a monetary benefit once you have invested. Sold (appreciation).
Examples of what is and is not passive income:
Some of these common small business ideas are not passive income streams. However, there are other ways to make it a business model while you sleep …
|Active Income Idea||Passive Income Alternative|
|A consulting job where you charge by the hour||Create an online course that people can buy|
|Computer programming on a freelance basis||Building a specific program that you can license and sell over and over again.|
|Freelance writing||Writing a book or eBook|
|Working in construction or a similar industry||Investing in real estate|
|Driving for Uber or a delivery company||Hiring your car or selling ad space on your vehicle|
|Hosting photoshoots or taking photos for commission||Selling stock images or building your photography Instagram account|
Best passive income ideas to build wealth
Passive income may seem complicated, but there are so many ways to generate passive income in 2021 that you are sure to find the perfect option that matches your skills, commitments, goals, and passions. To inspire you in your mission toward financial independence, here are some of the best passive income ideas that almost anyone can benefit from.
Start a dropshipping store
Dropshipping is one of the best ways to start making money wherever you are, even if you don’t have a lot of money. Some dropshippers report that they make over $ 100,000 per year. Dropshipping is not a get-rich-quick scheme, but it does require an initial investment of time.
This business model involves the creation of an e-commerce store where customers browse and buy products. The best thing about dropshipping is that you don’t have to see the products that you are physically selling.
With drop shipping, your supplier takes care of everything from manufacturing to packaging to execution. And because you don’t need to send money to your vendor until your customers pay, your cash flow risk is limited.
Another risk to be avoided is that of investing in a product that has no market. You can use a platform like Oberlo Marketplace to find trending products in different niches to sell in your store.
Depending on the product you choose and its price, you can earn solid passive income and learn how to run an e-commerce business.
Create a print-on-demand store
If you are an artist, designer or entrepreneur, print on demand can be a profitable passive income idea and monetize your creativity. This involves working with suppliers to personalize private label products such as T-shirts, posters, backpacks or books and sell them on demand.
As with drop shipping, you only pay for the product after it has been sold. No bulk purchase or inventory required. Print-on-demand stores are a good source of passive income because:
You can create products quickly and put them on sale in minutes
Shipping and fulfillment are handled by your supplier.
Once your store is set up, you can automate many sales and marketing processes.
With a print-on-demand business like Printful, you can easily create products to sell on your Shopify store. Overall, print on demand is a simple, low risk business idea that you can get started with quickly.
Sell digital products
Digital products are assets or media items that consumers cannot physically touch. These include downloadable or streamable files such as Kindle books, templates, plugins, or PDF files.
Digital products are a great source of passive income because they have high profit margins. You only need to create the asset once, and you can sell it multiple times online. No need for storage or inventory.
You can sell as many digital products as you want. Many creators increase their passive income by selling kits, printables, files, and other assets that professionals can use. UX kits, for example, sell people, flowcharts, and wireframes to aid in the design process.
Dividend stocks are a proven way to earn passive income. You will have to do a lot of research to find good stocks and invest a significant amount of money to receive big dividend checks. However, if you regularly invest money in dividend paying stocks, you can generate good residual income over time.
For each of these investment opportunities, make sure you open an account with the best online brokerage and get rewarded for doing so.
Our favorite place to invest is M1 Finance. You may not have heard of M1 Finance, but it is a FREE investment platform that allows you to create and invest in a wallet for free.
Investing in dividend paying stocks is amazing because you can build your portfolio of, say, 30 stocks. Then, your investments will be automatically allocated to your entire portfolio with each deposit, FREE! It can even rebalance itself automatically. So your dividends can also be reinvested. It’s a fantastic platform and it was designed for that.
Automatically invest in the stock market
If you’re not interested in picking dividend paying stocks (and I can understand that), there are always ways to passively invest in the stock market. You can automatically invest in different ways through what is called a robo-advisor.
A robotic advisor is exactly what it sounds like: a robotic financial advisor. Take about 10 minutes to answer a few questions and set up your account, and the system will take care of it.
The most popular robo-advisor is Betterment, which you can set up to invest automatically and they’ll take care of the rest for you. The good thing about Betterment is that they charge one of the lowest fees in the robo-advisor industry and make auto investing a lot easier.
Invest in real estate
Real estate investing has been a well-established method of generating wealth for almost as long as real estate has been around! Real estate investing was a complicated business to start, requiring a lot of time, effort and experience. However, real estate investing apps have now removed many complications and made it easy and assessable to become a real estate mogul from the comfort of your couch.
If buying a property seems a bit off budget, you can also buy a real estate investment trust, also known as a REIT. These investments generally pay generous dividends and follow the evolution of the stock market. This way the value of your investment will rise / fall just like physical goods, but they are much easier to buy / sell and you can diversify your portfolio by investing in different markets.
Buy or create a blog
A great way to make money with minimal effort is to start a blog. Of course, the construction will take time and effort, as you will need to blog regularly and build an following. However, you can earn amazing income blogging through affiliate marketing or even selling ad space on your website.
If you don’t know how to start a blog, you can also make money by buying an existing blog. This is a great “hack” because you can benefit from already established traffic and cash flow.
Get involved in affiliate marketing
Affiliate marketing involves partnering with a business to display and promote its products or services. Every time someone follows one of your affiliate links to your partner’s site, you earn a commission.
There are many ways to use your affiliate marketing partnerships to generate passive income. You can mention sponsors on your YouTube channel or podcast, write buying guides with links to company products, compile product reviews, unzip videos, and more.
To find the right business to join, you need to do your research and find a brand that matches your core values and the needs of your audience. There is no point in becoming an affiliate of a butcher shop if your blog’s primary audience is, for example, vegans.
Become a silent business partner
If you want to run a business but don’t have the time or experience, you might consider becoming a silent business partner. In other words, you contribute financially to the business but leave the day-to-day operations to your partner.
After your investment, you will regularly receive a percentage of the profits and your money will be backed by a percentage of commercial ownership.
Not confident enough in your dubious partner’s business idea to invest? There are many websites for entrepreneurs looking for a quiet business partner to invest in their business.
Write an eBook
While blogging and monetizing is a good passive income idea, writing a book or eBook is an even better example of passive income because you only need to write it once!
Instead of blogging, spend time sharing your creativity or expert knowledge by writing a book or eBook and selling it. Every time someone buys a copy, they receive royalties, which can add up quickly if they hit the right target.
Royalties for a printed book typically range from 5% to 20% of the price of the book. E-books are even more profitable, paying around 25%. Audiobooks typically pay royalties between 10% and 25%.
Obviously, you have to write a good book to make a living from what you write. However, a few sales could help you earn the extra cash you need for your next vacation or to get closer to your early retirement goals.
Naturally, a list of passive income ideas would be incomplete without mentioning the famous Airbnb home sharing platform! While it’s not for everyone, if you have a spare room, vacation home, or other “residence,” you could miss out on some incredible winnings!
Airbnb isn’t the only option for renting accommodation, so you may want to find the best platform for you.
Rent your car
If your car gets in your way, you could make money by lending it to others while you’re not using it. Depending on your location and the make / model of the car, you can make money from this lucrative idea.
If the idea of renting your car appeals to you, you might want to take a look at Turo. Think of it like Airbnb for cars.
Depending on your location, you could also earn impressive income by renting out your driveway or garage. Big cities will be particularly profitable, as parking spaces are premium and people will pay more for a safe and guaranteed place to leave their cars.
Once you’ve found the perfect passive income opportunity that suits your lifestyle, skills, and passions, it’s important that you don’t let that extra money make you lazy. Make sure every penny works for you by putting the money you earn in a high-interest bank and letting it keep running no matter what you do.
It is also worthwhile to reinvest some of your passive money in the business. For example, you can buy additional vending machines or another storage unit to have more passive income opportunities and increase your investment.
Whichever way you choose to increase your income, make sure it fits into your schedule and don’t be afraid to try different options. There are no limits to the amount of income streams a person can have, so mix things up and enjoy the returns.
How can I make $1,000 a month with passive income?
Making $1,000 a month in passive income alone might feel like a pipedream, but it’s actually entirely possible to earn this sort of cash!
Some of the best ways to earn $1,000+ a month are through a successful YouTube channel, writing a best-selling book, joining an affiliate program, creating an online course, or investing in real estate.
How can I make passive income in 2021?
As we all know, 2021 has been a bit of a weird year for businesses with so much uncertainty. That said, it’s still relatively easy to make money online in 2021 with a bit of inspiration and know-how.
Some of the best ways to make passive income in 2021 include stock investment, cashback websites, selling stock photos, affiliate marketing, and blogging.
Can passive income make you rich?
Believe it or not, passive income is the primary source of income for most of the richest people in the world. Making money with minimum effort, reinvesting it wisely, and watching spending is vital for getting rich, so passive income streams are an essential part of any wealthy entrepreneur’s portfolio.