The journey to financial freedom is never easy and it requires a lot of commitment and resources. Whether you are an entrepreneur or an employee, do you know that you trade your time for money? Yes, you are compensated for the productive time spent and this is called active income. In this article, we’ll cover some of the best passive income ideas.
But what will you do when you get sick, sacked, or aged? In most cases, you stop earning and become dependent on other people. To avoid finding yourself in such a depressing situation, its high time you start looking into some of the best ways to earn passive income.
What Is Passive Income?
Passive income refers to the money that you earn from your investments and resources committed in a given venture without being actively involved in the day-to-day operations. Some of the best passive income streams do not require a constant input of time in order to generate revenue.
In layman language, it’s also referred to as the strategy of making money while you “sleep”. However, for you to earn any passive income, it requires a lot of commitment and resources. You must be prepared to commit your money and time initially in order to build a sustainable stream of a passive income portfolio.
Here are 4 Passive Income Businesses?
Seeking the best passive income is something that we all admire but what does it take to build a passive income business? Creating a portfolio that will be generating a stream of passive income for you requires high initial investment and time to grow it.
The good thing is that after some time, all the hard work will start paying off when the portfolio grows and you will start enjoying a consistent flow of revenues without much input.
The following are some of the best passive income businesses that are thriving today.
- Investing In Real Estate
The real estate market provides one of the greatest platforms for investors looking for an extra passive income stream. Although the real estate market has faced a lot of fluctuations in property pricing and demand over the years, it’s still one of the best passive income businesses that you can venture in.
One of the ways that investors earn a passive income through investing in real estate is by rental income. You can buy a furnished apartment or build your own houses and rent them out to willing tenants. Through this investment, you will be getting recurring rental income every month without being actively involved.
If you are not willing to go into rental properties, you can still invest in what is known as real estate investment trusts (REITs). When you invest in REITs, you can enjoy dividends at the end of every financial year.
Another one of those best passive income strategies in the real estate sector is the real estate crowdfunding program. Here, investors have the option of going for either equity or debt investment when investing in residential or commercial properties.
2. Investing In High-Yield Dividend Stocks
Investing in dividend stocks of listed companies is another great method of earning a decent and consistent passive income. Any time a public company makes profits, part of those earnings are given back to the investors in the form of dividends.
The more shares you have, the higher the amount of dividends you earn. As an investor, you can then decide to either use the revenues generated or re-invest it in the same company by buying more shares.
Different companies offer different dividend yields. In order to maximize your earnings and diversify risks, it’s advisable that you invest your money in reputable companies operating in different markets.
3. Peer-to-Peer Lending (P2P)
Just as the name suggests, peer-to-peer lending involves lending money to a person or business entity mostly through online crowdfunding programs at a certain interest rate. Under this program, the investors fund a business idea and provide the seed capital as a loan.
Most P2P programs have a return on investment range of 5-12% and have very few barriers to potential investors thus, making it an ideal business investment choice.
4. Certificate of Deposit (CD Ladders)
Investing in a certificate of deposit from banks is another low risk, low return item and can be counted as another one of those best ideas for passive income that any risk-averse investor can take advantage of. A low-risk investment means that an investor gets low returns but there is 100% security of your deposit.
Investing in a certificate of deposit is a better alternative to having the money sit in your bank account without generating any revenue. The longer the time you commit your money in a certificate of deposit ladder, the higher the accumulated returns.
If your bank does not offer this product, you can also opt for money market funds or investing your money in high yielding locked saving accounts.
6 of the Best Passive Income Ideas:
Now that we have highlighted some of the popular passive income businesses, let’s now have a look at other passive income ideas that you can venture in with little capital and time. If implemented correctly, they are some of the best ways that you can earn passive income in today’s dynamic global economy.
- Renting Out Your Extra Room/Full Unit To Airbnb
Do you have an extra room in your house that is not occupied or an entire unit lying idle? That’s is a business opportunity. You can lend out those extra spaces to short-term guests and earn passive income.
You can list your property on Airbnb and anytime you have an extra space or going on vacation, you can lend out your house for extra quick passive income.
Alternatively, you can convert those units that are not occupied into short-term vacation rentals and start marketing them.
Soon, you will start getting clients who can book and occupy without you being actively involved.
2. Publishing E-Book
Do you love writing or you are a professional in a certain field? Your skills can earn you a passive income easily in this digital world. All you need to do is to write an e-book on a particular topic that people are interested in and publish it on Kindle.
Alternatively, you can choose the self-publishing option on Amazon since it’s easier for starters. When you have your e-book published and ready for sale, you earn authors loyalties anytime someone buys or downloads your e-book.
3. Starting An Affiliate Marketing Blog
Starting an affiliate marketing niche is another easy passive income idea that you can invest in. It requires little capital and you can grow it into a big business within a very short period of time.
You need to start by identifying a niche that you want to focus on such as home improvement. Once you have identified your focus niche, look for a suitable domain name and reliable hosting.
After that, you will need to set up your blog/website and provide informative posts on your selected niche. But how do you make money through affiliate marketing? You need to register on available affiliate marketing programs in your niche and review different products.
Any time a customer buyers a product that you have reviewed through your affiliate link, you qualify for a commission. This is what makes affiliate marketing a great way to earn passive income.
4. Creating An Online Course
In today’s digital world, virtual learning has taken over the traditional brick and mortar learning processes. With the availability of platforms such as Udemy and Thinkific, you can create an online course and sell it to anyone on the globe.
If you are an expert in a certain field, just create an online course and you might be surprised by the high number of people who are looking for such skills. Alternatively, you can use an online course to complement your blog posts and podcasts and let people pay for it so as to get full and in-depth information.
5. Selling Stock Photos
Do you love taking photographs? You can earn good passive income through selling stock photos. Here, you sell the copyright of your photographs to interested businesses and brands that would like to use them.
If this is your passion or you are a professional photographer, you can try and register on various online platforms that sell stock photos and you will earn a decent passive income.
6. Leasing Out Your Tools And Equipment
Leasing out your own tools and equipment is an old business concept that is still viable even to-date. Here, you lease your tools and equipment that are not in use to other needy parties at a fee.
It requires less time investment and you are assured the best passive income every day/month.
Just look around your home and identify some items that you are not using and think of how they can make money for you instead of lying idle.
You can lease properties such as farm tools, industrial equipment, office items, event tents and chairs among others.
Now that you have understood what passive income is all about, it’s your turn to create one or more. Just identify suitable passive income ideas that can work for you and start now because passive income is the only guaranteed path to wealth creation.