Building different passive income streams is something that we all strive for. While the bulk of the money you make might be at your 40-hour job, here are ways to make extra money to have extra funds for a rainy day or possibly a trip you didn’t think you would ever be able to take.
While a lot of people will think that passive income isn’t actually real, don’t believe the haters. Everyone at Walletminded has passive income streams of some sort and we are walking proof that passive income is real and works.
What is passive income?
Passive income is income resulting from cash flow that is received on a regular basis that requires minimal to no effort by the recipient to maintain it. Passive income is not a pyramid scheme or a get rich quick scheme, but it does provide multiple streams of revenues if you choose to put in the initial effort.
What are the pros and cons of passive income?
There are quite a few pros to passive income and just a few cons. To start, you can make money with little work to maintain that extra income. In addition to making more money, you can diversify your income, do what you love and also make money, you can spend more time with your family, and it will even free up more funds to make money while you travel. While there aren’t many cons of passive income, one big thing we must note is that taxes are needed to be paid on all forms of income each year. So while you may have made $10,000, be sure to account for the tax on that $10,000 and not to spend it all at once.
How many streams of income should I have?
When it comes to your money, there is no “one size fits all” model when it comes to passive income or generating income streams. How many streams of revenue should depend on where are at financially and what your financial goals are.
How to make passive income while you sleep
If you’re ready to create a passive income, check out these 18 strategies and learn what it takes to be successful in them.
Affiliate marketing is one of our favorite types of passive income streams. Affiliate marketing is when you earn money by placing an affiliate link on your website, social media account, or YouTube video and have people purchase a product through the link you provided.
What is affiliate marketing?
An affiliate is a person or business that shares someone else’s product or service to their audience. As an affiliate for another company, you are provided with a link that tells that company where their sale came from. One of the most popular affiliate marketing channels on the internet is none other than Amazon. Picture this, you do a search for “what are the best mountain bikes this year?” More than likely the top 5 results on Google are websites that link out to Amazon with their picks on the top 5 mountain bikes you can buy. Since the website is an affiliate of Amazon, Amazon will pay that website and business owner for every sale coming from their referral link for a certain amount of time. When someone purchases a mountain bike or product from your link, this is known as a conversion.
Where can I place affiliate links?
The opportunities are endless with affiliate links. You can add an affiliate link to a blog post, within your email, on your social media accounts, within a podcast, or even by sending someone a text message telling them to buy something.
What kind of affiliate products should I promote?
We highly signing up for affiliate products that are within your area of influence. If you are in a mommy blogger group, we recommend to sign up for affiliate products that this audience you can relate to.
Pay off your high-interest debt
While paying off your high-interest debt isn’t the most appealing or attractive passive income strategy, it does help you save your money in the long run. If you currently have debt and are paying up to 26% interest, we highly recommend knocking your debt down as fast as possible. Your debt is costing you a lot of money. Whether you are paying off student loans, credit card debt, and/or a mortgage, you may be unnecessarily spending thousands of dollars each month on minimum payments and high interest. Did you know that the longer you have debt, the more interest you will pay in the long run?
Getting rid of debt will help relieve you of financial stress and will help bring extra joy back into your life. When we were in debt, we decided to tackle the credit cards with the highest interest first. Our Chase credit card had 24% interest rates. Once we paid this card off completely, we decided to focus on our next highest interest rate card and use the minimum payments we were paying on our Chase card to our next credit card. By pretending that we didn’t have that extra amount from paying off our credit card, we were able to pay off $30,000 in debt in under a year with this method.
High Yield Savings Accounts
One of the passive income ideas that often gets overlooked is to use a high yield savings account. High yield savings accounts are a great way to grow your savings with very little risk. While there is little risk, this also means that there is little reward. With banking accounts such as Ally and Betterment, you can earn up to 2.38% with a balance as low as one penny.
The average national savings rate is just 0.09%, so these high yield savings accounts are not applicable to every bank. We highly recommend using a high-yield savings account that offers the benefits of monthly interest returns.
Upload music to Spotify and other streaming platforms
If you are a musician or have dabbled in music, we highly recommend uploading your music to Spotify and other streaming platforms. We wrote up a guide on how to distribute your music to Spotify, YouTube Music, and Apple Music here. While it may take a little bit of effort to produce a banger, music streaming platforms help you earn passive income so that you can make money while you are sleeping or relaxing.
Rent out a room in your house
Even though you may not own real estate at the moment, you can still rent out a room in your home. While renting a room out in your house will most likely not make you rich overnight, you may be able to make a nice side income of this depending on how many rooms you can rent out. In addition to renting out a room on a monthly basis, you could also rent out a room on a nightly basis via Airbnb.
Invest in dividend stocks
While this passive income idea may take a bit of upfront capital, this is one of our favorite passive income strategies. A dividend is the distribution of reward from a portion of the company’s earnings and is paid to its shareholders. These dividends can be issued as cash payments, other property, or as shares of stocks. By investing in dividend-paying stocks, you can make a great passive income stream with little work. We highly recommend doing your research on the best dividend stocks for passive income.
Start to blog
Blogging typically takes time, effort, and a lot of dedication. While a blog can take quite a bit of time in the beginning, blogging can turn into a passive income stream. While there is no one size fits all strategy for how to make money while blogging, we recommend looking into affiliate marketing, sponsored posts, influencer marketing, and advertisements on your website.
Write a book
Writing a book for passive income is not necessarily something you can do overnight. It will take quite a bit of time and effort to finish your book, but it will take very little effort and work once the book is released.
Sell a course
Creating a course is also not one of the easiest tasks to get started with. You will most likely need a good microphone and the ability to look presentable in front of a camera. In addition to this, you will need to structure your content in bite-size pieces that the audience will love.
Start an online store
It is getting easier and easier to start your own online store. Thanks to Shopify and other developments in the e-commerce space, you can build a store with products on it in less than one day. If you don’t wish to handle the inventory and ship products yourself, you should consider dropshipping where people will purchase from your store and then behind the scenes you will be working with suppliers who will then ship the product to the person.
Shop at cashback websites
Shopping at cashback websites will not earn you a lot of extra income, but it is an easy way to earn back some of the money while you would have normally spent while shopping online. Ebates is a cashback website that will give you certain percentage points back for every purchase you make using one of their partner stores. By using Ebates, you can earn 6% at Walgreens, 5% at Amazon, 6% at Macy’s, 8% at Gap, and 3% at Kohl’s.
Utilize credit card reward points
Travel reward credit cards are popular right now since they are seen as getting “free” points from the credit card company. While we recommend using your credit card with caution and to not land yourself in debt, we love travel reward cards due to the cashback or travel points nature.
Other passive income ideas include:
Peer to peer lending
A bond ladder
Advertise on your car
Rental Real Estate
Start a podcast
Related: How To Be a Music Manager
Written by NFT CAST