Youve probably heard the term passive income.
It sounds appealing, right?
Unfortunately, thats a common misconception.
Carmen Mandato/The Penny Hoarder
However, its aviable way to make moneyand offers you security and freedom.
What Is Passive Income?
Passive income is money flowing in from a source where a person is not actively involved.
Common examples include rental income, investment dividends, and online business profits.
It offers financial security with minimal ongoing effort after the initial setup.
Hes a big proponent of this approach and has several passive income streams.
However, remember that the initial setup may take a lot of time and energy.
Often in passive income, you have to commit the time and energy upfront, Tresidder says.
He describes it as a machine; you must build the machinery before it can work without your assistance.
Another name for passive income is lagged income since the income follows the setup.
He first heard the term years ago and was immediately intrigued.
Hines compares passive income to its counterpart, active income.
Thats the money youre actively working to make, like at your day job.
But what can you do with that extra time?
You could make even more easy money with some of our favorite ways listed below.
Whats the Importance of Passive Income?
Why is passive income important?
Freedom, Tresidder says.
Ive designed my life to be free and flexible, he says.
The more youre earning passively, the less youre becoming a slave to money, he says.
I can go where I want, when I want.
Passive income is also important for the financial security it can offer.
Heard of These Money-Making Hacks?
Ready to find out how some folks effortlessly earn the big bucks?
Millions of Americans ignorethese easy tipsthat could have you padding your wallet in no time.
It offers several benefits that can significantly enhance your financial health and lifestyle.
The one youll want to study is from the IRS, which hasits own, very specific definition.
Take a look at thatbefore filing taxes.
Thinkreallybig like starting a business or investing in real estate.
Really, the possibilities are endless, so dont begin to consider this as a finite list.
Hines uploads his iPhone photos to stock photography sites.
After a quick upload, hell get email notifications when someone purchases his work.
You likely wont become a millionaire; Foap, for example, splits the profits with the photographer evenly.
However, it’s possible for you to step up your game if you have a nicer camera.
Create a Website
…like everyone else you know, right?
The upside is that it costs little money to start one and theres little risk.
Your startup expenses might only include purchasing a hosting package.
To earn money through your site, learn about affiliate sales.
For example, Hines has a site calledNerd Playthings.
If a consumer clicks on a link and buys the product, hell bag some money.
Make Money Off Your Extra Space
Do you have a room?
Establishing passive income in real estate doesnt have to start with a huge investment.
it’s possible for you to list your space through Airbnb.
Tonya Peters husband, Miles Rugh, was one of those skeptics.
Finally, though, he agreed to give it a try.
Now, three years later, the couple has hosted too many guests to count.
And the extra income has been great for them.
They plan to use it for some home renovations theyve been wanting.
Hes definitely changed his tune, says Peters, now an Airbnb Superhost.
And he loves having the extra income.
(Hosting laws vary from city to city.
just understand the rules and regulations applicable to your city and listing.)
Buy a Gumball Machine
Scratching your head yet?
you’ve got the option to also look into the same idea with vending machines.
Plus, itd be kind of cool to say, Fun fact: I own a gumball machine.
Sell Random Stuff on Sites Like Zazzle
By random, we mean…prettyrandom.
You wont have an inventory to handle (no production, no shipping).
Find outmore about selling on Zazzle, or look into other platforms, like Amazon.
Need a Hand With Bills?
Listen, we know its tough out there.
But theres no shame in asking for help.
These companiesmake it easy to help yourself and your bank account.
Get Cash Back with Credit Cards
Youre already shopping, right?
We createda list of cash back cardsthat can help you do that.
And, youre only spending what you’ve got the option to afford to pay back.
If you find one youre really digging, put it up for sale on a platform likeTeachers Pay Teachers.
This helps other teachers across the world and gives you some income.
Stick an Ad on Your Car
Do you already drive a lot?
If so, consider slapping an ad on the side of your car.
Weexplored the method of income.
For example, you could earn $100 a month from a platform like Carvertise with no upfront costs.
Make YouTube Videos
Think you have something that might go viral?
Or have expertise in something folks might be interested to learn?
Make a YouTube video, and establish a passive income.
One of our contributors, Steve Gillman, has done just that.
Hes monetized his YouTube videos with Google AdSense.
For example, he shot ten videos about ultralight backpacking.
No, they didnt become huge hits, but he has made more than $1,000 over the years.
We have a guide on how to make money onYouTube.
But theres no need to send it off to all the major publishing houses in New York City.
you could publish e-books through Amazons Kindle Direct Publishing platform.
Again, Gillman did this (because what has he not done?!).
He wrote a book in a week.
Note: E-books dont have be hundreds of pages long.
They can be as short as 6,000 words.
After publishing it on Amazon, he started making $350 a month.
He outlines exactlyhow he did it and the best tips and tricks for you.
If thats the case, this can be considered passive income, according to Hines.
It partners with tons of brands to give you points for every grocery receipt you share.
No scanning barcodes or searching for offers and you’re able to use it with any grocery receipt.
Rent Out Your Car or Other Stuff You Dont Use Regularly
Got a car?
Whatever it is you have,you could probably rent it out.
We get it.Everythingis more expensive than it used to be, but your paycheck hasnt kept up.
When money is tight,these resourceswill help nearly everyone.
FAQ on Passive Income Ideas
What is passive income?
Passive income is earnings from a source that does not require active involvement or daily management.
Examples include rental income, dividends, and earnings from online businesses or investments.
How can I start earning passive income?
Begin by assessing your financial situation and setting clear goals.
How much money do I need to start earning passive income?
The amount varies depending on the pop in of passive income.
Some online ventures may require minimal investment, while real estate can require a significant upfront sum.
Its important to start with what you’ve got the option to afford and scale up over time.
Is passive income really passive?
Initially, setting up a passive income stream may require substantial time and effort.
However, once established, it should require minimal active involvement, though occasional maintenance and oversight are necessary.
What are the risks of earning passive income?
Risks vary by the punch in of income stream.
How does passive income affect taxes?
Passive income is taxable, and tax rates vary depending on the income pop in and your location.
Its important to understand the specific tax implications for each passive income stream and plan accordingly.
Can passive income replace my full-time job?
Building a sufficient and reliable passive income stream to replace a full-time job often takes time and strategic planning.
What are some common passive income streams?
How do I manage and grow my passive income?
Regularly review and adjust your strategies to optimize performance.
Consider reinvesting your earnings to grow your income sources and diversify to spread risk.
Is passive income suitable for everyone?
Individual suitability depends on financial goals, risk tolerance, and commitment to initial setup and ongoing management.
Set Clear Goals:Define what you want to achieve with passive income.
It could be financial independence, additional income for retirement, or saving for a specific goal.
Be realistic and set measurable and achievable targets.
