Imagine being able to make money while you sleep. That’s the promise of “passive income,” which provides money-making flexibility beyond the limits of a traditional 9-to-5 job.
While “active” income requires consistent work to generate profit, passive income is repeatedly earned after an initial effort. Consider the difference between working for an hourly wage and collecting royalties on a published book. One requires repeated time and energy, while the other demands an upfront investment that yields profit well beyond its completion.
In the modern world, the opportunity to make passive income or have a side hustle is especially appealing. It’s a great way to make extra money, to mitigate rising inflation, and to capitalize on the flexibility of the work-from-home economy — which increasingly seems to be a fixture of the future.
So, what are some of the best ways to generate passive income? Here are five of our favorite ideas to help you get started:
1. Invest in Real Estate
There are two great ways to invest in real estate: through a real estate investment trust (REIT) and through individually-selected properties. Whichever path you choose, you’ll be able to earn regular monthly payments from properties you don’t even own or manage.
Here’s a brief breakdown of the two categories:
REITs: Real estate investment trusts (REITs) are corporations that own or finance a pool of income-producing properties.
Think of an REIT as a fund that manages properties like industrial centers, high-rise offices, and chic condos. While the trust oversees the buildings’ operations, investors like you can generate passive income (both on rental payments and after the property is sold) without lifting a finger.
Want to learn more? Check out RealtyMogul to explore your options.
Individual Properties: Rather than investing in a fund, you can also customize your commercial real estate portfolio on a granular basis. That means you can select each deal by the location and risk category that makes the most sense for you.
Explore Roofstock to view all available individual properties.
2. Sell An eBook
People with unique skills find ways to generate passive income, and that’s especially true for self-published authors. According to a recent report, self-published authors using Amazon Kindle Direct Publishing (KDP) make 70 percent royalties in eBooks priced between $2.99 – $9.99.
In fact, Amazon’s 2019 “Kindle Year In Review,” reported that thousands of independent authors earned over $50,000 in royalties. That’s passive income in its purest form!
If you’re passionate about a particular topic or have an exciting idea for a great novel, consider writing an eBook and uploading it to Amazon, Apple Books, Barnes and Noble Press, or any of the other highly-regarded publishing companies.
You’ll get published and make passive income all at the same time!
3. Publish An Online Course
This popular online platform enables users to create custom video courses across a spectrum of subjects. If you’re an expert in a particular area, you can produce your own course, film your own videos, and list them on Udemy for consumers to purchase them.
You can even set your own price points. According to one Udemy user who created a course on time management (and charged $24.99), over one-thousand students purchased his course over a three-month period, earning him nearly $2,500 in passive income.
Click here to learn more about Udemy!
4. Sell Stock Photos
Pictures are worth a thousand words, and some might even be worth more than a few dollars.
If you’re an avid photographer, you can submit your favorite pictures to stock photo sites and get paid every time someone purchases one of them.
While sites like Getty Images rank among the more famous stock photo providers, they only pay 20 percent commission for most photos. To help increase your passive income, check out these stock photo sites with the most competitive rates:
- Dreamstime, which offers 60 percent revenue share from all your sales. If you want to go royalty free, Dreamstime will even buy your photos outright.
- Stocksy, which emphasizes their respect for artists by providing artists with 50 to 70 percent commission on all licenses.
- Alamy, which pays out over $1 million to contributors every month (and promises 100 percent commission to student photographers).
While these are our favorite options, there are countless stock photo providers online. With a bit of research, you’ll easily find the perfect option for your needs.
5. Rent Out Your Car
A few years ago, renting out your car to make money might have seemed bizarre. In 2021, however, it actually might make sense (and cents!) — especially if your work-from-home lifestyle has left your car parked more than you’d like.
While there are a number of car-sharing businesses on the market, we recommend Turo. Why? They report that the average annual income for their partners is an impressive $10,516. Plus, if you rent your car through Turo, you’ll get up to $750,000 in liability insurance from Liberty Mutual and 24/7 access to customer support and roadside assistance for your guests.
Want to learn more? Click here to check out Turo and read some of their host success stories.
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