If you want to achieve financial independence, you must have at least 1 form of passive income. Trading money for hours worked isn’t stable nor will it get you live the lifestyle you want. You need to be able to make money while you sleep.
Passive income coupled with investments and side hustles will get you to financial independence the quickest. As such, here are some of the best passive income ideas to make you more money.
Table of Contents: Passive Income Ideas
- Start a Blog
- Become a Peer-to-Peer Lender
- Invest in King Dividend Stocks
- Invest in Crowdfunded Real Estate
- Create an Online Course
- Start a Vending Machine Business
- Audiobook Narration
What are the best passive income ideas to make more money?
1) Start a Blog
Starting a blog is one of the best ways to make passive income if you do it right. One of the best ways a blog can make passive income is through affiliate marketing.
Affiliate marketing is the process by which an affiliate earns a commission when they refer a customer to buy a product or service offered by another company.
The most common avenues for creating an affiliate marketing channel is through the creation of a blog, a website or via social media.
How much money do affiliate marketers make on average? Roughly $12,000 per month. The bottom 25% of affiliate marketers make on average $4,000 per month, with the upper 75% make roughly $400,000 per month.
However, there really is no maximum to what affiliate marketers make. Some of the biggest blogs in the world use affiliate marketing as a major source of revenue.
Their revenue is often in the millions.
Check out the Top 10 Blogs Highest Paid Blogs in the World (and How They Did It) to see the the income-earning potential of affiliate marketing.
Affiliate marketing is possibly one of the easiest passive income streams out there. The most difficult part is getting your affiliate marketing channel established with an active audience that will purchase products.
To start, the best way to grow your audience base is by:
- a) Creating content that offers lots of value to your audience.
- b) Drive traffic to your website.
- c) Promote products that your audience is interested in purchasing.
- d) Create copy that converts your audience into buying customers.
There is so much that comes with creating a blog or website that utilizes affiliate marketing that we wrote an extensive guide on How to Start a Blog that will help you get started on affiliate marketing journey.
2) Become a Peer-to-Peer Lender
Lending is no longer reserved for large banking institutions. Every day people can now participate in what’s called peer-to-peer lending.
Peer-to-peer lending (“PTP lending”) is a personal loan that you make to a borrower, which is facilitated through a third-party company.
Some popular third-party lending intermediaries include:
- LendingClub,
- YieldStreet, and
- Prosper.
With this method of passive income, you earn income through interest payments made on the loans.
The biggest risk, however, is that the loans are unsecured. This means, if the borrower defaults on the loan, the you could lose the money that you originally lent out.
The way to hedge your risk is to carefully evaluate prospective borrowers, and have a strong understanding of the ins and outs of P2P lending.
However, if done right, investors could earn between 2% and 15% of their initial investment depending on the terms of the loan. For reference, the stock market typically offers an average of 8% in annual return. Through P2P lending, you have the potential to earn twice that amount.
3) Invest in King Dividend Stocks
When a shareholder buys a dividend stock, the shareholders receive regular quarterly payments (called dividends) from the company issuing the stock. Dividends are paid on a per stock basis. If done right, the more dividend stock you own, the more you make.
The tricky part? Choosing the right dividend stock to invest in.
Potential investors should really spend time researching each company before purchasing stock.
If you don’t want to spend the time to investigate each individual company, then you can consider investing in an exchange-traded fund (ETF). An ETF is an investment fund that holds a bundle of stocks, bonds or commodities.
The cool thing is that ETFs trade like stocks.
You can certainly avoid putting all your eggs in one dividend basket by investing in an ETF that invests in dividend stocks. If one specific dividend stock tanks, then you still have the other dividend stocks within the ETF that won’t affect the overall price of the ETF’s too much.
4) Invest in Crowdfunded Real Estate
Crowdfunded real estate is a way to fund a real estate project through smaller investments made by a larger pool of investors.
For example, with crowdfunded real estate, instead of 1 investor investing $500,000 in 1 real estate project, you might have 25 investors funding a project with smaller investments of $20,000 each.
Crowdfunded real estate is a good option for investors who are interested in real estate investing but who don’t want to invest large sums of money in one project or who only have a smaller sum of money to start with.
How much can you make from real estate crowdfunding? The answer will vary greatly depending on the investment project. According to Fundrise, a popular crowdfunded real estate company, the average income return for all their clients is 5.42%.
Some of the more popular crowdsourced real estate companies to get started with include CrowdStreet, Fundrise, and EquityMultiple.
5) Create an Online Course
The nice thing about creating a course is that you only need to create the course once. If you are able to get people to purchase your course, then you have a passive way of earning money each month.
You can host a course on a personally owned website. Alternatively, you can utilize online course platforms like Udemy, Teachable, Coursera, Thinkific, and Skillshare to house your online course for a fee.
Successful online course creators make between $1,000 – $10,000 per month on average. Of course, the top performers make much more – averaging 6- to 7- figure incomes.
6) Start a Vending Machine Business
Surprised by this one? The average vending machine business owner makes roughly $400 per month in passive income. Not bad. That could easily cover a car payment, help fund a college savings account, or a large vacation at the end of the year.
The largest cost that comes with starting a vending machine business is the cost of the vending machine initially, then stock thereafter. With just $1,200, you can purchase a used vending machine to get your new venture started.
7) Audiobook Narration
With the growing demand for audiobooks, audiobook narrators can make a nice passive income if they can negotiate compensation based off of royalties from every audiobook sale.
One way audiobook narrators can get paid is through the royalty share route. “Royalty Share” means that the audiobook narrator would only get paid once a sale is made. The royalty rates can vary anywhere between 25% – 40% of the audiobook’s retail price.
For example, if the retail price of an audiobook is $20, the narrator could make $5 – $8 per audiobook sold. If 10,000 copies of the audiobook are sold, that’s $5,000-$8,000. That’s pretty great passive income for 10-20 hours of work.
Conclusion
Which passive income idea would you like to have a step-by-step guide for?
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