How great would it be if you could just kick back and watch money streaming into your accounts?
Passive income has an obvious appeal. After the initial setup process, it requires minimal work on your part, and it generates recurrent revenue from the momentum you have built up. That income could last months or years. And if you have multiple sources of passive income, you have a safety net in place. The others will hopefully still be there, providing you with revenue.
But how can you get started with passive income streams? Below are some ideas for diversifying your sources of income, with a focus on passively building wealth.
1. Rent Out a Property
Own a property you are not using, like a second home or vacation home? Consider renting it out to vacationers or even to full-time tenants. If you have a room in your primary residence, which is unoccupied, think about renting that out to a tenant as well.
2. Build a Website
Another idea for earning passive income is to create and promote a website. Use it to generate revenue from ads. Fair warning, however – it takes a lot of work to get a site off the ground. Some degree of continuous maintenance is also necessary to keep your website high in the search engine results pages.
3. Loan Money
Are you familiar with peer-to-peer (P2P) lending sites? Not only can you borrow from these sites, but you can also invest as a lender. You can earn interest from the unsecured loans that you provide. Just be aware that there is an element of risk involved with this kind of activity.
4. Invest in Stocks, Commodities, or Other Assets
There are numerous different types of assets which you can invest in, including stocks, commodities, currencies, and indices. Both high and low-risk investment opportunities are available. Note that this income stream may be either passive or involve intense levels of activity. It all depends on how you choose to invest.
5. Sell a Book, Software Program, or Other Product
If you have the skills to create an intangible product, you may be able to make passive revenue without putting substantial costs or effort into production over the long run.
For example, you could write an ebook which teaches people a skill, and then build a website to promote it. So long as the website ranks high and the book converts well, you may be able to enjoy long-term earnings from the project.
If you are a programmer, you may be able to do the same basic thing with an app instead of with an eBook. And these are just a couple of possibilities. You might be able to think of something valuable which you can sell digitally like this.
6. Invest Through a REIT
If you have ever thought about investing in real estate, doing so through a Real Estate Investment Trust (REIT) is an option to consider.
Think of it as being similar in concept to a mutual fund. You purchase property stocks and receive payouts as a shareholder. It requires fewer resources than actually buying a building.
7. Offer Other Rentals in Your Area
While renting out traditional real estate is one way to earn passive income, there may be some other rentals you can offer as well.
You own a boat, for example, in a tourist town on the seaside. If you don’t use it most of the year, consider renting it out to tourists. This would not necessarily be a full-fledged business like operating a marina, but it could help you earn some extra cash without a lot of involvement.
Passive Income Can Help You Grow Your Wealth
You have some possibilities now for diversifying your streams of income without switching jobs and generating passive revenue. Keep in mind that ‘passive’ does not necessarily mean ‘easy’. It can take time, trial and error to get one or more of these ideas to take off. But once you do, you hopefully can increase financial stability and grow your wealth.