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Making money while you sleep has a nice ring to it. I mean who wouldn’t want to be making some extra money while playing with the kids or while watching a game?
The only problem is that most ‘passive’ income ideas that you’ll come across are truly not passive at all. Since you’re already busy with your everyday life you won’t want to pick up a 2nd job that you don’t have time for. Most passive income ideas require you to put in a lot of work.
For example, a lot of people online tout starting a blog as a good source of passive income.
The only problem is that blogging is a lot of work. I run The Finance Twins, a growing personal finance blog, and my brother and I easily spend 50-60 hours a week writing, marketing, and researching for new content. Not exactly passive.
The truth is that to truly generate passive income you’ll need to make an investment into an asset that produces passive income for you. Unless you are making money the old-fashioned way (inheriting it), you’ll need to put in some effort.
Starting something from scratch will never be passive from the get-go because the act of starting it will be very time consuming and rigorous. And that’s okay if you have the time to devote to it.
The good news is that you don’t necessarily need a new cash outlay either. If you already have an asset that isn’t being fully used then that can serve as your investment. Check out the details below to learn more.
Today, let’s talk about a few passive income ideas if you’re ready to invest and make your money work for you instead of losing value in a bank account.
7 Best Passive Income Ideas
- Passive real estate investing
- Acquiring an affiliate marketing website
- Renting your primary home via Airbnb or another platform
- Renting your car
- Invest in dividend stocks
- Run a site with display ads
- Refer friends to great products you already use
1. Passive Real Estate Investing
When it comes to passive income, talk to anyone who’s a landlord and they’ll tell you that passive is the last word they’d ever use to describe having to replace a washing machine after a full day of work.
However, there are a ton of companies that give you the ability to invest in real estate projects without having to actually do any of the heavy lifting yourself.
One example is DiversyFund. It’s a private REIT (real estate investment trust) that allows you to invest in professional real estate projects passively for as little as $500. The thing I love about companies like DiversyFund is that they don’t make money unless the investors make money since they invest and manage the projects themselves.
When incentives are aligned, you give yourself the best chance to win.
2. Acquiring Affiliate Websites
I already discussed how starting a website from scratch was no easy undertaking (unless you know what you are doing and have done it before). So why not find an existing site that is already making money from affiliates and take it over?
Affiliate marketing is essentially where you get paid a fee for referring new customers to brands. So for example, if you have a site like Contacts Compare or Kayak.com that compares prices, you can earn a commission for referring customers to existing brands.
This type of investment can be truly passive if it’s already generating revenue with very little hands-on involvement.
3. Renting your Primary Home via Airbnb
I was recently contacted by a long-time reader who had just received her first passive income check in the mail and she was ecstatic. She was a single mom of two daughters and her youngest had recently gone off to college.
She had always dreamed of running a bed and breakfast but never had the time to devote to it. But once she became an empty nester, she realized she had two empty bedrooms she could rent out to guests.
After signing up for Airbnb and jumping through the hoops she was able to rent out her rooms for $50/night each. In fact, she said she’s considering moving out to a smaller space and renting out the entire home since it’s in an in-demand area of Fort Worth, TX. She said she is making enough money to hire a neighbor to handle the clean-up duties, so it’s as passive as can be.
4. Renting your Car
Companies like Turo and GetAround are making it easier than ever for you to rent out your car when you aren’t using it. And let’s face it, if you live in an area with Lyft and Uber service, there’s a chance you might not even need your own car on a daily basis.
You’ll want to keep in mind that you renting out your car will mean additional wear on your car so your repair bills might increase, but users have said it’s well worth it for the passive income checks coming in the mail.
If you have a 2nd car sitting around that never gets used or you have begun to bike to work and no longer need the car daily, this might just be the absolute perfect way to finally start generating some passive income.
5. Invest in Dividend Stocks
Dividends are profits that are paid out to owners of stocks. Some companies pay dividends on a regular schedule, which means it can become a solid source of income.
Investors who love dividend stocks will talk about the fact that your investment is not only generating dividend income but potentially also appreciating in value. But it’s good to remember that the opposite can also happen.
Dividend stocks are similar to other stocks in the sense that it’s usually best to buy and hold for a long time.
Some people even rely on dividend checks for their regular expenses, which means they must own a pretty large number of shares! If you have some extra cash to invest this is probably something worth looking into.
6. Run a Site with Display Ads
If you’ve spent any amount of time on major sites like ESPN, The Weather Channel, Google, etc., then you’ve seen lots of advertisements on them. If you don’t remember seeing ads, then you either have an awesome adblocker or you’ve simply learned to ignore them. Nice!
As you can imagine, the reason these sites have ads on display is that they are being rewarded handsomely in order to do so. The key to generating income in this way is to have a site with a lot of users since there is a strong correlation between the number of eyeballs on your website and the amount of income you’ll be making. Easy enough to understand.
If you have a friend with an old site that they never use it might be worth acquiring it if they have traffic. Adding ads to a site is super simple and you could be earning some passive income pretty quickly.
7. Refer Friends to Great Products you Already Use
Companies like Ebates.com have existing referral programs that pay out cash for every friend you can refer. If you have a lot of friends or social media followers this can be an extremely easy way to earn money.
All you have to do is set up an account using this link, go to your account settings and click where it says refer and earn to get a link you can send your friends.
To find other programs like this it’s super simple. Nearly any company that delivers food or other products will usually offer something like this. They are called referral programs so a simple search will make it obvious who offers a similar program.
The Bottom Line
As I mentioned before, generating truly passive income requires creativity and some initial work to set things up. Especially if you are already super busy. But if you are able to pull it off, you’ll be the talk of the town because you’ll be making money while everyone else is breaking their back.
This article originally appeared on Your Money Geek.
Camilo is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to writing for his personal finance site, The Finance Twins, he has been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar and other top publications. Camilo began his career as an investment banking analyst on Wall Street at J.P. Morgan. He has a master of business administration (M.B.A.) degree from Harvard University and a Bachelor of Science in finance from the Wharton School of Business at the University of Pennsylvania. You can contact Camilo via Instagram @thefinancetwins.