Most people have to work for each pay cheque. A passive income requires you to make the single investment after which you can usually let the money flow in whilst only having to lift a finger occasionally.
For many people, it can offer a security blanket by guaranteeing that an income is always coming in even if you’re too sick to work.
Here are several of the most common sources of passive income.
#1 Property rental
Renting out property is a popular way to make a passive income. By buying a property and renting it out to tenants, you can cover the cost of the mortgage and make a small profit on top. Ideally, you want a property that is going to cost you too much in maintenance and reliable tenants who will pay their rent on time. You may also need to look into how to protect your vacant property in case you don’t have a tenant.
Hiring a property manager could allow you to take a less hands-on role by handing over the job of finding tenants. There are also other ways to make money out of renting property – you may be able to rent a room out in your home to a lodger or you could rent out space as storage using sites like Store Mates.
You can even rent out your lawn to people that want to get involved in gardening.
#2 Stocks and shares
Stocks and shares are another way to make a passive income. You’re best off letting an expert taking care of your funds if you want a more secure and less hands-on form of income – enlisting the help of an investment broker or joining a mutual fund can allow you to sit back whilst an expert makes decisions on which stock and shares to invest in.
#3 Peer-to-peer lending
Many people use peer-to-peer lending platforms such as Lending Club for investing. These platforms allow you to loan money to people online.
This debtor then pays back the loan with interest each month, allowing you to make a small profit. You should always use trusted peer-to-peer lending platforms for doing this – such an investment option can be virtually risk-free compared to many other forms of investment.
If you’re a photographer or a musician, you may be able to make some money from your art through royalties. In the case of photographs, you can make money by putting them on sites such as Shutterstock in which users must pay a small royalty to use your photograph. In the case of music, you can make money through streaming platforms such as Spotify.
This isn’t an easy source of passive income to achieve – you may have to do a bit of marketing to help promote your work.
#5 Ad revenue
It’s also possible to make money through ad revenue. By starting a blog or a Youtube channel, you can then agree to display ads. Every time someone clicks on these ads, you will get some revenue. This involves attracting lots of readers/views in order to get people clicking on these ads.
What ways are you looking to build a passive income?