10 Ideas to Generate Passive Income
Receiving money without actually having to do anything sounds like a dream to you? Start making it come true through one of our ideas on how to generate passive income! Invest some money and time at first to enjoy a lifetime of money flowing to you automatically using one of our 10 tips below!
What is passive income?
Passive income describes any type of money which is not coming from an emloyer or contractor. This can be a rental property or a business in which you do not actively participate (e.g. dividend stocks). Passive income does not mean money comes from doing nothing! You must do some work upfront to start your source of income before money is flowing with you doing little to nothing more.
These are our main ideas on how to start getting passive income:
- Investing in dividend stocks
- Make use of AirBnB
- Rent out things you don´t need frequently
- Creative writing or producing
- Selling your photos
- Try Affiliate Marketing / Affiliate Links
- Advertise on your car
- A vending machine business
- Make money in your sleep
- Buying real estate
Investing in dividend stocks
Dividend stocks are one of the most commonly used methods to generate passive income. Earning a share of stock means you will buy a piece of the company you are investing into. The firm then pays a chash dividend to all stock holders on a regular basis.
The more shares you hold, the more dividends you receive! You do not need to do anything except initially invest money and then wait for dividends to be paid. Your gains will be deposited in the brokerage account you are using.
It is essential to find a stable stock or ETF which regularly pays the same or an increasing amount of dividends. ETFs are recommended because these investement funds diversify your investment by holding stocks, commodities and bonds so they stay stable, even when one company in their portfolio cuts its dividends.
One great example for a dividend ETF is the Vanguard High Dividend Yield ETF.
Make use of Airbnb
Renting out your home has become an increasingly attractive and popular option to earn money recently. Whether you are gone for a long weekend or on holiday for weeks, simply list your home on Airbnb and you can set all terms yourself in case someone wants to rent it. If you are a renter yourself, you must clear this with your landlord first.
If you are comfortable with a stranger living in your house for this period of time and are willing to do some work upfront (e.g. preparing towels, putting away valuable or personal items), then renting out your home via Airbnb is a great way to make money while you are on holiday yourself!
Rent out things you don´t need frequently
Why not make money with things you don´t use regularly? There is a huge pile of tools you do not need regularly, maybe not even once a year, but which are rather expensive and not to be found in any household. For example, think of a lawnmower, sewing machine, tool box or power tools. A lot of high-value items are only needed for a short period of time and then stored away.
Thus, some people would not want to invest a lot of money for an item they only need short-term, even when it is essential to use. This is where you come in! Simply offer your item for rent and receive money with tools you do not use!
With time, you might even scale higher and rent out items like a bike. The higher the initial price, the more money you can ask for rent.
Creative writing or producing
If you identify as more of a creative spirit, this idea is perfect for you! Get creative by writing a book, an e-book, composing a song or a beat. Any type of creative work is amazing to generate passive income, because once it is published, it automatically makes you money! In general, e-books are more profitable than printed ones, since you can sell them online without having to pay for printing first.
Every time a person buys your e-book, listens to your song or wants to purchase your beat to create a song of their own, you receive some money! After the initial publication, you do not need to do anything except market your product to find buyers.
Selling your photos
Do you love phtographing and have been complimented for your beautiful pictures before? Try using your favorite hobby to start generating passive income now! Stock photography companies might be willing to purchase your images, which will be sold on a third-party site. Every time someone buys your photo there, you receive a share of money.
Having a great camera might improve your chances for your photos to be sold, but some stock image companies even accept phone pictures if they prove good quality.
Try Afffiliate Marketing / Affiliate Links
We have mentioned affiliate marketing a couple times before, since this is a great idea for people with bigger reach in social media to earn money. When promoting a product on social media, you will include a link to the product. Once one of your visitors purchases the product through your link, you will earn a commisssion from your affiliate partner.
Most commissions range around 5%, so you would need a lot of your visitors to buy the product you are promoting. If your plan is working out, you will gain a lot of money!
Advertise on your car
Making money by simply driving your car? It can be a way to generate passive income! You have probably seen cars with advertisements sticking to their sides. Did you know you can advertise this way as well?
There are special advertising agencies to help you find an advertiser that fits to your regular driving range and the places you frequent. Once there is a match, your car will be wrapped in the ad and you will earn money in your day-to-day life!
A Vending machine business
Another idea you probably did not know would be available for everyone: owning a vending machine! This is a very low-maintenance business and can be extremely profitable if you do it right! Start by buying a few vending machines with a popular product and setting them up in frequently visited places. Maybe even a local business would be interested in selling their products there?
Now, you only need to restock the products in your machine regularly and collect your coins – it is as simple as that!
Make money in your sleep
Yes, you can literally make money in your sleep. Have you ever heard of sleep studies? When in good health, you can apply for a scientific research study to get paid for experts monitoring your sleep.
At first, you will be asked to take some physical and psychological tests to see if you fit the study. Furthermore, you might need to be cut off from friends and family as well as your phone for the duration of the study. If you are willing to do this, your dreams of high rewards will come true!
Buying real estate
This idea is essentially more targeted to our wealthier readers. If you have been looking for a bigger, more serious and generally more professional investing option, real estate might be just what you are looking for!
Owning houses or apartments enables you to rent out living space to others and thus generate passive income through their rent. Renting real estate, making money and investing this to buy and rent more real estate is a way how many very rich people accumulated their wealth.
However, getting into real estate is a huge step und should be taken under consideration very seriously! It is connected to a lot of responsibility and you do need to put in some work, for example to maintain a property.
After all, we hope you enjoyed our ideas on how to generate passive income and might even use one of them to start making money in your sleep! Tell us in the comments whether you have been using one of these methods in the past or will start doing so in the future.
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