"Hold on to your dreams of a better life and stay committed to striving to realize it."
Earl G. Graves, Sr.
When people talk about financial freedom, one thing that they often reference is passive income – which is essentially money earned while you’re not actively working. Autonomously earning money empowers you to pursue your passions and live life on your terms. Here’s a look at ten ways you could be earning passive income yourself.
1. Invest in Stocks
One of the most accessible ways for you to start making passive income is by investing in the stock market. The stock market can be a bit of a challenge to master, but the payoff is well worth the early confusion.
You’ll want to invest a significant amount of money ( think about $500-$1000) in a relatively safe or low-volatility stock. From there, all you have to do is wait for the quarterly payments to come rolling in.
Note: You want to make sure that the stock you’re investing in pays dividends. Those are the quarterly payments made to you from the company’s revenue.
2. Get Into Real Estate
Land is one of the best assets you can have and one of the easiest ways to generate passive income. Invest in rental properties or real estate investment trusts (REITs). This will allow you to profit from renting out things like office buildings or apartment complexes without being fully responsible for managing the property on your own.
3. Peer-to-Peer Lending
A less spoken-about way for you to earn passive income is to lend money to others. Joining a platform like LendingClub or Prosper allows you to lend money to small businesses or individuals in exchange for interest payments. These interest payments can range from around 6% to 35% APR.
Warning: This is a high-risk kind of investment and a lot of time and research should be done before you hop into this one.
4. Create and Sell Online Courses
Have you ever wanted to teach others how to do photography or sew? Good news, you could be making pretty decent money from it. All you have to do is take the initial time out to create an online course and sell it on platforms like Udemy, Teachable, or Squarespace. Once everything is set up, you’ll get money every time someone enrolls.
5. Write a Book or eBook
If you can lend yourself to writing, turn that hobby into some extra cash. You can write a book, guide, or eBook and publish it on a self-publishing site like Apple Books, Kindle Direct Publishing, or Barnes and Noble Press. From there, you’ll be able to earn from book sales that can generate income for years afterward.
6. Create a Blog or Website
If you’ve got an idea that you feel would be fun to express in a blog or a website, do it. You can monetize your sites through ads, affiliate marketing, or sponsored content. Be warned though, that this one will take a consistent investment of time and effort before you see your returns. To get a decent amount of traffic to your site, you will have to market your website and ensure that you have an upload schedule.
7. Royalties from Music
Do you have a love for music or songwriting? If you’re a musician, you can make money by selling your songs or putting your music onto streaming services. From there, you’ll be able to get paid for licensing fees, royalties, or having your music streamed on platforms like Spotify or Apple Music.
8. Dividend-Paying Savings Accounts of CDs
Do you have a savings account? You could be making interest from that money by putting it into a bank that offers certificates of deposit (CDs) accounts, which pay you regular dividends. The returns will not be huge, but it’s a low-risk way to make money off of funds that you already have sitting in a bank.
9. Automated Online Businesses
If you’re in the market for a bit of entrepreneurship, try your hand at starting an automated business. Ventures like drop-shipping, printing on demand, or e-commerce stores that use third-party fulfillment can generate a decent amount of income. Some sites to get started on are Printful, CustomCat, and RedBubble.
10. Become a Silent Partner
Investing directly in a business is also a great option. As a silent partner, the only thing that you will be responsible for is supplying the money needed for the business to get up and running. While you may have some limited input in the early days, once the business begins to make profits all you have to do is sit back and take your portion of the revenue.
These are just a few of the ways that you can begin to generate passive income. Some may be a bit more involved than others, but once you have that foundation, the cash flow coming in can be significant. All of this while you're at your day job or enjoying leisure time. How sweet is that?