If you’re industrious and innovative, these strategies can get your money working for you.
If you have money to invest, you could invest it in a business. Consider whether you have any friends or family members who are extremely competent, ambitious and looking to start a business.
Earning passive income is practically the American dream. Who wouldn’t want to lie in a hammock and make money without actually doing anything?
Unfortunately, short of coming into an inheritance or financial windfall, you probably have to work to generate a regular paycheck.
Still, if you’re industrious and innovative, you may be able to employ strategies that allow you to make money when you aren’t working. To see what we mean, take a look at these ideas for creating a passive income stream.
- Rent out a room.
- Rent out your driveway.
- Rent out storage space.
- Advertise on your car.
- Try affiliate marketing.
- Create an online course.
- Rent your old home.
- Write a book.
- Start an e-commerce business.
- Become a business partner.
- Design T-shirts.
- Be a pet sitter.
- Invest in your retirement.
- Create YouTube videos.
- Pay off debt or reduce expenses.
Rent Out a Room
Have a spare room that’s gathering dust? Consider it an asset in setting up a passive income stream. “A large percentage of Americans are finding themselves in financial straits and out of work amid the pandemic,” says Wendi Burkhardt, CEO of Silvernest.com, a home-sharing website. “However, many own a home that they can leverage as an asset to generate passive income by renting out spare rooms to long-term housemates.”
She adds: “Estimates show that they can earn an average of $10,000 a year to put toward mortgage payments, living expenses and retirement savings.”
But Burkhardt cautions that if you’re going to share your home, you’ll want to take the proper precautions and carefully screen prospective tenants.
Rent Out Your Driveway
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If you’re not thrilled about the idea of renting out a room, sites like Neighbor.com and Spacer.com can help you rent out your driveway. What you’ll earn varies, but Neighbor.com says you can make $50 to $150 a month. Spacer suggests that you might make up to $200 a month.
As you can imagine, if you live in an area where there’s a lot of free parking available, this won’t fly. But if you have a home and a driveway in the city where parking is hard to come by, you may have a passive income goldmine.
Rent Out Storage Space
Another space you can rent out to create a passive income stream is an unused storage shed or a corner of your basement.
Sites including Neighbor.com, ShareMySpace.com and StoreAtMyHouse.com allow you to post photos of your storage area for rent.
According to StoreAtMyHouse.com, you can earn between $300 and $3,000 a year, depending on your location and storage area.
You may want to discuss this with your insurance agent first, though. While 99% of the time this will go well, you can also imagine later discovering that you aren’t storing boxes of somebody’s belongings but stolen merchandise or drugs.
Advertise on Your Car
If you’re not familiar with the concept, there are advertising firms that will pay you to let them display advertising on your car. Some of the big names include Carvertise, Wrapify, StickerRide, Free Car Media, ReferralCars. (The advertising “wrapping” can be removed and won’t damage the car’s paint).
You make money simply for driving around, running errands and commuting to work. How much you’ll make is hard to say, but generally people report earning a few hundred dollars a month, and sometimes up to $1,000 (but that seems to be fairly rare).
While you may feel a little foolish at first, this is arguably one of the best sources of passive income. You’re going to drive anyway; why not earn money to offset at least the amount you spend on gas? Once you go through the hassle of getting approved for one of these vehicle wrap companies – and it can be a process – it’s passive income all the way.
Try Affiliate Marketing
Hamna Amjad is an outreach consultant at Smith Thompson, a home security and home automation company based in Plano, Texas.
But in Amjad’s spare time, she runs a blog where she promotes products and services of other companies “known as affiliates,” Amjad says. “When someone uses my affiliate link to purchase a product or sign up for a service, I get paid. The best thing about it is that you can have any type of website and find affiliates in your niche. You don’t even need to have a website to earn via affiliate marketing – you can do it using social media, podcasts and other platforms as well.”
Don’t expect to get rich doing this, but any extra money should help. And Amjad, who currently earns around $100 to $150 a month from affiliate marketing but brought in much less early on, suggests not making your website, whether it’s a blog or a site that specializes in reviews and recommendations, too promotional. Because if readers sense that your website is all about making you rich, that isn’t much incentive for people to stick around for long.
Create an Online Course
This is Amjad’s next goal. “It takes a lot of effort to develop a valuable course, but once you have done it, you’ll earn money whenever there is a sale,” she says. “Besides an online course, you can work on e-books, online instruction guides or any other digital products. Whatever product you choose, it should solve a problem or provide a service. Once you create it, you can sell it over and over and build a continuous revenue stream.”
Some websites that help people sell online courses include Digital Chalk and Click4Course.
Rent Your Old Home
Yes, buying a condo or rental home requires a significant down payment, but if you can buy a property – or move into a new house and rent your old one instead of selling it – you can create a very solid passive income.
Alex Willen, an entrepreneur in San Diego, has a lot of passive income streams. He owns a few apartments in the San Francisco area and says that because he employs a full-time property manager, “those are almost entirely passive. … I only get involved if there’s a major expense or issue, and thankfully those are rare. The income fluctuates a bit depending on when recurring expenses come in, but the revenue is reliable every month.”
He says he has taken a slight hit in that passive income, though, due to a tenant not being able to pay in full lately due to the coronavirus.
And, of course, another great thing about having a passive income stream is that the money allows you to make money in other passive ways.
Write a Book
Willen has written a couple of short books and self-published them on Amazon. One of those books, for instance, is called “Buying Small Apartment Buildings: Become a Successful Real Estate Investor by Owning Duplexes, Triplexes and Quads.”
Obviously, that’s a topic he knows something about. “In total they bring in about $150 to $200 a month, and I spend $20 to $30 in Amazon ads,” Willen says of the two books. “They’re truly passive; I do nothing whatsoever with either.”
Create a Product
Again, like buying an apartment or writing a book, this isn’t a simple task. But it is a classic example of a passive income stream. In fact, Willen recently started a frozen dog treat business called Cooper’s Treats.
“I’m currently in the early phase of doing all the production and logistics myself because sales numbers are still relatively small, but they’re ramping up quickly,” Willen says. “Soon I should be able to move production and logistics to a third-party manufacturer and a third-party logistics company. Once those are taken care of, I’ll hire a (virtual assistant) to handle customer support and basic marketing – mostly updating social media – and from there it should be almost entirely passive.”
Become a Business Partner
If you have money to invest, you could invest it in a business. This only works if things happen to line up well, but consider whether you have any friends or family members who are extremely competent, ambitious and looking to start a business.
You could consider going into business with them – but you’d be the one with the deep pockets, and your partner would be the one exerting all or most of the energy and time to run the business.
You could come up with an equitable way to split the profits, and as long as the business is a success, you’ll have a passive income.
If art is your thing, there are a lot of companies that will help you sell your T-shirt designs. Spreadshirt, Designhill, Zazzle and CafePress are a few. Some websites charge fees to sell your designs, but most don’t. Generally, these companies take care of the marketing and shipping of T-shirts; if your design is bought, you’ll receive a commission, usually around 10% to 15%. It may not make you a fortune, but once you’ve uploaded your design, anything you earn from a sale is a passive income stream.
Be a Pet Sitter
This can be a really nice stream of passive income for people who work at home or are retired. Sure, it’s active in that you’re feeding and walking a dog. But often you’re doing your own thing, cleaning and cooking or watching TV while petting the dog and simply being around when the pets you’re watching need you.
There are a number of websites like Fetch!, PetSit.com and Rover where you may find pet sitting jobs. You also may want to go on Facebook or Nextdoor, a popular social media site where you can find people seeking pet sitters in your vicinity. Just mention that you’re interested in pet sitting, and maybe you’ll find a regular gig.
ZipRecruiter suggests you could earn between $9 and $45 an hour pet sitting. Obviously, it’s up to you to set prices, and while $45 an hour may sound too good to be true, you have to consider factors such as whether you’ll be watching a sick dog who needs a lot of care or a canine with a ton of energy.
Invest in Your Retirement
If you’re starting to get discouraged because you don’t have any great ideas for businesses or money to buy an apartment, keep in mind that every time you put money into your retirement portfolio, you’re hopefully passively making money.
A lot of investors will tell you to invest in dividend-producing stocks versus, say, a certificate of deposit or an interest-bearing savings account, since the interest is likely to be low. But you may want to stick with an IRA or 401(k). The point is, while investing in your retirement accounts may not help you pay the bills right now, it will help you pay the bills in the future.
Create YouTube Videos
The nice thing about this idea is that even if you make next to nothing, you’ll probably have fun doing it. Meanwhile, your friends and family will probably enjoy watching your videos.
Ryan Scribner, a resident of Saratoga Springs, New York, is a good example of what you could become – but his earnings are not representative of what most YouTubers make.
He started a YouTube channel in 2017, and between that and a personal finance blog, “Investing Simple,” that he co-owns, he says he earns around $50,000 a month. He now has writers who create content for the blog, and he uploads a video a week. He estimates he works 15 hours a week, and in 2019, he made a little over half a million dollars.
All of that said, Scribner says, “It took a lot of work to get this up and running. In the first few months of operating this channel, I earned less than $40. In fact, I actually calculated my hourly rate and it was around 17 cents per hour.”
Pay Off Debt or Reduce Expenses
Yes, it’s an idea that sounds like a bit of a cheat, but on the other hand, if you save $900 a month because you finally paid off those revolving credit cards or switched health insurance plans, you just eliminated the need to find a passive income stream that pays you $900 a month.
So, these aren’t get-rich-quick ideas, but more along the lines of get-rich-slowly ideas. But better slow than never, and so now might be as good a time as any to buy a hammock and start thinking of passive income ideas and ways to get rich while (mostly) not working.