Passive income is considered by many to be the holy grail of personal finance. It inspires thoughts of laying on a beach, sipping on a drink with a tiny umbrella, and doing what you want in life. While that kind of life may not be attainable for all, building multiple streams of income is a fantastic way to increase your net worth. Although it’s not always easy to start, it is possible to earn passive income. Here are 13 legit ways you can make money in your sleep.
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Invest Your Spare Change
When our kids were little, we started keeping a spare change jar. All our change would go in it.
When we’d go on vacation, we’d pull the money out, count it and apply it towards something fun on our trip.
It taught them the value of saving a little each day AND added up over time. Take that principle one step further and invest your spare change.
That will give it a chance to grow larger for you, while you do other things!
Rent Out Your Car
It may sound like an odd way to create residual income, but renting your car is a unique way to create cash flow. Think of it like renting your home through a service like Airbnb.
Services like HyreCar and Turo let you list your car for free, and they even provide insurance coverage. Your chosen site manages the relationship between you and the renter.
This includes running background checks on potential drivers. You can earn over $700 per month based on your car’s make, model, and age.
Just make sure to check with your auto insurance company before listing to confirm this won’t violate your policy. If it doesn’t, this can be a good way to start earning passive income.
Invest in CDs
Not the old discs people used to listen to music with, but a certificate of deposit. While CDs aren’t the most exciting way to earn money in your sleep, CD laddering is one easy way to earn interest on your cash.
It works by putting cash into several CDs of different lengths and varying maturity dates. As each CD matures, you put it into a new one. Overtime, you can typically earn more on CDs than you could with a savings account. An online bank, like CIT Bank, is a terrific option to help you start with this opportunity.
Rent Out Storage Space or a Garage
Do you have spare room in your garage, an empty closet, or an attic? You can turn that extra capacity into another source of passive income.
You won’t become rich with this opportunity, but it is a way to add several hundred dollars of cash flow into your budget each month.
Neighbor is the leading player in the self-storage space. It operates much like Airbnb.
You list your space on Neighbor for free, and they vet all potential renters. Upon choosing a renter, they come to your space to fill it with their belongings.
The platform manages all of the paperwork and offers you $1,000,000 in free insurance coverage. Additional coverage is available to purchase.
Neighbor says you can earn between $100 and $400 per month through the service. They let you determine what you’re comfortable storing and manage all of the payment terms.
Pay Off Debt
It might sound counterintuitive, but paying down high interest debt is one of the best ways to make more money.
As you get rid of debt, you will have more money each month to invest and save. That will help you reach your goals of financial freedom and making money passively.
Peer to Peer Lending
Not everyone can secure a loan at a bank. Or, they may only need a small loan and want a better interest rate. This leads many to turn to peer-to-peer (P2P) lending.
P2P lending sites let you to loan money to other people. You receive the principal back plus interest as the borrower repays the loan.
Many P2P lenders allow you to earn a six to ten percent return on your investment. This is a competitive rate in relation to a savings account.
People who borrow through P2P platforms need funds for various things. These can include remodeling a room in their house or paying off a car.
Like other investment opportunities, it’s essential to perform your due diligence when considering a loan opportunity. You will want to create a diversified portfolio of loans.
This gives you additional coverage in case a person defaults on their loan repayment.
Investing in Real Estate
Investing in real estate is an excellent choice to generate passive income. Furthermore, it’s no longer just for people with significant means.
Thanks to crowdfunding, you don’t need much money to start. Many platforms have minimum requirements of $500 or less. Additionally, most options offer a mix of commercial as well as residential properties.
Furthermore, some companies even offer IRAs if you want to include real estate in your retirement plan.
No expertise is required on your part to get started. You simply open an account and invest in the fund that best matches your goals. The fund manager chooses the investment properties.
Invest in Art
If you enjoy art but believe investing in it is only for the wealthy, think again. Crowdfunding has also hit the art investment space, allowing anyone to buy pieces of art.
Masterworks and ArtSquare are the top options in the market. Investors can purchase fractional shares of fine art for as little as $20 a piece. You don’t need to be an accredited investor, and there is no account minimum.
The one drawback to this opportunity is that it’s a long-term investment. You typically must wait several years before the piece sells for a profit.
This isn’t for someone who wants immediate cash flow. However, it’s a legitimate choice for people looking to create multiple income streams in retirement and are comfortable waiting to see a return.
If that describes you, investing in fine art is a good alternative investment to consider.
Create an Online Course
Are you highly knowledgeable in a certain area, such as computer programming or photography? If so, a fun source of mailbox money is creating an online course.
You can use various methods to teach the course, from video to written content.
Courses take time to create and are a minimal investment, but they can be one of the more lucrative ways to make passive income. You can use a platform like Udemy to create and sell online courses. The site currently sells over 200,000 courses. These can be about anything from the basics of real estate investing to drawing.
Udemy handles sales and marketing for you. Like selling designs, it’s also advisable to promote the course to increase sales.
Design T-Shirts or Mugs to Sell
Are you a graphic artist? Do you like to design items in your spare time? You can use those skills to create a semi-passive business.
This does require some effort in the beginning to create the design. However, once you complete your design, you can launch an online store to sell the items you’ve created and earn residual income.
Sites like CafePress let you generate on-demand sales. The chosen platform prints your designs on anything from coffee mugs to t-shirts. It then markets and sells your designs or products, giving you a commission on each sale.
To increase your sales, it’s best to promote your store and designs on social media.
Advertise on Your Car
A unique way to create another stream of income is to put ads on your car. Sites like Wrapify and Carvertise compensate drivers for advertising on their cars and doing nothing but driving their normal routes.
Pay varies based on where you live and the number of miles you drive each day. You choose how many ads you want to place on your car.
Beyond the initial setup, it’s passive income you earn for something you’re already doing. Drivers can earn up to $450 per month by placing ads on their cars.
Rent Out a Room in Your Home
Do you have a spare room in your house, or do you have an extra residence? If so, you can make relatively passive income by listing it for free on Airbnb or VRBO.
Listing your property on Airbnb will require some work between guests to clean. You can hire that out if you’d prefer to keep your workload to a minimum.
Rates vary by city, but the average host earns nearly $1,000 per month. You can use these earnings to pursue another passive income venture or reach some other goal.
Get Cash Back on Your Shopping
You likely do a lot of shopping online. If so, why not earn some money back while doing it? Cash back portals aren’t lucrative, but they’re an easy way to get cash for something you’re already doing.
Apps like Swagbucks let you get money back on your shopping. These apps work with thousands of retailers to offer rebates to shoppers.
Some apps also give you a bonus when you open an account. Most apps let you redeem earnings for Paypal cash or gift cards to your favorite retailers.
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I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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