If you establish passive income, you’re making a great investment in your financial and retirement security. To be clear, “passive income” refers to revenue that keeps coming in on an ongoing basis without any significant sustained effort on your part. While it takes time and/or money to first create these streams of income, they continue flowing on their own momentum after that.
This is what differentiates passive income from things like a second job, a “side hustle,” or consulting. Those sources of income demand your time and energy on a continuing basis if you want to keep earning. But once you establish passive income from a source, you keep earning on autopilot.
Of course, to be fair, even a source of passive income usually requires you to pay it a small amount of attention here and there. And you can always decide to pay them some extra attention to boost your earnings. But overall, the demands on you are quite minimal and at your discretion for truly passive income.
Passive income is such a boon because it’s more money that doesn’t take up your time. We can only work so much, and we can only earn so much in a given time with a job. But passive income brings in extra cash without eating into your available work time. And it’s income you can enjoy in retirement.
So, here are some practical ways people establish passive income with a finite investment of time and/or money up front, and then continue to reap the financial rewards indefinitely after that.
Ideas to Establish Passive Income
- Buy investment properties to bring in rental income.
- Check out these supplemental ways to earn more from your rental properties too, if you pursue this source of passive income.
- Write books or e-books (or hire a professional to write them); royalties from a publisher or earnings from direct sales with self-published titles are types of passive income.
- Invest in real estate investment trusts (REITs) using a platform like Fundrise.
- Create paid online educational courses in your area of expertise that can be offered through third-party sites or on your own website.
- Get involved in peer-to-peer lending through sites like Lending Club (personal loans) or Worthy (business loans).
- Monetize your blog or website with ads or affiliate marketing programs.
- Develop an app or program you can sell.
- Build or—better yet, if you have money to invest—buy an established online dropshipping business through a site like Flippa.
- Rent out your home or second home, car, or even your pool through third-party sites and apps that facilitate these arrangements.
- Invest in investment vehicles that pay dividends at regular intervals.
- Sell stock photos if you’re a decent photographer on third-party sites like Shutterstock or Adobe Stock.
- Have your car wrapped with an ad if you drive a lot, particularly in a densely populated area.
