Wouldn’t it be great if you could make money while you sleep? This may sound like an impossible dream for many people, but a little upfront cash, research, and creativity can help you start earning a passive income within weeks or even days.
As opposed to an “active income,” which you make from working as an employee, business owner or freelancer, a passive income stream is designed to make money for you with minimal to no effort.
Everyone could benefit from having a passive income on the side. Either to supplement their working income or preserve their retirement savings. However, too few people take advantage of this lucrative opportunity because they mistakenly assume that passive income streams only come from scams like paid surveys and suspicious work-from-home options.
Don’t fall prey to the scams of course, but don’t give up on the chance to make a passive income, either. There are more legitimate passive income ideas than you might think, and you can get started with many of these opportunities right away.
How to Get Passive Income
One of the best ways to earn a passive income is through peer-to-peer lending platforms, such as Lending Club. These platforms cut out financial institutions as the middlemen and allow consumers themselves to lend and borrow from each other.
For instance, someone who needs money to pay for college tuition may seek out peer-to-peer student loans. As a lender, you would offer a certain amount of money, and depending on the creditworthiness of the borrower, you make money back on your investment in the form of interest. The worse the borrower’s credit score is, the higher the interest you’ll earn, but there’s also a risk of default.
With peer-to-peer investing, you can earn a passive income by investing in everything from personal/student loans to real estate and even start-up businesses. Platforms such as Wefunder are great for investors because you can maximize your ROI for a minimal upfront cost. Wefunder offers $100-minimum investment opportunities.
Investing with Robo-Advisors
Robo-advisors offer comparable returns on investment, but they’re often viewed as less risky than peer-to-peer lending opportunities. After all, a robo-advisor is based on an algorithm that allocates your funds in the most advantageous ways possible, while peer-to-peer lending leaves you more vulnerable to consumers’ financial stability instead of general market conditions.
One of my favorite robo-advisors is Betterment, which charges a tiny fee to manage your investments in a variety of high-performing stocks, bonds, mutual funds, and ETFs. Since a computer algorithm is doing all of the work, you don’t have to worry about constantly managing your investment portfolio for optimal returns.
Instead, just set up an automated investment option which will pull a set amount of funds from your checking account each month and allocate across your robo-advised portfolio, and let the interest rack up on your investments. It’s truly one of the best ways to make a passive income for beginning and advanced investors alike.
Higher-Interest Banking Options
Want to get more interest on your bank savings account deposits than the average 0.01% your current bank is offering? If so, then online-only banks are great alternatives to traditional bank accounts because they’re able to offer much higher interest rates due to the lack of brick-and-mortar infrastructure eating into their business expenses.
If you’re worried about the security of your information and finances with an online bank, then rest assured, you’re protected with FDIC-insured accounts, up to $250,000, and top-notch online security with reputable banks such as Ally and Aspiration’s Summit Account.
Best of all, online-only banks may even offer interest on your checking account deposits, which is something most traditional banks don’t offer at all. Like peer-to-peer investing and robo-advisor investing options, high-interest savings accounts and CDs require next to no effort at all to maintain.
Do you own a home with more rooms than you know what to do with? If so, then you might consider hosting guests through Airbnb to generate more income on the side with minimal effort.
If you want a truly passive income, you can even opt for Airbnb to provide a host for you to handle all of the guest communications and coordination. Alternatively, you may install keyless entry systems with a specific numeric code on your door so you don’t have to be home when your new guests arrive.
Airbnb hosting is advantageous for anyone who has a spare room, or even a trailer or RV and wants to make more money. You can charge an additional “cleaning fee” to cover any messes and laundry expenses involved with hosting other people, and there are few limits on what you can charge per night/week.
For instance, if you live in a touristy area, you may charge $100 per night for a private room in your home. If you host just 10 nights per month, this equates to $1,000 extra per month with barely any extra effort required.
Start Earning a Passive Income Today
As you can see, earning a passive income is easier than you might’ve imagined. Some types of passive income may involve short-term investments such as personal loans or short-term hosting with Airbnb, while others may be more profitable on a multi-year timeframe.
Regardless of which option you ultimately decide on, you can’t afford to ignore the rich assortment of passive income opportunities available to anyone. Even if you only have $100 available to invest, this could add up to quite a bit of interest over time, so get started by signing up for any of the aforementioned investment platforms today!