If your primary source of income — which often requires your full attention, time, and energy — is no longer cutting it for your expenses, or if you simply want to earn more while doing less, then a passive income source is best for you.
Read on to know four amazing ways to earn passive income.
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What is Passive Income?
Passive income refers to money you earn by doing minimal work. You’re not actively involved in the process. The most common examples include investing in businesses, renting out a property, or earning royalties through creations, books, inventions, etc. However, they can also be found on websites that offer flexible part-time jobs for students and employees.
Investing in Dividends
One of the most popular ways to earn passive income is through investing. Specifically, you can invest in dividend stocks, or stocks of a company that distributes part of the firm’s earnings to shareholders regularly. Usually, you receive the dividends quarterly or bi-annually.
The best dividends stocks often increase their payout over time, helping them garner more interested investors. Moreover, these types of stocks are less volatile than others. For instance, growth stocks usually go up and down in a short time, and they can pose risks to investors.
With dividend stocks, the only upfront work you’ll do is research — you should determine which companies offer stable dividend payments that rise over time. The companies must be stable and relatively resistant to changing economic conditions.
Renting Out Properties
If you have unused space or are willing to let someone use your vehicle for business purposes, then you can earn passive income by renting them to another person. Long-term rentals offer a reliable source of cash. However, they also require necessary long-term work, such as maintaining the rented property.
You can start by renting out an unused room in your house. If you want, you can also sign up on Airbnb for short-term rentals of your house. Remember that rentals are successful if your property is located in the right location and you target the right market.
This source of income is predicated on you owning a property in the first place. In other words, the upfront work you must do is to acquire a property. Because of this, the upfront cash investment may be hefty.
Peer-to-Peer Lending
If you’re looking to earn passive income faster — something that lets you cash out your investment in under five years — then you can try peer-to-peer lending. This works well especially if you have extra cash that you won’t use anytime soon.
In peer-to-peer lending, you lend money to borrowers or small businesses. Websites like LendingClub, Prosper, and Worthy are all platforms that can connect you with credit-checked borrowers who need funding. Interest rates are often based on the borrower’s history, and the usual return on these loans is between 5%–6%
Remember, though, that borrowers will sometimes default on loans, and it may take a while to collect the debt. That’s why it’s best to use spare money that you won’t need for necessary expenses.
Create a Jobs Board
If you have a working knowledge of designing and creating a website (or if you know a professional who’s willing to give a discount), then go for creating a jobs board. Jobs boards help job seekers find recruiters to get hired. They also help businesses find the right talent. More importantly, it’s a great platform for you to earn passive income.
You can charge employers to post on your job board and offer features like sponsored jobs or access to your entire candidate database.
Overall, this source of passive income takes a while to launch and may need significant investments. However, once you’ve established yourself as a reliable platform, the jobs board essentially pays for itself and more.
