Try These 5 Proven Ideas for Passive Income

The dream of earning a passive income – sitting on a beach while watching your banking app and see the dollars roll in.

It’s an aspiration for many but the reality is actually far different.

Perhaps the closest to true passive income is real estate – owning and renting out property. But even the steady flow of rental income every month is balanced by work dealing with tenants and maintenance.

Yes, these tasks can be given to a management agency but their fees eat into your profit margins.

Creating a stream of passive income takes time and money upfront, as well as ongoing care.

After some time and effort, these income streams grow and become self-sustaining, bringing you consistent revenue requiring little effort from you.

The reality is that many aiming to replace their jobs with passive income sources will have to maintain their careers for a lot longer than they had imagined.

Proven Passive Income Ideas

Having a few passive income ideas and dreams of wealth that go with them is great, but you must remember that not every idea is a good one.

There’s no guarantee that a particular method of making money will work for you, your skills, or your lifestyle, even if you’ve seen others do it before.

A clear set of goals and plans will help you discover passive income opportunities and for this you need a clear understanding of your financial and time resources is essential.

Here are some of the best passive income opportunities that almost anyone can take advantage of as a starting point.

1) Invest in Dividend Paying Common Equities

While investing for capital appreciation is not a passive income source, if you choose to invest in firms that pay out dividends to shareholders, you may be able to make inroads towards passive income.

Assuming that the shares’ value continues to rise, you’ll be able to profit from dividends and capital gains when you decide to sell them.

Consider using a broker or even advisors if you’re not a stock market expert and want a truly passive investment method.

If you’re not careful, you could lose more than you put in. Before beginning an investment portfolio, always seek professional guidance.

2) Put Your Money Away in a High-Yield Savings Account

Investing in a high-yielding savings account may not be what you had in mind when we promised you a list of passive income ideas.

They’re a great way to put your money to work for you instead of the other way around.

Open an account with no minimum balance and get an APY of around 0.50 percent. Some accounts even give you money just for signing up for the account.

To see any significant returns, you’ll need to deposit a significant sum of money into the account, but it’s still a viable option.

3) Invest in the Housing Market

For nearly as long as real estate has existed, real estate investing has been a well-established means of accumulating wealth.

Investing in real estate used to be a difficult task that necessitated a significant amount of effort, time, and knowledge.

It was difficult becoming a real estate mogul from your couch, but now some apps make it simple and accessible.

If you don’t have the money to invest in real estate, you can also invest in a Real Estate Investment Trust (REIT).

In general, dividend-paying investments tend to track the stock market’s performance.

While your investment’s value will rise and fall just like real estate, you’ll save time and money by investing in a variety of markets rather than just one.

4) Sell Stock Photos

Is it ever a mystery where the photos for your favorite websites, blogs, and even magazines come from? These images are typically purchased from stock photo websites.

Each time one of your images is purchased by a customer on a stock photo site, you will earn a commission. 

DepositPhotos is a well-known stock photo marketplace.

You can earn money whenever someone uses your photos by uploading them to the site. Indeed, check out this inspiring story of someone who turned photography into a lucrative stock photo venture.

5) Peer To Peer Lending

It’s a practice known as P2P lending that lends money to people who typically are ineligible for traditional loans.

As a lender, you have the power to select your borrowers and to spread your investments out over a longer period of time in order to reduce your exposure.

PeerStreet is one of the most effective lending platforms available right now. However, keep in mind that these loans will be used to purchase real estate.

This is a great option because you can simply lend your money and get paid back the interest and principal on it.

Wrapping Up – Passive Income

There is always a cost associated with passive income: time or money. However, the allure lies in the notion that it becomes passive once you’ve done the work.

It is possible to make money from your book for the rest of your life without doing additional work, such as writing it for six months.

However, this does not imply that more work is not necessary to increase your income. Always remember that the wealthy use passive income to build their wealth.

Your effort and time can be leveraged to create long-term income streams when you don’t have any money. The more money you have, the more passive income you can generate by using it (and even combining it with your time).

Previously published at Wealth of Geeks.

By Tim Thomas