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On the first paid vacation day of my initial full-time job with benefits, I experienced a seminal passive money-making experience: getting paid while not at work. I was hooked!
I moved on to putting money in a U. S. Treasury bill that, in 1986, yielded a 7% risk-free return of compound interest. A few years later, my husband and I rented out our house when the U.S. Navy sent us to a new duty station.
These experiences with passive income production delighted us, especially because our full-time jobs necessitated long hours, hard work, evil bosses and bad coffee, just like your full-time job today.
Passive income is money paid to you that you did not actively work for. Most of us rely on full- or part-time jobs where we work by the hour or the week for wages paid in exchange for the work we do. If you can set up income streams that don’t necessitate your continued hourly effort, you’re earning passive income.
You might not be able to generate enough passive income to quit your 9-to-5, but supplementing that income with passive revenue sweetens the credit side of your budget. We share some possible passive income ideas here that might work for you.
1. Produce and Sell Information
In our online world, the opportunities to create what I call eternal content are limitless. You can find other human beings the world over with interests similar to yours who will pay for knowledge you share. You can create content in any area you are interested in or have a skill in, and the types of content range widely from e-books, learning courses, videos, contests, podcasts, poetry, music, tutorials and others.
Often, the more niche your market, the more devoted your followers. For example, there are lots of cat videos out there, but if you concentrate just on 1 breed and become very good at and knowledgeable about that sliver of cat love, you may have better luck earning money.
Creating content is relatively simple and fast if you create content in areas you love. Getting the content out there in our crowded online world is harder, and the sales part of promoting yourself will not be passive. But once you are on a roll, your audience will grow, and that eternal content can make you passive income forever.
2. Rental Properties
As you move forward in your financial life, buying a property you can rent out for income can produce lucrative streams of passive income. It is true that you need to maintain your rental properties, but you aren’t going to be hammering fence posts 40 hours a week. Research the area you want to rent in, buy a property you can afford, advertise and select a renter, and start collecting monthly passive income.
Just like there is no guarantee that stock prices will rise, you don’t know for sure that you will be able to consistently find renters, and you will still need to make that rental property mortgage payment even if no rental income is coming in. But when it works, rental properties are one of the best forms of passive income you can choose.
CityVest is a web-based real estate investment platform that was established to give small-to-medium-sized investors access to real estate investment opportunities that typically require 6-figure minimum investments. CityVest does this by pooling multiple investor contributions into 1 bundle large enough to satisfy the minimum investment requirements of the best institutional private equity real estate investment funds.
- Individual investors seeking access to institutional investments
- Experienced investors looking to diversify their portfolio
- Investors seeking investments with strong due diligence and screening
- Access to high-performance institutional funds
- High returns
- Intense vetting of investment opportunities
- Third-party due diligence on all funds
- No registration needed to review investment opportunities
- Quarterly distributions
- Only available to accredited investors
- Not a lot of investor control of fund options
Streitwise is a unique online real estate investing platform that was designed to give investors, both big and small, an equal opportunity to invest in real estate. At its core, Streitwise is a real estate investment trust, but it’s one of the few online real estate investing platforms that is available to non-accredited investors.
- Investors looking to diversify
- Investors with less than $200k in annual income
- Passive traders
- Consistent quarterly dividends
- Low, transparent fees
- Low investment minimum
- Convenient and easy to use
- Limited offerings
Arrived Homes is a real estate investment platform that focuses on building wealth through investing in rental properties. While most real estate platforms and REITs focus on commercial properties, Arrived Homes focuses on single-family homes as its source of rental income.
This focus on smaller properties allows Arrived Homes to sell ownership shares on individual properties to non-accredited investors with buy-ins as low as $100. Learn more about Arrived Homes with Benzinga’s review.
- Small- to medium-sized investors
- Investors interested in rental income
- Investors looking to diversify
- Buy-ins as low as $100
- Open to non-accredited investors
- Offers ownership shares in real property (and all the tax benefits)
- Multiple ways to earn dividends (rental income and property appreciation)
- Great way to diversify portfolio
- Open to self-directed individual retirement accounts (IRAs)
- Long hold periods
- No secondary market to liquidate shares
Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.
CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.
- Accredited investors
- Long-term investors
- Investors looking to diversify from stocks
- User-friendly interface
- Diverse investment offerings
- Great investor resources
- Proven performance history
- Many offerings eligible for inclusion in self-directed IRA
- Accredited investors only
- Most offerings require a $25,000 minimum investment
Yieldstreet is an online investment platform that specializes in alternative investment offerings designed to generate passive income and wealth for investors. The platform offers a 1-stop shop for a range of alternative investments ranging from real estate to structured notes and even art collections.
- Accredited investors looking to diversify
- Alternative investments to stocks and bonds
- Investors looking for passive income
- Easy-to-use platform
- Carefully selected offerings
- Excellent mobile app
- Full spectrum of alternative offerings
- Options for non-accredited investors
- Majority of investments only open to accredited investors
3. Rent in Your Home
If you are not quite in a place where you can buy a rental property, you can start filling your passive income coffers by renting a room or space in your own home. Renting a room, basement apartment or garage in your home can help pay your mortgage. If your lease does not prevent it, you can even rent to others if you are a renter.
Be creative in figuring out what space you can rent. It might be intermittent nights rather than a full-time renter, or maybe you could rent garage space for someone’s boat, a field for a horse or a well-lit art studio.
Renting spaces in your home requires no cash outlay, so it’s a great introduction to nailing down passive income profits. While there can be risk involved, you can manage those potential pitfalls with common sense and reasonable care.
4. Sell Online
We talked about selling content for passive income, but you can also sell tangible items you already own. That old box of baseball cards you collected a decade ago might be worth something now.
If you or people you know have things that others may want to buy, you can sell them online through places like eBay, Facebook or other sites, or you can sell them from your yard. If these are things you already own, you make a profit from every sale. This method is another one where you don’t need money to make money in passive earning experiences.
To get the best return for your stuff, do some research to figure out how much others are charging for similar items. If you are shipping something away, you want to be sure to collect the buyer’s money before you ship, and remember to price in the cost of shipping. Regardless of your method of sale, this source of passive income is low in risk.
Decluttr is an online marketplace where you can buy and sell all kinds of cell phones, smart speakers, CDs, DVDs, games, LEGO®, books, smartphones, MacBooks and more. All phones, tablets, wearables, games consoles, laptops and other tech gadgets are Certified Refurbished Tech by Decluttr.
Buyers are guaranteed a free 12-month limited warranty, 14-day satisfaction or money-back guarantee and free shipping. The platform boasts a wide variety of used and refurbished products selling at or below market price.
Plus, Decluttr’s Tech Price Promise guarantees sellers receive the first price quoted or can request their item back for free.
- People looking to sell used Tech, DVDs, CDs, LEGO and books
- People looking to buy quality, refurbished tech gadgets and pre-loved DVDs, CDs & Games
- People looking for a convenient, secure way to sell their items
- Convenient for trade-ins
- Certified Refurbished Tech in the Store
- Large selection of items for sale in the Store
- Free insured shipping for Store purchases
- Fast payments for trade-ins
- 28-day price lock for trade-ins
- Only offers payments through PayPal or direct deposit
- Not all items will be accepted
Buyback Boss is a trade-in company that allows you to sell your iPhones, Samsungs, tablets, laptops and almost any other electronic device you can think of online. It will even buy broken or used equipment.
If you have multiple devices, you can bundle them together for an even higher payout. Buyback Boss also with a highest price guarantee.
Buyback Boss also offers free shipping, free instant valuation quotes and even has same day payments via PayPal or check. There are no bait-and-switch offers, and every offer comes with a 14-day price lock guarantee.
Buyback Boss is trusted by over 50,000 customers as an easy, hassle-free way to sell any tech device. Learn more about Buyback Boss in our review.
- People looking to sell used or broken smartphones or other electronics
- People looking to sell certain niche products like Beanie Babies
- People looking for an easy, secured way to sell electronics
- People who aren’t interested in a mobile app
- Accepts used and broken devices
- Easy, convenient and secured
- Highest price guarantee
- Free shipping
- 14-day price lock
- Can’t buy items on Buyback Boss
- No mobile app
- No direct customer service phone line
- Only 2 payment options: PayPal or check
5. Stock Market
Participating in the stock market is the penultimate form of passive income. The stocks you own do all the heavy lifting — either by paying you cash dividends or by rising in price and netting you a profit after sale.
You can learn more about stock dividends from our recent article, but briefly, a stock dividend is money paid out by a corporation on a regular schedule, usually quarterly, to holders of the stock.
When you own a dividend-paying stock, you’ll receive a set amount of cash per share of stock you own at set times. If using dividends to pay yourself passive income interests you, check out this Benzinga article to learn how to start. Not all stocks pay dividends, and dividend yields vary widely.
The other, less-reliable way to get passive profit from the stock market is the profit you earn when you sell stocks at a share price that is higher than what you paid for the stock. It’s such a great feeling if you buy Nike (NYSE: NKE) at $122 per share, it goes up to $145, and you sell it for a lovely passive profit. If only that kind of profit could be a sure thing! But when it works, it creates a satisfying form of passive income.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
SoFi’s mission is simple: to help reach clients like you reach their financial independence and realize their ambitions. SoFi knows that this independence comes from making decisions that help your money start to work for you in the long run. The brand helps individuals make these decisions through personal financial products such as personal loans, student loans and automated and active investing.
The brand additionally provides in-person experiences such as educational and networking events, personalized guidance from experienced financial planners and one-on-one advising with professional career coaches. SoFi’s services have been highlighted in outlets such as Forbes, Medium, and CNBC’s Make It.
- IPO Investing
- Mobile Investing
- U.S.-based customer service
- Highly-rated mobile app for iPhone and Android
- Only available in the U.S.
Robinhood is a broker designed for traders who want a simple and easy-to-use platform. It takes out all the bells and whistles that can be confusing to the modern day trader, serving as the perfect place for beginners to learn the markets. The interface is intuitive and easy to master, streamlined to ensure you don’t get distracted as you build a portfolio. Though advanced traders might like more thorough analysis tools, Robinhood gives you everything you need to start trading and learn the ropes.
- Beginner traders
- Mobile traders
- Streamlined, easy-to-understand interface
- Mobile app with full capabilities
- Can buy and sell cryptocurrency
- Fewer analysis tools than most
- Only taxable, non-retirement accounts are available
E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.
- Active traders
- Derivatives traders
- Retirement savers
- Sophisticated trading platforms
- Wide range of tradable assets
- Exceptional customer service
- Limited currency trading
- Higher margin rates than competitors
- No paper trading on its standard platform
6. Higher-Yield Savings and CDs
Not to dash your dream of risk-free returns, but in 2021, the passive income you’ll earn from higher-yield savings accounts or certificates of deposits (CDs) is so small as to almost be missed. Putting money in one of these finance choices is not bad in any way, and it will certainly generate passive income, but the amount may disappoint you.
If you could time-travel back to the high interest rates of the 1970s, these alternatives would be great options. But the trade-off of an 11% interest rate for a home mortgage doesn’t make me want to go back to drinking Tang in my bellbottoms.
7. Sell Business Leads
Selling business leads is a way to snag some extra passive income for your small business. It’s a niche income avenue that is really only available to business owners, but if you as a business owner have valuable contacts in clients or vendors, you can parlay those connections for dollars.
8. Monetize Your Website
If you already have a website or if you are thinking of setting one up, you might be able to use it to collect a strong passive income stream. Placing display ads, CPC ads and even affiliate ads on your website (or someone else’s) can produce reliable and extremely passive income.
The hard part of this tip is continually creating fresh content that sustains current subscribers and entices new ones. You need to have followers in order to get companies to advertise on your site. Using actions like creating email lists, hosting sponsored posts, teaching concepts and connecting with affiliate ads are a few ways to succeed.
Drop-shipping is a clever potential moneymaker that has come of age in the burgeoning e-Commerce retail boom. You access different types of apps to use an online store to create a method to become a 3rd-party seller. You earn a small portion of that sale and depend on volume to nail down substantial passive income. It takes time to set up and watch over the site, but it’s simpler and financially safer than owning a business with a big warehouse and many employees.
Drop-shipping is not without risk. If things go wrong, you can be liable for the expense of making them right. Additionally, the drop-shipping business is rife with scammers, so even if you do everything right, you can still be a target for fraud.
10. Learn a New Skill
As you explore ways to earn passive income, consider learning a new skill that will open more doors to passive income. If you love the stock market, take the free training offered by your brokerage site (TradeStation, E*TRADE and many others). Khan Academy, the Massachusetts Institute of Technology (MIT) and many others offer free training for writing blogs, creating websites and generating passive business ideas. Lynda from LinkedIn.com teaches you coding, Excel and accounting that you could use to analyze projects and figure out other passive profit opportunities. Let yourself start small, but go ahead and get going now.
11. Robo Invest
When most people think of investing, they primarily think to buy stocks and bonds on the New York Stock Exchange or NASDAQ. While investing in stocks can be a fantastic way to secure your financial future, choosing which individual stocks and funds to invest in can be a major challenge for a beginner.
A robo-advisor is a class of financial investors that can make investing easier and more welcoming for beginners. Simply create a portfolio, answer a few questions about your risk tolerance and employment, and your robo-advisor will generate a portfolio customized to your needs based on your answers. Most robo-advisors also allow you to invest on an automatic schedule that allows you to see returns without even opening your app.
If you’re interested in robo-investing, we recommend starting with Betterment. Betterment is a robo-advising hybrid platform that provides you with a complete shop for all of your financial needs. Set future financial goals (like a college fund or new home renovation) and watch your investments grow to fit your needs.
Frequently Asked Questions
How can I make $1,000 a month in passive income?
It can be hard to generate $1,000 a month of passive income if you don’t quite have much seed money yet. However, you could generate a smaller monthly amount with some of the tips here. If you start out with $50 a month in passive income, you could save that and build it into money to in turn generate continually higher levels of passive income.
A quick online search yields scores of examples of passive income, but once you start to research them in-depth, it seems like many of them are pure scams. One valid way to generate $1,000 or more a month in passive income, if you have quite a bit of money already, might be to buy dividend-paying stocks with staggered payout dates to produce the desired amount of monthly income.
Here’s an example of a stock-purchase plan that would yield about $1,000 a month. What you would be trying to do is to buy shares of stocks that pay their dividends in different months so that you could count on that $1,000 of passive income coming in every month. The sources would rotate around through your stocks every 4 months. Because dividends are usually paid quarterly, you could buy shares in companies that pay in different months.
For example, if you could invest about $800,000 in 1,000 or more shares of each of 6 different companies, then you’d end up with the $1,000 a month in passive income you were looking for. Every 3 months, each pair of those stocks would pay dividends equal to about $1,000 a month, thus covering the whole year.
How can I make passive income with no money?
Passive income generation without startup costs is a challenge. Raking in stock dividends requires capital to buy shares with; collecting rental income depends on your owning a place you can rent.
The easiest way to start making passive income is to sell things you already own. Once you’ve made some money that way, you can use that income to move onto other passive income generating ideas.
Accelerate Your Wealth
Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.