Most responsible adults earn money through active income, which is income for services that have been performed. Active income includes salaries, wages, commissions, and tips. It also includes earnings from a business that you own and operate.
Passive income is earning money through sources in which the earner is not actively involved. This includes dividends, royalties, interest, and rental income. Passive income is a rewarding way to earn money because your money is doing all the work while reaping the benefits. Here are six ways to earn money through passive income.
Real Estate Investment
There is more than one way to earn money through real estate investments. You can purchase a property then rent it out. Once expenses are paid, such as a mortgage, taxes, and maintenance, the rest of the money earned is passive income.
Another way to earn money is through crowdfunded real estate. This type of real estate investment offers investors less money to purchase real estate as the buy-in amount ranges from $500 to $5,000. Most crowdfunded real estate options don’t allow you to choose where to invest, nor is it easily liquidated. But it is still a great option to earn money through passive income.
Dividend-Paying Stocks
Buying stocks is not a new concept when it comes to earning money through passive income. Dividend-paying stocks generally pay out dividends quarterly. Most smart investors take dividends and reinvest them. But if you are looking at it as a passive income source, you can use the money you earn to pay bills or save towards long term goals.
Peer-to-Peer Lending
Another great way to earn a passive income is through peer-to-peer lending by becoming a part of a lending club. You earn money receiving returns on interest. There is some risk though minimal, due to the possibility of the lendee defaulting on the loan. The risk is far less in lending clubs than if you directly lent money to a loved one.
High-Yield Savings
There are several types of savings accounts but opening a high-yield savings account immediately starts earning you money on dividends, earning you passive income. Similar to dividend-paying stocks, some high-yield savings account will earn you a usable income, quarterly. Check with a financial advisor to find the best high-yield savings options that will earn you the most passive income.
Royalty Earning Creations
There are multiple creative ways to earn a passive income after you complete the initial work. Writing an ebook is one way to earn money on a passive income. You can also earn royalties by selling your photos on stock photo sites. And yet another way to earn a passive income through creativity is to produce an online course. Once you do the initial work, the income from that point forward will be passive.
Use What You Have
There are several ways you can earn a passive income using what you have. You can use your car to earn money while you drive by using it to advertise. You get a percentage of the income that comes in from your efforts. You can also earn money by renting out an extra room in your home. Yet another way to earn is by shopping. Some apps offer cash for shopping in certain stores or for specific products.
Conclusion
A passive income is a great way to increase your income streams or replace your main source of income. There are many other ways to earn a passive income. The main thing to remember is you may have to put in some initial work to earn money, but the payoff will be worth it.
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