Creating passive income is a great way to build your finances (and savings) on the side. It will also protect you financially if you ever take time off work or lose your job because no matter what, with the right "side hustle," you will always have money coming in. According to the IRS, passive income can be generated one of two ways: through a rental property or through a a business that does not require active participation.
We wanted to share some passive income ideas with you to help you get inspired and hopefully get started!
- Flip retail products or used products from placed like Goodwill, Salvation Army or online sites like Offerup, Craigslist or Facebook Marketplace. Thereâs also lots of âfreeâ giveaway groups on Facebook where neighbors post stuff theyâre getting rid of. You can fix up items and resell them at a higher cost.
- Rent out a room of your house or apartment, or rent your place out if you are ever gone! This can be especially valuable during holidays when you can charge a premium like New Yearâs, Fourth of July, Labor or Memorial Day.
- Advertise on your car. Reach out to your local advertising agencies and see if any are running car ads. They will wrap your car for free and you'll get paid to drive around town!
- Create a blog or YouTube channel. Figure out what kind of information you can be the go-to expert for, and put yourself out there! It will take time to build an engaged audience and create compelling content, but once you establish yourself in the space you can monetize your content with ads, sponsorships and partnerships.
- Rent out high-cost household items like a power washer, a lawn mower, weed whacker, power tools, camping gear, skis/snowboards/snowshoes, etc. You can even rent out your car with services like Turo, a peer-to-peer car-sharing company!
- Sell designs online with sites like Red Bubble, or get your designs printed onto items like mugs or clothing with business like CafePress and Zazzle.
- Get crafty! Sell handmade crafts on Etsy. Our favorite Etsy finds are handmade candles, jewelry, pottery, and knitted wear.
- Dividend stocks â buy shares from companies that have dividend-yielding stocks. As a shareholder, you will receive quarterly payments from the company based on how many shares you on. This is a great way to generate passive income with basically zero effort, the only difficult part is choosing the right stocks! We recommend exchange-traded finds (ETFs) because each fund represents a variety of stocks, commodities and bonds, so even if one company doesnât do well one quarter, the diverse holdings ensure youâll still profit.
- Real estate investment trusts (REITs) â because investment properties are great but who has the money for that? If you want to get started investing in real estate but arenât quite there financially, REITs are the perfect way to get involved without having to manage a property or renters. These trusts usually pay income in dividends, so you can easily generate income without much effort. Plus, if you automatically invest some or all of your returns, youâll be able to continue to grow your portfolio without any effort
- High-yield certificates of deposit (CDs) or savings accounts. Do some research online and figure out what online banks offer the highest interest rates in the country. Just make sure it's FDIC approved and keep in mind that even as your money works for you, inflation will work against you.
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