When people hear the term passive income, they think of somebody who wants to be lazy and not work for their money. Which is not at all why you should be trying to build a passive income stream.
Instead, the thinking should be that building a passive income is a fast way to build wealth. You can keep working your regular job and make money while you work or while you sleep so you can parlay that into more money later.
Money Makes Money, After All.
From creating an online business to investing, there are ways to make a few extra dollars a month that can be used to build wealth. Now, in some cases, it takes a lot of work to create that passive income stream in the beginning, so it doesn’t always mean now work at all.
In this article, I will go over several ways you can make some passive money and fulfill your dreams.
1 – Investing
Investing money is truly passive as it doesn’t ever require punching a time clock. When done right, it can earn you dividends every month and really build some wealth when the market is going well.
The beauty of investing these days is how easy it has become. You don’t have to have a lot of money to start and in many cases, you don’t have to go to a broker.
There are apps that can make investing easy with just a few dollars at a time. In fact, according to this Acorns review, you can have that app round up your purchases and use the difference to invest a little at a time. After a while, you can build a tidy income from your small portfolio.
Index funds are also a very safe way to have your money work for you and bring in returns of around 6% to 8% on your principal.
2 – Rent Out A Room
If you have a spare bedroom that has become a storage area, then you can clean it up and list it on Airbnb. There is no work to be done aside from cleaning up after guests so it really is passive.
People who live in or near an area of touristic interest often can make several hundred dollars per month by renting out the room to short term guests. Unless the room has a separate entrance, or is an in-law apartment, then you will have to get used to having strangers in your house.
3 – Peer To Peer Lending
There are many lending platforms online these days that allow you to put some money up and act like a bank with peer to peer lending.
You can lend as much or as little as you like and for terms as short or as long as you like. There are people on there that only need a few hundred dollars for a few weeks and others that need thousands for a year or more.
Whatever amount or length you feel comfortable with is fine. You can make more by taking on high risk borrowers but there is the risk that they default, of course. Or, you can play it safe and make less but with less risk from more trusted borrowers.