Forget Side Hustles. Focus on These Passive Income Streams Instead

Millions of Americans rely on side hustles to keep themselves afloat financially. There are all kinds of statistics out there, but data from Zapier shows about 40% of people have some kind of side hustle. On average, they spend over 13 hours a week on their extra jobs.

If you have a side hustle because you're worried about your bank or brokerage account balance, good for you. Sometimes earning more is the only realistic way to live within our means. However, your time is valuable, too -- and working extra hours can become unsustainable if you do it for too long.

If you're getting tired of hustling every day, passive income might be the answer. The difference between a side hustle and passive income is the amount of effort involved. A side hustle is essentially an extra job where you earn money. Passive income may take an initial investment of time or money, but once it's working, it should give you extra income without tons of extra work.

Here are four passive income sources to consider.

1. Create an online course

Online learning is booming. If there's something you might teach people, consider creating an online course. It can be anything from using Excel to playing a musical instrument, though it should be something you're passionate and knowledgeable about.

It's crucial that you take time to research demand. It would be extremely disappointing to spend lots of time making a course on how to crochet elephant-themed wine glass holders, only to find they were something made up by a personal finance journalist.

The idea of making online courses may seem pretty active, not passive. True, it can take days -- or even months -- to get it up and running. But once it's done and uploaded onto the right platform, it should take very little upkeep.

When you choose an online learning platform, keep your passive income goal in mind. Some platforms charge lower fees but require a lot of ongoing marketing and sales work. Others already have a broad base of students and will do a lot of the legwork for you. If you want to keep it passive, pay more for a platform that does more of the work.

2. Create customized prints

Advances in printing technology have made it super easy to get your designs onto t-shirts, mugs, posters, notepads, and more. Gone are the days when you'd need to print and store hundreds (or thousands) of copies of your product in the hope they would sell. These days, on-demand printing services will produce the items as they're ordered. Even better? They can ship them directly to the customer.

If you have an eye for design or a knack for printable puns, there are a lot of possibilities. The initial time investment here is in creating a portfolio, setting up your store, and building automated marketing systems. Look for platforms and tools that will keep things running with minimal ongoing work for you.

3. Invest in dividend-paying stocks

If you have cash to invest, there are various ways you can use it to generate passive income. Some companies pay shareholders a portion of their earnings in the form of dividends. The great thing about dividend stocks is that you get those regular payments in addition to any appreciation in the stock's value.

Let's say you own 20 shares worth $10 each of ABC company. It pays a quarterly dividend of $0.10 per share. You would get $2 per quarter -- $8 a year -- from that $200 investment. Investors look at what's called the "dividend yield," which is the annual payment as a percentage of the stock price. In this case, your dividend yield would be 4%.

There are a couple of ways to focus on dividend stocks in your portfolio. You can research and pick individual stocks that often pay high dividends. This can take a lot of time, management, and knowledge, and may not suit new investors.

Another option is to research dividend-focused ETFs (exchange-traded funds). These are baskets of securities that follow specific themes. So a dividend ETF would give you exposure to a mix of companies that often pay high dividends. Check out our list of best ETF brokers.

4. Rent out space

I hesitate to put rentals as a passive income stream. I rent out rooms and can tell you definitively that my stock market investments are a lot less work. However, it's not easy to generate, say $1,000 a month in extra income from dividend stocks. That could require more than $500,000 in investments.

I don't know about you, but I don't have a spare half a million kicking around. But I do have space. Renting it out gives me some passive-ish income. Especially as I now always pick my tenants carefully and do regular maintenance to avoid unexpected issues. Being proactive can minimize the time I spend managing my rental space.

If you want to be more hands-off and make rental income more passive, consider paying a property manager. Sure, it will eat into your profits. But it can keep the process on a more professional footing and reduce your day-to-day time input.

Key takeaway

We can all get caught up in the daily grind. Working more may seem like the only way to move forward. But sometimes, there are ways to work smarter, such as investing time in projects that might eventually make money with minimal ongoing work.

Time is precious. And with an alarming 65% of workers experiencing burnout, per HR tech company isolved, side hustles are not always a long-term financial solution.