by Dana George | Updated July 21, 2021 - First published on Jan. 13, 2020
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Earning money takes effort, but once they're set up, these five ideas can help you earn as you sleep.
The phrase "passive income" is a bit misleading. Unless you inherit it, making money always requires some level of work on your part. What's nice about passive income is that you earn in a way that calls for less structure than a regular 9 to 5 job. And with time, what you earn can add up.
No matter the stage of life you're in, creating streams of passive income is a smart way to make your money work for you. This list is by no means exhaustive, but does offer five passive or semi-passive income ideas that have worked for others.
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Dividend stocks provide the ultimate in passive income. Here's how it works: You purchase shares of stock in a dividend-paying company called ABC. If they're like most companies, ABC pays dividends quarterly. Say you own 100 shares of stock and ABC pays an annualized dividend of $0.40. At the end of each quarter, they pay one-quarter of $0.40 for each share you own ($0.10). Multiplied by the 100 shares, your quarterly dividend would be $10, simply for owning their stock. No, it's not enough to blow your hair back just yet, but imagine how this would work if you used your dividends to buy more ABC stock -- or other stock. Over the years, your number of shares would grow and your dividends would grow with them.
If you have the patience to wait until home values in your area drop, purchasing rental property can make good financial sense. But be aware that even if you buy while values are depressed, you may not enjoy a positive return on investment right away. Plus, becoming a landlord only works if you're willing to be on call when things go wrong with the property, have money put away to make needed repairs, and don't mind chasing someone down for rent. At best, this is a semi-passive investment.
Investing in a real estate investment trust (REIT) is a truly passive investment. You have the option of putting money into a REIT or even into crowd funded real estate. There are several different types of REITs, all of which allow you to join other investors in owning a piece of the real estate market. Like most investments, you should plan to let your money work for at least five years.
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Do you know how to repair garage doors or clean an entire building using inexpensive, all-natural products? Share that knowledge by creating a YouTube channel, or writing an eBook, or starting a blog so others can learn your tricks. Amazon will walk you through the steps of uploading your manuscript to their site and you will earn money each time someone downloads it to read.
You can earn money in a couple of different ways by sharing videos on YouTube. If you connect your channel to AdSense the money you make is based on how many views your video receives. If your channel becomes popular enough, you can sell ad time to sponsors. Blogging is monetized by placing ads on your site, selling private ads, and including affiliate links to your site.
Going to be away from home for a while? List your property as an Airbnb rental. The more popular your area, the more you're likely to earn each time you rent this property out. If you have more house than you use, consider renting out a bedroom, bath, and kitchen privileges to a college student or young professional.
If you have equipment people might want to rent, place an ad in a local paper or on your neighborhood website. Whether it's a rototiller, riding lawn mower, spray paint gun, extension ladder, scaffolding, snow blower, or chainsaw, someone is likely willing to pay per use.
If one of your hobbies is creating unique items, there is likely a market for them. You can sell your goods through sites like ArtFire, Zibbet, Meylah, eBay, Etsy, and Amazon. The fact that you don't have to do any selling of your products once they're listed is what makes this a semi-passive stream of income. Depending on which site you sell them through, you may still need to take care of shipping and customer service, but wouldn't it be fun to make money doing something you love anyway?
Ideally, we would all find a way to earn passive income while we're sleeping, money we could then use to save for emergencies and invest in our futures.
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