Earning passive income is the best way to build an income cushion that will pay you long after you have stopped actively working. Whether you are looking for money-making ideas for your early retirement, or simply want to enjoy additional income in your monthly budget, learning how to earn passive income is a valuable skill.
Ways to Earn Passive Income
The key to passive income is that it does not require your full, active participation. Most passive income sources allow you to do the work once, and receive ongoing payments as a result. If you want to retire by 37, the most popular form of passive income is through real estate property ownership. Many landlords purchase a property and collect rental income each month on their original purchase. The key to making the most of passive income streams is to find one that does not require your full attention. Below you will find the best ways to earn passive income, with or without investment, suitable for various skills and professional backgrounds.
Develop Information Products
One of the best ways to generate passive income is through information products. Writing a book, publishing a blog or creating an online course are several ways that you can generate income by sharing information. You simply write the book, market it and collect income every month from sales. While you may have to do some marketing to sell the book, the majority of your work will be complete after you have finished the book. You can use this same principle with online courses. Set up the course, market it to your students and get paid each time another student signs up for your content.
Create a System and Let Others Run It
If you want to know how to earn passive income, one of the best ways is to develop a business system that can be run by other people. Take McDonald’s, for example. If you visit a McDonald’s restaurant in Illinois, your Big Mac will probably taste the same as a Big Mac in Seattle. The reason is that each franchise follows a formula or system that was created beforehand. The restaurants look similar, the prices are similar and the staff follows similar procedures from one store to another.
Develop a system—a system to sell baby shoes on Amazon, for example, then delegate another person to manage that system. You can pay someone else to do the work, then collect the profits later. Another way to make passive income through business systems is to use order fulfillment services, like Fulfilled by Amazon, for example. With this system, you simply send the products to Amazon and let them do all the work of picking, packing and shipping. You simply get a check every two weeks.
Use Your Extra Space to Earn Cash
Have a spare, unused bedroom? Take in a renter and earn income each month. Or rent out your apartment on AirBnb while you’re away on vacation. Got space in your driveway? Make it earn money for you. There are people who have extra cars, mobile homes or storage containers and will pay you to park in your driveway. You can rent our your car, your camera or even your baby’s stroller and make money that doesn’t require the full use of your time and energy. This is a way to make passive income without investment, just by using what you already have!
There are billions of websites on the Web, some of which have been abandoned by their owners years ago. You can purchase these already built websites, build them with your own content, then sell them for a profit later. While the majority of people won’t make a ton of cash flipping websites, it is a task that you can do in a few days or weeks, then generate income from later when you sell. Because these websites often contain some content, all you have to do is add new content to the site and breathe new life into it for a few months before you sell it.
Invest in Dividend Stocks
One great way to make passive income is by earning dividends from your investment portfolio. A financial advisor can help you to choose the best stocks to buy to maximize your income, but dividend stocks are a popular choice when it comes to buying investments that will pay you over and over again.
Recommended read: How to Start Investing in Dividend Stocks
Get Paid for Someone Else’s Work
If you want to know how to earn passive income, learning to get paid for someone else’s work is key. The best way to do this is to start a business, then receive a portion of the labor of your workers. Start a cleaning business and charge a flat rate, then pay your workers from the profits. Run a temp agency and get a portion of every hour your assistants work. While you will have to do the work of setting up, marketing and managing the business, the majority of your income will be passive.
Act as a Middleman
If you can build up a website that connects people who need services, you can act as a virtual middleman and collect the profits. Create a marketplace for people to exchange goods like bikes, clothing and collectibles, then charge a fee for membership.
Create a Mobile App
Creating a mobile application is not the simplest task and there is a steep learning curve, but once you master the science, you can resell your app again and again. You can also outsource the design and implementation to a third party, then make money on the royalties. Everyone uses apps on their smartphones, now they can simply use yours. You can charge a fee for the download or you can make money through in-app purchases.
Become a Loan Shark
Well, not really a loan shark. Peer-to-peer lending is a good way to learn how to earn passive income. Instead of going to a traditional bank for a loan, borrowers come to you and ask you to fund their next business venture, home loan or other project. With peer to peer lending, you don’t have to invest huge sums of money, and you can spread out your cash between borrowers. Buying notes of the highest grade of borrowers yields less profit but includes less risk, while betting on the low scoring borrowers carries greater risk but yields higher profits. If you have ever wondered how to earn passive income, peer to peer lending is at the top of the list of ways to make money in your sleep.
Sell Your Writing
There are marketplaces online that will allow you to sell your writing and make a profit from business owners who are looking for content. You simply write your content, list it for sale and wait for business owners to search for your content. Then you sell at a price that you have set beforehand. The beauty of this means of passive income is that you can often sell the same content again and again. If the buyer wants exclusive rights to your work, he will have to pay you a premium for the privilege. If you are good with words, and wondering how to earn passive income without investment, writing might be your best bet.
When you want to know how to earn passive income to retire early, remember that the key is to work once and get paid again and again. From peer to peer lending to website flipping, online marketing and property management, there are great ways that you can make money year after year without investing all of your time in your business.