We all need more than one income source, but there are only so many hours in a day to work. Here are 31 passive income ideas to make money while you sleep.
What is Passive Income?
There is a lot of chatter in the personal finance world about passive income, why you need it and how great it is. But what is it and why is it such a topic of conversation?
Passive income is money that you earn without doing much to make it. Some passive income ideas take a degree of upfront work to earn, like writing an e-book and some don’t take any effort at all, such as investing with a robo advisor.
Active income is money earned when you perform a service. This is money you make from a job and includes salary, tips, commission and any other extra cash you make from a side hustle.
Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also revenue that comes from real estate or business investments where you don’t have to be present to earn it.
Why You Need It
It’s never a good idea to put all of your eggs in one basket whether it comes to income streams, your portfolio, or applying for jobs. Almost no one has 100% job security and with automation set to take over more and more industries, finding and keeping a job is more uncertain than ever.
Having passive income may not replace your entire salary if you were to lose your job but having something coming in is better than having nothing coming in. It can keep you from depleting your emergency fund and can help keep you from sliding into credit card debt.
Pursuing some your passive income ideas can also speed your path tofinancial independence.
How Much Can You Earn?
If you read a few stories about passive income, you might be under the impression that you can start a blog or write an e-book and two weeks later you will be raking in $20,000 a week. Sorry, it doesn’t usually work that way.
While some people make a great living from one form of passive income, it’s more common that you will have small amounts from a few different sources coming in.
Choose a few things that sound interesting to you and try them out. Try to choose a few that do require some work as an e-commerce site and some that don’t like buying dividend yielding stocks.
Something will emerge that either you enjoy the most or is making the most money. Focus on that thing. Put some time and effort into it. We all hear stories about blogs making thousands of dollars a month but what we don’t know is how much time and effort went into that blog before it was able to break even, never mind make money.