9 Smart Passive Income Ideas 2020
Whether you’re trying to save up money for something special or attempting to build an empire, passive income is something that could help you achieve that goal.
The average millionaire is estimated to have seven streams of income. That doesn’t mean seven jobs. Most millionaires have figured out additional streams of income other than their mainstream.
Here are a few passive income ideas to help you build up your personal wealth.
1. Make Money from Daily Activities
Earn money by redeeming money on your everyday purchases.
When you use Swagbucks, you earn points for shopping you’re already doing online from places like Amazon, Walmart and Starbucks. Plus, earn extra points for watching videos about a variety of topics, browsing the web and answering surveys. You can then redeem those points for gift cards to your favorite stores or get cash back via PayPal.
Just like Swagbucks, with InstaDollar you can earn residual income for doing stuff online that you already do, though you also get paid for doing a wider variety of tasks that you do with Swagbucks like checking email and playing games. Overall, the concept and reward structures are nearly identical. With InboxDollars, you do get a $5 sign up bonus, but you won’t be able to collect it until you build up $30 worth of rewards.
2. Make Your Car Work for You
Another daily activity you can turn into passive income is driving.
If you’re already driving around to run errands, why not pick up a passenger or two? Driving your car with Uber will help you make money by driving people to their assigned destination.
You can also place advertisements on your car to earn money while you’re driving around.
If can even make money when your car is not being used while you’re on vacation, traveling or just during a typical workday. With an app like Getaround, you can make thousands of dollars by renting out your car while you’re not using it. Plus, Getaround car owners get the best parking spots in town, a $50 monthly credit to rent whatever vehicle they like and $1 million in primary insurance coverage.
3. Get a High-Yield Savings Account
Online banks have started to offer enticing interest rates that can help earn money on your savings.
With CIT Bank, you can get a 1.55% return on your savings. It is not money you are going to get rich from but it is free money. And since there are no monthly fees, that’s a double win from CIT Bank.
An alternative option is Discover. Like CIT Bank, Discover offers competitive rates on their savings accounts. The big perk with Discover is that there is no minimum opening balance.
4. Rent out a Room in Your House
If you have a spare bedroom, you can rent out your room through Airbnb. It is totally up to you when the room is available, what the daily rate is and you make the rules for your guests.
A great way to make money while you’re on vacation or out of town is renting out your whole place on Airbnb.
It might feel weird leaving your space in the hands of strangers but luckily Airbnb has up to one million dollars of insurance in case something goes wrong. There’s also a rating system, so you can review the renter’s reputation before letting them rent your place.
5. Invest in Crowdfunded Real Estate
With just $500 you can start investing in real estate via a Starter Portfolio from Fundrise. You will get to take advantage of a REIT (real estate investment trust) with more flexibility and potentially high returns. Performance reports indicate that you will get returns of 12.25% on your initial investment.
Another crowdfunding real estate platform to consider is RealtyShare. It is similar to Fundrise but the minimum investment is $5,000. With this platform, there is more control and you are allowed to choose what properties you want to invest in, instead of relying on the performance of the entire portfolio.
If you choose either of these options, keep in mind that since they are private funds and not public stocks, you won’t be able to easily liquidate your investment and access your cash right away. Your investments could be tied up from anywhere from six months to five years. However, you’ll most likely still receive monthly or quarterly payments, depending on which investment opportunity you select.
6. Invest in Dividend Paying Stocks
Investing in stocks that pay quarterly dividends is the oldest and one of the best ways to generate passive income.
Let’s say you buy shares of Colgate-Palmolive stock. When you buy stocks the price is likely to ruse over time, you will get paid for each share of stock you own. Over the past seven years, Colgate-Palmolive has paid between $0.34 and $0.68 each quarter for every single share owned by stockholders.
If you’re trying to develop a long-term investment strategy, you might want to reinvest those dividends but if you’re strictly looking for passive income, you do well to cash those dividends.
If you’re new to investing, Ally Invest has free courses to help you have a better understanding. If you would like the guidance of financial advisors, you just need an initial investment of at least $2,5000 to get professional help for as low as $0.62 per month.
7. Peer-To-Peer Lending
If you want a higher than average return rate on your investment and would like to feel like you’re contributing to society, consider becoming a part of the Lending Club. The Lending Club takes your investment and uses it to help people borrow to start a business, consolidate debt and pay for medical care.
Here’s how it works:
- Open an account and transfer as little as $0.01 as a minimum initial deposit
- Build your portfolio by investing in a range of loans in increments of as little as $25
- Get paid by receiving monthly payments as borrowers repay their loans
- Reinvest payments or withdraw your money
8. Affiliate Marketing
With affiliate marketing, you earn a commission by promoting a product. The product you promote online should be something you know about and that you believe is high quality.
There are a few ways to get started as an affiliate. You can either form an affiliate relationship with directly with a specific company or through a commission platform like the Commission Factory, RewareStyle or ShareASale. You could also sign up as an Amazon affiliate.
So how do you get started? You’ll need a blog.
When you have an online presence, you have a place to give recommendations and share your knowledge about products. This is an essential part of affiliate marketing. Having a blog opens you up to all sorts of revenue streams. Not only can you earn passive income online with affiliate commissions, but you can also make money on advertising, too.
9. Create and Sell an Online Course
Perhaps, you have a certain knowledge and excelled skill level with a particular topic. You can use these skills that you have earned during a very long career to make you money.
You can create an online course to teach anything from Algebra to guitar on platforms like Udemy or Teachable. The best part about this passive income idea is that once you do the initial work of setting up your course, you will continue to get paid when people take it.
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What Does Passive Income Mean?
Passive income is traditionally earned through rental property, limited partnership and other ways in which a person is not actively involved. Just active income, passive income is taxable usually but it is often treated differently by the Internal Revenue Service (IRS) agency. Portfolio income is also considered to be passive by some analysts, so dividends and interest would, therefore, be considered passive.