Whether youâ€™re actively making money through an earned wage, reaping dividends from a portfolio, or enjoying a passive income stream, money is something no one can go through life without.
If youâ€™re looking to earn extra income but all of your time and energy is taken up by a full-time job, now may be a great time to set up a stream of passive income. Passive income is earnings derived from an enterprise in which a person is not actively involved. This means your earnings arenâ€™t directly tied to the hours you put in.
As the saying goes, â€œDonâ€™t put all your eggs in one basket.â€ The saying can be applied to income as well. Most millionaires today have multiple streams of income â€” and with good reason. As Warren Buffett once said, â€œIf you donâ€™t find a way to make money while you sleep, you will work until you die.â€
Passive income is all about front-loading the work and then sitting back and watching the money roll in, while only making minor adjustments periodically. While some people find the thought of taking on a new project too daunting or time-consuming, many times thereâ€™s more to be gained than to be lost.
Table of Contents
Here are some of the key benefits of earning passive income:
True Financial Independence
Passive income is a great way to reach your retirement goals early, an essential motivator in the FIRE (Financial Independence, Retire Early) movement. When you have enough money to fund the rest of your life, you wonâ€™t need to actively work anymore, which is when true financial independence has been achieved.
More Time for Your Priorities
Automate your cash flow so you can have more time to spend with loved ones, chase your passions, or travel the world.
Almost all types of passive income streams arenâ€™t tied to physical locations, meaning you can work from home, a coffee shop, or a remote tropical island with a Mai Tai in hand.
Faster Debt Repayment
Use the additional income from your passive income streams to pay off debt sooner, saving you interest money and setting you on the path to financial freedom.
While thereâ€™s no such thing as free money, passive income allows you to earn extra cash with little to know effort. Whether you work a full-time job or youâ€™re a stay-at-home parent, almost anyone could benefit from these easy side hustles.
Some people are pressed for time and would rather use the money to make more money. Others may not have starting capital, but they have time and energy to give. Thereâ€™s no right or wrong way to make money, so this infographic from Lexington Law gives some examples of passive income streams based on the amount of time and money youâ€™re willing to invest. From opening a high-yield savings account to creating a mobile app to licensing your photos, thereâ€™s a passive income stream for everyone. Browse the options to find something that fits your lifestyle and needs.
Should You Be Making Passive Income?
If you wish you could be making money while you sleep. build a source (or two) of passive income to make your dreams a reality.
65% of self-made millionaires have at least three streams of income.
Having even just one passive income stream maximizes your revenue without increasing maintenance and work.
How do you do it?
3 Types of Passive Income
Self-employed business ventures and silent partnerships.
Rental properties and notes.
Dividend-paying stocks and mutual funds.
Which passive income is right for you?
Some passive income streams require money to get started, while others require time. Decide which you have more to give, and build from there.
- Real Estate Properties
- High-Yeild Savings Account
- Peer-To-Peer Lending
- Dividend-Paying Stocks
- Invest with a Robo-Advisor
- Silent Partnership
- Crowdfunded Real Estate
- Cash-Back Credit Cards
- Digital Products
- E-Book or E-Course
- Rent your Car for Ad Space
- Participate in Research Studies
- Mobile Apps
- Affiliate Marketing