These examples will help you understand what passive income is and how you can transform your existing side gig into a profitable enterprise that will earn you money even while you sleep. Selling stock images or building your photography Instagram account Hosting photoshoots or taking photos for commission Hiring your car or selling ad space on your vehicle Working in construction or a similar industry
#Best sources of passive income license
However, there are alternative ways to transform them into a money-while-you-sleep business model… Active Income IdeaĪ consulting job where you charge by the hourĬreate an online course that people can buyĬomputer programming on a freelance basisīuilding a specific program that you can license and sell over and over again. Some of these common small business ideas are not passive income streams.
Examples of what is and is not passive income: That said, investing in high dividend-yielding stocks is an example of passive income as this provides you a regular income injection without you needing to do anything.Ī good trick for figuring out whether an investment is passive income or appreciation/speculation is whether you’ll see a cash on cash return like dividends (passive income) or if you only get a monetary benefit once you sell the investment (appreciation). However, we disagree that investing for speculation is one of the best passive income ideas for one simple reason… Stock appreciation is not income. Investing for speculation – You’ll often hear people tout investing in the stock market as a source of passive income. If you want to make passive income by coaching or consulting, you need to build your practice with others who could take on the hands-on element while you step back and enjoy the benefits.Į-stores are going to make the big bucks this year. However, if your side gig allows you to step back over time without losing traction, this could become passive income over time.Ĭonsulting – Consulting is an excellent side gig or online business if you have a specialist subject that you can share with the world, but it’s not a source of passive income. Your main job is not a passive income stream.Ī side hustle – While a side hustle can potentially generate passive income, they’re more often an example of active income as they require your attention and effort to maintain. Your job – The idea of a passive income stream is to boost your regular earnings or allow you to retire early. While a side hustle or second job is a great way to boost your income streams, unless it’s operating in a way that allows you to step further and further back (while earning more and more cash), then it’s not truly passive. What is not passive income?Īs we mentioned, passive income is often misunderstood and confused with side hustles. If you’re willing to commit your time, skills, and money towards your goal of generating passive income and potentially enjoying early retirement, then you could be making thousands in the long run.
Sure, there might be the odd property inspections and tenant changes to deal with, but the majority of your time as a landlord will be enjoying the passive income earned through the rent.īasically, passive income is a long-term decision that involves short-term trade-offs.
#Best sources of passive income plus
While there is some work and effort required to find the right property, deal with the legal side of things, and get it ready for tenants – plus financial investment in terms of the mortgage and deposit – once you get your tenants in, you can be earning money with minimal effort. One great example of a passive income stream is buying a property to rent it out. In other words, over time, effort goes down, and profits go up… Sounds great, right?! With these ingenious passive income ideas, you’ll be one step closer to living your dream life, with all the cash you need to fund it! What is “passive income”?īefore we get into the best passive income ideas to suit your lifestyle and talents, it’s worth taking a moment to establish what we actually mean by passive income, as this phrase is frequently misused or misunderstood.Īlthough passive income isn’t some magic money-making scheme that will get you rich with no work, it is a way of maximizing returns so that you can work decreasingly hard over time. But is it actually possible to get rich without lifting a finger? Earning money while you sleep or sip mimosas on the beach is a dream for so many of us (and even those who say it isn’t are probably lying!).