Updated: Jun 8
What is Passive Income?
Passive income is money that gets added to your bank account without requiring too much 'active' effort on your part. As the name suggests, passive income makes minimal demands on your time and energy, allowing you to continue investing fully in your job or business while opening up an alternate revenue stream.
Although there are a multitude of ideas for generating passive income, they're not all created equal. Almost all Ideas for generating passive revenue streams require an Initial Investment of either time or money.
If there was ever a way of 'making money while you sleep,' passive income is it.
In this article, we'll outline 20 ways to earn passive income, as well as basic information on how to get started with each idea. So, if earning passive income is something you're interested in, keep reading.
Passive Income Ideas
Here are some ways to earn passive income. Of course, the effort required from you may vary depending on the time, money, and other resources you'll need to invest initially.
1. Rent out valuable household items
Have you ever thought about renting out items that are just sitting idly in your garage or attic? You probably have some household items that are expensive but not being used presently. Instead of gathering dust in a corner or getting rusty from lack of use, you could put them to good use by renting them out. Some examples of things you can rent out (and websites that facilitate the transaction) are:
Tents and other camping tools - Loanables.com
Lawnmowers - FatLama.com
Power tools - FatLama.com
Baby gear - BabyQuip.com
Camera equipment - ShareGrid.com
Event or party furniture such as tables and chairs - Loanables.com
The idea is to rent out high-value items that people typically require for a short time and, therefore, would be more cost-effective to rent instead. You can list your items on platforms such as Facebook or Craigslist or let your neighbors know that they can visit to check your rental inventory at any time. Ensure that you protect your assets by demanding a security deposit or similar assurance in case any of your items incur damages.
2. Rent Out Your Computer's Processing Power
Did you know that your computer can function as a money-making tool? Many individuals and companies are looking for extra processing power to carry out tasks usually related to research or big data analysis.
The concept of having people' rent out' their hardware's computing power is called distributed computing.
Simply put, you only need to leave your computer running to earn money.
You don't need to perform any research or data-related tasks at all. In other words, it's all about renting out your PC's CPU to individuals or companies in need. While this will not help you get rich, it allows you to have an additional income stream to supplement your budget and clear off some bills.
You can earn passive income with the help of a distributed computing platform, your computer, and an internet connection.
Here are some platforms you can look up if you are interested in learning more about this concept:
3. Recover your old 401(k)s
Companies will contribute to 401k retirement savings plans for their employees during the the course of their employment; but when you change jobs, that money often gets left behind.
Unless you transfer that money into your own person IRA, it will just sit in limbo for forever.
Beagle helps people recover their old 401(k)s.
Just sign up for an account and they'll help you recover your money!
4. Invest in a high-yield CD or savings account
You can generate a passive income and enjoy high-interest rates by investing in an online bank's high-yield certificate of deposit (CD) or savings account. Online banks offer more flexibility and allow you to choose the best rates in the country, making it a better option than your local bank. Ensure that the FDIC backs the financial institution you are considering to enjoy a guaranteed return on principal deposits up to $250,000.
To make the most of your CD or savings account, check the following resources:
5. Real estate investment trust
A real estate investment trust or REIT is a company that owns and manages real estate. They have a unique legal structure that allows them to pay very little corporate income tax as long as they can pass along most of their income to shareholders - a win-win for all concerned.