It’s cool to have a steady paycheck from a 9 to 5 job, yes. But did you know that there are people whose incomes aren’t tied to their daily grind? That’s because they have ways to generate ‘passive income’ or money that keeps rolling into their pockets or bank accounts even when they’re not working. This extra income can provide a cash cushion for any emergency, pay for added luxuries, and even serve as your stepping stone to financial independence.
Now, who wouldn’t love to have a passive income? Well, the good news is passive income isn’t as rare as the Easter Bunny or Santa Claus.
This article breaks down six ways you can build wealth through passive income.
1. Invest In Dividend Stocks From Publicly Listed Companies
Investing in dividend stocks is one of the ways people can generate passive income.
A dividend can be shares of stock or a sum of money that a company regularly pays to its shareholders. It comes from the company’s reserves or profits. Dividends are typically distributed quarterly, although other arrangements, like monthly or annual distributions, are common in this profit-sharing plan too.
It’s essential to note that neither the value of the stock nor the dividends are guaranteed despite many companies having a long history of paying regular dividends to shareholders.
2. Join Peer Lending Platforms As An Investor
Peer-to-peer lending platforms eliminate banks as the middle man, helping lenders/investors and borrowers alike obtain more favorable rates.
Creating peer to peer lending passive income doesn’t require considerable lump sums to start, which is one of its advantages. Anyone with at least USD$500 could start building a peer-to-peer lending portfolio, then just add to it when they already have more budget.
Investors can choose to fund all, some, or none of each loan. Usually, there are multiple investors that fund a single loan.
A portion of each of the payments made by the borrower, consisting of principal and interest, returns to each of the investors involved with the loan.
3. Invest In A Rental Real Estate Property
The profits from rental real estate may provide investors a steady stream of cash flow when the property’s income exceeds ownership and maintenance costs, such as operating costs, taxes, and loans or mortgages.
As long as you purchase wisely and pay your mortgage with rental income, you can end up with significant cash flow that will eventually turn into a free-and-clear asset from your relatively modest initial investment covering both down payment and improvements. Investments in the real estate market can also provide you with growth in equity over time. However, it’s essential to note that you should make decisions based on potential future appreciation and not only on cash flow.
Of course, finding and managing tenants, as well as maintenance and bookkeeping, eat time. Depending on how many units you own or rent out, it can be a full-time job. To make this income source a really passive one, consider hiring a property manager.
4. Be An Amazon Affiliate
Joining Amazon’s affiliate program means you can get a cut of their profits. All you need to do is go through the quick sign-up process then you can already start sharing your affiliate links with people you think would be interested in buying products on Amazon. You’ll receive four to eight percent of the sale price as a commission for every purchase.
The best thing about being an Amazon affiliate is that you can still earn a commission even if someone who clicks on your affiliate link doesn’t buy what you recommend. If they purchase anything within the next 24 hours, the commission is still valid.
5. Create And Sell Digital Products Online
Another way to build wealth through passive income is to create a digital product and sell them online on e-commerce sites like Shopify.
Digital products can include stock photos, custom graphic designs, PDFs, online courses, and eBooks.
It’s possible to automate the entire process with instant downloads on e-commerce platforms, so selling digital goods is really a great passive income source.
6. Rent Out Your Vehicles
Even just part-time, many people still earn thousands of bucks each year by renting out their camper van, SUV, or car. After all, vehicles are assets that are often underutilized. They cost tens of thousands of dollars but are sometimes used for only several hours a week. The good news is that there are now websites that allow automobile owners to list their vehicles. They’ll then only have to wait for interested renters to book online or contact them.
Conclusion
There are gaps that a nine-to-five job can’t fill on its own. Passive income can help elevate an individual’s earnings and fill those gaps. The passive income ideas you’ve just read can help you do just that.
Once you’ve already established these passive income sources and built enough wealth through them, you can choose to either quit your job or still work full-time if you like. Yes, you can do both because the passive income ideas mentioned and discussed here tend to be manageable even when done with a nine-to-five job.
