The best passive income ideas might not be fast but they will pay the bills with no extra effort
You can work your ass off to make money but you’ll never get anywhere until you start making passive income. I make money on seven different income sources but some of them take a lot of work.
I make good money but what’s the point of making money if you’re always busy…making money?
Passive income is money you make from a product or an investment where you don’t have to do any more work after you set it up. That means consistent cash flow every month whether you’re working or not.
That’s the only true way to financial freedom. Passive income is the only way you will ever be free from worrying about money and the only way you will ever reach financial independence.
I’m going to share my seven favorite passive income sources, income streams I use to make money every month. Now I’m not going to sugar coat this, some of these are going to take work but will mean thousands a month you can count on.
How to Find Passive Income Ideas
I’m going to start with the easy passive income ideas, the ones you can start making money on immediately and will work through to the ones you’ll make the most money on as we go through the list so make sure you stick around to catch those last couple of passive income strategies.
I’d also love to hear your passive income ideas so be sure to leave those in the comments.
Our first side hustle idea is with deal sites like Swagbucks and TopCashBack. Now these are actually two different types of passive income ideas because they’re different types of websites.
Swagbucks is a get-paid-to site so you get paid to do things like take surveys, play video games, watch videos and try out free product samples. Doing each of these, you earn points which are usually convertible to one hundred points for a dollar.
Now this isn’t something that’s going to make you rich but you can earn some legit money for less than an hour of your time. Swagbucks users have redeemed over $344 million in rewards for gift cards and Amazon rewards.
Now I’ve been using Swagbucks for a while and have found the money works out to just under $2 an hour so this isn’t something that’s going to make you rich. You’d have to work 2,500 hours to make $5,000 so that’s about three and a half months, non-stop. The thing with Swagbucks though is you can do it when you’re doing something else so I flip through surveys and other stuff while I’m cooking dinner or flipping channels.
Swagbucks is offering a $5 cash bonus just for signing up through their special offer so sign up here to snag your bonus cash.
TopCashBack is an online shopping cash back site where you get a percentage discount on anything you buy online. What you do is start at the TopCashBack website then click through one of the 4,000 retailers with a cash back program.
These are everything from Nike to Home Depot and you get from 3% to 25% cash back on anything you buy. You’re still shopping directly on the retailer’s website so you get all the other discounts and deals they offer, you just get an extra bonus for going through the TopCashBack site first.
It’s free to use the site so basically it’s just free money on stuff you were going to buy.
Start getting paid to shop online with TopCashBack
TopCashBack is a little better with the average cash back around 6% of your purchase so if you spend $1,000 online you’re going to get $60 back. Again, not something that’s going to make you rich because you have to buy stuff to get the cash back but it’s free money on the things you were going to buy anyway.
Blogging as a Passive Income Source
Our next passive income idea is blogging. I’m not a big fan of the term blogger because it sounds like you’re just writing random notes on a website. In fact, owning your own piece of digital real estate is big money.
I started my own sites in December 2014 and broke $5,000 a month just two years later. I averaged $5,500 through 2017 and that’s not including side hustle work I did freelancing.
Blogging is still going to take work starting out. That path to $5,000 a month didn’t happen overnight but just like real estate development, it build up an asset that now creates constant cash flow whether I work or not. I get over 30,000 visitors a month from Google search rankings, rankings that will continue to send traffic even if I take a little time off.
Now I’m working on a video to share five secrets to starting a blog that I’ve learned over the last four years from how to boost traffic to the easiest ways to make money so be sure to subscribe to the channel so you don’t miss it when it comes out.
The biggest secret to success in this passive income source though, is to just get started. There are factors like website age that play into getting ranked on Google and the sooner you get started, the better.
You can start your website for less than $5 a month with Blue Host and spend just a few hours a week to build it while you wait for it to start producing that income you can count on.
I’ll leave a link to a special offer by Blue Host below. Don’t wait until you need the extra cash to start your blog. I was making a grand a month off my websites within a year of launching so even if your blog isn’t big enough to replace your job, a grand a month is still pretty nice for a mostly passive income source.
Real Estate Crowdfunding is the Only True Passive Source in Real Estate
I talked about this next passive income idea in a recent video on the five investments that helped me make money while stocks were crashing. Remember that, back in February when the stock market plunged 10% within two weeks? I came out ahead because I had real estate crowdfunding and p2p lending to smooth out my portfolio.
I started my professional career as a commercial real estate analyst and I’ve managed my own rental properties so real estate has always had a special place in my portfolio. No other asset has created as much long-term wealth as property.
There are a couple of problems with direct investment in real estate though. It’s expensive to buy even a single property, a minimum of tens of thousands of dollars, and there’s no way most investors can build a portfolio of different property types and in different regions to protect from those risks when you have all your money in just one or two investments.
Besides that, managing your own properties is a constant headache with tenants and repairs.
So real estate crowdfunding is just the crowd meets real estate investing. Developers and investors list their properties on a crowdfunding platform that reviews the investment and the project owners. This is a detailed review and only about 5% of the projects ever make it on to the RealtyShares platform which is where I do most of my investing.
You can invest as little as $1,000 in each property which means you can build up a portfolio of different property types and in different areas for that diversification. You also get professional management of the projects. The project owners send all debt or equity payouts through the platform and it gets passed on to investors.
Since these are longer-term projects, short-term market hiccups shouldn’t affect them. Real estate prices may follow the economy a little but there is still that natural demand from homeowners and commercial users so that supports prices.
I surveyed real estate crowdfunding sites on returns and found that debt investments average around 9% while equity returns average 15% annually. I invest in real estate debt on PeerStreet and in debt and equity on RealtyShares. I like investing on more than one platform because it gives me access to as many deals as possible.
Self-Publishing is My Favorite Passive Income Source
Subscribers to the channel have probably already seen the videos on our next passive income idea, self-publishing. I’ve been self-publishing on Amazon since 2015 and have 10 books that averaged $1,857 a month last year.
Before you think you can’t write a book, anyone can do this and it is so easy. In fact, self-publishing is a natural fit for bloggers because you’re already writing the material. All you have to do is reformat it and turn it into a book for another income source. So if you’re thinking about blogging, you definitely need to be self-publishing also.
I’m making an average of $185 a month on each book and you can produce a new book every couple of months if you’re really focused. The best part about self-publishing is that once you have it published on Amazon, there’s almost nothing left to do. I spend about $20 a month on advertising for each book and that’s it.
So if you’re doing a book every two months, you’ll have your $5,000 a month in just over two years and that’s going to be consistent income every month even if you stop writing.
P2P Lending for Monthly Passive Income
Another investment I highlighted recently was p2p lending through Lending Club. I’ve been investing in p2p for a few years now and have booked returns just under 10%. Now that might not sound great against double-digit stock returns but it’s double what you get from other fixed-income investments.
Investing in loans is nothing new. In fact, I guarantee you already have money in them through any pension plan or insurance. You see banks sell their loans to investors that need reliable cash flow so their biggest buyers of loans are pensions and insurance companies.
With p2p, you cut out the middleman and become the bank yourself for higher returns.
I average just under 10% annually on the loans so about $1,000 on every $10,000 invested. Now that’s a year so you’ll need quite a bit invested to make that $5,000 a month but even a small portfolio will constantly be putting cash in your account. You get paid principal and interest monthly on your loans so it’s a great cash flow investment.
What I like about p2p investing on Lending Club is the website’s automated investing tool. You pick the criteria for loans in which you want to invest and the program does the rest. It will look for loans every day that meet those factors and automatically invest your money. It’s important because you’re collecting money on your loan investments every day so you want that money reinvested as soon as possible.
The automated investing tool on Lending Club makes the investment completely passive. I might only check in on my account once a month or even less often. I know that program is going to keep investing my money for a stable and passive return.
Patreon: Residual Income for Artists
Our next passive income idea is another twist on crowdfunding called Patreon. The website is promoted as a crowdfunding site for creative people like artists and writers but really it’s for anyone with a side-hustle idea.
Patreon is actually how the arts used to work hundreds of years ago. Back during the renaissance, artists used to ask the rich to be their patrons to support their work through regular contributions.
This gave us amazing masterpieces like the Mona Lisa and many of Picasso’s works.
So now the website Patreon gives you the opportunity to get patrons for your own works. You build a community of people interested in your work, another use of a blog that does double-duty for this passive income strategy, and then ask them to make contributions each time you produce something.
Now patrons don’t come away empty-handed, you offer rewards and copies of the work. So for a writer, you might offer copies of your books. You could promise to publicly thank patrons on your blog or to promote something of theirs in the future.
Even if each patron only contributes a very small amount each month, it can still be a huge source of income. Take a look at the Patreon page for Kinda Funny, an internet video company. They have over 6,209 patrons which means an average of just $3 a month would be a monthly income of almost $19,000 – plus they get cheerleaders that are always happy to spread the word on their brand.
Residual Income Sales from Amazon FBA
Our last passive income source is creating your own brand and selling through Amazon FBA. This is one of the most exciting income ideas I’ve seen in years. Amazon FBA makes it easy to start your own retail company, to sell your own products.
It used to be that you needed hundreds of thousands of dollars for manufacturing, marketing, logistics, everything that went into selling products. With Amazon FBA, you contract with a manufacturer to ship everything directly to Amazon warehouses across the country.
The manufacturer is going to put everything together, package it and even put your label on it. Then you just run your advertising and sell everything from your page on the world’s largest internet shopping site.
Amazon FBA gives you the opportunity to compete with the biggest names in retail. Always wanted to start a toy company, move over Hasbro. Want a line of blue jeans with your name stitched across the pocket, you can now get started for just a few thousand in inventory.
I’ve got a couple of interviews on the blog from people that have started stores through Amazon FBA. A couple of them are making six-figure incomes in less than a year so $5,000 a month is easily achievable in less than that.
Making legitimate passive income isn’t as difficult as you might think. Some of the best passive income ideas might take a little time to set up but can start cash flowing within a couple of months and will provide a consistent monthly income for years or more. The most important point is just to get started. You make exactly $0 on the passive income sources you never start.