Forget homeownership — passive income is the real American Dream. The idea of making money while you sleep and being your own boss is what most of us fantasize about. The house can come later.
But beware, becoming an entrepreneur isn’t for the faint of heart — if you want to work for yourself, it requires rolling up your sleeves and dedication. You won’t find any get-rich-quick schemes here, just different avenues to explore long-term.
So if you’re ready to take a crack at finding passive income streams to flow into your bank account in 2021, this guide will break down some ideas on how to get started.
Overview: What is passive income?
Passive income is the money you make without having to take any direct action. Money flows into your account from a revenue stream that requires only relatively minor monitoring and tweaking.
You can make passive income from a variety of sources, but it may take a significant amount of work to get it up and running. Setting up a strong passive income stream typically requires great patience and investment over years of effort.
3 benefits to establishing passive income streams
Passive income is the holy grail for most people, as it allows them to focus on other things in life rather than spending a significant chunk of their days at work. Here are three main benefits to setting up a passive income stream.
1. Greater revenue
Even if you like the work you do, setting up passive income streams allows you to make more money without taking on extra work. Revenue is created without hands-on effort, and you are opened up to diversified income streams that protect you should you lose your job. It benefits people or enterprises with limited resources or time.
2. More time
Passive income allows the individual to scale back work activities and free up more time for themselves, either to relax or to engage in work they find more meaningful. Once established, less effort is required and the individual has more freedom to choose how they want to spend their time.
3. Expand your impact
Passive income also allows you to focus your efforts on higher-value activities that you didn’t have time to tackle before. You can spend more time on marketing, outreach, and growing your brand as you don’t worry about where day-to-day revenue is coming from.
7 passive income ideas
You can choose from many types of entrepreneurship and passive income opportunities, but some might be a fit and others may not, so this should be considered carefully. Here are seven ways to make passive income that you should consider trying.
1. Invest in financial securities
Passive income investments are a great way to make money, which is why most of the rich people in the world take this approach to making money. While they pursue other activities, their investments are constantly making them money in terms of dividends and investment growth.
Unfortunately, these kinds of passive income opportunities are usually only available to people who already have money to begin with — although 401K matching programs at many employers allow workers to slowly build up an investment over time.
2. Get into real estate
Real estate investment is a common form of passive income, as you can buy a house and then flip it for a profit. Sometimes, houses need work to increase their value, although you can hire people to do this for you. Be warned, though: Real estate can become another full-time job if you aren’t careful.
3. Create an app
Mobile apps have never been more popular, and people are finding new ways to monetize them. If you have software experience or are willing to hire a developer, you can create your own game or service and make money off of paid downloads, subscriptions, or advertising. This requires a lot of development work and marketing, so it may require some significant up-front investment before you make any money.
4. Put your property on Airbnb
For those who own their own homes, AirBnB has become a great way to make money. Some people even buy properties just to feature them on AirBnB. Aside from hiring someone to clean the home between guests, this business requires very little upkeep. Unfortunately for those who rent, this is typically not an option as landlords often forbid it in leases.
5. Start a side business
An online business on the side is a common source of passive income for people who remain in the workforce, although this form of business takes a while before it becomes passive. However, if you are able to market and build the product or service early on and bring in a solid stream of revenue, you can hire people to take over and run it for you, turning it into a passive income source.
Examples of side businesses include starting a YouTube channel for monetization, becoming an online seller, affiliate marketing, or even running a brick-and-mortar business during off-hours.
6. Write an e-book
Creating content that people want to buy is a great way to get passive income, and e-books are a good way to do this because of the low production costs. If you have expertise in some area, sell it to a niche market by putting it in e-book form and marketing it directly to them. Self-publish through Amazon and promote through advertising or an extensive social media campaign. Pitch it to publishers.
7. Rent out your car
If you don’t drive your car all the time, why not let someone else drive it for a fee? Car-sharing marketplaces have grown in popularity in recent years, and you could make thousands of dollars per year just by making this asset available to the general public.is the most prominent site for doing this. You can search the site for cars available based on location and cost.
The road to success is long, but worth it
Finding passive income sources is not an easy task. To get started making passive income immediately, you need to already own something or have enough money to invest in developing and marketing products. However, that doesn’t mean it’s not worth pursuing — it just means there are no shortcuts to success. You’ve got to put in the work.
If you’re just looking for an extra few thousands dollars per year, renting out your car may be a quick fix for that, but if you want to start a side business you must set aside time to come up with a business plan and start creating a product. Years from now, you may thank yourself for doing so.
The next step is to determine which of these options looks most appealing to you, and then map out a plan to make it a reality. Be conservative and don’t quit your day job. Experiment and tinker with different strategies. Talk to potential customers constantly. And above all, just be persistent.
Remember the words of President Calvin Coolidge: “Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated failures. Persistence and determination alone are omnipotent.”
View more information: https://www.fool.com/the-blueprint/passive-income/