Passive income streams, in simple terms, is income you earn from your business without being actively involved. Earning income from working at a 9-to-5 job is active income; earning income from collecting rent as a landlord is passive income.
There are several passive income streams. They include rental properties, renting your house or apartment with Airbnb, high yield savings accounts, creating a YouTube Channel, or earn money by just watching TV.
If you’re serious about creating passive income streams, you may want to work with a financial advisor, to help developing a plan to reach your financial goals.
This article will discuss some of the best passive income streams that will make you rich.
In the beginning, they are not entirely passive. To build passive income, you have to put a lot of work up front, usually with little to no returns for extended period of time. You can go months, even years without a single dollar produced from these passive income streams below.
But once the work is done, they can become completely passive and make you really rich.
Now that does not mean these passive income streams can be completely ignored. No, quite the contrary. It’s important to track every passive income stream, no matter how automated it might be.
5 Passive Income Streams That Will Make You Rich
1. Invest in Real Estate
Real estate is one of the best passive income streams to make great money and become rich. It has long been the source of passive income for ages. After all, some of the rich people made their billions by investing in real estate.
So, investing in real estate is not only a great way to make passive income, but it is also a great way to becoming rich. At first, it can be an active venture. As with all income streams that are passive, it takes a significant amount of time and effort on the front end.
It also requires time to seek and acquire properties, to come up with finances, etc. But when all of that is done and your property is fully rented, it’s mostly a matter of managing the property and keeping it performing well.
Property management can make the investment much more passive for you. Those property managers can manage your property for you, usually 10% of the monthly rent.
You’re most likely going to need a mortgage loan in order to invest in real estate.
2. Invest in Stocks and Earn Dividends
Some common sources of passive income streams are dividends from stocks. When you buy stocks that pay dividends, you earn dividend income on a monthly or quarterly basis.
Depending on how many stocks you have, you can generate massive passive income by doing practically nothing. To invest in dividend stocks, you would need to open a brokerage account. I would recommend Ally Invest for only $3.95 per online stock trade.
Speak with the Right Financial Advisor For You
Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with fiduciary advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
3. Peer-to-Peer Lending
Another way to generate massive passive income is to earn interest when you loan money to others. This is made possible by peer to peer lending. Peer-to-peer lending companies such as Lending Club make it easy to invest in people business and generate passive income from interest payments.
The way peer-to-peer lending works is that people who have money are matched with people who are looking for a personal loan, through an online platform.
These peer-to-peer lending platforms can get you a much higher rate results than a typical savings account.
4. Start a Blog
A blog, regardless of the niche, can provide you with tremendous amount of passive income.
Again it is not entirely passive, it requires a lot of time and work to succeed. But it’s certainly more passive than getting up every day to go to work.
I created my WordPress blog on Bluehost. BLuehost is one of the best hosting companies out there. You can start your blog with Bluehost for as low as $3.95 a month. The regular price is $7.99 a month, but you get it for $3.95, which is 50% off the regular price.
Once your blog becomes popular, it gives you the platform and audience to generate multiple streams of revenue by monetizing your blog.
You can monetize your blog in two ways: (1) Affiliate marketing, (2) Ads. Affiliate marketing can be a great way to make passive income because when people click on the affiliate links, you receive a commission at no cost to them when they product or service.
The second way you can make money by starting your own blog is from advertisements that you put on your blog. A good example is Google Adsense or Commission Junction. When someone clicks on your ads, you get a commission. See our beginner’s guide to making a blog.
5. Write and Publish an E-book
An e-book is one of the best passive income ideas. Although you have to put a lot work upfront on the e-book, once it is done and marketed, it can provide you with thousands if not hundred thousands of passive income streams for years.
You can either sell the e-book on your blog or offer it as an affiliate arrangement with other websites that provide content related to your e-book.
While working on creating passive income streams, here’s what you can do in the meantime:
You can start a blog.
If you’re interested in earning passive income from passive income streams, then you need to create your own blog. It’s one of the best ways to make money while you sleep.
Starting a website with Bluehost takes less than 15 minutes and hardly costs anything. And there are several ways to monetize your website.
Read our step-by-step guide on how to start a successful blog in 15 minutes. It’s one of the best passive income streams you can have.
Third, If you’re thinking of buying a house, estimate how much you may be able to borrow. Get pre-qualified.
Fourth, maintain a good credit score.
A good credit score of 750 means that not only will you able to get qualified for mortgage loan, it also means you’ll get qualified for a better interest rate. And being able to get a better interest rate means that you will have lower monthly mortgage payments. This, in turn, means that you’ll save thousands of dollars on interests.
Work with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.