Passive Income Strategies
Maybe you have heard about making your money work harder for you or making money while you sleep. These concepts are the core of any passive income strategy. Unfortunately, there is no easy way to get started because each passive income idea requires commitment, focus and hard work and in many cases, money to invest, in order for it to pay off. Similar to successful investing strategies which hinge on diversification of risk, a successful passive income strategy will include multiple streams of income built up over time. The best approach is to start small, save the money that you earn using these strategies and then invest in higher yielding ideas. After trying some of these ideas myself, here are a few of my favorites (in order from least to most cash-intensive):
Self-publishing - Writing a book and publishing it yourself on Kindle is super easy to do and you can earn royalties every time someone buys / downloads it; just write about something you are passionate and knowledgeable about - Kindle offers many easy ways to promote your book once you are done including free giveaway promotions and paid advertising.
Selling stock photos - If you like taking pictures and want to make a little extra money you can publish your photos on sites like Shutterstock and you will get paid when your photos are downloaded.
Selling items on EBay - Want to de-clutter your house and make a little money? Try selling your extra items on EBay. It's very easy to do with the app; just take a few pictures and search for the item and generally most of the listing will auto-populate. Make sure your description is accurate and detailed. Check what other items sold for before you price (you can also use EBay's pricing recommendations - they usually recommend an auction format but you can also do a fixed price with "Buy it Now"). Make sure you can cover the shipping cost for the item - USPS flat rate packaging is best I have found; include that in the price you set, either explicitly (buyer pays shipping) or implicitly (higher price). Beware of scammers - don't ship until you get paid (PayPal is usually best but there is a fee for that in addition to the fee EBay charges for selling your item).
Investing in US Treasury bills - see my recent post on this; you can earn a lot more interest income than banks are paying with no risk.
Dividend stock investing - search for the best companies that have the longest track record of paying and buy shares in a few - for example, I like AT&T (T), Consolidated Edison (ED), Exxon-Mobil (XOM) and Ventas (VTR); add to it over time as you have extra money; there are many easy ways to invest online now and here are a few suggestions I personally like Acorns for investing small amounts regularly over a period of time.
Royalty investing - you can buy music royalties as an income investment see my recent post on this subject
Peer to Peer Lending - Lending money through a peer to peer network like Prosper is a great way to earn high interest rates, depending on the borrower risk you are willing to take. Riskier borrowers will pay a higher interest rate, but also have a higher risk of defaulting. Investing in a portfolio of loans diversifies the risk and reduces the impact of defaults. If you are looking for money to consolidate debt or for an investment, assuming you have good credit, Prosper can also be a quick source of low cost funds. I have been both a borrower and a lender on the Prosper platform for years and have been pleased with the results.
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