Would’ve it be nice to have extra income that’s working for YOU and not something you’re actively earning like your day job? Income that’s still coming in whether you’re asleep at night or on a tropical vacation?
If you’re serious about retiring early, quitting the 9-5, creating wealth or just want more flexibility in your budget, passive income is a must have. If your own source of income is your day job, it’s going to be TOUGH to break that cycle of living paycheck to paycheck.
Finding passive income ideas are one of the BEST way to create wealth, retire early or to pay off debt. Passive income is how we’ve been able to live on ONE income but will still be retiring by age 50. (We’ll that’s my hubby, I’ll still be in my 40’s 😉
It is VERY HARD to create wealth if you DON’T HAVE SOME passive income mixed into your financial strategy.
Passive income opens up so many doors and will give you flexibility with your job, it can help you retire early and it can give you the extra money to pay for extras like fun trips or maybe college tuition.
I truly believe there’s a passive income source out there for everyone, even if you can’t implement all of these in your life right now. Pick one idea you can start with, set goals for yourself, set aside money each month and add on other passive income ideas later. We definitely did not start all of these at the same time either.
If you’re just getting started with passive income, start with something small and as you earn money from that source, re-invest it into creating even more passive income!
Creating passive income is not a get rich quick path, it takes a lot of hard-work and commitment NOW to make things a little easier for you LATER.
What is passive income you say? It includes income sources that make you money without you doing any work to achieve them OR with just a minimal amount of work.
We’ve received income from most of these items in this post, so I know they can be achieved and we started most of them when we were on the tightest budget of our lives. The one way we have tried yet, we’ll be implementing when our youngest leaves for college in 1.5 years!
PASSIVE INCOME #1: CREATING EBOOKS
This does take work to set up, but once you’ve found an established niche’ and get yourself set up, you’ll still be receiving income when you sleep! Well known examples include writing an eBook about your hobby or special skills, or creating a course.
I recently published my first ebook and it even made $200 within the first two weeks. My goal is to get it to $500/mo as passive income and add on other ebooks or courses. How cool would it be to make $2K plus per month with passive income!!
Once you get an ebook written, the profit is all passive. Every time my phone dings with a new Pay Pal payment notification, I get so excited!
My ebook isn’t even fancy, I wrote it in Word, converted it to a pdf and added stock photos and Smart Art to make it prettier.
I sold it through SendOwl (the first month is free and $15/month after that) and I’ve been marketing it from my blog on Pinterest and through blogging Facebook groups. SendOwl is a popular platform for eBook writers since you get paid instantly through PayPal as soon as you sell a book, whereas other companies hold your money 30 days before making you a payment.
I definitely want to sell my eBook on Amazon too and will be getting that set-up soon!
RESOURCES TO GET YOU STARTED
If you want a step-by-step on how to write an eBook, Lena Gott has an amazing resource called Ebook Creation Guide. I haven’t taken this course, but I have numerous other courses of hers and really value her knowledge and expertise.
PASSIVE INCOME #2: SIDE HUSTLE
Blogging is my FAVORITE side hustle, it’s a long-term strategy, and not something that makes money overnight. That being said, when done well, blogging has the potential to be very lucrative.
Michelle makes over $100,000/mo with her blog and most of it comes from passive income.
Blogging income from affiliate marketing and advertising truly is money you earn while sleeping. Even if you stopped writing blog posts down the road, you’d STILL be receiving the advertising money whenever anyone comes across your posts through Google, Pinterest or other forms of social media.
Within 4 months we were making over $400/mo working on our blog part-time and we made $700/mo by month 6. By the end of the year, our goal is $3K/month. Fingers crossed!
SIDE NOTE: Blogging is NOT a make money quickly path, this is a long-term idea that takes most people many months or possibly years to see a good income from it. While I LOVE blogging and I did make money from it pretty fast, I just want to be real with you that while it’s fun and rewarding, it is lots of hard work too!
RESOURCES TO GET YOU STARTED
The one thing you HAVE TO HAVE to start blogging is a high-quality host. There’s many blogging add-ons you can skip until you’re making more money, but starting with the #1 rated web host, Siteground, is a must! Don’t let anyone tell you it costs tons of money to start a blog, it doesn’t! Just find a way to pay for a high-quality host like Siteground (hmmm, maybe even do the surveys listed below haha) and when you start making money with your blog, then add on one new service or course to help you grow!
And to be direct, if my hubbie who works 50-60 hours per week can STILL make time for 2-4 hours/week to be in a band as a side hustle, you have the time to add-on a side hustle too 😉
PASSIVE INCOME #3: REAL ESTATE
No, we aren’t real estate developers, from a rich family that gave us money to buy houses and we didn’t win the lottery, or inherit property. But, we do own one rental house that was actually our first home we decided to keep when we moved into our current home 14 years ago.
So, how could we afford to keep our first home as a rental when we moved? One, we’ve ALWAYS lived well below our means and two, it was HARD and we were on an EXTREMELY tight budget to pull it off! Was our new home our dream house? Heck no! It was a beat up 1980’s ex-college rental house that had the space we needed for a growing family. The plan was to give it a little TLC over the years and fix it up as we could afford to (still working on that ;).
Our focus back then was to save save save in our 20’s and 30’s to set ourselves up for early retirement, travel and whatever we FELT like doing once our kids left the nest!
Is that ONE tiny rental house making us rich? Of course not! But with the mortgage getting paid off in a few years (we refinanced years ago to a shorter term mortgage and put the extra money earned each month to help pay down the principle), we’ll receive the rental income free and clear, plus the value of the home has tripled since we purchased it. Earning over $10-$20K/year on a rental house for something that takes a very small number of hours per year sounds pretty nice, doesn’t it?
RESOURCES TO GET YOU STARTED
Here’s a couple best selling real estate investing books to help you get started. I haven’t read this exact Rich Dad book but the Rich Dad real estate series was a huge motivator on why we decided to keep our first home after we moved.
If you’re interested in real estate investing but don’t yet have the funds, Real Estate Investment Trusts (REIT’s) are something to consider.
PASSIVE INCOME #4: HOBBY INCOME
When you have a second income source you ENJOY, it doesn’t feel like work! Many people have successfully turned their part-time hobbies into small sources of income for their family.
For my husband, that’s music and he currently plays in two different bands. It’s an awesome creative outlet for him after working 50-60 hours a week at his business. For me, that was being a cheer and dance coach for 4 years and making handmade cards to sell online. Let your hobbies and interests inspire you!
RESOURCES TO GET YOU STARTED
- Getting started with Etsy
- Getting started with Amazon – The Selling Family has a FREE 7 day course, I’ve taken it myself and want to add an Amazon store too some day 🙂
PASSIVE INCOME #5: BUSINESS INCOME
My husband is a self-employed successful businessman. He receives a bi-weekly paycheck like everyone else, but what’s different for business OWNERS is they also receive profits from the company at year-end.
Yes, many businesses fail and if a company has a bad year, some of the money you rely on might not be there (or worse, you have to make up the shortage). In many aspects of life, success also takes risk. If you’re looking to start a new business and minimize risk, my opinion is to start small and let it grow over time. How many bloggers and online business people have done just that?!
For my personal comfort level, I’d still have multiple income sources and try not to rely just on the business source to pay my bills. ALWAYS give yourself options in case of unexpected life changes!
PASSIVE INCOME #6: INVESTING AND SAVINGS
SAVINGS Because we’ve been so focused on paying debt off to retire when we’re younger, our investments to date mainly include a 401(k) and IRA accounts. If you have a work 401(k) and aren’t putting in at least the company match, you’re basically giving away potentially thousands of dollars each year! Regardless of your income level, contribute SOMETHING to your retirement accounts! We have always prioritized retirement income, regardless of how cash-strapped things became.
The key is–have the money automatically deducted from your paycheck or bank account (if saving for an IRA) so you get used to this being a financial habit.
If you’re someone saying you do NOT have extra money in your budget to save for retirement, please go read my recommended posts at the top and the bottom of this post. You can’t afford NOT to prioritize your senior years!
Savings account income is also considered passive income, however, they usually pay lower returns than most investments.
While we love investing, we’re not financial planners and will direct you to other resources for financial advice. Here’s some amazing finance books to get you learning more about the power of investing and compound interest! I love anything from the Rich Dad Poor Dad series, Warren Buffett and Motley Fool.
The Millionaire Next Door is an awesome read! The premise is the people who act rich and live lavish lifestyles often aren’t wealthy, whereas the people who actually have millions in the bank often live in old houses, drive old cars and live a frugal existence.
BONUE TIP: I LOVE the Personal Capital app to help me keep track of our expenses and investments.
PASSIVE INCOME #7: RENT OUT YOUR HOME
I’m not talking about buying a house a renting it out as a full-time Airbnb (although some have done that!–check whether it’s legal in your area before considering this option!)
What I’m talking about is renting out your home when you go on vacation/leave town to help pay for your vacation or earn a little extra on the side. We’re hoping (fingers crossed), to take a 2 week family trip to Europe before our son graduates. One way to help pay for that (in addition to savings, visiting people we know who live there, mileage points, and travel rewards) would be to rent out our home while we’re on vacation. Airbnb’s ARE legal in most communities if it’s a short-term rental of your primary residence.
This is the one passive income suggestion we haven’t yet tried, however, we recently figured out one awesome option.
We can leave for one year to Europe (or for many years!), rent out our home for about $3000/mo at current market rates, and get a decent apartment rental in another country for $1500 or less/month. I’m sure you figured this out fast–we can rent out our house and make a PROFIT from renting out our home to help with living expenses while we travel.
But the key again is….go back up to the tips under real estate…..save save save when you’re young, live below your means, and prioritize paying off your mortgage/other debt to give yourself more options in life later!
Yes, I understand there are articles out there that say debt can be good and used to grow your assets and blah blah blah…..I’m just letting you know what worked for my family! Everyone has a unique situation and story and there are MANY paths to success and financial freedom. My path is choosing to live debt free as quickly as possible! 🙂
To learn more about renting out your home with Airbnb, go here.
PASSIVE INCOME #8: CREDIT CARD PERKS
I also touch on this in Holiday Shopping on a Budget, but having a credit card you pay off in full monthly is an easy way to earn free money! This requires no extra time and effort on your part and can earn you 1%-2% cash back for free.
This can easily equal hundreds of dollars of free money each year! If you have the discipline to track every expense and put a rewards credit card on automatic payment in full, this is an awesome way to earn extra cash, travel points or other perks.
We just got 2 FREE plane tickets to Europe because of earned credit card points from 2 credit cards. Diligent use of putting all purchases on a credit card and paying them off in full each month, can make you lots of extra money! Yes, I could’ve gotten the cash back instead for this to be passive income, but checking off a bucket list item to take a family trip to Europe was important too 🙂
RESOURCES TO GET YOU STARTED
PASSIVE INCOME #9: CREATE YOUR OWN COURSE
Creating your own course is an awesome way to teach others about your special skills or talents through videos. This is another way where you can get paid indefinitely after your tutorials get set up and years from now, you’ll still be receiving the income. Whether your talents are something career related or even a part-time hobby of yours, there’s a platform for you!
You can even get started teaching the basics on YouTube and then convert those loyal fans through your paid courses.
Whether you’re an experienced teacher who wants to make extra money on the side creating lesson plans or you’re talented at calligraphy and want to teach others your skills, sharing your skillset with others can make you big money.
I’ve even convinced my talented business-minded hubbie to start creating courses for entrepreneurs and one of my creative teacher friends to start selling courses to help new teachers.
RESOURCES TO GET YOU STARTED
Skillshare- Whether you’re an artist, entrepreneur, designer, tech person, writer, or musician, there’s a place for you to teach your skills via video courses on Skillshare. You can also get a 30-day free trial to be able to checkout the other 19,000 online classes on their website. The average Skillshare teacher makes $1600/year and their top earners make $100K/year. Students pay a monthly fee to get access to the courses and you get paid a pre-determined rate based on how many course viewers you have.
Udemy– Similar to Skillshare, Udemy is another popular platform for creating and selling video courses. The difference between this and Skillshare is students pay for each course instead of paying a monthly flat rate to have access to all courses. Udemy has over 65,000 thousand courses available on their platform.
Teachable– Teachable is a popular choice many bloggers use to host their courses. You can create your ebooks, video courses and feature product downloads within Teachable. When you host a course on Teachable,
**There are many successful bloggers who’ve even make $20-$30K+ per year by selling their courses through Teachable!
If you’d like to see an example of what a Teachable course looks like, my blogging friend Lizzie created a course through Teachable to teach women how to set-up a successful Etsy shop. Lizzie even gives you a sneak peak into her course by letting you see the first module, this is the perfect way to see what a course hosted by Teachable looks like.
PASSIVE INCOME #10 CREATE YOUR OWN DIGITAL PRODUCTS
If you’re creative, starting your own business creating digital products customers will pay to download is the perfect passive income source. Once you create your designs, you can set up an Etsy shop like my friend Lizzie.
Creating a digital product is a great passive business idea whether you want to make downloadable wall art, printables, calendars, templates or more. There’s so many options!
RESOURCES TO GET STARTED
- Etsy has a free getting started guide for people who prefer to figure things out on their own
- Lizzillusions offers a fantastic course specifically about what it takes to set-up a digital products business on Etsy
BONUS: WHAT IF YOU HAVE NO MONEY BUT WANT TO GET STARTED
EARNING PASSIVE INCOME??
Well, my friend, you do still have options to earn a little passive income, even if you’re broke. Here’s a few ways to get started:
- Cut back on expenses. The tips we use to cut expenses on one income, work for ANYONE looking to spend less.
- Start a side hustle like completing surveys. Some of the survey companies pay $3 each, they take 15-20 mins to complete and you can even cash out after earning $3. You can go here to learn more about making quick cash with surveys.
- Sell stuff you don’t need on eBay
- Write an eBook, it costs nothing to make one and with SendOwl you get your first 30 days free to get your book up and running.
NOTE: Doing any of the above will at least get you started with having a little extra cash to invest, buy real estate or earn business passive income.
I hope you found some passive income options from this list that will work for you too! It’s never too late to work toward your financial goals!
- 8 Ways to Afford Christmas Gifts When You’re Broke
- Why Everyone Should Have a Side Hustle
- 14 Fun Ways to Earn Money That Aren’t on the Internet