The more income streams you have, the easier it will be to recover if one of these income streams disappears.
Even now, I spend some of my time building different income streams to support my family.
I prefer not to be dependent on just one source of income, because a single stream can unexpectedly disappear. If you only have one source of income and it disappears, you are in a difficult situation. If you have multiple income streams and one of them falters, that’s just a setback.
To create passive income, you typically need to invest time or money. Since you are busy and time is not immediately available, you may need to invest money.
1. Dividend stocks
It involves investing in shares of companies that regularly share their profits with shareholders in the form of dividends. To give you a clear idea of how it works, let’s look at two well-known companies: Verizon Communications and Johnson & Johnson.
Verizon Communications currently offers an impressive rolling dividend yield of 7.31%. This means that if you invest $1,000 in Verizon stock, you can expect about $73.10 in annual dividends. If you decide to invest $10,000, your annual passive income from dividends will be approximately $731.
Johnson & Johnson has a rolling dividend yield of 3.14%. If you invest $1,000 in Johnson & Johnson stock, you will receive approximately $31.40 in annual dividends. With an investment of $10,000, your annual passive income from dividends would be approximately $314.
2. Invest in farmland
Farmland may not be the most glamorous investment, but it does offer several advantages in the world of real estate investing.
It’s a slow and steady asset that produces consistent rental income, and it’s a basic need because everyone needs to eat. Additionally, it tends to be less volatile compared to other types of real estate.
For those interested in investing in farmland, there are two major companies to consider: FarmTogether and AcreTrader.
3. Rental income
If you want to make money in real estate and prefer a more hands-off approach, property management companies could be your solution.
Renting out your holiday home, house, apartment or even a single room can be an excellent way to generate passive income. You might assume that beachfront homes are expensive, but there are still coastal towns where you can buy a home for under $100,000.
Platforms that work well with property management companies to list your home are VRBO and Airbnb.
These sites offer homeowners the opportunity to earn income by renting out their properties, making it a viable choice for those looking for additional income streams in the real estate market.
4. Buy a website
Yes, you can generate passive income with a website. While it’s not as easy to find good deals as it used to be, there are many marketplaces where online businesses can buy a website.
To get the most out of your new blog or website, you’ll need some digital marketing expertise.
Websites typically sell for about 24 times their monthly income. For example, if the site generates $500 per month in revenue, you can probably purchase it for no more than $12,000. In other words, an investment of $12,000 could give you $6,000 per year in cash flow.
5. Real estate crowdfunding
If you’re hesitant to invest directly in real estate, or if you haven’t yet achieved accredited investor status, that’s fine. There is one way you can profit from real estate investing, and it comes in the form of REITs – Real Estate Investment Trusts.
REITs are investment vehicles that own diversified portfolios of real estate, and as an investor you can share in the profits, gains, refinances, and even potential losses of these properties.
Our recommended platform for investing in REITs is Fundrise. With a low entry requirement of just $10, they are accessible to a wide range of investors.
6. Rent storage space
Many people need extra storage space because their homes often cannot accommodate all of their belongings. This is where the storage industry comes into the picture, providing a solution for those with excess items. Guess what? You can tap into this space!
You have the option of purchasing a storage unit and renting it out, or you can use the extra space in your basement to generate passive income from the space you’re not using.
When setting up a storage unit business it is important to consider how to do this in the most practical way possible. This may include implementing features such as keyboard input and security cameras to ensure everything remains safe and hassle-free for both you and your customers.
7. Rent a billboard
You’ve probably seen billboards along highways that catch your attention while driving. What you may not know is that these billboards are a source of passive income for their owners.
Companies pay rent to display their advertisements on these billboards. You can invest in a billboard and lease the advertising space to earn passive income.
Location is important here. Billboards in high-traffic areas, especially near highways in densely populated areas, tend to generate more advertising revenue.
8. License your photography, video or art
Six years ago I licensed some videos and even today I make about $100 a month from them.
The same can be done with images or artwork. This process involves giving others the right to use your creative content, creating a steady stream of passive income.
9. Invest in a franchise
There are franchises that can be a source of passive income. For example, ATMs have the potential to generate stable passive income. When individuals use ATMs that charge fees for withdrawals, that fee not only benefits the bank; it also goes into the pockets of the ATM owner.
Securing a strategic, high-traffic location for your ATM can lead to a reliable and hands-off passive income stream.
10. Develop an app or software
If you have a great idea for an app or piece of software, developing it (or hiring someone to develop it) can be a significant initial investment of time and resources, but it can pay off in the long run if the app becomes popular.
11. Peer-to-peer lending
A few years ago, I made a decent amount of money lending money to others using Reddit. Yep, there’s a subreddit for that. However, it is a bit risky.
For a more secure approach, platforms such as Lending Club and Prosper are available. They provide a structured environment for lending money to individuals or small businesses, allowing you to earn interest on your loans with greater certainty.
12. A tool website
If you’ve ever thought about a useful online tool, like a unique calculator, you can actually create one!
Developing a website or app for a specific tool can be a great way to attract steady traffic, especially if it serves a niche need. Once set up, it can become a source of passive income through ads or premium features.
13. Sell digital files
Printables are one of the best-selling items on Etsy. If you’re skilled at design, you can create and sell digital files such as planners, art prints, or organizational templates. After designing and uploading these files, customers can purchase and download them for personal use.
14. Sell design on Redbubble
When you upload your designs to Redbubble, you open up the opportunity to earn royalties from your creativity. Redbubble allows you to place your designs on a wide range of products such as t-shirts, mugs and more.
Every time one of your design products is sold, you earn royalties. This setup is ideal for artists who want to make money from their work without the hassle of production, inventory, or shipping, as Redbubble handles all of these aspects.
15. Invest in the stock market automatically
If stock selection and market trends aren’t really your thing, you can still invest in the stock market effortlessly.
This is where robo-advisors come into the picture. Think of them as your personal investment assistants, automatically managing your portfolio. You simply set your financial goals and how much risk you want to take, and they take care of the rest.
Regular, automatic contributions put your money to work without you having to constantly monitor the markets. Platforms like Betterment or Wealthfront make investing simple and stress-free, perfect for a more hands-off approach.