An important factor to build wealth and to achieve financial freedom is to find a way to generate passive income.
Warren Buffet once said: If you don’t find a way to make money while you sleep, you will work until you die.
He was referring to passive income of course. Passive income is income that takes little to no effort to earn and maintain. Its money that shows up in your bank account month after month, whether you are awake or asleep.
Below I discuss the best passive income ideas that you can use to build true wealth. The list below will help you become financially independent.
Invest in crowdfunded real estate
Real estate investment is one of the holy grails of passive income investments. Rental properties prove time and time again that they are the leaders in returns.
In real estate, investors enjoy the benefits of residual income and value appreciation.
Crowdfunded real estate is where real estate business offers the average person who doesn’t have time to source for properties and make deals. This allows you to invest in their business and provides you with a return on the profits.
The minimum starting investment amounts ranges from $500 to $10000 allowing to start gradually. The low minimum makes this type of investment accessible to most.
Rent out your storage space
Self-storage industry is growing at a rapid pace. In current times 1 in 11 Americans pays for storage space. This is great opportunity and a great passive income maker.
While you can go out and develop storage units across the country or purchase existing storage units and put them up for rent. You could start with your own place. Clear out that extra storage space and list it for rent. The returns can be used to help you pay your own home mortgage.
Storage is also less regulated than residential property. Which makes evictions cheaper and faster. This is worst case scenario and if your renter defaults on the payments.
So, what are you waiting for. If you have a basement, spare room, or garage put it up for rent and make some passive income.
Rent your car
Another passive income idea is to rent your car. Individuals can now rent their cars out on short term to other individuals. Remember to sort out the insurance before renting out your car to others otherwise you could be in for a nasty surprise.
People usually use an application called Turo. They manage the whole process. I’ve known some people who have had a fleet of cars that they have rented out on Turo and make great passive income.
Starting a blog
Share your knowledge or ideas with the world. Do you like talking about a certain topic or have great writing skills? well why don’t start a blog.
No matter how small the niche, someone else out there is looking for what you have to say. As your posts and your blog builds traffic, you can monetize it. This can either be done with advertising or affiliate links. You can even sell your own products or services.
It’s the perfect side hustle, you can do it in your own time, making this idea very attractive. Blogging is a long game and will take some time to build up, however keep posting good content and you will be building a following soon.
Peer to peer lending (P2P)
Another passive income idea is to lend people your money. Websites like Lending club and Prosper helps fulfil this gap.
These websites allow you to lend money to others and they provide you with an income return. The return amounts typically range from 6 to 10 percent. It might not seem like a lot however this is a simple way to make money because it requires little to no effort.
Writing a book
Are you good at writing and have you ever thought of writing your own book? We guess what. This is a great idea to create passive income. You write the book once and keep collecting money forever.
You can write about whatever topics you are good at, it can children’s story books or even about penguins, the possibilities are limitless.
What’s also a good idea while we are on this topic of books is to create an eBook, this will allow you to sell your books online, reaching a much larger audience.
Laundromats are a great idea for passive income. Buying a laundromat or starting a Laundromat business is great because every washing machine, at every location is a willing worker, working 24/7.
These can be set up at student accommodations and city centres where people don’t have time to wash their own clothes.
Vending machines usually provide food and drinks to people. Nowadays they even provide toys, medicines and cell phones.
Finding the right locations is key to this passive income idea as well as inventory management. If you can maintain these requirements, you can have yourself a great passive income stream.
You can start small with just a few machines with a small investment, then grow bigger as the money starts rolling in.
Start a YouTube Channel
Do you like to test out new products, or do you have your own opinions on certain topics? A YouTube channel could be your way to earn passive income. Some of the ways that a YouTube channel makes money is through running advert space on your videos and affiliate marketing.
A video that brings in a thousand views each time can bring in a great passive income stream, and the amount of money you can make can run into the millions.
Invest in a Food Truck
Not only does a food truck provide delicious foods from Tacos to hot dogs, but they also bring in good money. If you know of someone who is thinking about starting a food truck business but requires some investment, this could be your next source of passive income.
Food trucks are mobile, so location is not a problem, if one place is not doing so well it can always be moved. Another good thing is that they are low maintenance.
Think about how you want to structure your pay-outs, either a percentage of the profits every month or as a loan where you will get you money and more after 6 months.
Passive income ideas that beginners can use
Everybody must start somewhere, and when you are starting out it can be hard to find your ground, however, don’t let that deter you from your goals. You just need study the relative areas, plan well and take massive action.
Mindset is most important, start off on a pace that you can manage and work your way up from there. Passive income compounds over time.
So, what are the benefits of Passive income?
If you are trading your time for money, then there will always be a limit on your earning potential, because there is only a certain amount of time that you have in a day. By creating passive income streams, you have removed time from the equation and that allows you to earn potential uncapped amounts of money.
The financial security and independence of passive income will leave you feeling fulfilled and give you the ability to spend more time with your family and friends and travel more.
And remember, if you don’t learn how to make passive income while you sleep, prepare to work until you die.