While there are many steps to reaching your financial freedom, people always wish that they could make a little extra money without the added time and effort. Finding a passive income stream is a great way to do this without a massive amount of stress. A passive income means gaining an additional stream of money with limited involvement or maintenance on the project. This is a great way to add a little bit more to your bank account without the weight of a full-time job.
Benefits of Earning a Passive Income
There are many benefits to having a passive income aside from simply the extra cash. You are no longer solely reliant on a single source of income and can have more flexibility with your finances. Everyone knows that dealing with your finances can be stressful, so this helps relieve some of those feelings. You might be able to spend a little more each month, or save up and buy a larger purchase that you wouldn’t have previously been able to afford!
Additional sources of income mean more money, and how you spend that money is up to you. While previously you might have strict financial requirements, with a bit more cash, you can begin to loosen those should you please. You can earn more money at a faster rate, helping you meet any financial goals more quickly or even retiring early.
1. Look into Renting Your Home
Renting your home or even a room in your house is a great way to earn a substantial amount of income on a regular and reliable basis. If you find the right renter, your money flow will be consistent and reliable month to month, without having to worry about any fluctuations.
Renting your home might require a little initial investment, through either money, time or both. If you need to do any small renovations to either prepare the home for a renter or increase its value, do those first to get the most money you can over time. If an addition to your home can allow you to increase your rent, you can be earning more money over time, and quickly cover the costs of said addition!
Finding the right tenant should be your first goal when considering your renting options as they’re a critical part of your passive income, and how easy, or difficult, it can be. Look into a thorough tenant screening program to make sure you’re covering all your bases when renting your home. In addition to looking for responsible tenants, it’s important to protect your house and its value. Consider looking into a home warranty plan to cover any wear and tear on appliances or home systems. It’s better to be safe than sorry when it comes to not only your home and property, but also your source of income.
Related read: Financing a Rental Property: 4 Things You Should Know
2. Dig Deeper Into Investments
Investing can be a great way to earn money while doing almost nothing. Through simply taking your hard-earned money and putting it in the right places, you can start to watch it grow. Investing in the right mutual or index funds is one of the safest ways to earn a substantial return on your investment, and it means your money is still very liquid. Here are a few tips for getting started in investing that might come in handy.
It’s important to consider your long and short-term goals when investing, as those will show you where exactly you should be putting your money. If your goals are more long-term, you can be more aggressive with your investments as you have a longer time horizon to course-correct should anything happen. If your time horizon is more short-term, consider playing it a little more safely to protect yourself and your assets.
3. Consider Creating a Blog or Website
Similar to other sources of passive income, creating your own blog or website might take a little while to get things fully off the ground, but can be a great source of extra money once it takes off. If starting from scratch, you’ll need to create a visually appealing website, and then attract traffic to your site.
There are a few ways you can generate a passive income from your website:
- Affiliate marketing is arguably the most common way of doing so. This simply means you’re partnered with a site, you include links to products or services of said site, and you get a small commission on each conversion, at no cost to the buyer.
- Selling a premade service is another great way to generate income through your site. This can range from an ebook, a recorded course, a guide or instructions for something and more.
- Ads have been on the internet since the very beginning, and while some are starting to decline in profitability, they’re still a great way to earn some additional online income, especially during your site’s infancy.
Once you find the right niche for your site and begin growing your audience, your site can quickly start producing four digits a month, which can help increase your passive income, and provide you with more financial freedom.
Related read: 10 Best Online and Offline Ways to Make Money Writing
4. Rent Out Your Car or Parking Space
While this may seem less common than renting out your home, you can make a considerable amount of money renting either your car or parking space. Both are great ways to earn some extra passive income, and with people struggling with the return to the office and more companies working remotely, your need for transportation may decline.
Renting your car can be a relatively easy process, especially if you use a car listing service. Many provide you with liability insurance, options to rent out multiple cars, and an app to manage your bookings from your phone. If you find yourself working from home or simply not using your car for extended periods of time, this might be a great option to supplement your income.
For the parking option, there are also similar services that help you rent out your parking space. The price range can vary depending on demand and location, but it’s still a great way to earn some extra income if you have a parking space you aren’t using. In higher traffic and populated areas such as city centers, you can make a pretty penny with your spot.
Exploring some different options for creating a passive income stream is a great idea for anyone who’s looking to make a little extra money on the side. With limited involvement, you can be adding to your current income, and help you reach your financial goals more quickly. With varying levels of effort and income, finding the right passive income stream can help you prepare for your financial future with the least stress possible.