Diversifying your income is something always spoken about and something evident of most millionaires. Making money while you sleep also sounds so appealing to most people, doesn’t it?
After reading books like “Rich Dad Poor Dad” and “The Intelligent Investor”, I became fascinated with making passive income.
Whenever someone says they want another stream of income, the stereotypical suggestion offered is to “get a part-time job.”
But what if you don’t have the time or energy to put in all those extra hours? What if you have children and you genuinely lack resource and you feel sleep-deprived. Can you relate?
All I know is for many, including myself when I thought about a side hustle or passive income it felt like a task….
As a solution, you may need some passive income ideas — ways to make money with little investment of time and effort on your part.
Here’s a list of the top 3 passive income ideas, so it’s likely that you’ll be able to find at least one that will support your current work/life balance and environment…
- Index funds & Stocks.
Index funds provide you with a way to invest in the stock market that is completely passive. For example, if you invest money in an index fund that is based on the S&P 500 Index, you will be invested in the general market, without having to concern yourself with choosing investments, rebalancing your portfolio, or knowing when to sell or buy individual companies. All that will be handled by the fund which will base the fund portfolio on the makeup of the underlying index.
You are also free to choose a fund that is based on any index that you want. For example, there are index funds set up for just about every market sector there is — energy, precious metals, banking, emerging markets — you name it. All you have to do is decide that you want to participate, then contribute money and sit back and relax. Your stock portfolio will then be on automatic pilot. The average return of the S&P 500 is 10% and that is awesome for someone who lacks time to invest in individual stock – oh yeah, it also beats inflation and returns from savings accounts!
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.
Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation.
In that way, you can earn passive income from two sources — dividends and capital gains.
You will need a brokerage account to purchase these stocks and complete the research needed.
The possibilities here are endless — you can sell just about any product or service that you like. It could be a product you have created and can manufacture on your own or it could be digital in nature (such as software, clothes, or even instructional videos).
You can set up a dedicated website for this product or service, unless of course you have a website or blog already in place. Alternatively, you can also sell it on an affiliate basis, either by offering it direct to websites and blogs related to your product or service, or through a platform such as Clickbank.
If you make a lot of money in your current job and you’re not sure that you can make a similar amount by selling products online, think again. With a clear understanding of the niche you want to be a part of, a basic understanding of branding, a sales funnel through social media you could be on track to make 6 and even 7 figures. While it’s not entirely passive, it’s certainly more passive than getting up and heading out the door to work every morning! People order products online and guess what, if you fall asleep at 11pm and someone decides to buy something chi ching…you made yourself some money. Now let’s face it, have you ever purchased and indulged late at night on Amazon or through WordPress? If you answered yes in your head then 100% you know money can be made because someone got paid and notified through Paypal because of your order ?
- Invest in real estate
This is one of the oldest forms of investment vehicles. Property is semi-passive because even if you have an agent collecting rent on your behalf if something goes wrong your involvement as a Landlord for example will be called upon. Still, once you have a property that is established and fully rented, it’s mostly a matter of managing the property and keeping it performing well.
Additionally, there are professional property managers who can manage your property for you, usually for around 10% of the monthly rent. This professional management can make the investment much more passive, but will take a bite out of your cash flow.
The key to success with rental properties is buying smart. Not every property is going to provide a good return or prove to be passive.
Another benefit of investing in rental properties is the loan pay down. If you obtain a loan to buy the property, each month your tenants are paying off part of the loan. Once the mortgage on the property has been paid off, your cash flow will increase dramatically, allowing your mediocre investment to skyrocket into a full-fledged retirement program.
It wouldn’t take many paid-off properties to provide a pretty great, and mostly-passive, future for you and your family.
With property also you don’t need to even own the property to generate cash flow. There are methods out there like Rent – to – Rent which we cover as part of our Outhustleyou Entrepreneurship Academy which can generate you £1000’s per month without even owning any property but by simply sourcing and finding property you can sub-let.
Those are the top 3 ways of diversification of income. I honestly know for certain they can be of benefit and profit a good return and income to anyone considering making some sleep money. Whatever you do, don’t try to create all 3 at once. Take your time and build 1 income stream at a time and find the support of a mentor to guide you on building each side hustle you desire to create into a full-time business. Check out our members only area in the ‘Get Started’ area on our site if you are ready to build your empire…