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Business ideas to generate passive income:
Passive income is the money you earn through little or no effort from your end to maintain it. Unlike your 9-6 jobs which require an active effort on a daily basis, passive income sources only need some initial investment and time, and you can rely on that income in future. Due to the global pandemic many of us have faced difficulties in our regular businesses/jobs and having an additional passive income can be a great help during these tough times.
So here some business ideas to generate passive income that are suitable for the new normal and can be implemented easily-
Rental income & real estate investments:
Rental income is one of the traditional sources of passive income. If you own an additional property other than the home you live in, you can rent it out to a family/small business to generate rental income. You can even flip the property to increase its rental value and add furnishings to charge premium. Even if you do not own an additional property you can consider buying or renting a new property and sub-letting it to generate additional income.
An alternative way to make money through real estate is by investing in Real Estate Investment Trusts (REITs). REITs are companies that finance income producing real estate projects. Just like shareholders benefit by investing in other businesses, you can become a stockholder of a REIT and earn a share of the income without actually having to go out and buy/finance a property.
Beyond looking for traditional investments in buildable land or apartments, you can also invest in storage rentals. You can either buy the storage units or invest them through REITs depending upon the amount of liquid cash you have. The only time you will have to participate actively in this venture is whenever there is an opening for the unit you invest in, rest all times you will keep making money in the form of rent. Also as compared to traditional real estate, storage units are more resilient to all sorts of economic cycles making them a safer investment.
Royalties through book publishing:
If you enjoy writing, self-publishing books on Kindle is a great way to generate passive income. Unlike the old times, you don’t need to have contacts with a publishing house or convince the distributors to get your book in the stores. Anyone can set up a Kindle Direct Publishing account and publish eBooks or paperbacks free of cost.
Once you take the effort of coming up with a great topic for your book and create original content, the rest of the business can work on auto-pilot while you keep churning money through royalties. You can earn up to 70% in royalty on your book sales and set your own prices. You can even hire writers and designers from freelancing marketplaces at low cost to help you in creating content and cover for your book. KDP account also enables you to make changes to your book to keep it updated and launch new editions. Even if you are selling a single book copy for a few dollars, you will make a decent extra income in the long term as more copies are sold.
You can even consider producing audio books instead of book publishing. Audiobooks are becoming a popular form of content consumption and provide great value. You can make use of Audible’s ACX platform to make your audiobook available for customers on popular platforms like iTunes and audible.
Building a niche affiliate website:
If you are looking for passive income ideas that require a very little or no capital, setting up an affiliate website can be a great option. You can select a niche aligned to your interests and build a website of your own and make money by signing up for affiliate programs. ShareASale, eBay partners, Clickbank, Rakuten are some of the leading affiliate marketing websites you can sign up for. The idea is to select specialized good quality affiliate products that solve a problem and provide you high margins on sale.
You can sell the affiliate products related to your niche and earn commission or even sell the ad space on your website and encash your website traffic. You can even publish reviews for the affiliate products on your website for successful monetization.
Peer to peer lending:
If you have liquid cash, peer to peer lending is another passive income source you can opt for. Just the way banks provide loans and charge interest on it, you can be the lender and make money through interest. We are not suggesting you lend money to your family and friends as that can create problems at later stages and spoil your relationship with them. But there are many peer to peer lending websites where you can lend money to legit borrowers and sign in contracts that protect your funds.
Kiva, prosper, Upstart, LendingClub are a few popular peer to peer lending websites you can invest in. However if you are opting this idea to make some extra money, we recommend you minimize your risks by lending money to multiple borrowers rather than putting all eggs in one basket.
Selling stock photos and videos:
You can list your finest photos and videos from your leisure trips on stock photography websites like shutterstock and make money without any extra effort. You do not need to buy a high end camera or any other additional equipment as most of the smartphones these days are capable of producing high quality images.
You can check the stock photography websites to study the trends and understand what type of images/videos businesses or individuals are buying to improve your sales. This idea might not generate a lot of profit as compared to other ones but is easy to implement and a great way to make recurring income.
Create a print on demand online store:
E-commerce has become one of the popular sources to build passive income. You can create custom graphics based on a theme or a subject you are passionate about and print them on fast moving products like mugs, t-shirts, backpacks, cushions etc. You can sell products with printed quotes or trending hashtags. Once you take the initial effort of designing and finalizing the graphics, you can hire a third party seller to fulfill the orders and make money on an ongoing basis without being involved actively on a day to day basis.
Selling Digital products on Etsy:
Etsy is not just for handcrafted goods, you can even sell digital products on Etsy. Unlike handcrafted goods, digital files/graphics do not need any maintenance or active involvement. Once you create a few digital files and quality listings you can earn money passively whenever users download your designs. You can create digital goods like yearly planners, E-invites, flyers, wall art, etc. depending upon your target market. You just have to ensure that your designs are attractive and high quality to boost sales.
Rent your car:
Just like you rent out a property, you can rent your car too and earn passive income. If you have a second car or whenever your own car is not in use you can list it on car rental platforms and make some extra money. Getaround, Turo, HyreCar are some popular platforms you can use to create a listing. Depending upon the type of car you have and the city you live in you can make a decent passive income on a monthly basis. Some people even rent out their parking spot, or put advertisements on their car to make money in addition to the rent.
Making YouTube Videos:
You may think making YouTube videos is not really a passive income source as it takes effort in creating the videos and you have to be consistent with it. But the videos you make will keep generating money through ads/sponsorships over the years even if you don't make new videos on a daily basis. You can even promote affiliate products, generate leads for other businesses and earn commission through your videos. Most importantly YouTube is a free platform and you do not have to invest any money in creating your YouTube channel.
In addition to the ideas mentioned above you can also park your liquid cash in a high yield savings account or CD and gain interest. You can choose an online bank rather than your local bank to cash in the best interest rates offered in your country. Even though the money you will make will be lower as compared to the rest of the passive income sources mentioned above, it’s one of the safest forms of investment. You won't have to put any extra effort from your side and it's always better to invest your money in this form rather than holding it in a non-interest bearing checking account.
All of the ideas listed above can be started as a side hustle and can be managed well without compromising on your current job or business. Depending upon what your financial goals are you can choose one or more of them to make extra money.
Just like you diversify your investments to minimize risks, it’s a good idea to diversify your income streams rather than relying on one job. We are sure our ideas will inspire you to build your own passive income and improve your financial stability.