Most working professionals earn active income every day by showing up to work and putting in a set amount of hours completing tasks and assignments in order to earn a paycheck. While this is the most common way to earn income, there’s another way to earn money without working too hard.
Passive income is a source of regular earnings that comes from a source other than an employer. There are two main sources of passive income, rental property, or a business that you don’t actively participate in. There is some initial upfront work when establishing a source of passive income and you may need to put in some hours along the way, but overall, passive income isn’t something that takes much effort.
Passive income is a great way to generate supplemental income especially during an economic downturn, extreme circumstances such as COVID-19, and if you find yourself between jobs. Building wealth or your future nest egg with passive income is a smart investment strategy if you are worried about saving enough to reach your retirement goals.
Take a look at three smart passive income ideas that can help you build personal wealth:
1. The Sharing Economy
Participating in the sharing economy is a great way to earn passive income. Make your car work for you by getting paid to drive. Becoming an Uber or Lyft driver is a fun way to earn extra money while going about your daily errands and best of all, you set your own hours. Instead of driving people around, another option is to rent out your car when not in use on the app Getaround. Think of it like Airbnb for your car; you can earn a pretty penny while away on vacation or during a routine workday by renting out your car for others to use.
Speaking of Airbnb, why not make your homework for you, too? Renting out a spare room in your home or even your entire home when you are away on vacation is an effective way to earn passive income. If a real estate investment is an option, you can earn an attractive, steady stream of passive income with short-term, long-term, and vacation rentals.
2. Alternative Investments
A potentially lucrative investment opportunity and source of passive income are alternative investments. These are investments in illiquid assets like real estate, tangible assets, private equity, hedge funds, and commodities. Unlike conventional investments, alternative investing has a high yield potential but comes with high investment risk.
An accredited investor looking for an investment opportunity with higher returns should head over to the alternative investment platform Yieldstreet. The short-term crowdfunded lending platform offers debt offerings secured by commercial loans, real estate, fine art, or marine assets.
The Yieldstreet platform features investment options in real estate deals such as commercial real estate assets as well as debt investments in art, marine finance, and short-term commercial loans. Compared to other platforms, Yieldstreet requires a low minimum investment, comes with a reasonable fee structure, and features a partnership with BlackRock. The investment platform is targeted toward individual investors with a high net worth or annual income given the risk of default, the minimum investment of each individual offering, and management fee.
Yieldstreet review breaks down everything you need to know about asset classes, annual returns, interest payments, collateral, and borrower default on investment offerings. Yieldstreet’s investment platform is a great platform for lenders interested in an investment option in liquid assets.
3. Affiliate Marketing
A great passive income idea for website owners, social media influencers, or bloggers is to get involved in affiliate marketing. All you have to do is promote a third party’s product by including a link on your online platform that readers can click on and go straight to the product site. Every time a reader clicks on the link and buys the product, you earn a commission. Affiliate marketing is a great idea if you already have an established online presence and see a lot of reader traffic. The more readers your site attracts, the more passive income you can potentially earn.
Whether you are saving for the future or have your eye on a more immediate prize, earning money through passive income is a great way to build your personal wealth.