When you have a full-time job but are still itching to earn extra income, a passive income may be your best deal. A passive income is one that you earn from investments that you have no active participation in. Among the most popular passive income opportunities are though properties being rented out, limited partnership and other enterprises. While it is taxable, it has a different computation from the Internal Revenue Service than other forms of income.
Here are some tips for creating or earning passive income:
Determine what other skill you can use for a second job
The best way to have a passive income is by doing something you are good at. Unlike other passive income like rental or properties or the limited partnership deal, a second job will need your active participation.
But finding something that you are not only good at but also something you actually enjoy, then it won’t feel like work at all. If you are good at writing, then blogging is one option for you. This way, it doesn’t feel like a real job because you like what you are doing and things will flow quite easily. If you are good at making videos, perhaps you can start something on YouTube. The challenge is to create somethings that’s interesting enough to gain a wide audience because it is only then that you can actually earn money.
There are many other gigs out there. If you are fond of kids, perhaps you can babysit. If you are creative, then you can sell crafts or paintings. Or you can tie up with a writer friend so you can be his or her illustrator in a book project. If you are great at making accessories, you can do that, too. You can just sell your products online. If you are great at photography then showcase your talent and earn money from it, too.
Invest in a lending program
Now this is a real passive income-generating activity. You can hook up a lending company and financially invest in it. You really don’t have to do anything. You just hand in your money to the company and every month—or whatever the term the company is offering—you will receive the earnings from your investment.
There is also something called a Lending Club online. It is a platform where people who need money, and those who have it, meet online for transactions. You could earn as much as 10% every year. It could be more, too. However, the risk in such platform is kind of high. So you just need to be careful.
Open high-yield savings account
If you want to earn a lot, a savings account is not be the best option. However, it is the safest option. Your money will always be safest in a bank—a reputable bank. But if you go online, there are alternatives for high-yield savings accounts. Most high-yield savings accounts earn between 1.10 and 1.5 percent.
Also, this is a great way to temporarily store your money in case you want to invest on something more financially rewarding. If you are still weighing your options on a particular investment, it might be best to put your money in a high-yield savings account so it will not become stagnant. Use every opportunity you can to earn money.
Invest in index funds
This is a form of passive-income activity that allows you to invest an amount on a mutual fund but without the added high operational expenses in regular mutual funds.
If you have a car that is in good condition and would pass the requirements of Uber, then you might be able to use your car for this transportation app. The great thing about it is that there is no requirement on the number of hours you need to be on the road. So you can always do it while you are headed for work, for home and during your lunch break.
One of the reasons why people back off from a planned trip is the accommodation expenses. This was how Airbnb was born. It was a way to provide affordable hospitality service for tens of thousands of travelers. If you have a home and an extra space where strangers can crash, then this is a great way to earn money. But since this is a passive income, perhaps you can find a way where the tourist can have a separate entrance and exit to his or her room since you will not be there round the clock to monitor your things. They are strangers after all. If you have a garage, perhaps you can modify it so it can be a room on its own.
Online garage sale
A garage sale will take a lot of time to set up and you will need to be there to man the place. So a garage sale is not a great passive income. However, if you do it online, then you really don’t have to invest much effort except in taking photos of old stuff that you can send online. This is actually like hitting two birds with one stone. You don’t only earn money, you also get to clean up the house of junk.
Invest in real estate
If you really have a large sum of money that you can invest in, real properties are the best. You can buy an old property and just ask a real estate agent to fix it up and sell and you can earn a huge sum of money without lifting much finger. Or you don’t need to sell it, you can just rent it out. Just make sure the rent will be enough to cover the monthly amortization and more.
The more extra money you have, the better the opportunity for a passive income. But if you don’t have much, it should not be an excuse to just forget about the possibility of earning from passive income. Remember that a small amount is better than no amount at all. Create a passive income any time you can, every time you can.