Who wouldn’t like to make money doing nothing? That’s the dream, isn’t it? Well, keep dreaming because it’s not possible to make money doing nothing. It is, however, possible to make money doing almost nothing. It’s called passive income.
Okay, so first of all, I’m joking. Characterizing passive income as income you do “almost nothing” to earn is just a humorous exaggeration. But it’s based on a misconception a surprisingly large number of people have. Too many people think of passive income in terms of something-for-nothing get-rich-quick schemes. The truth is, passive income takes work. Maybe not as much work as active income, but work nevertheless.
Need some examples? Here are three of my favorites.
Renting Out Property
One of the most popular and accessible passive income avenues is rental property. Buying a house in Canada might seem expensive at a glance, but turning Banff homes for sale into Banff homes for rent can pay off big-time.
I’m not going to lie, the costs you have to put into obtaining and renovating a property can be steep, but once you start renting that property out, you might be surprised how quickly you make back all those costs, and then some. One great option is to turn a single house into several smaller apartments, allowing you to multiply your profits exponentially.
Being creative isn’t easy. Whether you’re writing a book, composing a song, or designing an innovative new gadget, it can take a lot of blood, sweat, and tears. But when you own the rights to your creation, it can become an income stream that lasts long into the future.
You may put a few months or even a year into making a piece of art or perfecting an invention, but you can then license your creation out to others as much as you like. If you use a digital ebook format, your novel could be selling on Amazon for decades. If you write a catchy tune with a memorable chorus, your song could end up in commercials, movies, and TV shows. If you patent a piece of hardware or software, every system that uses it in any capacity will owe you royalties.
Everybody needs a little financial help from time to time. In the past, that’s often meant taking out a loan with a bank or other traditional lenders. Nowadays, though, peer-to-peer lending sites makes it possible for people to take out loans from other everyday folks just like themselves.
If you have a little extra money saved up, peer-to-peer lending allows you to loan that money to someone else and then collect interest when they pay you back, at a rate that you yourself get to decide. While there certainly is the risk of someone falling behind on their payments, it’s about the same amount of risk as any other type of investment. At least with this one, you’re the boss.