Instead of earning all the money you make at a traditional job, setting up some passive income streams can boost your lifestyle with disposable money. Figuring out how to generate passive income, though, can be overwhelming to new investors. Passive income does not have to come from the stock market or an investment portfolio. In fact, some of the most popular ways to earn passive income have nothing to do with the stock market. You’ll have to work hard at first, but the income stream will be worth it.
Lending Club
Lending Club is a way to invest in startup businesses looking for loans. Your initial investment goes to high-interest loans that your peers are looking for. You take on some risk, but by spreading out your investment across a bunch of Lending Club loans, you’re likely to make back your investment with significant interest. You get to pick which loans you invest in, so you have control over where your money goes and can choose the loan applicants that look most promising.
Real Estate
To earn money with real estate, you need some money to begin with. If you already own property, consider renting out a room or creating a separate suite in your house. Either rent it out with Airbnb or take on a renter. If you have considerable extra money, buying a property solely to rent out is a popular way to earn passive income while also building equity. However, being a landlord can be stressful. Some months you’ll earn money while you sleep, but other months you’ll be dealing with annoying tenant problems. Keep that in mind before investing in real estate.
Binary Options
The basic premise of binary options is this: You answer a yes or no question about whether or not an asset will be worth a certain amount at a certain time. If you answer correctly, you make money. It sounds simple, and on the surface it is. You need to know which markets to trade in and have knowledge of the assets so you can make the right yes or no call. Binary options happen relatively quickly, and they’re a zero-sum game. Once you place your bid, though, you don’t have to do anything except wait for the financial result.
Blogging
Like with real estate, you need to lay the groundwork to create a blog that will earn you a passive income stream. Finding a niche and attracting followers takes effort and some trial and error. Once you’ve set up a blog with quality SEO and a solid following, you can start monetizing your blog. One option you have is affiliate marketing. You add links to your site, and when your followers click the links and buy something, you earn money.
No income stream is completely passive because you have to make the initial investment somewhere and monitor it occasionally. But passive income streams do generate income while you do nothing, so in many ways, you are making money as you sleep.
Image via Flickr by srqpix
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