Passive Income Streams: Make Money While You Sleep!

How would you like to get paid while you sleep? Better yet, how would you like to get paid while you sleep in on Monday morning?

If that sounds sweet to you then what you want is passive income streams.

What is passive income?

But what exactly is passive income? Well, according to the IRS it’s income from rentals or a business you’re minimally involved in. But we’re not the IRS, so let’s just say that passive income is money you earn with little or no work.

Why do you want passive income?

The real question is, why would you possibly not want passive income?

If you’ve ever fantasized about sitting on a beach with a piña colada in one hand with fan made out of hundred dollar bills in the other, then you want passive income.

Or, if you’ve ever wanted to pay your debts, invest, and build wealth but can barely afford to pay your monthly expenses, then you want passive income.

The bottom line is that passive income can not only reduce your financial stress and help you reach the life you’ve always dreamed of, but it’s a huge tool when it comes to wealth building.

Imagine if you had an extra $100, $500 or $1,000 every month being automatically deposited into your bank account. How fast could you pay off your debts and build wealth?

Pretty quickly, no doubt.

You may also like: 50 Brilliant Ideas to Make Money on the Side!

Two ways to create passive income

Passive income streams are created in two main ways. Either you invest time and sweat to build it. Or you invest money to build it.

And if you’re investing your time and energy, you have to be ready to invest heavily before you reap a dime. But if you’re investing money, you’ll start collecting pretty quickly.

So when you’re thinking about which passive income streams you want to create for yourself, you’ll have to choose based on what you have to invest. Do you have time and effort, or do you have money?

Here are a few examples of each type…

Passive income investing money

Staggered CDs

Certificates of deposits are basically bank accounts that pay you a higher interest rate. In exchange for the higher interest rate, you’ll have to keep your money locked in the account for a certain period of time.

These are excellent options for people who have a decent savings or emergency fund built up and want to put their money to work earning extra money.

If that sounds down your alley then create an account with CIT bank and get yourself a CD account. (If you don’t want a CD then they also have high interest saving accounts available.)

But wait! Wasn’t the point of the emergency fund to have money available in case something happened? What good is savings or an emergency fund I can’t touch my money for months?

Excellent question. Let’s say you have a $10,000 emergency fund set up, it’s highly unlikely that you’ll need all $10,000 at once. What’s more likely is that you may need a few hundred bucks suddenly, but the rest of the money will just be sitting in our account untouched.

So, why not put your money to work while it’s sitting there. For example, let’s say you do have $10,000 saved (congratulations!) One option is to:

• leave $1,000 in your regular savings so it’s available if you need it.
• Put $3,000 in a 6 month CD and the remaining
• $6,000 in a one year CD.

When the 6 month CD matures you can keep it in your regular bank account of get another CD.

If you’re looking to open a CD check out CIT bank.

Dividend paying stocks

Investing in the market (specifically, companies that are going to pay you dividends) is the ultimate passive income stream.

The thing about dividends is that companies aren’t usually required to pay them out and they fluctuate with the company’s performance. So, you can expect the dividends you get to fluctuate year over year.

And on top of that, you’d have to have a pretty large amount of money invested to make a decent return.

But hey, it’s just one of the passive income streams out there that are available, and every stream has value.

If you’re not invested in the market at all (in dividend stocks or otherwise) then you’ll want to check out Acorns.

Acorns is an app that rounds up your purchases to the nearest dollar and invests the change. While it won’t necessarily create a passive income stream for you, you’ll at least get in the game.

Sign up with Acorns and get started.

REITs

Who doesn’t want to be the next real estate mogul?

But buying a building outright or having the credit and collateral to get a loan…it may seem out of the question for most of us.

But that’s where real estate investment trusts come into the picture.

A REIT is a company that owns and operates large scale, income-producing real estate. This could be malls, office buildings, medical buildings, apartments…there are all kinds of REITS really.

And the best part is that we don’t need to be rich or qualify for a 6-figure loan to buy the property. We can simply invest in a REIT and collect a piece of that profit.

Treasury bills, notes, and bonds

Treasury bills, notes and bonds are investments that you can make with the U.S. government. They’re famous for being an extremely save investment, with a consequently less-than-stellar return rate.

But hey, it’s a great passive income option for those of us who are looking for an extremely low risk investment.

For the longest time I didn’t understand the difference between the three, but it turns out that it’s really pretty simple.

Treasury bills or T-bills for short, are like a short-term (between 4 and 52 weeks) loan you give to the U.S. government. Treasury notes have a term that’s a bit longer, between 1 and 10 years. And Treasury bonds have the longest period, between 10 and 30 years.

If you’re thinking about investing in Treasury bills, notes or bonds then visit the government’s official site, TreasuryDirect.gov, and check it out the different options.

You may also like: Highest Paid Survey Sites to Make Money Fast!

Municipal bonds

If you invest in municipal bonds you’ve basically given a loan to a city, county or state government. And because you’ve given them a loan, your passive income will be the interest you collect (usually paid twice a year).

But the great thing about municipal bonds is that the interest income you collect will be tax free!

Because of the tax benefit, this is definitely one of my favorite passive income streams.

Corporate bonds

A corporate bond is a loan given to a corporation. They’re nowhere near as safe as treasury bonds or municipal bonds, but they can be a good passive income stream, depending on the company.

But if a company is asking for loans, doesn’t that mean they’re in trouble? Will they be able to pay you back or are they on the verge of bankruptcy?

Well, not necessarily. A company may be doing just fine and wants to raise money for development through loans instead of by issuing extra stock.

Corporate bonds usually pay interest every 6 months, and can be a great passive income stream, but you’ll definitely want to do your research before giving them your money.

Peer to peer lending

If you have a little bit of extra money that you wouldn’t mind lending out, then try out peer to peer lending.

Sites like Lending Club and Upstart are great places to check out if you’re looking to make this one of your passive income streams.

Just be careful though, loaning money out obviously carries risks and if your borrower doesn’t make payments you’re not going to get paid.

Passive income investing time and effort

Affiliate income

Affiliate income is one of the best ways of making passive income out there. It doesn’t actually start out passive, and will require some upfront effort. But if you hang tight and work at it, you’ll eventually build a passive income stream.

If you have a social following or are at least active on social media, then you can do affiliate marketing even if you don’t have a blog. Either way, you definitely want to check it out as a potential income stream.

If you don’t know much about affiliate marketing or where to get started, then you definitely ought to check out Michelle Schroeder-Gardner’s course on affiliate marketing. Making Sense of Affiliate Marketing.

Start a blog

Starting a blog is another phenomenal way to build a passive income stream. Getting your own domain and creating your own online space is dirt cheap nowadays and the potential for income is mind blowing!

If you want a step by step walkthrough for setting up your own blog then check out our post here!

Blogging and affiliate marketing go together like peanut butter and jelly!

BUT you don’t actually have to have a blog to do affiliate marketing, and you don’t have to do affiliate marketing if you have a blog.

What you can do it place display ads on your site and get passive income just from the traffic that visits your site.

YouTube Videos

It’s pretty well known that you can make videos on YouTube. If you’re able to create amazing videos and build an engaged audience then you can definitely turn YouTube into one of your biggest passive income streams.

To get started take a look at YouTube’s Creator Academy to get primed on the basics.

Rent your spare room

You can always make some cash on the side by renting out your spare room with Airbnb. This passive income is a bit different from the other’s mentioned here because it doesn’t require you to invest money, and it doesn’t require a massive amount of effort to start.

Just post your place, wait for a roomie and get paid.

Write a book or sell a product online

Are you looking to write the next great American novel? Or maybe you just have a story that you’ve been wanting to tell. Either way, it’s quite easy to publish your own book nowadays.

And they make an excellent passive income stream!

Check out this self-publishing guide from Amazon to get started.

Rent your items out

Chances are you own a lot of object that you don’t use very often. Since they’re probably just sitting around your place taking up space, why not rent them out and earn a bit of change on the side?

Sign up with Rentah to turn all of your idle things into one of your passive income streams.

You may also like: Increase Your Income Developing Your Skills!

Rent out your vehicle

If you have an extra car just hanging around your driveway, then you’re missing out. You can put that baby to work and make some money with Hyrecar!

Hyrecar is a company that lets you rent out your car to drive for Uber and Lyft and it can make you some pretty good money. Just make sure you have Uber/Lyft inspection documents before you go this route.

Teach a course on Skillshare

Do you have a skill or some knowledge that you can share with others? If so you should consider signing up as with Skillshare.

Skillshare is an online learning community with literally thousands of classes available to teach you anything you want to know.

But you can also turn Skillshare into one of your passive income streams by signing up as a teacher. And I must say, it’s pretty cool.

The way it works is that a portion of Skillshare’s profits are taken every month and put into a payment pool. That money is paid out to Skillshare’s teachers based on the total number of minutes users spent watching their videos.

So, if you can make engaging, educational videos, you can make some pretty decent royalties.

Check them out and start making some money!

Cheers!