Passive income involves ideas or methods that, once you set in motion, require minimal maintenance work. The following money making ideas are mostly passive, and are proven to work.
1. Earn Higher Interest on Your Savings
2. Build a CD Ladder
For a slightly higher yield, build a CD ladder. Break your money into smaller chunks and buy a series of 1-year high yield certificates of deposit. To learn more about this, take a look at How to Create a CD Ladder .
3. Lend Money via Social Lending Network
Lending Club is a platform where you can lend your money to other people. You’re the bank. Each note is only $25, so you can invest $1,000 and lend money to 40 people. There are many grades of loan (from safest to riskiest) and investors earn, on average, between 5% and 7% annualized returns. For more information, check out Investing and Making Money with Lending Club Peer-to-Peer Lending and my real money Lending Club Portfolio.
4. Invest in Dividend Paying Stocks or Funds
If you’re looking for current income, investing in the dividend paying stocks (or dividend funds) is a good way to earn money regularly. Pay particular attention to the S P Dividend Aristocrats ; these are companies that have long histories of increasing their dividend payouts each year.
5. Use Cash Back Reward Credit Cards
You buy stuff every day: Why not make the most of your purchases? Take a look at these credit cards that pay 5% cash back on your purchases. When you make your day-to-day purchases, use a rewards card and get money back. My family receives several hundred dollars a year from using these cards.
6. Get Cash Rebates When Buying Online
When you shop online, go through Ebates. This web site provides you with extra cash back (on top of your credit card cash back) when you buy through them. Install the browser toolbar for even better results.
7. Earn Money When You Search
You probably do a couple of web searches each day. If you do all your web searches through Swagbucks. com (instead of Google or Bing), you can collect points called SwagBucks. Trade your SwagBucks for a variety of prizes, including gift cards for Amazon. com, Walmart, PayPal, and more.
8. Real Estate Investing
This is mostly passive once you have it all set up, but it does take a lot of work at the beginning. Real estate investing also requires occasional maintenance. Currently, we invest in a couple of rental properties and earn about $500 profit from each per month. You can read more about my rental properties at MoneySmartLife. com: How and Why I Became a Landlord .
If you don’t want to get your hands dirty, you can gain exposure to real estate investing through Real Estate Investment Trusts (REITs). REITs invest in real estate and mortgage, and pay out 90% of the taxable income to shareholders annually.
