35 Passive Income Ideas You Can Use to Build Real Wealth

BY- SAHIL SAIFI

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Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work these income streams start to build and are able to maintain themselves, bringing you consistent revenue without much effort on your part.

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Dividend stocks are tried and true way to earn passive income. You will have to do plenty of research to find good stocks and invest a significant amount of money to receive large dividend checks. However, if you consistently invest money into dividend stocks you can amass a nice residual income over time. For any of these investment opportunities, make sure you open an account at the best online brokerage, and get rewards while doing it.

Dividend Stocks

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A cash flowing rental property is a fantastic way to bring in a monthly income. To make this truly passive you can outsource the running of the properties to a management company.

Rental Properties

If you don't want to think much about your money, but want it to work for you, a basic place to put it is in a high yield savings account or money market fund. The difference is in the account type and where it's located. Typically, high yield savings accounts are located at banks, and are FDIC insured. Money market funds can be located at both banks and investment companies, and are only sometimes FDIC insured.

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High Yield Savings Accounts And Money Market Funds

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Over the last year, crypto savings accounts have become very popular - simply because they provide much higher rates of return on your money. It's important to note that these aren't really "savings accounts". These are investment and lending accounts that allow you to earn a high yield on your crypto "easily".

Crypto Passive Income Opportunities

Building a CD Ladder requires buying CDs (certificates of deposits) from banks in certain increments so that you can earn a higher return on your money. CDs are offered by banks and since they are a low risk investment they also yield a low return. This is a good option for the risk averse.

CD Ladders

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Annuities are an insurance product that you pay for but can then provide you passive income for life in the form of monthly payments. The terms with annuities vary and are not always a great deal so it’s best to talk to a trusted financial advisor if you’re interested in purchasing an annuity.

Annuities

Invest Automatically In The Stock Market

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you're not interested in picking dividend paying stocks (and I can understand that), there are still ways to invest passively in the stock market. You can automatically invest in various ways through what's called a robo-advisor. A robo-advisor is just like what it sounds like - a robotic financial advisor. You spend about 10 minutes answering a few questions and setting up your account, and the system will take it from there.

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If you're concerned about investing directly in real estate, or maybe you're not yet an accredited investor, that's okay. You can still take advantage of real estate in your investments through REITs - Real Estate Investment Trusts.

Invest In A REIT (Real Estate Investment Trust)

Invest In A Business

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Another way to generate passive income is to invest and be a silent partner in a business. This is very risky, but with risk comes the potential for high returns. For example, several years ago both Lyft and Uber were looking for private investors to invest in their companies. Today, they are worth billions - but you as an investor would only reap that benefit if they go public via an IPO, or get acquired. So, it's risky.

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Invest In Student Income-Share Agreements

An Income-Share Agreement (ISA) is an alternative to student loans. By using an ISA, a student’s tuition is paid for in exchange for a percentage of their future income. Who is funding these ISAs? Private investors and universities fund them. Investors basically take a bet on a student’s future.

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Refinance Your Mortgage

This may sound strange in a passive income article, but refinancing your mortgage can be a great way to free up a lot of income and save you $100,000s over the life of your loan. That's a pretty good gain in my book. Right now, interest rates are still near historic lows, and if you haven't checked out your mortgage lately, now's a great time to shop around and compare rates. If you can save 0.50% or more on your loan, you're potentially adding tens of thousands of dollars back into your pocket. Not many investments can beat that.

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Pay Off Or Reduce Debt

Along the same lines as refinancing your mortgage, if you can pay off or reduce your debt, you're making huge progress in building income. But just like other things in this topic - it takes a monetary investment to make that happen. The great thing about paying off debt is that it's a straight return. If you have a credit card at 10% interest, paying it off is a 10% return on your money! That's huge.

Peer to Peer Lending

P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk.

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Don't Forget Your Matching Contributions

This is one of my favorite passive income ideas, because it's so easy, yet so many people fail at it. It's simple - take advantage of matching contributions for your 401k or HSA. That's literally free money for simply contributing to your own retirement accounts. By not taking advantage of the match, you're leaving free money on the table.

Sell an eBook Online

Self Publishing is mainstream today. When you purchase an eBook off of Amazon there’s a pretty good chance you’re buying a self-published book. Self-publishing is also ridiculously easy. I tried this a few years ago and couldn’t believe how simple the process was.

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Create a Course on Udemy

Udemy is an online platform that lets its user take video courses on a wide array of subjects. Instead of being a consumer on Udemy you can instead be a producer, create your own video course, and allow users to purchase it. This is a fantastic option if you are highly knowledgeable in a specific subject matter. This can also be a great way to turn traditional tutoring into a passive income stream!

Selling Stock Photos

Do you ever wonder where your favorite websites, blogs, and sometimes even magazines get their photos? These are normally bought from stock photo websites. If you enjoy photography you can submit your photos to stock photo sites and receive a commission every time someone purchases one of them.

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Licensing Music

Just like stock photos you can license and earn a royalty off of your music when someone chooses to use it. Music is often licensed for YouTube Videos, commercials, and more. With the amount of YouTube videos and podcasts that are being created, there is more demand than ever for music - and people are willing to pay for it.

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Create an App

If you own a smartphone or tablet then it’s safe to assume you have several apps downloaded. But have you ever had an amazing idea for an app? If so, you could consider hiring a programmer to create your app for you. You could then sell it on the App store for residual income. Just look at what happened with Wordle! A guy developed the app in a weekend, and started sharing it with his friends and family - and then it was acquired by the New York Times.

Affiliate Marketing

Affiliate marketing is the practice of partnering with a company (becoming their affiliate) to receive a commission on a product. This method of generating income works the best for those with blogs and websites. Even then, it takes a long time to build up before it becomes passive.

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THANK YOU

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