Making money while you’re on the beach has a beautiful ring to it, and that’s the idea behind passive income.
Most people think of income as something they have to do labor for, like going to work for a day and then getting paid.
Passive income is money you earn even when you’re not working and for working parents it’s especially helpful to have other sources of income coming into the family home.
Yes, it takes some investment of time, money, energy, or all three, but then the money just comes in, helping you pay off a student loan, dig out of credit card debt, save for retirement, or advance other personal finance goals.
What Is Passive Income?
Passive income is defined as income that requires minimal effort to earn. It is a form of income that builds you wealth even when you’re not working.
For example, if you invest some money and your investment increases in value, that’s passive income. If you create something digitally–like a video or a song–and you get money every time someone views it, that’s passive income.
You might also be interested in: 35 Passive Income Ways to Make Money While You Sleep in 2023
Passive Income vs. Active Income
No matter how you make your income, making money always falls into two categories: passively or actively. While you may have heard about these, plenty of people still don’t know their differences.
To put it simply, passive income is indirectly obtained, such as interest from savings accounts or dividends from stocks. Additionally, income is procured from rental property, limited partnerships, or other businesses where you invest funds without any added effort.
Active income on the other hand is money you substantially work to earn. If you possess a business in which you actively engage, it falls under this income type. Your paycheck from your job is an example of others such as wages, tips, salaries, and commissions.
5 Semi-Passive Income Ideas
If you’re motivated to create additional income outside of your day job, these ideas that require a bit more effort can help you generate cash to put towards your short and long-term financial goals.
1. Renting Your Car
Companies like Turo and GetAround make it easier than ever to rent out your car when you aren’t using it.
Of course, you’ll want to keep in mind that renting out your car will mean additional wear and tear on your vehicle, so your repair bills might increase. But users have said it’s well worth it for the checks coming in the mail.
If you have a second car sitting around or have begun to bike to work and no longer need the vehicle daily due to working remotely, this might be the perfect way to start generating some passive income. You need to make sure your insurance policy covers this side hustle.
Pro: A car is one of the worst investments you can make. But renting your vehicle out makes that investment less bad.
Con: More miles = more repairs. And what if the car renter spills their burrito all over your nice clean seats?
2. Rent Extra Land
Perhaps the idea of hosting someone inside your house isn’t for you. But how about hosting someone on your property by renting your extra land?
There is a tiny home bonanza sweeping the country right now. People are choosing to live in tiny homes and embrace a minimalist lifestyle. But, unfortunately, a lot of those people can’t find anyplace to put their tiny homes.
If you have some land, this creates an opportunity for you to rent out space on your lot. You’re making the most of a resource you aren’t using and giving someone else a place to live. Win-win. You’ll want to make sure you don’t violate any laws or codes in your city or state.
Pro: Compared to other ways you can share your real estate, this is pretty hands-off.
Con: Adding new buildings to your property can be a significant headache due to local laws and zoning codes. Do your homework!
3. Refer Friends to Great Products You Already Use
Companies like Rakuten.com (formerly eBates) have existing referral programs that pay out cash for every friend you register. So if you have many friends or social media followers, this can be a low effort way to make money.
All you have to do is set up an account by clicking the join now tab at the homepage’s top. Once the account is up, go to your account settings and click where it says refer and earn to get a link to send your friends.
To find other programs like this, it’s super simple. Nearly any company that delivers food or other products has similar programs.
Pro: Many people buy many things, and most people would like to save money if they can.
Con: You don’t want to be known as the “let me sign you up with my referral code” guy. There’s a fine line between passive income and alienating the people in your life.
4. Make Money Playing Video Games
Did you know you can earn money playing games? If you’re already playing games in your free time, you can earn some extra cash while having fun. For example, Mistplay is an awesome app that allows you to make money playing video games.
Pro: You’ll be making money for something you’re already doing.
Con: You might be tempted to spend more hours playing video games than usual.
5. Create a Print-on-Demand Online Store
Do you have a graphic design touch? Create some iconic designs and sell them in an online store.
Then, your customers can simply download the designs they enjoy and print them on their own.
Alternatively, you could outsource the printing to a third party—e.g., a customer orders one of your t-shirts, and a third-party print shop makes the t-shirt and sends it to the customer.
You’ve got to do some work upfront making the art and researching what kinds of designs customers are buying today.
But if you’re up for it, you can create a steady passive income stream from print-on-demand graphic designs.
Pro: A creative outlet that can lead to stable passive income. Possible to outsource nearly all of the sustaining work.
Con: It’s possible to create a whole portfolio of graphic design that nobody wants, and you’ve got to create something desirable.
The Bottom Line
Remember, generating passive income requires creativity and some initial work to set things up. You’ve got to consider the value of time!
But if you can take some time to learn something you think you’d be good at, you can start to make money outside a traditional day job. So take an intriguing idea, do your homework and give it a try. You’ll be on your way to building an income stream for yourself in no time.
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This post was produced by Wealth of Geeks and syndicated Mama Say What?!
Feature image credit: Shutterstock
Tim Thomas is a renowned writer and entrepreneur specializing in finance, investing, and money matters. With his extensive knowledge and experience in the financial sector, Tim offers valuable insights into the world of personal finance, stock market trends, and investment strategies.
