You’ve thought about it before: creating several streams of passive income to live off. But it just sounds too good to be true. And I'm not just talking about the passive income that requires work – I'm talking about residual income streams that work all the time, even when you're sleeping.
I mean, how can a regular person like you create residual income?
Obviously you know it can be done or people wouldn’t be buzzing about it all over the internet. Or are those people lying?
Luckily for you they’re not.
In fact, here are 7 super smart ways to build residual income.
Purchase A Rental Property
Real estate has always been high up on my investment list and for good reason: real estate is one of the longest standing, proven investments.
In fact my grandmother had several rental units. Her husband plans on the rentals funding his retirement. Since they’re now paid for all the money that comes in on a monthly basis provides a great income.
But the biggest thing holding most people back is money – it used to take a lot of money to buy a rental property. That's all changed with recent legislation and multiple online companies that have entered the space to make real estate investing affordable.
If you're looking to get started in real estate, look at a crowd funding solution like RealtyShares. It works similar to LendingClub – you commit as little as $5,000 towards a property. When the property is fully funded, you become an owner, and will receive your share of the earnings and appreciation in the property. Check out RealtyShares to learn more.
Another option, with a lower minimum, is FundRise. FundRise is a little different, in that you invest via a REIT, but the concept is the same. And it allows you to invest for as little as $1,000. Check out FundRise here.
Rent Out Your Spare Room
Don’t have money for a rental? That’s okay, you can rent out a room in your house.
Look for a quality tenant who you’d be okay living with (a friend or family member would be ideal) and rent out your spare bedroom.
This is one of the easiest ways to bring in some residual income. This is one of our key strategies for earning an extra $10,000 per year.
Invest in the Stock Market
Investing in the stock market opens up a wide area of opportunity.
For easy investing you could choose to invest in a couple of index funds or if you like to pick investments yourself you can hand pick a group of stocks. Whether you invest in a personal investment account or a retirement account you’ll still be making your money work for you.
The good thing about investing in the stock market is that it’s fairly easy to do. The con, however, is that you’ll have to put up a lot of your own money before you see any substantial benefits.
I choose to invest in an index fund for retirement and dividend stocks within my personal investing account.
Don't know where to invest? Start by checking out these companies that offer amazing deals just to get started:
Or check out the full list in our Online Stock Brokerage Comparison Tool.
Write a Series of eBooks
Lately I’ve been captured by the many authors who are making it big on the Kindle Market. The potential is enormous.
With this method you have to put in a lot of work upfront but the benefits can be outstanding. Take Steve Scott for instance, who made more than $100,000 last quarter from a handful of Kindle eBooks.
Even though Scott puts out eBooks on a consistent basis once they’re published they’ll continue bringing in money for months or even years.
Create an App
I was watching the news last week when I saw a story featuring a mother who had just developed a successful app. Sick of her children not answering her phone calls she decided to come up with a solution to the problem.
She had an app built that would prevent her children from using their phones until they called her back or answered her phone calls. She had the app built and is now available for purchase.
While I’m not sure about the numbers yet I can only guess that this app will be wildly popular among parents. (I know I’d use it!)
You don’t have to possess technical skills to make money from apps. Simply come up with a great idea, hire somebody to build your app, and then market it like crazy.
Make a Video Course
We all have something we can teach. It can be anything – career related, weight loss, sleep habits, or even education on technical subjects.
If you’re comfortable sharing your knowledge on video you can make and sell a course on Udemy. The beauty of this system is that you create your course once and you’re done.
You can then go on and make a second and third course or you can move to a completely different passive income model.
Become a Bank…..(Kind of)
In the past month we’ve covered quite a few peer to peer lending companies. You can now help students get their degrees or help give consumers personal loans. The market is getting pretty saturated with P2P lending companies so as an investor you can take your pick.
Since you now have the ability to lend people money you get to bank on the interest rates. Plus, most of the P2P companies allow you to spread your investment through several borrowers therefore mitigating your risk.
A Word of Warning
Before you get all hyped up on a passive income buzz I’ve got to be honest with you: Building a passive income is not easy by any means.
In order to make a significant amount of money you need to either put a large amount of money into interest producing investments or put a ton of time and hard work into the other residual income ideas.
While it’s completely possible to build up multiple streams of income it’s going to require some initial blood, sweat, and tears.
Looking for more ideas? We put together a list of 20+ Ways To Build A Passive Income Stream.
Have you built up any passive income? How’d you do it?
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