In today’s economy finding ways to generate that extra income with minimal effort is becoming one of the most searched topics. Fortunately, in this digital age making extra income is more accessible than ever. Passive income streams allow you to earn money without need your undivided attention, freeing up your time to actually enjoy life! Whether you are looking to supplement your normal income or want to build wealth over the long term, here are some beginner friendly passive income ideas to get you started in 2024.
The 6 Best Passive Income Ideas
1. Invest in Dividend Stocks
You’ve likely heard about stocks before and you might think you need to be an expert or spend a lot of money to start. However investing in stocks is a very straight forward process these days that anybody can do. Dividend stocks are shared of companies that pay regular dividends to their investors.
Its such a simple way to make passive income. Once you purchase stocks in these companies you will receive a share of the profits (dividends) on a regular basis without needing to sell your shares.
How to start:
There are lots of user friendly platforms like RobinHood, M1 Finance or E*TRADE that make it easy for beginners to invest with minimal fees and low barriers to entry (you don’t need to invest a lot). Look for companies that have a strong history of dividend payments.
Benefits:
- Consistent income: Reliable dividend stocks provide regular payments.
- Long-term growth: Stocks have the potential for capital appreciation in addition to dividends.
- Minimal maintenance: Once purchased, you don’t need to monitor them daily.
- Example Companies: Look into well-established companies like Coca-Cola, Procter & Gamble, or Johnson & Johnson for stable dividends.
2. Real Estate Crowdfunding
Real estate crowdfunding is an easy way to invest into property and property projects without needing to have endless amounts of money or having to deal with the complexities of being a landlord.
By pooling your money together with other investors your can earn passive income through rental properties or the almost guaranteed real estate appreciation.
How to Start:
This guide is for beginners and you are probably thinking you will need significant funds for real estate investment. However platforms like Fundrise, RealtyMogul offer opportunities to invest in real estate with as little as $500.
Benefits:
- Low entry cost: Unlike traditional real estate investing, you don’t need to purchase an entire property.
- Diversification: Invest in multiple properties or property types (residential, commercial).
- Hands-off approach: No need to manage properties or tenants yourself.
- Returns: Earn income from rent or property value increases without needing property management expertise.
3. Create and Sell Digital Products
This does require a bit more work than other suggestions, as it requires you to produce and make the product. However digital products like eBooks, online courses, stock photography and printables offer a great way to generate passive income long after you’ve created them.
If you’ve got the skills this offers you a route to earn money without the need for ongoing work.
How to start:
There are millions of options available for selling digital work. You’ve go the beast that is Amazon (Kindle Direct Publishing), Teachable and Udemy which are great for selling Ebooks and online courses. Whilst platforms like Etsy are great for selling printables or templates and if you’ve got a keen eye for photography getting your images on stock sites like Shutterstock are very easy.
Benefits:
- Scalable: One product can be sold to an unlimited number of customers.
- No inventory: Digital products eliminate the need for physical inventory or shipping.
- Low startup cost: Little to no upfront cost is needed to create digital goods.
- Passive income over time: Once created, your product can generate income for years with minimal updates.
4. Peer-to-Peer Lending
Peer-to-Peer Lending platforms allow you to lend money directly to individuals or small businesses in return you get interest payments. This can be a relatively passive way to earn higher returns that a saving account or traditional investment. However the risk is increased vs those other options if the borrowers fail to repay their debts. It is high risk but usually a higher reward.
How to Start:
Websites like LendingClub and Prosper allow you to start with minimal investment. You can mitigate your risk by lending small amounts to multiple borrowers rather than lending a large amount to a single borrower.
Benefits:
- Higher returns: Potential to earn higher interest than traditional savings accounts.
- Diversification: You can lend to multiple borrowers to reduce risk.
- Passive: After your initial investment, income comes from regular interest payments.
- Risk: Although there’s a chance of default, spreading investments across many borrowers mitigates that risk.
5. Create a YouTube Channel or Blog with Ads
If you have a particular interest or knowledge in a subject or just simply enjoy making content starting YouTube or a blog could be a good option for you. YouTube and blogs are a great way to generate passive income via advertising and affiliate marketing.
Once your content is created and starts to generate traffic you’ll earn passively as long as the content remains relevant.
How to Start:
For video content, documenting a hobby or sharing interesting information the go to is YouTube. Once you have got 1000 subscribers and 4000 watch hours of your videos you can join their advertiser program. Short ad’s can be put into you videos and each time they are viewed you will earn money.
For blog’s you can set up a website for as little as £1 a month, using WordPress you can start to write your content and post it online for everyone to see. You can monetise your blog through Google AdSense or other affiliate programs.
Benefits:
- Long-term potential: Content can generate income for years.
- Multiple income streams: Earn through ads, sponsorships, and affiliate marketing.
- Flexible: You can create content on any topic that interests you.
6. Invest in Index Funds
Index funds are a collection of stocks or bonds that are designed to match or track a particular market index. They are low-cost and importantly passive investments that usually provide a solid and long term growth. Like any investment there are risks and negatives to consider, there isnt any loss protection on Index Funds and there is a lack of flexibility.
How to Start:
Brokers such as Vanguard, Fidelity or Schwab offer index funds with low fees. Look into popular funds like the S&P 500 Index for diversification and consistent growth.
Benefits:
- Diversification: Invest in a wide range of stocks or bonds.
- Low fees: Index funds are often cheaper than actively managed funds.
- Simple and passive: Buy and hold for long-term growth, with minimal management required.
Passive Income Ideas, Final Thoughts
Building a steady stream of passive income is one many people wish they could have, the reality is almost anyone can achieve it. It does require some initial effort (nothing is for free) but once established these methods can generate long term earnings with little additional input. Whether you have some money stashed away to invest or you are a creative mind that can monetise products and knowledge there is an option for everyone.
Starting small and scaling it up is key! But with dedication these passive income ideas can help you on the road to financial freedom, or at least give you funds for a rainy day.