10 Passive Businesses that Brings Steady Income
Oftentimes, passive income is highly sought after and often misunderstood as it requires 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.
For example, passive income could be useful to help you get out of debt or achieve financial independence sooner.
Before we delve fully into passive income ideas, it is a good idea to first clear up a couple of misconceptions. Although the word “passive” makes it sound like you have to do nothing to bring in the income this is untrue.
In the actual sense, passive business requires an upfront monetary investment, or an upfront time investment and it is impossible to earn residual income without being willing to provide at least one of these two.
Below are examples of passive income ideas that could yield steady income:
1. Dividend Stocks
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.
2. 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.
3. Rental Properties
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.
However, the internet has made investing in rental properties easier than ever before. There are a lot of ways you can invest in rental properties depending on what your goals and interests are.
You can be a limited partner in large residential or commercial properties, or you can buy homes and be a landlord online!
4. High Yield Savings Accounts And Money Market Funds
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.
Interest rates have been rising, so putting more money into a savings account can generate a safe passive income stream.
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.
These investments aren’t for everyone – they can come with high fees, and not be worth it. But if you have zero risk tolerance for loss, and are looking for a passive income stream, this could be a good potential idea for you your portfolio.
6. Invest In A Business
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.
But there are ways to reduce your risk. For example, you can invest small amounts in many companies through lending them money in small bonds.
7. 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. To self-publish a book you’ll first need to write and edit it, create a cover, and then upload to a program such as Amazon’s Kindle Direct Publishing.
Instant success is not guaranteed and there is a need for upfront marketing before you can turn this into a passive income stream.
8. 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.
9. 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. If you want to get started with affiliate marketing check out this great list of affiliate marketing programs.
10. Vending Machines
Vending machines are another great low maintenance small business idea.