Passive Income Ideas: 3 Proven Ways To Earn While You Sleep

Article Approved By Banking Expert

This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

Article Approved By Banking Expert

This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

Few things in life better than extra cash, and with the right passive income ideas, you can earn money in your sleep.

Whether you’re trying to break the paycheck cycle or just want to set yourself up for a brighter financial future, the right passive income ideas make all the difference.

What is passive income? It’s a stream of additional cash flow that requires little to no work.

We could’ve hit you with a laundry list of options here, as there are millions of ways to make a passive income.

But rather than waste your time–and ours–we decided to focus on the top 3 best passive income ideas.

These have been proven time and time again to generate the best returns.

But before we get into the best passive income ideas, let’s go through the benefits first (because there’s a lot!)

Passive Income Benefits

Passive income ideas are a dime a dozen because the benefits are unmatched, no matter who you are or what you do.

The luxury of putting your time or money into something that subsequently generates new incomes is the crown jewel of financial stability. Passive income benefits include but certainly are not limited to:

  • Increased overall earnings
  • Reach financial goals faster
  • Financial freedom
  • No income limitations
  • Less demanding than a job
  • Eliminate debts
  • Free up time
  • Reduce stress
  • Multiple sources of income

But be aware, this doesn’t necessarily mean that you press a few buttons and you’re well on your way to instant cash flow. These passive income ideas require work. But with sufficient time and effort, you could set yourself up for life with these suggestions. Sign up for them and take it serious!

Best Passive Income Ideas

When it comes to Passive Income, you’ll want to do your research. First and foremost, you need to understand that some routes require time, while others only require a monetary investment.

1. Invest In Stocks

Investing in stocks is one of the best passive income ideas.

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This route offers opportunities that vary from dividend stocks, individual stocks, and stock mutual funds. While some avenues have a higher risk, it’s important to know where you’re putting your money and the possible reward.

For beginners, investing can be tricky and downright confusing. A good starting point is figuring out what type of approach you’re going to take.

If you’re on the fence, Robinhood offers a wealth of educational resources, tips and access to advisors–all included free!

For those with little to no experience, you’ll always have some handy to ask questions to. They even have robo-advisors that are programmed and customized to your needs based off of a series of questions and profile. Give it a shot. Investing is the gold standard of passive income ideas.

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For those that are more experienced or are extremely confident in making the jump, you have a bit more control of how you invest your money.

If you’re going to become an investor, you’ll need to open an investment account. This can be done through that same robo-advisor for those that are just beginning.

For the more experienced investors, an online brokerage account may be your best option as it offers you the least expensive avenue to buying stocks while providing additional forms of investing.

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Now set your budget and start investing!

It takes thoughtful risk, know-how, and/or a professional on your side to ensure you’re making all the right moves. Be diligent!

2. Become A Lender

Peer-to-peer lending allows you to lend money to borrowers and get paid in interest and principal.

Lending Club is the perfect, all in one, marketplace that connects borrowers and lenders with the click of a button.

You have full control over who you lend to and how to delegate your money. Alternatively, you can choose to have your investments controlled by automation by answering a few simple questions.

Ever wanted to be an investor? Sign up with Lending Club.

We understand investing is a big commitment though, so if you’d like to learn more before taking the plunge, give our Lending Club review a read. Lending Club is a true pioneer in this space, so start with them.

While the percentage of your return can vary, you can utilize services that make it easy for you.

3. Invest In Real Estate

If investing in stocks is the gold standard, real estate is the platinum standard of passive income ideas.

There are multiple avenues one can take to invest their money wisely into real estate, from being a landlord in a single-family to running an entire apartment complex!

As you can imagine, this can be extremely lucrative. But the reality is, investing in properties is not a cookie-cutter option.

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Being a landlord has its perks, and while yes, you’ll have to deal with your renters when issues arise, it’s worth your return.

Multi-Family Homes
Although it may cost a pricier penny to invest in larger real estate properties, it will be easier to finance. Banks are more likely to approve a loan for larger properties because of the strong monthly cash flow it will generate.

Predictable cash flow, tax deductions, and long term security are the top perks.

Even with revolving tenants or predictable renters that are late on monthly payments, you don’t run the risk of foreclosure, as there’s no full vacancy at once.

Crowd Funded Real Estate
Crowd-funded real estate is a way to get a piece of the pie without throwing all your eggs in one basket. This works by pooling a certain amount of money from a handful of investors to finance one or few properties.

Fundrise is a simple, low-cost way to access real estate’s consistent returns.

Crowdfunding is proven to be successful thanks to the advancements in social media, and its convenience in attracting potential investors.

This could be considered “low-risk” depending on the amount of money you are investing, in the fact that there is not one sole individual putting all of their money on the line.

Both investors and real estate developers can come out victorious with their financial returns in the long run.

What’s your favorite passive income idea on this list? Sign up and let us know how it goes in the comments.

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