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9 Passive Income Ideas to Make Extra Cash



Ever wish you could quit your 9-5 job but still have enough to live on? Are you looking for ways to supplement your income so you can afford that dream house or trip around the world? Or do you fantasize about being able to earn money while laying on a beach or pursuing your passion? These are some of the reasons that inspire people to turn to passive income.

What Is Passive Income?

When investors think about passive income, limited partnerships, stocks that pay dividends, and rental properties might come to mind. After all, income from passive investments is a great way to supplement your regular salary. But in this article, we’re actually talking about a different kind of passive income. You can earn “passively” with low effort, easily accessible side hustles—and that’s what we’re focusing on here.

Essentially, these side hustles can help you earn without contributing much, if any, active effort. If you are paid for a service you perform, that’s active income—you have to put in time and energy in order to get paid. If you can continue making money while staying mostly hands-off, that can be a form of passive income. That doesn’t mean you won’t have to put work in up front to get started—you probably will. But besides some maintenance, passive income shouldn’t require your active involvement.

There are obvious benefits to these low-effort side hustles. Earning more money without putting in more hours offers the opportunity to make extra cash without burning yourself out. If you’re successful enough, it might even give you the freedom and flexibility to quit your day job and do whatever you want instead, whether that’s going to school, traveling, writing, or making art.

How to Make Passive Income: 8 Ideas

 

If you’re trying to figure out how to make passive income, you have plenty of options. The route you choose will depend on your assets and skills, as well as your interests. But don’t be afraid to think outside the box. You might surprise yourself. You can always try several methods at once to potentially open up multiple income streams.

1. Renting Out Rooms on Short-Term Rental Websites

 

If you have a spare room, or are able to leave your apartment or house for short periods, consider renting it out on websites like Airbnb or VRBO. It’s pretty easy to get started. Your first step is to create a listing on the website that describes your rental and upload some photos.

Then you can set the terms, including how much you charge, when the room is available, how many guests you can accommodate, and the house rules. You get to keep nearly the entire payment, minus a small fee (as of this writing, it’s 3% on Airbnb . Some insurance companies offer additional services to cover your home if you want to rent your home out, but are worried about someone damaging your property or getting hurt. Call your insurance agent and ask how you can protect yourself. And make sure you won’t get in trouble with your landlord before going the short-term rental route.

2. Renting Your Car

Your home isn’t the only thing you can rent out. If you have a car that would otherwise sit idle in your driveway, several companies have sprung up that allow you to lend out your vehicle for short periods. These include Getaround , HyreCar , and Turo . Each service is different, but generally to get started, you create a listing online, including some photos of your car, and post a schedule of when it’s available.

Once you confirm a booking, you arrange to meet the renter and hand off the keys. Most of these companies offer liability insurance, so you’re covered if something goes wrong. In terms of earnings, the more days you offer, the more you have the potential to make.

3. Wrapping Your Car in Ads

Speaking of cars, companies like Wrapify and Carvertise allow you to turn your vehicle into a passive income source, while still having access to it. Adding an advertising decal onto your car (either full or partial) turns it into a moving billboard, which is advantageous for marketers.

If the look doesn’t bother you, you could make $100 or so per month without dealing with any upfront costs. Getting started is often free, but there are usually requirements for the age and appearance of your car and how much you drive. (Check company websites for all the details.)

4. Launching an Online Course

If you have a specific expertise or skill—anything from playing guitar to baking—you can create an online course through a website like Udemy or Teachable . You can usually launch a course for free, and you get paid anytime someone signs up, minus a percentage that the site keeps (this can range wildly between 3% and 75% so you probably want to get all the details before putting your course together). Although it can take time to sell and market a digital course, once it’s up and running and enrolling students, you can sit back and collect the cash.

5. Publishing an E-book

Like an online course, an e-book is a way to share your expertise with the world. Anyone can self-publish a book online through services like Amazon’s Kindle Direct Publishing , iBooks Author , or Kobo Writing Life .

The percentage of royalties you earn varies depending on the publisher. Of course, the more marketing you do, the more copies you’re likely to sell—and there’s no shortage of online marketing strategies to investigate. But once you write and publish the e-book, it’s out there ready to generate passive income for you.

6. Selling or Licensing Your Crafts Online

If you have some design skills, you can create t-shirts, photo prints, or handicrafts to sell online through websites like Shopify , Printful , and Etsy . You’ll need to put in time to design or make the crafts, but once you have them, they can serve as a passive income stream.

You’ll get the most bang for your buck if you only need to put in design work up-front, rather than take time to make each craft whenever you get an order. You can also license the rights to photos you take and sell them online through sites like Shutterstock and Stocksy .

7. Getting Involved in Crowdfunded Real Estate

Investing in real estate usually requires a lot of capital, but recently more than 100 sites have emerged that democratize the process through crowdfunding.

Companies like Fundrise , Realty Shares , and Realty Mogul allow you to invest in the private real estate market, sometimes with as little as $500 or $1,000. Some, but not all, of these websites require a relatively high income or net worth to get started, so be sure to carefully consider each site’s terms and conditions.

8. Engaging in Affiliate Marketing

Affiliate marketing allows you to make money by promoting products and getting commissions on sales, usually through special promotional links and ads. It probably makes sense to focus on products that you are already buying and/or blogging about, and that are likely to appeal to your friends or readers.

Typically, you can promote affiliate products through a website, social media platform, blog, or other channels that can attract interest. Your earning potential from affiliate marketing varies widely, but this strategy can work especially well if you already have a big following on social media or through your blog or website.

How to Fund Passive Income Projects

Once passive income starts flowing, you hopefully won’t have to do much. But as with any new venture, you are likely to encounter some initial expenses to get projects off the ground.

These start-up costs can include fixing up your room or car before renting them out, buying a new camera to take photos or film an online course, or subsidizing yourself while writing a book or developing clothing designs. If you don’t already have tons of extra cash lying around, don’t worry—you may still have options.

One way to free up cash to invest in a passive income project is to refinance your student loans. Refinancing involves taking out a new loan from a lender, with a new term and interest rate, and using that to pay off your existing loan. You can refinance federal or private student loans, or sometimes both together.

If you qualify, refinancing could get you a lower interest rate or a lower monthly payment. If you are eligible to refinance federal student loans, you should be aware that you potentially give up access to the government’s income-based repayment plans or hardship options like deferment and forbearance. If student loan refinancing works for you, however, it could free up extra cash that you can then use towards your passive income venture.

About SoFi

 

SoFi is a modern finance company keen on helping you plan for your financial future. If you’re looking to free up some cash to invest in a passive income project, consider refinancing your student loans to a longer term with SoFi or paying off your credit card debt with a SoFi personal loan. With a low-rate SoFi personal loan, there are no origination fees or prepayment penalties, and you may be eligible to borrow up to $100,000.

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The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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