Everyone wants to make more money, but very few want to work more hours. The best way to work less and make more money is to learn how to generate passive income. Passive income can be described as income that is received at regular intervals that does not require a lot of work to sustain it — money that you automatically make whether you work any more or not.
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We have covered some wealth building tips in the past, like the list of alternative ways to make money. If you want to earn more money, the following are 10 ways to make money passively in no particular order for income potential:
1. Dividend Investing
Becoming a stockholder in a company is a great way of earning income with very little time involved. Buying shares in the business, you can then decide whether you wish to receive quarterly dividend checks (money earned from your investment) or to reinvest the money back into more shares. Dividend investing is easily one of the most popular sources of passive income.
2. Rental Property
When you buy rental property, you can start receiving monthly income almost immediately. The work involved requires buying the property one time only. After your mortgage on the property is paid, anything left over is considered passive income.
3. Peer-to-Peer Lending, e.g., Lending Club
Online you will find a wide variety of peer lending groups. When you become an investor, you are simply lending a certain amount to other members of the group who need to borrow money. With Lending Club, you can expect to earn a 9% interest on average.
4. Building Websites
If you have a knack for building websites that can generate a high amount of traffic, you have a great opportunity to earn passive income. Many people find that by simply creating an information site about a topic they are passionate about, they can get high traffic and earn income by either selling the advertising space on the site or by joining an ad revenue sharing program. Website building is hands-down the most reliable way to make money online.
5. Bank Accounts
If you like money, you will like seeing it grow. Instead of putting your money in low-interest earning accounts, shop around and find the banks and accounts that will pay you the most money. The money earned on interest may seem small, but the longer you keep it in the bank, the more money you will make.
Many individuals are earning a lot of passive income by investing in bonds. These treasury bonds, also known as T-bills or T-bonds, are long-term investments. When the bonds mature or come due, you earn money on them. For example, you could purchase a $100 U.S. Savings Bond for $50, but when it comes due, you get the $100.
7. Writing a Book
If you write a book, you can earn royalties for as long as people keep purchasing it. Many great authors receive monthly royalty checks on books they wrote twenty years prior. All you have to do is look at authors like Stephen King and Danielle Steele to know this is quite possible. Even if your book in not on the best seller’s list, you still have a great chance of earning a passive income from it.
8. Writing for the Web
Another way to earn passive income from your writing is to join some of the online article sites, or become a freelance writer. Many of them pay you for the views your articles get each month or when someone clicks on ad that has been placed on your article’s page. Many writers are earning as much as $300 or more each month in passive income from these sites. Squidoo, Yahoo Contributor Network, and Triond are just a few examples.
9. Residual Affiliate Marketing
When you become an affiliate or network marketer, your goal is not just to sell the products; you will also work to recruit other people to become an affiliate, as well. When they sell anything, you earn a percentage of the commission. With enough recruits in your downline, you could earn several thousand dollars a month in passive income. This is extremely rare, of course — and watch out for scams and hype.
10. Selling Insurance
When you sell insurance, every time one of your customer’s renews their insurance, you will earn another commission. Signing up several customers each week ensures your future income, as the majority of your customers will renew their policy each year. Note that you will need a license to sell insurance; unless you do it as an affiliate.
As most people already work forty to fifty hours each week, the last thing they want to do is put more time in to make more money. Instead, they could be earning passive income. By investing some time into learning the different methods of passive income generation. With passive income, you could stop working so many hours and still make more money than you were before. It is all a matter of understanding how wealth building works and how to make it work for you.
Shaun Connell is a full-time personal finance blogger and student living in rural Arkansas. He runs several blogs on investing and finance, including a daily blog on gold, and a weekly blog on wealth management. Shaun firmly believes in dividend investing, debt-free living, and long-term financial planning.