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Edited by Gary Dudak
If you’re looking for better ways to generate a steady flow of money with little effort, passive income may be just what you’re looking for. Passive income, that is, money that does not come from active involvement, such as a salary, can come in different flavors.
Whether it’s a short-term financial goal like saving for a car, or a long-term goal like having enough savings for retirement, earning passive income can turn your free time into a game changer. While getting started may require some initial financial investment (and a lot of patience), once your cash flow is in order, you can just sit back and relax. You might even make $1,000 a month.
Your personal finances will only benefit from what you start today. Here are some ideas that can help you get there with one little help from our money experts.
1. Sell printables
Like Sarah Sharkey from Smart girl finances noted, printables are one of the unique side hustles you can start doing online. These include a variety of themes ranging from planners to coloring pages, cards and more.
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“You usually only need to create a printable once. You can use programs like Canva to create printables that your customers will love,” Sharkey wrote. “Then you can watch the somewhat passive income flow into your life. Etsy is a great place to get ideas and sell your printables.”
2. Create an online course
Certain websites, such as Udemy, allow you to create a course on their platform. The courses offered range from IT certifications to sourdough bread baking, from speaking German to learning the guitar. So if you have a specific skill, that might be your best bet.
“Once it’s published, it doesn’t require any extra maintenance and you get paid when people take your class. It’s a way to make extra money on a shoestring and help people. It’s like a win-win… win,” Dave Ramsey stated on his blog.
3. Open and invest in a high-yield savings account
Another effortless way to earn passive income is by investing in a high-yield savings account. By not taking advantage of the high APYs your bank already offers, you are essentially leaving money on the table.
According to the Federal Deposit Insurance Corporation (FDIC), high-yield savings accounts (HYSAs) have been very attractive lately, offering rates above 5% compared to an average of 0.47% for traditional savings accounts.
4. Invest in Real Estate Investment Trusts (REITs)
Outside of real estate rental income, investing through REITs can be quite lucrative. These are essentially mutual funds that buy real estate instead of stocks.
Still, Dave Ramsey urged caution in this area. He said that while there are many good REITs, “there are still many bad REITs that use debt to buy properties – which means more risk for you as an investor.”
5. Peer-to-peer (P2P) lending
Peer-to-peer lending involves borrowing money (as little as $10) and collecting interest, on top of getting back your initial investment. The millennial money woman explained in a blog post.
For example, platforms like GroundFloor, a peer-to-peer real estate platform, offer the opportunity to finance microloans for home flippers. Although passive income from P2P platforms can be very lucrative, the practice can also be a bit risky.
“Make sure you do your research first – before committing your resources financially,” The Millennial Money Women explained. Your initial funds are not always fully secured.
6. Use affiliate marketing
You can also generate passive income streams thanks to affiliate marketing – in other words, partnering with companies and promoting their products or services through affiliate links on your blog, website or social media platforms.
“This doesn’t mean you can just hashtag your favorite running shoes on Twitter and expect to get paid. The companies you know and love need to have an affiliate marketing program to get paid for them, and you need to sign up to be a part of it,” Ramsey explains.
Websites like Rakuten LinkShare can help you find and connect with these affiliate marketing programs.
7. Invest in dividend stocks
Last but certainly not least, a dividend-focused stock portfolio can generate $1,000 per month or more in perpetual passive income. However, with a dividend yield of, say, 4%, you would need a portfolio worth $300,000, which is a significant upfront investment.
Dividends allow you to continually profit from top companies without selling shares, and while a dividend stock strategy requires quite a bit of patience, it allows money to work for you in what can feel like a lot of time.
Caitlyn Moorhead contributed reporting for this article.
This item was supplied by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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