Passive income is a term that’s been thrown around for a while, but it’s only recently become more prominent in the mainstream. The IRS definition of passive income is simple:
There are two kinds of passive activities.
• Trade or business activities in which you don’t materially participate during the year.
• Rental activities, even if you do materially participate in them unless you’re a real estate professional.
So although the term “passive income” may create the image of lying on the beach while the money rolls in, that may not be entirely accurate. But passive income is still better than “trading hours for dollars”. In modern thought “passive income” can mean doing something once and getting paid forever, such as artistic royalties from writing songs or stories, building websites, or patenting something.
To help you find the right passive income source for you, here’s a breakdown of six passive income ideas to grow your wealth.
1. Dividend Stocks
Dividends are one of the simplest passive income ideas out there. The best aspect about dividends is that they’re typically passive income distributed to investors quarterly. Having a little bit of money invested in stock can lead to big returns, especially when the company is growing.
2. Design T-Shirts
If you are an artist or passionate about design. Sites like Cafe Press, Zazzle, and Redbubble allow people to upload designs they’ve created and then sell those designs to other people. Once the profits from each sale are tallied up, some of it gets filtered back to the original owner of the design.
3. Rent a Room
You can rent out an extra room to someone who needs it. Whether it’s by using a site like Airbnb or renting on your own, it can be a useful way to add income to your life without having to do too much work.
4. Affiliate Marketing
Affiliate marketing is when you earn a commission for referring someone to a product or service. There are many ways to do so, from having advertisements on your website to writing individual reviews of products and then sharing those reviews on social media. This method of generating income requires minimal work but can offer a decent amount of passive income.
5. Create an App
Creating an app can be a great way to start earning passive income. With apps, you are essentially creating a software program made up of a wide range of different functions. The best aspect of this passive income type is that it’s very flexible. You can start by building simple apps and then building more complex programs over time.
6. Invest in Crypto Passive Income Opportunities
Over the last year or so, crypto has been on the rise. Cryptocurrencies like Bitcoin, Litecoin, and Ethereum have grown faster than most people thought they would. The amount of money that you can make from them is incredible.
The best part about crypto is that it’s mainly passive income that you can generate from anywhere in the world. The only thing you need to have is a device capable of handling crypto transactions. After that, you can set up a wallet and start earning crypto each time your device is plugged in or left alone for long periods. This is a great way to earn passive income through zero effort.
One more tip to help you realize the potential of passive income is to opt for high-yield funds. They can be a great way to generate passive income as they are mutual funds designed to give the investor high returns. There are multiple types of high yield mutual funds with varying levels of risk associated with them.
Those who are new to the world of passive income should opt for smaller high yield mutual funds, which can benefit from giving higher returns with low risk involved. These investments can help you build wealth and increase your passive income over time.
Does passive Income Really Work?
Yes! Passive income is possible and can be a great way to build wealth. As long as you take the time to conduct thorough research before investing and only make investments that you’re educated about, then you can rest assured in the knowledge that your passive income will grow.
Where Can I invest to Have Passive Income?
While there are many different ways to generate passive income, the most popular ways include investing in stocks, bonds, and mutual funds. These are the easiest ways to build wealth quickly because they don’t require much. However, we encourage you to get creative and figure out ways to monetize your skills or passion.
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