4 Passive Income Ideas to Increase Your Annual Income
October 4, 2019
Having multiple streams of income can help relieve the pressure of relying solely on one job to pay your bills and reach your retirement savings goals. Luckily, one of these streams could be income that you earn daily—without even trying. Passive income is the monetary stream that could help you achieve your savings goals sooner or afford something that might have otherwise been outside of your price range.
What is passive income?
When it comes to your personal finances, passive income is money earned with regularity, sometimes through investment, without actively performing a service. Figuring out how to create passive income can come down to making a few changes or, possibly, capitalizing on habits you already have.
4 Passive Income opportunities
1. Consider opening a high yield savings account
A high yield savings account, like a traditional savings account, is an account that acts as a storage unit for your money. Funds that are put in this account can grow at a faster rate thanks to the help of a higher interest rate. According to ValuePenguin, the national average interest rate for savings accounts, as of 2019, is .09%. Some of the highest yielding savings accounts offer over 2%.
High-yield savings accounts tend to hold money that isn’t going to be spent in the near future. Emergency funds or money that doesn’t yet have a clear objective could both be perfect candidates for your high-yield account as they will benefit from having time to mature and grow.
Be sure to follow up with your chosen banking institution about whether they’re insured, about fees, and about minimum balances.
2. Earn revenue on creative ventures
These days, there are more opportunities accessible to those who aspire to earn income from home and create their own hours. Platforms for blogging and generating creative content are both ways to make money doing what you love from the comfort of your home. This is a great opportunity to develop a passion project or reprise a creative project you might have had previously.
How this sometimes works is by creating your content and allowing ad providers to run their ads alongside your content. You might earn money by just having the ads up, by viewers clicking the ads, or purchasing products you promote with affiliate links.
Your content will continue earning passive income so long as it’s accessible to users and compliant with your ad providers. If you don’t yet have a platform, it might be necessary to put in work upfront generating content and developing your platform before worrying about ads. Be sure to research what platforms will best host your content and stay organized with your content creation, too.
3. Rent out your home
Your home could be the perfect getaway or rest point for someone traveling through your town. Consider renting out your home or a room in your home to make income on space you aren’t presently using.
This option might work best for:
- Those who travel at several points in the year
- Empty nesters
- People who live in densely populated cities
- Those with empty and furnished property
The best part about renting out your property is that it’s all done on your terms. You decide the duration of your rental and you set the price.
While renting out your home or space(s) in your home might be amongst the most accessible option to earn passive income, this opportunity is not without risk. Be sure to do careful research about renting tips, laws, and if your home is compliant with whatever is necessary for someone to comfortably and safely make your home their own.
4. Credit rewards program
Your credit card can do more than just buy you time on paying for an item in a more manageable way. Nowadays, there’s a credit card benefit for just about everyone. Whatever your interest might be, there could be a credit card to help you earn rewards.
Consider opening a credit card that is going to benefit you most based on the habits you already have. If you love to travel, treat your credit card like a debit card, and earn miles so you can travel more for less. The same could be true of other types of rewards like gas for your car, dining rewards points, and cashback on participating purchases.
Consider auditing your past financial habits to glean what rewards would benefit your existing habits and which credit card will offer you the best rates.
The goal of a passive income is to maximize your income with minimal effort. Integrating these passive income strategies can help make this possible.
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