Passive income is money that you can earn without needing to put in a lot of ongoing time and effort. Whether you choose to generate passive income on the side of your full-time job or make it your primary venture, it can take some up-front work when you’re just getting started.
This means it's important to pursue opportunities you're passionate about and identify niches where you can earn a reasonable income without needing to put in a lot of ongoing effort to maintain your progress.
As you consider your options, here are some ideas to help you get started.
There are countless ways to earn passive income, some of which require a big upfront investment. Here are five options that may be within reach if you don't want to spend a lot of money to get started.
If you have expertise in a certain niche, you may be able to earn passive income by selling digital assets. Examples include craft patterns, PDFs, templates, stock photos, e-books, plug-ins, and more.
Digital products may not provide a lot of income individually, but if you can scale them, you could generate a significant amount of income. In some cases, you may not even need to update your products after you release them, so there shouldn't be a lot of ongoing effort required on that side of things.
However, it may involve a lot of upfront time investment, and you may also need to do some ongoing work to market your product.
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Car owners can rent out their vehicles using services like Turo and Getaround.
You don't have to spend any time marketing your car, so your costs are relatively minimal. But you will need to be available to hand over the keys, and you won't have access to your vehicle while someone is renting it. Additionally, insurance can get tricky if you're using the vehicle for both personal and commercial purposes.
Check out the services above to learn more about the process and whether it's a good fit.
If you have a lot of expertise in a specific area, you may be able to create an online course to teach others. The subject matter can be about anything, giving you a lot of flexibility to find the right approach for you.
Once you create the course, you can put it on a platform like Gumroad, Udemy or Teachable, after which you don't have to do much beyond making updates when necessary. However, there could be a lot of work involved with outlining, writing, and developing the content for the course so that it’s something people want to take.
Also, some platforms may charge fees or take a cut of your income, so take your time to compare various options before deciding which one to use. Depending on your expertise, it’s a good idea to do some competitive research first. Search for other courses in that niche to get an idea of how popular they are and what to expect in terms of cash flow.
Investing in the stock market and other financial instruments can help you generate passive income over time without a lot of upfront or ongoing work. Simply open a brokerage account and make regular contributions to your account.
With Acorns, you can even set up Round-Ups® to invest your spare change, rounding up purchases with your linked credit or debit cards to the nearest dollar and automatically investing the difference.
Stocks and other securities can be high yielding over time, and if you have a brokerage account that allows you to invest in individual stocks, dividend stocks and bonds can also provide ongoing income through their regular dividends or interest payments.
You can get started with investing with just a little bit of money, but it will take consistent contributions over a long period of time to generate a significant amount of passive income. Also, some brokers may charge various fees, so keep an eye on those to maximize your gains.
There are a lot of different ways you can earn passive income, and depending on how much money you have on hand and time, you may decide to pursue just one or multiple opportunities. The important thing to remember is that each one differs in how much time and money it requires to get started, how long it'll take to start earning money, and how much you can earn overall.
Take time to research all of your options and focus on opportunities that work for you based on your time, expertise, money, and other factors that are important to you.
This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Article contributors are not affiliated with Acorns Advisers, LLC. and do not provide investment advice to Acorns’ clients. Acorns is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.