5 Passive Income Streams You Can Start Today

Let’s be realistic, we all want to earn money without having to go to a full-time job. That’s the dream, right? Well, what would you say if we told you that it is possible?

Yes, you can do it! There are some passive income streams you can learn more about right in this article.

First of all, we need to learn the meaning of passive income.

What is passive income?

Passive income is the money you receive without being directly involved in a job. In simpler words, it’s money that comes to you without having to work constantly for it.

For example, when you invest money into a business agreeing that you will receive a percentage of the earnings. At the end of the month, the money you receive for what you invested is your passive income (provided that you were not involved in the operations of the business).

You can see passive income as planting an apple tree. First, you need to look for the right place to plant the right tree. Then, you must take care of the tree so it grows. You need to water and fertilize it.

As the tree keeps growing, it needs protection from pests, insects, and in some cases even animals. However, it will reach a point in which you won’t need to care for it as much, as it will be strong and healthy, providing delicious apples without you having to do much work for them.

The same thing goes for a passive income stream. First, you need to invest some time and/or money if you want to generate income. Then, you have to check every now and then if everything’s working out well. As time goes by, and if you do things right, you will reap the benefits of your investment in the form of passive income.

Now that you know about passive income, let’s check out some examples of passive income streams.

Here are some passive income streams

If you know where to look, you’ll find that there are several ways in which you can develop sources of income that will keep making you money on their own.

Here are some of the most popular passive income streams:

• Rental properties: If you own a house, department, or even an extra room, you have a potential source of passive income. If you rent it, you will be earning income with little to no work at all.
• Affiliate marketing: You could get paid for promoting a product online. The magic happens when your promotion campaigns reach hundreds of internet users and the amount of sales commissions increase with the same amount of work.
• Create and sell online courses: If you are really good at something, you can create a course from it and sell it online. Cooking, playing guitar, solving complex math problems… Whatever works! Once your course is published, it can generate sales for years to come.
• Create a blog or a YouTube channel: You can get paid for showing ads on your digital content, so this might need a little more work upfront. Nevertheless, if you make a name for yourself, ad viewers will keep coming in passively.
• Invest money in a startup business: If you know someone who needs money for their business, you could invest in their startup and become a business partner.

All these examples of passive income streams might work out for you, but you haven’t seen our best recommendation yet. Are you ready?

Invest your way to passive income streams

One of the most popular and accessible passive income streams is investing in stocks.

As you should know, stocks are pieces of a company that represent the percentage someone owns of an organization. You can buy stocks of almost every important company around the world, depending on the stock market you focus on.

“How can I earn a passive income through stocks?” you may ask. Well, there are several methods:

Dividend stocks

The most common way to turn your investments into passive income streams is through dividends. Dividends are a company’s earnings distributed to the shareholders (yes, that’s you).

You can invest in a big company and you’ll receive dividends each month, quarter, or year.

Read also: Use dividend yield to make wiser investment decisions

Investing in dividend stocks is highly recommended by very successful investors, as the passive income you’ll receive can make your investment grow exponentially over time thanks to compound interest.

Growth stocks

Another way to earn a passive income by investing is growth stocks. These are stocks from companies that, as its name suggests, are expected to grow at a faster rate than the average.

For instance, imagine you bought some Amazon stocks just when they launched. If you had bought $100 worth of stocks at their initial price of $18 per share, by the beginning of 2020 your investment would have been worth around $129,186, with a total return of 129,000% over your initial $100.

As you can see, investing in growth stocks means that you can see revenue in less time than with other kinds of stocks. Their stock price often increases faster, so you can choose either selling them for good capital gains, or keeping them for future profits.

You won’t be earning a recurring income as you would with dividend stocks, but growth stocks are, without a doubt, a perfect way to let the value of your money increase passively over time.

The takeaway

As we mentioned previously, generating passive income streams by investing in stocks could be the most accessible option for everyone. This may be because you don’t need to put in the initial effort to create an asset like a course or a blog. Yes, you need some money for your initial investment, but with fractional share options now you can get started with as little as $5.

If you want to learn more about the stock market and some top tips to be a successful investor, make sure to explore our blog and read the rest of the articles. Surely you’ll find a lot more useful information!