Ever wondered how to generate money in your sleep? Here are 5 guaranteed ways to earn passive income no matter where you are in the world.
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#1. Invest In Index Funds
An index fund is a type of mutual fund that tracks the market index of pooled investments. These index funds provide broad market exposure with low operating expense. Some of these yield a whopping annual return of 10%-20%!
This type of investment can be short-term but is mainly used as a long-term strategy for building wealth. Depending on the performance of the index fund, these yield passive earnings (dividends) as the market fluctuates. Here are some tips to choosing the right index fund for you!
- Be aware of the expense ratio. The lower this number is, the smaller the fee is. A low expense ratio would be 0.03% while a hefty one would be 1.00%+
- Check the funds performance history. You should be investing in a fund with a great performance history, especially if you’re just starting out. The market is consistently going up and down but if a funds history shows it has a great track of continuously going up, then it’s sure to keep growing in value.
- Choose a fund that invests in companies that you follow and are genuinely interested in. This thought process allows you to invest in companies comfortably and confidently. Don’t invest in a company you haven’t done your research on.
Index funds are a great way to earn small passive income that eventually snowballs over a long period of time. You can invest in index funds by opening a brokerage account.
#2. Open A High Yielding Savings or Money Market Account
Investing your money into a high yielding or money market account will bear money every month. It will not fail you. Instead of having your money collect dust in your personal savings account, move some of it to an account that will put your money to work and pay you an interest for holding it. Here are some tips to how you can make the best out of this strategy:
- Choose a bank that is FDIC insured. This protects your assets.
- Look for banks with the highest paying interest to make the most of your hard earned money.
- Deposit money every month. By depositing earnings every month, interest will accumulate on the deposits made, the initial deposit, and all interest earned! This creates a snowball effect by multiplying your money, also known as compound interest.
This passive income is guaranteed every month and is much more effective than a regular savings account.
#3. Rental Income
If you own property, you can establish passive income by renting it out. Each bedroom you aren’t using can generate you passive income year-round! Write a rental agreement that details the rent amount, due date, whether utilities are covered or not, and conditions of living space in order to set some ground rules clear.
Another great idea is to enlist property you own on Airbnb. Airbnb is great especially if your property is near a popular tourist hot spot. List all the awesome areas near your property to attract visitors year-round.
Consider renting out storage space in your home if you have the room for it. Neighbor.com allows you to find people in your area looking to store their personal belongings. This makes it easier for you to find prospects without the hassle of marketing your service online. Renting your space is one of the more underrated strategies to earn passive income.
A REIT is similar to an index fund and is another great way to earn passive income. By investing in a REIT you invest specifically in real estate companies.
These funds have a higher dividend gain than most index funds and have better traction when the market isn’t performing at its best. REITs own income-producing real estate such as offices, apartments, warehouses, hospitals, shopping center, hotels, etc…
The awesome thing about REITs is that you invest in real estate without involving credit, large amount of upfront cash, or closing deals yourself. Similar to an index fund, you want to invest in companies that are high performers and have the biggest returns in history.
#5 – YouTube Content
YouTube content has allowed many people to earn passive income through the use of placed advertisement in their videos. Find a niche and grow an audience. Meet the requirements to monetize your videos so you can start making money in your sleep. This will require your time and dedication so write a plan and take action to see it through.
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