I have been pursuing passive income for several years now, because putting less time into making money allows me to have more time to enjoy life. The more I work on my passive income streams, the less time I have to work in the future. Of course, no passive income is truely passive. It requires some maintainence and finetuning. Passive income can keep paying you back indefinitely.
Peer to Peer Lending – I have had success with Lending Club as an investor. I was looking to gain a stream of passive income by investing in loans with interest rates from 7% to over 20%. I learned the hard way that loans with interest rates higher than 20% have a high tendency to default, simply because the borrowers are less creditworthy and the interest is stacked against them. My best success has come from investing in notes with an interest rate of 10% to 15%. A 15% interest rate will double your money in 5 years. The payments come as both principal and interest, so all your money is not tied up all the time like it is with other investments. For best results, reinvest the interest to grow your money faster. A $10,000 investment in notes that yield 15% will earn you up to $125 per month in interest alone. Now that is passive income.
Dividend Stocks – Many companies pay their shareholders quarterly dividends. The annual yield depends on the share price, which changes every day based on how the company is doing. For some real estate investment trusts and energy royalty trusts, you can expect an annual dividend yield of 4% to 15%, depending on the company. Remember that the energy royalty trusts will run out eventually, within 15-20 years of their formation, so this is not a lifetime investment. You can also make money when the share price goes up. Beware of any dividend yields higher than 10%, because the company cannot grow if it is giving away too much money to shareholders. I have had some success with dividend stocks, though it does tax my patience. Payments only come once every 3 months.
Blogging / Writing For Pay – Some content platforms allow you to write articles and get paid based on the number of views they recieve. If you are willing to start your own blog, you can set up advertising and get paid everytime a visitor clicks on an ad. If your blog is evergreen, meaning that the topic never gets old, you can expect visitors to always keep coming back to your blog and making you money. Remember to keep posting new articles to keep your audience engaged. Do not expect to make a living off this passive income stream right away. You will have to be an expert at what you write about and compete with other blogs for web traffic.
Selling Stock Photography – If you are a talented photographer, you can sell your photography online and earn a passive income stream based on the number of people that download your photos. Beware that competition in stock photography is heavy, and they are extremely picky about who they accept.
As with all monetary ventures, passive income carries its risks. Some sources of passive income require large amounts of capital investment, while others you can build from scratch. Make sure you are passionate about whatever you decided to do and research your passive income idea to mastery. If it was really super easy, everyone would be doing it, right?