Do you want to build up residual income? These residual income ideas are perfect if you need money now, looking for a side hustle, or want to earn extra money in the long term.
With the current state of the world, many people are looking for additional income opportunities. They want continuous payments over time, without being paid only based on the hours they put into their work.
Creating a source of passive income to make money while you sleep helps you build wealth over time. It will make sure you increase your liquid net worth and work toward any financial goals you have set for yourself.
If you not familiar with residual income? This post will break down what you need to know about residual income and how you can start to build it.
Residual income means that you make money after you’ve done the initial work. You have invested time, money, or both. Over time, you start to make money without having to do any active work for it.
There is this belief that you don’t need to do anything for passive income. However, you need to invest time to get it up. Besides, you need to invest minimal time to make sure that everything is running smoothly.
Let’s say that you want to invest in real estate. You look for a home you like, which takes time and money. When you’ve found it, you have to invest time or money to communicate with the tenants.
The main idea behind residual income is that you will create something that people will buy after investing time or money in it. An example would be an ebook, an online course, or buying rental property.
So, when someone is talking about residual or passive income ideas, know nothing is 100% passive. There’s no “get rich quick” solution where you will buy something that will pay you for the rest of your life without any effort.
Do you dream about having to work less and spend more time with your family? Investing in either time or money will be necessary upfront. Let’s get into the details of how to build up residual income streams.
In the digital age we’re currently living in, there are dozens of opportunities to earn residual income. If you want to make money online or create multiple streams of income, this is for you.
Besides the classic real estate investments and dividend stocks, we will show you the best residual income ideas you can work on.
Are you the person who always wants to be the bank when doing Monopoly? Now you’ve got the opportunity to be a real bank.
With peer-to-peer (P2P) lending, you can loan your money to people, your peers. They will pay you back with interest.
You can use peer-to-peer investing platforms to invest your money. These platforms bring together people and businesses who are looking for a loan. They match them with the people who have money to lend.
The borrowers often don’t qualify for loans from institutions like banks. They are willing to pay a higher interest rate, which benefits the lenders. Be aware that the higher the interest rate, the higher your risk generally is.
Purchasing rental properties and investing in real estate is a classic way of creating residual income. Real estate investing is great because you get a steady stream of side income with many potential upsides.
For the majority of the months, you will have tenants renting your property. Plus, real estate has a fixed value, and it is tangible. That makes it one of the classic residual income ideas.
Real estate investing can take a lot of time when buying a property, and dealing with tenants can be a hassle.
If you’re not up for buying a property, it is possible to invest in real estate through Real Estate Investment Trusts (REITs). REITs are companies that invest in real estate, and you can get a share of their rental income. They are 100% passive and give you consistent residual income over the underlying property.
REITs are more like stocks in the sense that you can sell them whenever you want. They are more liquid and quick to cash out. Most REITs will pay dividends monthly or quarterly.
When we talk about investing, many think it simply isn’t for them. Investing seems too complicated or only for rich people. Luckily, it’s easier than ever to get started with investing.
There are dozens of companies that can help you to start investing. Some companies support you when you set up your portfolio, while others will create a portfolio based on your preferred risk allocation.
That’s why investing is a fantastic residual income idea. There is little time investment needed to set it all up. When you have set it up once, you can get a quarterly dividend without lifting a finger.
There are several ways of investing available:
- Check out Robo-investors. Robo-advisor is a software that helps you determine how to invest your money based on factors you fill out. They manage your investments automatically, and the costs are low. Options here are Betterment and M1 Finance.
- Manage your portfolio. When you are sure which stocks or bonds you want to have in your portfolio, you can manage your portfolio. That way, you can select what you want to buy.
- Invest in index funds. Index funds are popular nowadays, as these are packages of investments following an index (for example, the S&P 500). When you want to invest in index funds, M1 Finance is a platform that has zero trading fees.
If you have some high-income skills like programming or coding, creating an app is a great way to make residual income. You could create a gaming app or a to-do list app, for example.
When you don’t have programming or coding skills, but have a great idea, try a platform like Upwork to outsource the app development.
The moment you put your app in the app store, you can start receiving income. If you build a simple app that is unique in its field, you may be surprised by how lucrative it can be.
Do you have specific knowledge that others want to learn? Create a digital product. Online courses are gaining in popularity, making them a great way to create residual income.
It may be overwhelming in the beginning, when you don’t know where to start. Here are a couple of steps you can follow:
- Do you want to create a video or written course?
- Decide on which topics you want to include
- Outline the topics that you want to discuss.
While creating an online course is a great way to make money from home, it does take time to make and sell it. At first, it will probably feel like an active income. If you want to generate income and build passive income streams, there is some hustle involved in the beginning.
Writing a book is a textbook example of making residual income. Once you’ve written the book, there is no limit to how many copies you can sell.
You can write a book about something you’re interested in, fiction or nonfiction. When you have written your book, there are several paths to take. You can go to a publisher, you can publish the book yourself, or you can do it through a service like Amazon Kindle. You can decide if you want to publish it as an ebook or hard copy.
When you’ve done with work and written the book, the money can continue to come in.
To increase your chances of being successful, talk about something relevant that people want to learn. Even in 10 years, you want your book to be relevant and help people.
Are you currently working from home, and would you love to continue that for a while? Blogging will allow you to work from home while building up residual income. Starting a blog is quick and cheap.
You pick something you love to write about, stick to writing weekly posts for 1-2 years, and build up traffic to your website.
If you’re looking for some money on the side and love to write? Check out this step-by-step guide to starting a blog!
It does take a fair amount of time and effort to build your blog. Most blogs monetize by selling their products or services, banner ads, or affiliate marketing.
With affiliate marketing, you promote a product or service that you enjoy, and you get money when someone purchases your affiliate links. That way, you can make passive income once you’ve written an article.
Over time, you will get more readers, which is how you build up your blog’s income. Blogging is a popular way to make income online and create new income streams.
If it sounds like a lot of work to build up your platform from scratch, you can always buy an established online business. If they already have residual income, you can pocket that.
Go to platforms like Flippa or Empire Flippers to buy your new online business.
Does real estate interest you, but you don’t want to deal with tenants? Try self-storage units as a way to build a residual income with minimal work.
You will be surprised how many people are looking for storage space and are willing to pay for it. With minimal effort, you may get rich while you sleep this time.
Start your own YouTube channel and put yourself out there. Building a following will build your residual income up with it.
Choose something you’re passionate about, and start a YouTube channel around that topic. You will need to make regular videos to grow your following, so you want to enjoy doing it. Promote your videos on social media channels and get people to look at them.
You can make extra cash on YouTube when you advertise through Adsense. The more people watch your videos, the more money you will make.
When you’re worried about the editing and video skills you need, don’t worry. There are plenty of platforms that help you cut your videos. It does cost a lot of time in the beginning, when you’re not used to making videos.
Over the last couple of years, savings accounts have become less and less popular. It makes sense, given the interest rate that has dropped rapidly. You don’t want to put all your money into a savings account and have it there until retirement.
Saving money and putting it in a high-yield savings account can generate residual income for you. When you’re saving for a big purchase, or you have a full 3-6 month emergency fund, putting it in a savings account may be just the solution for you.
Are you located in a popular area where the rental market is tight? Or are there many tourists in your area? You can rent out a room in your home. How is that for a residual income business!
Before the pandemic hit, we were traveling for a couple of months in Central America. When we are traveling, we love to use Airbnb. It is convenient, comfortable, and often cheaper compared to hotels.
Online content creators need photos daily and are willing to pay for great stock photos they can use online. All you do is upload your pictures to the platform. The platform will take care of the rest.
Once you’ve made your picture, you can sell them over and over again. If you’re putting your photos on different platforms, your income can become passive over time.
Similar to selling your photos, you can license music. When someone uses your music, you get paid for it through royalties. You don’t have to make songs. You can also make sound effects or beats.
The more music you make, the better it will probably get. If you’re building your portfolio, you can earn residual income over time. Upload your music to Soundcloud, and you will get paid every month.
These residual income ideas should give you enough inspiration to use residual income to build real wealth. You can earn more income every month and put that toward your financial goals.
When you’re currently working a day job, you can add other income sources to start building wealth. Adding other income sources and different streams of income can make you a lot of money over time.
Pick one from the list and get started. Put some time and effort into it, as you may not be profitable and earning money from day one. Build up your residual income streams today, and enjoy making money for years to come.
What are your favorite ways of making residual income?
This post was produced and syndicated by Wealth of Geeks.
Featured Image Credit: Pexels.