Best Passive Income Generators 2023: How to Earn Passive Income
There has never been a better time in the 21st century to uncover the best passive income generators.
Passive income has become a major focus for people looking to supplement their income. They often do not require much time or work, and your earning potential is unlimited.
So, if you think your present earning is not enough to meet your basic needs, then you had better start considering a passive income strategy. And even when your basic needs are met, but you’re unable to do extra savings, pay off loans, achieve future goals, or give yourself good vacation treats, you would need to start considering additional ways to generate income for yourself without necessarily putting in lots of work.
By discovering suitable passive income strategies that will work for you, you will multiply your income while still keeping your 9-5 job.
What Is Passive Income?
Passive income can be described as revenue generated from a source different from a paid job or contract. According to the Internal Revenue Service (IRS), this kind of income can come from a business that you are not actively involved in, a rental property, or stock dividends.
Just like any other stream of income, it would require some level of work, which may be upfront or along the way, to keep the income flowing. In the case of a rental property, you’ll need to ensure proper maintenance of the property or update your products.
The beautiful thing about this is that if you are committed to passive income generators, you can turn them into your primary source of income.
Here Are The Best Passive Income Generators 2023
1. Dividend Stocks
Dividends are portions of a company’s shared profits paid to the company’s stockholders. They are one of the ways investors can earn passive income.
So, if a company pays $2 annually on dividends, and you own 30 shares in the company, you’ll get paid $60 for that year. Aside from owning stocks in a company, you really have no task to carry out to receive your payments regularly. Dividends are paid per stock share, so the higher shares you own in the company, the higher payout you receive.
Owning dividends-yielding stocks is a reliable passive income generator, especially since your initial investment is all you need.
However, the tricky part is identifying the right stocks to invest in. Companies that issue sky-high dividends may find it hard to sustain it. So, it is crucial to give yourself ample time to investigate the company.
If you are struggling to pick a specific company you are confident will increase or maintain its dividend, you might chose to invest a dividend ETF, of which there are plenty to chose from.
Real Estate Investment Trust (REITs) are companies that own and manage real estate. Investors’ money is pooled together and directed into real estate assets such as hotels, shopping malls, serviced apartments, offices, or residential apartments, which are used to generate profits that are distributed among REIT holders.
A typical way a REIT structure works is to get investments from unitholders through an initial public offering (IPO), which REIT subsequently uses to acquire different real estate properties leased out to tenants who produce profits for the unitholders.
REITs are usually handled by professionals in the industry who distribute revenues at intervals after taking account of fees such as property management fees, trust fees, and REIT management fees.
Investing in REIT works just like investing in dividend stocks through brokers. The core focus is to generate income distribution and long-term appreciation potential.
You can purchase them on the stock market just as you acquire dividend stock. You’ll receive whatever it pays out as regular dividends, which can increase yearly.
3. Car Rentals
Passive income can be generated from renting out your car, especially if you rarely use it or have alternatives. There are car rental apps such as Turo, Expedia, Hertz, Enterprise, and Rentalcars.com that can make your car rental goals a reality.
Give your car an edge to being rented frequently by offering discounts with a minimum amount of rental days to increase your revenue.
Renting out your car is a passive income generator that will not interfere with your primary source of income, especially if the car you are renting out has nothing to do with your primary job. The income potentials of this business can run into several hundreds of dollars each month.
This means that you can recover the total cost of acquiring your car within a few months. Aside from this, you can also rent out your parking space and car equipment for additional income.
Do your research ahead of what these items and facilities cost in your area, and offer discounts to increase being patronized.
Transcribing for individuals and companies will give you the kind of flexibility you want while still making good cash outside your regular job. You can easily decide what you want to do each week and make more savings to achieve your personal goals.
Online platforms that offer transcription jobs include Transcribeme, Gotranscript, Rev.com, Upwork, Indeed, and Fiverr. There are several others out there, and they pay per hour for each job. In essence, if the audio file you are transcribing is one hour long, you’ll get paid for one hour of transcribing.
Transcription jobs are often broken into legal, medical, and general categories. So, you can simply opt for the option that suits you. You’ll find many opportunities with big companies that will pay you awesomely. But it is advised that you gain lots of experience with individual clients first.
For an efficient transcription session, you’ll need equipment such as headphones, foot pedals (to pause clips while your hands are free for typing), a computer, sound-enhancing software, and a good internet connection. There are also paid apps like Otter and Zapmeta that may be very helpful in speeding up each transcription process.
5. Vending Machine Business
Vending business is a business that is often overlooked. But it is one great way you can earn extra bucks per week. The location you pick has a huge role in the success of the business.
If you have a vending machine in a strategic area, you can generate up to $100 per month. If you have more, you’ll increase your earning potential and can earn up to $1000 weekly – depending on the number of machines you have and their locations. However, before starting this business, ensure to acquire the needed permit and license with your state.
To get started, consider all your vending machine options. This includes bulk vending, food and drink, and speciality vending.
Get a perfect place with good human traffic where you have a high chance of generating good profit. Have an agreement with the proprietor.
A successful vending machine business operation requires that you invest in tools that will increase the efficiency of your business while also prioritizing customer service.
6. Peer-to-peer Lending
When you offer lending funds, you’ll get income on the interests that borrowers pay on loans they receive. But this method may be quite risky in the case of defaults. Since the loan is unsecured, you could lose your investment if borrowers refuse to pay back loans.
You can reduce this risk by diversifying your lending portfolio – lending in smaller amounts over diverse loan offers. And you can also take time to analyze a prospective borrower’s historical data to make informed decisions.
7. Rent Out Spaces And Items
Many do not think their empty spaces and unused items can become passive income generators. In fact, platforms like Airbnb, ForRent.com, and Apartments.com are already being widely harnessed to generate extra income from spaces around the home.
For renting out household items, you can use sites like Turo.com, Spinlister, SuperHero, Neighbor.com, and a host of others. You can rent out parking lots, storage spaces, and items people will be willing to pay for on rent.
Search around your house for items that are in good condition and will also be beneficial to people out there. Do you have mechanic tools and toolboxes? Lawnmowers? Tents? Huge coolers?
These items may fetch you some really cool side income every month if you can put them to good use. Find out where people will mostly need your items. Even if you do not have it, and you are sure there is a high demand for it, you can buy it and recoup the item’s value after a few uses.
However, put measures to secure the items from being stolen and for repairs if they get damaged.
8. Selling Online Courses
If you are knowledgeable in a particular field of study, you can create a course around it to impact the knowledge to others. Sell the course on websites like Udemy, Skillshare, LearnDash, Thinkific, and Teachable.
You’ll find out that this passive income generator is one of the best ideas, as you can connect to a wide range of audiences around the world without the need to do any extra work. You may only need to review the contents periodically to make them stay relevant.
The work you’ll put into the course or ebook at the initial stage may be much. But once this is done, it can continue to provide you passive income for many years. In addition, if you have other passive incomes, you can promote them using the course as a medium.
9. Create An App That Solves A Problem
Creating an app that solves a basic human need can offer tremendous rewards over several years in the future. The app might be a fascinating game that makes it easy to carry out complex tasks.
When people begin to use the app and see how good it is, they’ll refer it to other people who will also refer it to more potential users, thereby growing your app’s user base.
With a good app, you can generate income by making some of its essential features require a paid subscription. You can also create space for sponsored ads and subscribe on advertising networks like Google AdSense.
Additionally, if you aren’t sufficiently tech-savvy, you could easily outsource the app’s creation to developers on freelancing platforms like those stated earlier to ensure it’s built to the best standard for its prospective users. Website’s such as Fiverr have made this easier than ever to pay freelancers to make an app for you.
There are huge benefits of creating a problem-solving app, and the revenue potentials can be massive. As your app continues to gain so much popularity, you’ll need to include incremental features to keep it popular and relevant to users. However, it is crucial that if your app collects the data of users, it must comply with privacy laws that differ from country to country.
10. Investing In High-yield Savings Account Or CD
Investing in a high-generating certificate of deposit (CD) or savings account at an online bank can offer you passive revenue steadily without you having to do anything extra.
A high-yield savings account can offer you an easy boost on your savings beyond what you’ll have gotten in regular savings or checking account. It may not be very huge, but it is a good source of passive income. With CDs, your money would be held up more than it would be in a high-yield savings account.
To get the best offer, you’ll want to research around for top savings accounts or CD rates. You’ll very likely get better rates with an online bank than a local bank, as you will be able to select the top available rates. With this, you’ll still enjoy a principal of up to $250,000 in guaranteed returns if your bank has FDIC backing.
As long as your financial institution has the backing of FDIC and is within stipulated limits, it guarantees a safe return on your investment.
You do not need lots of skills and time to benefit from passive income generators. Rather than allow spaces around you to remain unused and unyielding, find a way to offer them out for some easy cash.
You can also rent out your car, allow advertisements on it, sell courses online, consider dividend stocks, transcription, and others. And then, watch your money grow!