The extra cash flow that comes from passive income can help you build wealth in a big way. Whether running a small business side hustle or just wanting easy, simple ways to bring in more monthly money, passive income is about earning extra dough with as little effort as possible. As inflation continues, any investor or wealth builder needs to do what they can to earn more to reinforce their purchasing power and maintain their savings.
Here are the most profitable passive income streams to invest in.
1. High-Yield Savings Account
What most people start with and usually settle for when it comes to passive income is a high-yield savings account. You put your money in an account designed to earn you interest. The interest rates are not necessarily the biggest returns from this list.
However, savings accounts are among the most profitable passive income streams because they are very low-risk. All you have to do is let your money sit there, and it accumulates interest all on its own without you having to invest or even think about it.
2. Invest in a Small Business
When you invest as a silent partner in a business, you can set up your agreement to reap dividends and profits without involving yourself in the day-to-day management. So long as you invest in the right small business, this can generate some comfortable passive income you can hang on to.
3. Invest in Mortgages
Invest in private mortgages by becoming a lender, working with a mortgage syndicate, or investing in a mortgage investment corporation or MCI. The risks can be relatively low if you’re smart about where you invest, the returns are high, and the passive income is steady. Investing in mortgages is one of the most profitable passive income streams.
4. Affiliate Marketing
Affiliate marketing is passive income that may appeal to web designers, website owners, social media influencers, bloggers, and individuals who follow online. You only have to add a link to your content with affiliate marketing. From there, you can earn a commission off the sale of specific product items through affiliate programs by sites like Amazon and others.
5. Invent and License a Product
Suppose you invent a marketable product that a large corporation sees value in. In that case, you can license your product to a corporation that will take over all the manufacturing, marketing, and distribution. In return, you receive payments without having to do anything more. The difficulty and risk here are in inventing the right product, which can prove a costly endeavour with much trial and error.
6. Invest in Stock Dividends
Certain stocks pay dividends on a quarterly, annual, or regular schedule. This puts passive income in your bank account simply for holding a stock. They are paid per share, meaning the more shares you own, the higher the payout.
7. Create an Online Course
An audio or video course you make once and then can re-sell potentially for years, if not decades, with updates to the information. There are lots of sites that you can use to promote a course. Many subjects exist on which courses can be built, such as language, mathematics, stock-picking advice, and small business entrepreneurship.
8. Buy a Rental Property
If you have a lot of money that you want to put towards a passive income investment for the present and future, a rental property that you hire someone to manage can be a hands-off way to build equity in a property while gaining passive income.
9. Create a Paid App
If you have a decent idea for a paid app, creating an app that is paid can yield a nice return for potentially years. There are thousands of apps in lots of different categories. If yours catches on and you can generate sales or sell advertising on it, this could mean lots of passive income that you don’t necessarily need to do much for beyond the initial putting together of the app.
10. Sell Photos, Images & Digital Paper
Etsy is a great example of a website where you can sell photographs you’ve taken, images, graphics, digital paper, prints, and more. Create the product once and sell it over and over again. Sell to a specific personality, find out where the demand is, and service it.
11. Rent Out Your Home
Another way to earn passive income is to rent out your home. People rent out extra rooms, their basements or upper level, or, if they know they will be away for an extended period, will rent out the entire property. You can pay someone to clean or manage the rentals and/or do it yourself. Either way, you’re earning cash with very minimal extra work.