Making money while you’re sleeping, traveling, or just watching Netflix sounds too good to be true, but it’s actually possible. It is possible to make a large amount of money with minimal effort. Here are practical tips on how to start earning at least $100,000 annually from passive income sources.
What is passive income and why you should care about it
Passive income is simply income that you don’t have to work for. In other words, it’s money that comes into your bank or business account without having to put in more than an initial number of hours.
Earning passive income is the best way to significantly grow your wealth in the long run. It allows you to focus on the things you enjoy without having to worry about money.
There are many creative ways to earn passive income, from renting your car to opening a self-service laundry. Some require more preliminary work than others; Some require you to be skilled in certain areas; Some require a high initial investment while others require no investment at all, and finally, some require a long time before you begin to see the benefits of your efforts. In this post, I will focus on people who can help you start making money right away.
7 ways to start earning passive income in 7 days or less
#1. Invest in real estate
If you think that this is not something that can earn you $100k per year or more in just one week, you are wrong! Real estate is a great form of investing, and the key to earning fast is knowing what type of real estate to invest in.
You can start making passive income as soon as you invest if you choose rental properties that already have tenants. The amount you will earn depends on the net rental income (NRY) in each particular area. This tells you how much you’ll make on your rent after accounting for property taxes and other costs.
NRY varies greatly with location. It can be as low as 0.1% or less in certain cities in Texas and New Jersey and as high as 21% in some counties, with an average of about 3.5%. On average, then, you would have to invest approximately $3 million to reach a passive income of $100,000 annually.
#2. High Interest Savings Accounts (HISAs)
Savings accounts are perhaps the simplest (and most boring) way to earn passive income. You just make a deposit and let it grow over the years. It’s an easy, low-risk, low-return way to invest your money to earn passive income, and it takes absolutely no time to get started. This means that you can do it by today, and you will already earn interest before tomorrow.
I’m not talking about regular savings accounts, of course. You need to open an account that will earn more interest than that. There are high interest savings accounts that will help you get more money and grow.
The best available HISAs offer an annual return of 0.55%, so you will definitely have to invest a lot of money to make a decent income from this type of account.
#3. Rent your car
Do you have an old car sitting in your driveway? You can make money from it using apps like Turo or Getaround. Peer-to-peer rental companies will let you rent your car on a daily basis. It’s a good way to earn extra money if you don’t use your car and don’t plan to sell it.
This is a great option for those looking to make some quick cash passively within their community (as long as there is demand), even if you are a busy person.
#4. Outsourcing Your Freelance Business
If you work as a freelancer and have a name for yourself, you can use your experience and reputation to quickly find many new contracts on platforms like Freelancer.com and Upwork. You can then outsource the work to another freelancer who has trouble getting employers to look their way. This way, you can earn the difference between what your employer pays you and what you pay the other freelancer without putting in the effort.
It requires this independent work and turns it into passive income instead of a job. However, it does have its challenges, as finding the right freelancer to take care of the job can be difficult, because you want to make sure that they can do as well as you do.
Depending on your industry and how easy it is to find new clients, this can quickly turn into an income stream many times higher than what you originally earned as a freelancer.
#5. Peer-to-peer lending
Perhaps the easiest way to earn passive income is through peer-to-peer lending. This includes lending money (usually via a website platform like Peerform, Upstart, or Prosper) to people who need fast cash.
In terms of return on investment, this would give you much more decent income than depositing your money in a savings account (even if it’s HISA). It’s usually easy to get an interest rate around 5% if you avoid higher-risk loans, but it can also go as high as 30% for riskier options.
You can lend as much or as little as you like, but I recommend staying away from any loans over $25,000 because this type of lending comes with a higher than usual risk of default.
#6. Selling Potential Customers
Many companies are lead magnets. They attract people with an irresistible offer that brings them, although they do not intend to immediately buy what the company sells. These leads could be very valuable if you could sell them to another company looking for more leads.
So, if you already have a website that allows you to passively attract leads, then selling those leads now and then will turn them into passive income. This only works in a week or less if you already have the mechanisms in place to expand your list. If you need to start from scratch to create and market a website, it will take much longer than one week.
#7. Monetize Your Blog
If you already have a long-term blog with a lot of readers, you can turn it into a passive income earning machine in less than one week by monetizing it. There are many ways to monetize your blog, both free and paid. The easiest ways include:
- Show ads on it (either via Google AdSense or similar platform)
- Writing sponsored posts
- Join an affiliate program.
However, keep in mind that you have to be careful with some of these options. If the ads are too annoying or have nothing to do with your content, they will not attract many visitors and may harm your reader base.
The same goes for affiliate programs. However, if you want to get into this, there are many beginner affiliate programs that you can try.
How This Entrepreneur Got Six Figures in Passive Income
I recently spoke with Lucy Corvald, co-founder of personal finance website How I Travel. Over the past several years, Corvald has built How I Travel into a site that earns five figures annually. This is a short version of our interview.
Q: How much do you earn from How Do I Travel today? How much of this income was passive?
A: Today, I earn over $100,000 annually from How I Travel. Most of that is passive income earned through affiliate deals and ads, although some of it – like sponsored posts – isn’t entirely “passive”, as it does require some work in the form of brand communication.
Q: What is the most difficult part of creating passive income for you?
A: The truth is that there is very little that is actually “negative” about creating passive income. There is a tremendous amount of work up front, and you are only reaping the rewards of that work on the back end. So the hardest part for me was balancing the heavy workload with my other responsibilities, as well as trying to maintain some semblance of social life. That was especially difficult in the early years, but now it’s a lot easier because the momentum is on my side.
Q: What is the best part about creating passive income?
A: I mentioned this in my last answer, which is that the rewards you get from passive income can be exceptional. Being able to make money while you sleep will change your life because it separates your earnings from your time.
It also means that increasing your income is much easier: if you work hard this month, you will reap the benefits of that hard work for months and possibly years to come. There is no limit to the amount of passive income you can earn, but there is a limit (depending on your industry) to how much you can sell your time for, so if you are looking to get really rich, developing passive income streams is the way to do that.
Caitlin Pyle is another example of an entrepreneur with a large passive income. In Pyle’s case, that income comes from Proofread Anywhere, an online proofreading course. Proofread Anywhere reviews praise its thoroughness, which is a direct result of Pyle’s more than 10 years in the proofreading industry. And while Pyle isn’t as transparent as Corvald about her earnings, she is open about the fact that she now earns more selling courses than she ever did when she was selling her time for money as a proofreader.
If you are looking for a way to make passive income in 7 days or less, there are many ways to do it, and it doesn’t matter if you are in your 30s or 50s. Some methods are more risky than others but offer higher rewards (such as peer-to-peer lending), while others are easy and secure but require a high investment to achieve $100,000 or more each year. However, the bottom line is that earning significant passive income is absolutely possible, as entrepreneurs like Corvald have proven time and time again.
So what are you waiting for? Why not start building your next passive income source today?