TIM THOMAS

5 Awesome (and Easy) Passive Income Ideas- Story

Most people think of income as something they work for. Go to work for a day, get a day's pay. Passive income is money you earn even when you're not working. It takes some investment of time, money, energy, or all three, but then the money just comes in, helping you pay off a student loan, dig out of credit card debt, save for retirement, or advance other personal finance goals.

Passive income is defined as income that requires minimal effort to earn. For example, if you invest some money and your investment increases in value, that's passive income. If you create something digitally–like a video or a song–and you get money every time someone views it, that's passive income. It is a form of income that builds you wealth even when you're not working.

Since you're busy living your life, you want to build a passive income stream that eventually works while you sleep, play, socialize…whatever you want to be doing with your time. If you already have an asset that you are not fully utilizing, that can serve as your investment. If you have money that's just sitting in a savings account, you can instead put it somewhere where it will earn more money, letting you invest in your future.

These truly passive income ideas require a one-time investment followed by zero future effort. There's no upkeep, no fuss, no muss, and these are some of the most straightforward passive income ideas to implement.

1. Alternative Assets

Alternative assets, or alternative investments, are often headline news. Because traditional investments like stocks and real estate sometimes involve a lot of market volatility, and savings accounts only offer low-interest rates, people are looking for other options. Some of the more popular alternative investments include hedge funds, private equity, crowdfunded real estate investments, and commodities like wine,  geeky collectibles, and even luxury watches.

2. Passive Real Estate Investing

Talk to any landlord, and they'll tell you that “passive” is the last word they'd ever use to describe apartment management. However, many companies give you the ability to invest in commercial and residential real estate projects without being involved in the day-to-day management. One example is DiversyFund. It's a private REIT (real estate investment trust) that allows you to passively invest in professional real estate for as little as $500.

3. Earn Passive Income with Lending Club

If you're looking for another way to earn passive income, you may want to consider Lending Club's peer-to-peer lending platform. Lending Club allows passive investors to diversify their assets by investing in different types of loans. Lending Club will enable you to loan your money out to people and groups looking for funding. The type of loans you choose will determine your investment return and risk exposure.

5. Open a High-Interest Savings Account

Savings accounts are a reliable way to protect money–but not to increase it. Sadly, brick-and-mortar banks barely pay any money in interest, and institutions like Wells Fargo, Chase, Bank of America, and others pay around 0.08% interest. So you could have $100,000 in the bank and earn less than $100 per year in interest. That's nothing! That's why keeping your savings in a high-yield savings account is clutch.

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