The idea of sitting in your living room and making money sounds very appealing to many entrepreneurs.
But is it possible to make money without lifting a finger?
YES! It certainty is.
In fact, the best way to make more money is by generating different sources of income. It is tough to become a millionaire with only one source of income.
That’s why you need to focus on building your passive income portfolio, in which case the additional sources won’t waste your time but still generate you some money.
So, where to start?
Well, there are many ways you can generate passive income, and in this article, we will highlight the best passive income ideas you should consider in 2020.
But first, you have to understand the whole idea behind the passive income.
What is Passive Income?
Passive income are regular earnings from a different source other than a contractor or an employer.
Many people misinterpret passive income, thinking that it is about getting something for nothing. Passive income still involves work. The only difference is that most of the work is done upfront.
The idea behind passive income is to make money from a product or service that doesn’t require your constant attention.
Best Passive Income Ideas In 2020
Now that we got that out of the way, it is time to see the best ways to generate additional income without putting too much effort. We are going to analyze the best passive income ideas and the risks that come with them.
1. Selling a Digital Product
One of the most popular strategies for generating passive income is selling digital products, such as an audio or video course, e-book, or other.
Since we live in times where digital goods are accessible in every corner of the planet, it is a shame not to use this to your advantage.
Starting an online course has been a popular option for generating passive income. The numbers suggest that online courses could earn from $0 – $50k+ per month. On average, course owners earn from $1k-$5k per month, which is a great passive income.
The best thing about online courses is that you only need to put effort when making your course. After that, you’ll send the course to each person that makes a purchase.
The same goes for publishing an e-book or any other digital product.
Here are some tips for starting your online service business.
Risk: The biggest risk of selling digital products is that it requires a massive amount of effort to make the product. Also, since the competition is fierce, your digital product must be great to make money out of it.
2. Property Rental Income
Investing in rental properties is another great way to generate passive income. However, the whole idea behind the passive income from rental is complicated.
It requires significant upfront investment and often more work than expected.
The best thing about investing in property is the return on investment. First of all, the value of your property has a positive growing trend, so it is highly unlikely that it will lose value.
Some entrepreneurs even say that it is much better to invest your capital into properties where you can generate passive income rather than in a bank.
Risk: Even though we are talking about passive income, the rental business requires quite a bit of work, as well as market knowledge. You have to know which property can generate you money and which property will be a huge waste of time and money.
3. Affiliate Marketing
Promoting third-party products by including links to the product or service is a nice way to make additional passive income.
In order to promote third-party products, you need to have a blog or social media account. So, you have to put in some work before you are able to generate additional income.
There are many affiliate programs from big companies like Amazon, eBay, ShareASale, and many more.
Once you add the link to your website, you’ll receive a commission every time someone purchases from your link. This means that you will be able to make money out of your links as long as the affiliate program is active.
Risk: There is a lot of competition, and you have to publish content and build traffic before you can start with affiliate programs.
4. Dividend Stocks
Investing in dividend stocks is a nice way to make extra cash without doing any work. Shareholders in corporations with dividend stocks receive a payment on intervals from the company.
In most cases, companies pay shareholders quarterly. The amount of money you receive from the company is based on the number (percentage) of shares you own. More shares equal bigger dividends.
Dividend stocks are part of our best passive income ideas for a good reason. You can also become a stock trader and earn money by trading with stock prices and, at the same time, get some extra cash from the dividend.
Risk: Even though this is one of the best passive income ideas, you cannot expect to make millions of dollars from your dividends. The income you receive from the dividend is not something that will blow you away.
In fact, the average dividend yield is about 2.22%, so your dividend depends on the amount of money you are willing to invest in stocks.
The biggest risk comes from choosing the right stock. After all, it is not only about the dividend. You can invest in a stock that plummets down and loses its value. That way, you will lose your profits from the initial investment.
5. Consider Peer-to-Peer Lending
The whole point behind the best passive income ideas is to have a higher return rate on your investment. That is where peer-to-peer lending comes in handy.
If you become a part of a lending club, you have to invest some amount of money that will be used to help other people start a business, buy a car, etc.
A lending club is organized just so the people can avoid going to other financial institutions. You will get your profits from the interest that people are paying when they borrow money.
Risk: The passive income from peer-to-peer lending depends on the amount you are willing to invest. Additionally, you have to make a contract and involve a lawyer since you’ll be entering a sensitive business that can go the wrong way every second.
6. Sell Pictures Online
If you love taking photos or you travel a lot to different places, maybe it is time to turn your passion into passive income. The stock photography business is one of the best passive income ideas that can generate quite a bit of money without lifting a finger.
Now since smartphones are equipped with awesome cameras, you can take photos wherever you go and make money out of them.
Here are some of the best places to sell your photos online:
7. Create an App
If you are looking for a bigger project that can generate a high income per month, you should try creating an app. Making money with apps is one of the most profitable passive income ideas out there.
First of all, you don’t have to be a professional app developer to make money out of ads.
Since we live in times when you can hire a freelancer to execute your idea, it is much easier to start a passive income business.
The app market is very competitive at the moment, so you have to make something spectacular to get people’s attention. Having an app will allow you to make money through ads or in-app purchases.
There is no limit to the passive income from apps. If you develop the right app, you will be able to make more than $10k per month, so it should definitely be looked into.
Risk: Developing an app requires a significant upfront investment, especially if you don’t know what you are doing and hire someone else to take care of things. Also, the app market is very competitive, which means it is hard to prosper with all the hard-core companies that invest a lot of money in their projects.