When you’re a remote worker, you often have the luxury of time flexibility. It allows you to look for passive income jobs that ease some of your financial burdens.
With interest rates shooting up across the world, nothing comes cheap. A good source of passive income can help out. Whether you want to pay your loans or invest in high-risk, high-return financial instruments without taking a chunk out of your primary income, a passive income job is a way to go!
But let’s face it! Passive income jobs are not easy to carry out. It involves planning, hard work, and also research. Figuring out what to do is a headache altogether. But don’t worry; we’ve got you covered!
In this article, we’ll explore a few examples of passive income jobs, tips to take them up and why you should take up passive income jobs. But first, let’s understand passive income.
Passive Income Ideas
- Peer To Peer Lending
- Real Estate
- Dividend Stocks
- Index Mutual Funds
- Rent Out A Storage Space
- Write Books
- Non-Cumulative Fixed Deposits
- Enlist In A Company That Does Multi-Level Marketing
- Freelancing In Various Domains
- Buy And Sell NFTs
- Invest In Fine Art
What Is Passive Income?
Passive incomes come from sources in which you’re not directly involved. It could include rental property, limited partnership companies, returns from stock markets, or others. They are a great way to generate some extra cash flow. Passive income can come in handy as inflation picks up due to demand and supply issues.
Top 11 Passive Income Opportunities While Working From Home
1. Peer To Peer Lending
List yourself on a P2P lending platform and start lending to people directly. Remember that this is a high-risk, high returns kind of investment. While your money is usually safe on verified lending platforms, you should still do thorough research.
What do you need to know?
- Prosper and LendingClub are two very famous P2P lending platforms.
- Returns typically range from 7% to 12%.
- Very few entry barriers. You can start investing with meager funds. Even as low as $25.
2. Real Estate
You have two options here. Option one, buy a property and rent it out. But if you think it takes a lot of maintenance, here’s option two- look towards REITs (Real Estate Investment Trusts).
What do you need to know?
- Investing in real estate and renting out to people can have high returns. However, this can involve a lot of maintenance, resolving tenant issues, and others. Thus, real estate may require a lot of your active attention.
- Investing in REITs can waive you from your responsibilities of maintenance.
- Through REITs, you can choose to invest either in commercial properties or residential properties. Most REITs pay 90% of their taxable income as dividends.
3. Dividend Stocks
When a company goes public, they sell parts of its equity as shares. If you invest in these shares, you can earn returns when the company makes a profit. In other words, when companies make profits, they funnel some of their profits as dividends to shareholders/ investors.
What do you need to know?
- Returns can vary from company to company.
- If a company is not doing well financially, you may not get dividends that year.
- Make sure to do your research about the company before you invest.
4. Index Mutual Funds
Index mutual funds are regular funds linked to a particular market index like the NASDAQ-100 or the Dow Jones Industrial Average.
What do you need to know?
- These are passively managed. You can invest in these funds and let the fund manager take care.
- It is relatively safe. For example, even if one of the companies is not performing well, your returns mainly depend on how the market is doing.
5. Rent Out A Storage Space
If you have an empty garage at home, rent it out as a storage area for businesses. You can have high returns depending on the location of the space.
What do you need to know?
- Physical spaces, like storage spaces, require a lot of maintenance. It can incur high costs.
- You’ll also need to deal with the depreciation of the storage space.
6. Write Books
If you’re a gifted writer, you should consider writing books. An e-book can be a great way to make it into the market.
What do you need to know?
- Publishers give you a royalty for a percentage of book sales.
- Your books need to be successful to be able to earn royalty.
7. Non-Cumulative Fixed Deposits
These are like regular fixed deposits that you keep in banks and NBFCs. In a non-cumulative FD, interests are paid every month/at regular intervals to the investor. However, in a cumulative FD, interest is withheld until the maturation of the FD tenure.
What do you need to know?
- You can use the returns from the non-cumulative FD to invest elsewhere.
- It is helpful, especially when you don’t want to park your funds anywhere for long.
8. Enlist In A Company That Does Multi-Level Marketing
No, we’re not talking about pyramid schemes. Some legitimate companies like Amway rely on grassroots marketing to sell their products. If you’ve some free time, you can join these companies’ many networks.
What do you need to know?
- Most of these companies have sales targets. If you don’t fulfill them, you might lose your position.
- It needs active attention and might take a significant part of your time.
9. Freelancing In Various Domains
If you’re an architect, you can also freelance as a graphics designer because both jobs have a similar skill set. Similarly, if you’re good at marketing, you can try copywriting.
Sometimes, your primary profession and freelancing gig can have diametrically opposite skill sets. For example, you can be an engineer on weekdays and sell paintings on weekends.
What do you need to know?
- Freelancing requires active attention. It can therefore take a significant portion of your time.
- It’s not just an initial investment but a continuous one.
- You’d need the required skill sets to start freelancing in any domain.
10. Buy And Sell NFTs
NFTs can be an excellent way to make some money. NFTs derive their value from rarity and branding. For example, the bored ape yacht club derives value from its aggressive marketing and user base.
What do you need to know?
- We cannot accurately predict the prices of NFTs at a future date.
- NFTs have high market volatility.
- Beware of NFT scams- buy only from legitimate NFT minting companies.
- NFTs are vulnerable to market bubbles.
11. Invest In Fine Art
For many years, investing in “blue chip” art was reserved only for the top few rich people. With the coming of companies like Masterworks, fine art has been democratized. Now you can buy shares of blue-chip art and trade them in the secondary market. When the painting is sold, you get % returns.
What do you need to know?
- Investing in artwork with a huge collector base is always a good idea.
- Predicting the returns can be difficult if you’re investing in a regular painting without an established collector base.
Tips To Get Passive Income
1. Research
Understand the domain you want to get into. For example, if you’re going to get into the real estate market, figure out how the market works and how it is doing at the moment. Similarly, if you think the NFT market is bullish, do your research to understand how NFTs work and how to find the most credible NFT pieces in the market.
2. Work Towards It
Contrary to popular belief, passive income involves significant work (At Least in the beginning). It might include talking to a few experts, reading different articles, understanding the concept, and others. All in all, you only get paid for what you do. Yes, that’s true, even with passive income opportunities.
3. Have Patience
You cannot sow the seeds today and expect the plant to bear the fruits tomorrow. Some passive income opportunities take time to mature. For example, if you invest in dividend stocks, you’d have to wait until the company starts making significant profits to get the desired returns.
4. Passive Income Jobs Might Require Active Attention
A lot of people come with a set-it-and-forget-it mentality. However, some passive income jobs require your active attention.
Imagine you want to invest in real estate to get rental income. The investment property needs to be maintained, and you should resolve tenant issues. Similarly, businesses like drop-shipping and storage rental places require active attention.
Why Should You Find Ways To Get Passive Income?
There can be many personal reasons to get some passive income jobs. But here are a few common ones.
1. FIRE Lifestyle
FIRE is an acronym for “Financial Independence Retire Early.” It first appeared in a 1992 book- ‘Your Money or Your Life. The authors of this book advocate aggressive saving and investing so that you can quit your job early and retire. Many millennials since then have used this idea to realize their dream of retiring early. Here’s where passive income jobs come in.
2. Pay Your Loans
When fresh out of college, the initial excitement of having a better income is easily doused by education loan commitments and others. With education loan installments, leaving you with a hand-to-mouth existence, having an excellent passive income can help you out.
3. Tackle Inflation
With inflation rates hitting double digits in most countries, the cash you hold today is worth less than what you had yesterday. Increasing passive income can help you catch up with the high inflation rates and sustain difficult times.
4. Take a Sabbatical
Taking a sabbatical from your regular job is not easy, especially when you’re low on savings or when your company does not offer a paid sabbatical. However, taking a sabbatical can be easy if you’ve got a steady source of passive income.
As appealing as it may seem, getting a passive income job is difficult. It involves a lot of hard work, patience, and research. Many people confuse passive income with “easy money.” The truth, however, is that passive income involves its share of hardship. Nothing comes for free.
While it is difficult, it’s not impossible. Obstacles don’t come in the way, “obstacles are the way.”
Bottomline
Passive income jobs require hard work and patience. Some of them even demand a portion of your active attention. Passive income does not translate to easy money. It’s challenging but not impossible. Whether it is to hedge against inflation or to have some extra cash to spend, passive income is a good idea.