10 Most Common Passive Income Technique for Everyone

Anybody can earn passive income, you don’t need to find time to generate a passive income. You just invest your money or time and then sit back, relax and reap the profits from your investment. The best part is you can keep your day job, you can continue to do the work you want to do while in the background the passive income machine generates revenue for you.

Don’t you feel excited? Don’t you want to generate some passive income in future? I am sure you do and that’s why I wrote this article full of ideas that are most common and very practical. I know at least one person in my real life who earn money by the ideas I presented.

Passive income is a beauty, we all want to create additional revenue source yet we are time bound, we have only 24 hours a day to work on. Passive income machinery works even while you sleep in the night. That’s why passive income is much loved.

Having your online site on a self-hosted domain is still the best way to earn passive income. This year my income from this site went up to $6,000 in April, an all-time high. I started with a $70 income at my 7th month, back in 2011. The more content you publish, it attracts more visitors.

Want to open a site of your own? I have this easy to follow guide to starting your site in 20 minutes and $20.

Here are the most practical passive income ideas

1. Via Peer to Peer lending Sites

Lending Club and Prosper are two of the most prominent players in the social lending scene. For you, the process is same as with any other investment. You deposit money into your online accounts with Prosper or LendingClub and you get back regular return in terms of interest.

The difference is you can choose to whom you want to lend money. You can pick borrowers. The risky a borrower is, higher the interest rate. We have an investment in Prosper and we earn close to 6% return. Which is very similar to the stock market return over the long-term.

We are now going to invest more money towards peer-to-peer lending platforms. Except stocks, none of our other investments performing so well consistently.

2. Invest in Dividend Paying Stocks or Funds

Investing in the dividend paying stocks (or mutual funds) is a great way to generate passive income. If you buy quality stocks, the dividend is almost guaranteed. The rate of dividend (termed as Yield) quite often outrank the interest rate you earn on deposits. Also, the stock price gain is yours to keep when you sell the stock.

Here’s how my friend Joe is  generating extraordinary passive income through dividend-paying stocks. There are a number of stocks which pay a dividend every year and have yielded more than 3%. To me, that’s a wise stock investment towards generating passive income while growing your invested capital.

Just for the potential capital growth opportunity, I’d put more money in dividend stocks than in peer-to-peer lending.

3. Use Reward Credit Cards

You buy stuff every day. Do you make most of your purchases? At least do you know you can make income from your purchases? We earn $250 almost every quarter from our credit cards. We buy even a dollar worth of milk on a credit card. Out of our 4 cards, at least one earns us more than 2% at any given store. So on average we earn more than 2% discount on everything we buy from a pen to car servicing.

This is yours to practice only if you pay off your entire due every month, without carrying a balance.

4. Get Rewards Buying Online

Make Ebates your first stop while shopping online. They give us with extra cash back (on top of credit card rewards, if any) when you buy through them. Install their toolbar for even better results. You don’t have to go to their site anymore to get cash backs. One of our colleagues gets $25 gift card almost every month. She simply buys her grocery through eBates

5. Earn Money When You Browse The Internet

Approximate how many minutes you usually use the internet every day. You search for things, you play games, you socialize with others. You watch videos, movies and listen to songs. The best part is you can continue doing all these and earn money doing so. If you do all your web searches through InboxDollars (instead of Google, Bing, Yahoo, etc), you can accumulate points which you then can redeem to buy gift cards. From InboxDollars, we earn about $50 a month.

6. Real Estate Investing

This is a very common way to earn passive income. I have many friends who invested in rental or commercial real estate. There’s no limit to your income as you basically use other people’s money to earn passive income. Your bank lends you money to buy a rental property. You pay them off with the rent you get. The surplus amount after home tax and insurance is your passive income.

Initially, it requires a lot of effort in buying a property that can easily be rented out and as many times as needed. After that initial effort, the income from it becomes really passive. You get automated rent check and you pay out automated mortgage payments.

Even you can outsource the process of finding a tenant to real estate brokers.

If you don’t want to get your hands in direct real estate, you can invest in real estate through Real Estate Investment Trusts (REITs). REIT companies invest in real estate properties (at least 75% of investment) and pay at least 90 percent of its taxable income in the form of shareholder dividends each year.

One of my friends has 4 rental properties, earning him about $1,500 in passive income every month. He has 5 mortgages, including his residential property. His renters pay four of the mortgages. He keeps the difference. He has service contracts on all the properties, in case repairs and fixes. This is extra money without doing any work.

7. Savings Account/CDs

Very negligible Income in terms of interest rate. You almost certainly lose the value of your money to inflation. But still, earning 0.5% is better than earning nothing by having your cash stashed up at checking account. A long-term CD rate might touch 2%, and since your capital is safe, there’s little to no risk.

My emergency fund is invested in a high yield saving account, earning me 0.89% interest.

8. Build a Website and Advertise

I created this blog and I put up advertisement. I earn money through it but I don’t call it a passive income. I have to work on my blog every day for at least an hour.

A true passive online income would be through a website which you create and upload content once and then it can continue to earn money for you from the advertisements you put up.

9. Write a Book

Easier said than done, I admit. If you love writing then you need to put effort for few months to create a book and market it to publishers. Then, once you’re published, you pretty much don’t do anything else than counting the royalty payment. Many personal finance bloggers have written eBooks and published them through Amazon. They earn $1 to $10 for each book sale, depending on the price of the book. Here’s how you can start writing books.

Here’s an inside into the world of book publication and earning thereof.

10. Developing Apps for Smart Phone

To generate passive income through apps, you should possess a quality very few does. You should have an innovative idea for an app. You then need to know the coding part or need to know someone who will develop the app for you. Then it’s all about marketing. Once you have a stable app which has a market, you earn a very serious amount of money.

One of my classmates is a champion app and game developer working from India. His monthly passive income touches $60,000, can you believe?

Now whatever you are good at, do invest the money and time accordingly. Work hard initially and then count the income you generate month after month.