Passive income is money that you get from sources which don’t require work at that time. However, many passive income sources require you to put in money or work well in advance before reaping the rewards. Just because the income is passive doesn’t mean it’s easy to get. If you find advertisements for easy passive income, take a minute to double check what the deal really is. Someone might be trying to sell you a product or even scam you out of your money or time.
Even though passive income can be difficult to nail down, it’s nowhere near impossible. With the right information and tactics, it’s possible to earn thousands of dollars each month. In this article, we’ll take a look at 5 ways to earn at least $5000 in combined passive income.
1: Home Rentals
Do you really need a guest room in your house? Do you need the office that you use once a week? Take a good look at your lifestyle and ask yourself if you can free up a room in your place to rent. Depending on the area in which you live, you could add an extra $500 to $1000 per month in passive income. You can charge a rate that’s comparable to other rooms in your area and bump up the price if a tenant would have access to laundry or utilities like high-speed internet.
If you just purchased a new home, you might not like the idea of sharing it with a stranger. But it would be a good idea for you to consider the financial benefits of renting a room. Also, you’re the landlord, now. When you own the home, you can dictate the rental agreement. Want to set bathroom time limits? Regulate noise levels? Keep the grill to yourself? You can.
The requirement for this income stream is that you own your home or apartment—and that takes money and work. If you’re renting, make sure you know what your lease says about additional occupants. In that situation, you could add a roommate to lower your overall costs. The money they pay would go to the landlord, but it would let you cut down on your expenses overall.
Learn about AirBnb options or other Rental Opportunities to get yourself going.
2: Invest in Stocks
Before we get going on this idea, we have a little disclaimer. If you’re new to the world of investing, take some time to educate yourself on the topic before diving in. Investopedia is a great place to start. They even have a simulation that lets you invest with fake money—it would be much better to lose fake money than real money.
The second thing you should know is that safe investing is a long-term game. True, there are stories about day-trading millionaires, but that’s not the majority. Investing is also not a quick way to make money (unless you have a huge amount to invest). You can make money by selling stock that has grown in value or by receiving dividend payments.
The S&P 500 is a group of the 500 largest companies on the New York Stock Exchange. By its nature, the S&P 500 is stable and has an average growth rate of 10%. If you invested $10,000 in the S&P 500, you’d have $11,047 one year later. But if you let that same amount of money sit for 10 years, you’d have $27,070 by the end. One year gives you about $1000 in return, so you’d think 10 years should give you $10,000. However, thanks to compounding interest, 10 years actually gives you about $17,000 in return.
You can also get passive income from investing by receiving dividend payments. These are payments made by the company to its shareholders as thanks. Let’s look at Coca Cola. Right now, they pay a quarterly dividend of 40 cents per share. So if you have one share, you get 40 cents every three months. How many shares do you need to make $1200 every three months? You’d need 3,000. And at $50.92 per share, that would cost you $152,760.
Now, Coca Cola is an expensive stock, so there can be others with dividend potential that are more affordable. It’s not hard for you to build up a dividend portfolio that gives you a few hundred dollars each quarter.
Passive Income: How to Make $5000 a Month (5 Ways) in 2019: 1 - Home Rentals, 2 - Invest in Stocks, 3 - Create an App, 4 - YouTube Ad Revenue, 5 - Affiliate Links #SideHustle #PassiveIncome Click To Tweet3: Create an App
If you think you need to know code to build an app, you’ll be pleasantly surprised. Today, there are many platforms that will help you design and publish an app for Android and iOS devices. One example is AppyPie. These services also give you the ability to monetize your app. You can put ads in the app, create in-app purchases, or charge a subscription price to users. Of course, making an app still takes work. But once it’s all done, you can enjoy the revenue as a source of passive income.
Let’s say you have an app that charges users a subscription fee of $10 per month. If you had 100 subscribers, you’d be making an extra $1000 per month. That’s not bad, but with 500 subscribers, you could make $5000 per month.
To have a successful subscription app, you need to provide value that people really want and need in their life. But once you do the work, there isn’t a limit to how many subscribers you can have. The same app could be enjoyed by 100 people or 1000 people.
4: YouTube Ad Revenue
YouTube ad revenue can be another passive income source. If you have a channel that brings in views and subscribers, you can monetize that with ad revenue. This passive income stream does require some time and work to create. Successful YouTube channels cover a popular niche—it doesn’t have to be something mainstream, but it does need to have some following.
If you aren’t much of a comedian or entertainer, you can still make a great educational channel. Think about something you’re good at, then break that down into tutorial-style videos for people to learn from.
With YouTube ad revenue, there are two main things to think about: views per day and engagement. Many things make up engagement including the number of viewers who click an ad and the number of viewers who watch at least 10 seconds of a video ad. You’ll need about 1000 views per day to see any measurable revenue. With 50% engagement, you’ll make about $100/month.
Ok, that’s peanuts. But if you had 10,000 views per day, you could make $1000/month. Bumping your engagement up to 75% would turn that into $1500/month. Remember, views-per-day include views on all your videos. If you worked on a YouTube channel for six months, you could have 12 or more videos online. At that point, it wouldn’t be difficult to hit 10,000 views per day if you had great content. Here’s an online YouTube ad revenue calculator you can check out for your own channel.
5: Affiliate Links
Another way you can make passive income with YouTube is by focusing on review videos linked to Amazon products. For example, let’s say you’re into gaming. You could review a new gaming keyboard on your channel and insert a link to purchase the product in your video description.
This isn’t just a regular link to Amazon. It’s a unique affiliate link. That means the Amazon product page tracks who purchases that product from the link on your YouTube page. When one of your viewers buys the keyboard, you make a comission. Once you’ve made the video you can sit back and enjoy the passive income.
The money you can make from Amazon affiliate commissions depends on the category of product and the product’s price. Currently, luxury and beauty products pay the highest commissions of 10% while physical video games and consoles pay the lowest commission of 1% (some categories pay 0%). You can check out the whole list of commission rates on Amazon here.
Now let’s imagine that you wanted to review headphones. This category has a decent commission of 6%. You review a $200 pair of headphones and give your viewers the complete pros and cons. It was very sucessful, and in one month, 100 people purchased those headphones from your affiliate link.
Your commission on each headphone is $12, so you made $1200 in that month. And you deserve it. You helped the brand sell an extra $20,000 worth of product that wouldn’t have sold otherwise. Now, it will take time to get those numbers. There’s a lot more that goes into a successful YouTube affiliate channel than we’ve talked about.
One other thing to mention is that affiliate marketing isn’t owned by Amazon. It’s older than Amazon and there are plenty of other sites that offer commissions. You may be able to find a manufacturer that offers 15% commissions on affiliate links. You can still use YouTube as your traffic generator and still put a link in the description. It will take a little more time to find opportunities like that, but if you do, you could make twice or more what you would have made on Amazon.
These are just a few ideas for you to think about when it comes to passive income. With some diligence and hard work, it’s possible to reap the rewards of passive income. Looking for more side hustle ideas? Be sure to check out our Master List of 92 Side Hustle Ideas to get your hustle juices flowing.