5 Practical, Passive Money Making Ideas

There are many ways to make money that do not involve a lot of ongoing effort, and they are actually practical. Some are easier to implement than others, but all virtually require work up front to get your activity off the ground. Here are five:

Rental investments: Thousands of books have been written on this subject, but I’ll summarize the secret to making money on this one in one paragraph. The work comes before purchasing the property. First, estimate the lowest expected amount of rental income per month, less at least one month to two months of vacancies per year. Next, calculate all of the costs of owning the property, including mortgage payments, property taxes, insurance, repairs, etc. If your cash expenses are greater than the expected rent then do not buy the property. If the opposite is true then consider purchasing the property as long as the income and appreciation potential are profitable. One paragraph books about real estate investing do not sell too well.

Lending to a business: If you have extra cash, then consider lending to a small business. Just make sure to think somewhat like a banker and understand the risks and rewards. Make sure you have an attorney draft the agreements, prepare all of the filings, etc., to reduce your risk in the case of disputes or default.

Invest in a business: Invest in a business to eventually receive dividends, distributions, or a payout upon sale. Just as in lending to a business, make sure to understand what you are getting into, ie, perform your due diligence, and see your accountant and attorney.

Sell a digital product/course/e-book: Unless you are tech savvy, it may be easier to hire a consultant to set up a website for you to sell a digital product. The product can be about virtually anything, but a good place to start is to offer a digital product based upon your specific expertise and knowledge.

Referral commissions: Usually this one applies to an existing business owner, but the idea is to refer your customers to another vendor for either a product or service, and then receive a commission for it. The amount of effort expended is very minimal, but the commissions can be a good source of profits for your business. The caveat is to always make sure that you abide by all legal requirements for receiving commissions.

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