How to earn passive income: 22 ways to create multiple streams of income

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Shutterstock Making money while you sleep has a beautiful ring to it.

The 19 best ways to generate passive income in 2019

Earning passive income provides the opportunity to do just that. What is passive income? Passive income is defined as income that requires minimal effort—or perhaps even zero effort—to earn. Passive income typically enables your money to work for you. The best passive income takes the least effort.

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But today, we will consider many popular passive income ideas that will earn you money, whether you want to pay off a student loan, dig out of credit card debt, or put together a retirement plan.

As long as it requires little passive activity, it passive income additional income be a decent passive income stream. Those who achieve financial independence will tell you that passive income streams are the key to success. Most income sources require you to put in a LOT of work. Do you want to make passive income? You will need to invest in an asset that produces passive income for you. If you already have an asset that you are not fully utilizing, that can serve as your investment.

Stop letting your money stagnate in a bank account and lose its spending power.

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Some of these next passive income ideas will get you ready to invest in your future. Passive income means you want to start valuing your time and your money.

These are some of the easiest passive income ideas that you could implement.

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Alternative assets Alternative assets, or alternative investments, are much talked about these days. The volatility of the markets and extremely low-interest rates for the foreseeable future have many people looking for alternate options. There are many types of alternative investments. Some of the more popular offerings are hedge funds, private equity, crowdfunded real estate investments, and commodities like wine or geeky collectibles. We recently discovered another unique alternative investment, passive income additional income only available to the wealthiest of the wealthy: luxury watches.

Why inform you about an investment with that kind of price passive income additional income You can buy partial shares of an assortment of watches at that buy-in level. The best part of it is your investment is backed by luxury watches owned outright by Luxe Street. Pro: Alternative investments give you exposure to unique asset classes, different from everyday stocks, bonds, real estate, etc.

Con: Alternative investing is a fledgling industry with developing regulations. However, many companies give you the ability to invest in commercial and residential real estate projects without actually doing the heavy lifting yourself.

One example is DiversyFund. Having aligned incentives is important in investing. Another detail that differentiates DiversyFund is how they invest. Rather than spread their expertise too thin, DiversyFund focuses its investments on lower-risk multifamily housing. They use technology to scour the country for properties that fit their specific criteria. What criteria? Specifically, DiversyFund looks for high occupancy and positive cash flow properties, but that needs some work.

Instead, a typical DiversyFund property could just need an updated bathroom binary options without video indicators kitchen, or maybe just a fresh coat of paint. The fact that DiversyFund does all of the work themselves means they have lower costs than their competitors.

After the aforementioned minor renovations, the upgraded properties merit increased rents. And that increases passive income additional income cash flows and the value of the properties.

12 passive income ideas to help you make money in 2021

Holding periods for DiversyFund properties tend to be in the five-year range. Both DiversyFund and their passive investors—e.

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When incentives are aligned, you give yourself the best chance to win. Pro: DiversyFund does all the hard work for you, giving you exposure to residential real estate without requiring you to be a landlord. Lending Club allows passive investors to diversify their assets by investing in different types of loans. Wait…in loans? Lending Club allows you to loan your money out to people and groups looking for funding.

The type of loans you choose will determine your investment return and risk exposure remember, risk and return are related. Your investment is combined with other investors to make up the entire loan amount.

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This diversification tends to decrease risk. So how do you generate income with Lending Club?

Passive Income Ideas Requiring an Upfront Monetary Investment

As a borrower pays down their loan, you will receive monthly interest payments. Like all loans, Lending Club charges interest to the borrowers.

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That means that you collect the principal and the interest. Pro: Lending Club allows you to help many different loan seekers while earning passive income yourself. Con: If a few of your loaners cannot repay top option reviews loan, it can be easy to miss out on profits or potentially even lose money.

Invest in dividend stocks Dividends are profits paid out to owners of stocks.

How to earn passive income: 22 ways to create multiple streams of income

Some companies pay dividends regularly, which means that dividends can become a dependable source of income. Investors who love dividend-paying stocks will talk about their investment is generating dividend income and appreciating.

Keep in mind that stocks with high dividends still carry risk. Dividend stocks can drop in value like any other stock. Historically, dividend-earning stocks drop in price less than the overall stock market.

The average millionaire is estimated to have seven streams of income.

They tend to be steadier in price—less upside, less downside. Some people even rely on dividend checks for their regular expenses.