Getting paid whike you sleep, travel or just binge watch Netflix sounds too good to be true but it is actually possible. And it is possible to make a signficant amount of money with minimal effort. Here are actionable tips on how to start earning at least $100K per year from passive income sources.
What is passive income and why you should care about it
Passive income is simply revenue that you don’t have to work for. In other words, it’s money coming into your bank account or business without having to put in more than an initial number of hours.
Earning passive income is the best way to grow your wealth considerably in the long run. It lets you focus on the things you enjoy without having to worry about money.
There are many creative ways to earn passive income, from renting out your car to opening up a self-serve laundromat. Some require more initial work than others; some require you to be skilled in certain fields; some require high initial investments while others don’t need any at all, and finally, some require a long time before you start to see the benefits of your efforts. In this post, I’ll focus on the ones that can help you start making money right away.
7 ways to start earning passive income in 7 days or less
#1. Invest in real estate
If you think this isn’t something that can get you $100K per year or more in only one week, then you’re wrong! Real estate is a great form of investing, and the key to earning quickly is knowing what type of properties to invest in.
You can start making passive income as soon as you invest if you choose rental properties that already have tenants. How much you’ll earn depends on the Net Rental Yield (NRY) in each particular area. That tells you how much you stand to make on your rental after accounting for property taxes and other costs.
NRY varies wildly with location. It can go as little as 0.1% or less in certain cities in Texas and New Jersey to as high as 21% in some counties, with an average of roughly 3.5%. On average, then, you’ll have to invest close to $3 million to reach a passive income of $100K per year.
#2. High-interest savings accounts (HISAs)
Savings accounts are perhaps the simplest (and most boring) ways to earn passive income. You just make a deposit and let it grow over the years. It’s an easy, low-risk, low-reward way to invest your money to earn passive income, and it doesn’t take any time at all to get started. This means you could get this done by today, and you’ll already be earning interest before tomorrow.
I’m not talking about regular savings accounts, of course. You need to open an account that will earn more interest than that. There are high-interest savings accounts that will help you get more money and grow.
The best HISAs out there offer an annual percentage yield (APY) of 0.55%, so you’ll definitely have to invest a lot of money to make a decent income from this type of account.
#3. Rent out your car
Have an old car sitting in your driveway? You can make money off of it by using applications like Turo or Getaround. These peer-to-peer rental companies will let you rent out your car on a per-day basis. It’s a good way to earn extra money if you’re not using your car and don’t plan to sell it.
This is a great option for those looking to make some fast cash passively within their own community (so long as there is demand), even if you’re a busy person.
#4. Outsourcing your freelance work
If you’re a freelancer who has carved a name for yourself, you can use your experience and reputation to quickly find many new contracts on platforms such as Freelancer.com and Upwork. You can then outsource the work to another newer freelancer who has trouble getting employers to look their way. That way, you can earn the difference between what the employer pays you and what you pay the other freelancer without breaking a sweat.
This takes freelancing work and turns it into passive income instead of work. It does have its challenges, though, as finding the right freelancer to take care of the job can be difficult, since you’ll want to ensure they can do as good a job as you do.
Depending on your industry and how easy it is for you to find new clients, this can quickly turn into an income stream that is several times higher than what you originally earned as a freelancer.
#5. Peer-to-peer lending
Perhaps the easiest way to earn passive income is through peer-to-peer lending. This involves loaning out money (usually via a website platform like Peerform, Upstart or Prosper) to people who need quick cash.
In terms of return on investment, this has the potential to make you a much more decent income than depositing your money in a savings account (even if it is a HISA). It’s usually easy to get around a 5% interest rate if you avoid riskier loans, but they can also go as high as 30% for the riskier choices.
You can loan as much or as little as you want, but I’d recommend staying away from any loans that are for more than $25,000 because this type of lending does come with a higher-than-normal risk of default.
#6. Selling your leads
Many businesses are lead magnets. They attract people with an irresistible offer that brings them in, even though they don’t intend to buy what the business is selling right away. These leads may be worth quite a bit if you can sell them to another company that’s looking for more prospects.
So, if you already have a website that lets you draw in leads passively, selling those leads every so often will turn them into passive income. This only works in one week or less if you already have the mechanisms in place to grow your list. If you need to start from scratch to build a website and market it, it’ll take you a lot longer than one week.
#7. Monetize your blog
If you already have a long-standing blog with lots of readers, you can turn it into a passive income-making machine in under one week by monetizing it. There are many ways to monetize your blog, both free and paid. The easiest ways include:
- Showing ads on it (either via Google AdSense or a similar platform)
- Writing sponsored posts
- Joining an affiliate program.
Keep in mind, though, that you have to be careful with some of these options. If the ads are too disruptive or unrelated to your content, they won’t drive as many visitors and may even hurt your reader base.
The same goes for affiliate programs. However, if this is something you’d like to get into, there are many affiliate programs for beginners out there that you can try out.
How this entrepreneur earned six-figures in passive income
I recently spoke with Lucy Korvald, co-founder of the personal finance website How I Travel. Over the past several years, Korvald has built How I Travel into a site that earns five figures per year. Here’s a condensed version of our interview.
Q: How much do you earn from How I Travel today? How much of that income has been passive?
A: Today, I earn more than $100,000 per year from How I Travel. Most of that is passive income earned through affiliate deals and ads, though some of it—like sponsored posts—isn’t quite as “passive,” since it does require some work in the form of communicating with brands.
Q: What’s been the toughest part about building a passive income for you?
A: The truth is that there’s very little that’s actually “passive” about building a passive income. There’s an enormous amount of work upfront, and you only reap the rewards of that work on the back-end. So the hardest part for me has been balancing the heavy workload with my other responsibilities, plus trying to maintain some semblance of a social life. That was particularly tough in the early years, but now it’s become much easier since momentum is on my side.
Q: What has been the best part about building a passive income?
A: I alluded to this in my last answer, which is that the rewards you gain from a passive income can be exceptional. The ability to earn money while you sleep will change your life because it decouples your earnings from your time.
It also means that scaling up your income is much easier: if you work really hard this month, you’ll reap the benefits of that hard work for months and potentially years to come. There’s no limit to how much passive income you can earn, but there is a limit (depending on your industry) to how much you can sell your time for, so if you’re looking to become truly wealthy, developing passive income streams is the way to do it.
Caitlin Pyle is another example of an entrepreneur with a sizable passive income. In Pyle’s case, that income comes from Proofread Anywhere, her online proofreading course. Reviews of Proofread Anywhere praise its comprehensiveness, which is the direct result of Pyle’s 10+ years in the proofreading industry. And while Pyle isn’t as transparent as Korvald about her earnings, she is open about the fact that she’s earning more now selling courses than she ever did when she was selling her time for money as a proofreader.
The bottom line
If you are looking for a way to make passive income in 7 days or less, there are many ways to do so, and it doesn’t matter if you’re in your 30s or your 50s. Some methods are riskier than others but offer higher rewards (like peer-to-peer lending), while others are easy and safe but require a high investment to make $100K or more each year. The bottom line, though, is that earning a sizable passive income is totally doable, as entrepreneurs like Korvald have proven time and again.
So, what are you waiting for? Why not start building your next passive income stream today?