10 Passive Income Ideas To Start This Year

Start building diverse income streams this year by utilizing this list of passive income ideas. Identify the ideas and money tips that fit your skills and objectives and go for it!We all share a common goal each year… to become wealthier. The savviest build wealth not by exchanging their time for money, but by investing their time and money in schemes and investment vehicles that earn a return. To help motivate you to achieve your wealth building goals, I’ve compiled a list of 10 passive income ideas to focus on building this year.

Not all passive income ideas work for everyone. And this list is far from complete. You need to pick and choose where these ideas align with your financial situation, skill set, and time availability.

Passive income is everywhere, but you need to be willing to invest time and money upfront to reap the benefits.

For more passive income ideas and strategies, subscribe to my email list and you’ll receive my free eBook, 6 EASY Income Streams You Can Start Building TODAY!

With that, here are 10 passive income ideas to power your wealth building machine this new year.

10 Passive Income Ideas

1. Real Estate Crowdfunding

Real estate crowdfunding is one of the most promising passive income ideas for the future. It’s a new opportunity because the U.S. laws were only recently loosened via the 2012 JOBS act.

Through real estate crowdfunding, you can invest in commercial and residential real estate opportunities with experienced real estate developers, all from the comfort of your computer or phone.

No need to show up at a construction site or deal with lousy tenants. You simply invest your money and let the professionals handle the day to day operations.

Due to the hands-off, long-term nature of these investments, real estate crowdfunding is about as passive as investing can get.

RealtyShares

My top pick for real estate crowdfunding this year is RealtyShares. I recently wrote about RealtyShares as a hassle-free way to invest in real estate. RealtyShares has harnessed technology and the new crowdfunding laws to create an easy user experience for the couch potato investor.

Members build portfolios of investments and receive regular payments which can be reinvested into more real estate deals. You can build both geographic and investment type (debt or equity) diversity.

It’s all done through the user-friendly RealtyShares website. Super slick and easy.

For now, RealtyShares is only for accredited investors, but anyone can create an account and browse the opportunities. And if investing opens up for non-accredited investors this year, this method of passive investing will blossom.

Build Passive Income With RealtyShares

FundRise

Another high-growth real estate crowdfunding platform is FundRise. This Washington D.C.-based startup has created a simple way for all U.S. based investors to invest in commercial real estate through eREITs. eREITS are not publicly traded. Instead, you own them through FundRise.

The eREITs are comprised of various commercial real estate investments that are thoroughly vetted by real estate investing professionals at FundRise. The minimum investment is only $1,000, and dividends are paid quarterly. Dividends are typically higher since the funds are directly invested in real estate deals, and there’s no publicly traded company to operate like a traditional REIT.

Since these aren’t publicly traded, liquidity is only available quarterly. Investment horizons are typically in the five-year range, making eREITs a long-term and passive income idea. Learn more here, and see how their funds performed against the S&P 500 (hint, they beat it handily in 2015).

Invest With Fundrise

2. LendingClub + LendingRobot

Peer lending is still a reliable passive income source despite the industry’s bumpy 2016. Lending Club is by far the leader for both investors and borrowers. Through Lending Club, borrowers can save thousands by refinancing their debt. Investors earn interest by lending the money to borrowers in small increments, as little as $25 per loan. The small investment amounts spread the risk of loan default.

I’ve been investing in LendingClub for almost four years, earning greater than 9% each year in passive income. To make this investment even more passive, you can utilize tools like LendingRobot or NSRInvest to automate note selection. For a more detailed explanation of how this works, read my LendingRobot review and my most recent (though a little outdated) Lending Club investing review.

3. Self-Publish a Book

Sounds daunting, right? However, eBooks don’t need to be extended novels. I’ve paid $4-$5 dollars for 40-page eBooks that were worth every penny. If you’re knowledgeable on a subject, or entertaining, you can create a quality piece work and reap the benefits for years to come.

Amazon‘s rise to domination in publishing has empowered writers, creative people, and experts to easily make money from their work while bypassing the middleman (publishing companies).

I’ve spoken to a number of blogger friends who have self-published books. Once your book is written, just follow a simple online guide or course to monetize it. My friend Joseph Hogue has self-published several books and receives passive monthly cash flow for his prior efforts.

To explain how it works, he’s written a free 4-step article on how to publish a book on Amazon that contains everything you need to start earning.

There are a few ways to make money from eBooks:

  • Sell on your own website (as a PDF file)
  • Sell as an eBook on Amazon
  • Sell as a paper book through CreateSpace on Amazon
  • Record a spoken version of the book and sell through Audible

Many bloggers, including myself, already have a book or two worth of content written. So it’s a matter of packaging the existing content into a book and formatting for Amazon. Joseph steps you through the process and explains how you can outsource a lot of the tasks to experts for a very low cost.

If I can prioritize time, this one is a no-brainer for me. Even if you don’t have a blog or content already written, we all have passions and expertise to share with the world. Why not share it and get paid for it?

4. Refinance Debt

Technically, this isn’t passive income. It’s passive savings. But it’s so easy and powerful that you should always look for refinancing opportunities. Doing so will help you strengthen cash flow, build wealth, and empower you to invest more.

My favorite refinance opportunities are:

  • Refinance your mortgage – We did ours in 2016 and saved about $3,000 per year. We used LendingTree to find the best rates.
  • Refinance high-interest credit card debt – SoFi is the top tier option with Lending Club as a close second for those with good credit. For less than stellar credit, PersonalLoans.com might be a better fit (but stop going further into debt first!).
  • Refinance student loansSofi is the place to save on student loans. Also, check out this calculator to help plan your pay down strategy.
  • Refinance your car – Better yet, pay off your car and never go back to borrowing for cars. But if you can find savings through refinancing, it’s better than paying a higher rate. LendingTree can help with car rates too.

5. Start a Blog or Online Business

A blog is a way to generate passive income… IF… you put in a ton of time up front. Blogging supplements my day job income with several hundred dollars every month (learn more about how I make money on RBD on this blogging resources page).

The income fluctuates, but the longer you blog, the more your efforts can be monetized. And the smarter you get.

There are a few caveats here. You can’t put a bunch of crap on the internet and expect to make money from it. Audiences want unique, high-quality and helpful content that entertains and solves reader problems.

Blogging also takes a massive commitment. You can’t be half-assed and expect to make money. At least, not until you’ve established yourself online. Consistency, quality, and endless promotion are necessities.

That doesn’t sound passive, does it? However, once your online presence is established, much of the work continues to earn income without residual work through search and automated social network traffic.

If writing isn’t your thing, there’s plenty of ways to make money online.

For those committed who find the right audience or business idea, the money is out there for the taking. You need a domain name and website to get started blogging or running a business online. If you’re interested, I’ve put together an article on starting a blog or online business. Read it here.

I use Bluehost to host this site. It’s perfect for beginners because it’s reliable and the cost is low. If you decide you don’t like blogging, your loss is minimal.

6. Buy Dividend Stocks

I’ve been investing in stocks for more than 20 years. Back when I started, you needed to utilize dividend reinvestment plans (DRIPs) to be able to invest small dollar amounts. Otherwise, you had to call a stock broker and pay a ton in fees.

Because online investing is so accessible now, I recommend avoiding new DRIP programs in favor of low-cost online brokers. Some charge no fees to buy and sell stocks. Others offer a slew of traditional services including research, options trading, bonds, and IPOs, in addition to simple buy and sell orders.

They say the best time to start investing in stocks was 20 years ago, and the second best time is now. Below is a list of online brokers that I recommend.

  • Motif Investing – Buy and sell individual stocks or create your own motif (like a mini-ETF) to invest in themes. Also good for access to IPOs.
  • TD Ameritrade –  Tried a true, full-service investing platform. Awesome research, trading, options, bonds, ETFs, and mutual funds on both mobile and desktop.
  • Loyal3 – A long-time recommendation for beginners. Free to buy and sell limited stocks and IPOs. Great for dollar cost averaging into stocks of brands you love.
  • Robin Hood – A free trading platform exclusively used on your smartphone. Great for no-fee transactions for frequent beginner investors.
  • TradeKing – Another full-service broker; focuses on options trading and advisory services.

7. Buy Index Funds and ETFs

For those that don’t have the time or knowledge, there’s plenty of other investment vehicles that still pay quarterly dividends.

Index funds and ETFs give you wide coverage in the stock market and pay dividends. There are thousands to choose from, but most investors choose the biggest and most liquid ones. Buy them through a full-service broker like TD Ameritrade or TradeKing.

Below are a few popular index funds and ETFs for income:

  • Vanguard Total Stock Market Index Fund (VTSMX)
  • Vanguard Total Stock Market ETF (VTI)
  • Fidelity Total Market Index Fund (FSTMX)
  • SPDR S&P 500 ETF (SPY)
  • Vanguard 500 Index Fund Investor Shares (VFINX)
  • Vanguard S&P 500 ETF (VOO)
  • Schwab US Dividend Equity ETF (SCHD)
  • iShares Select Dividend ETF (DVY)
  • Vanguard Dividend Appreciation ETF (VIG)

8. Create YouTube Videos

Did you know that the most watched channel on YouTube stars a five-year-old kid who plays with toys? The channel, Ryan’s Toy Review, was only started in March of 2015. It took less than 18 months to beat out Justin Bieber as the biggest star on YouTube.

When our kids started watching Ryan, Mrs. RBD and I were like WTF is this crapBut the kids are hooked. It’s estimated the channel makes about $11 million per year.

It doesn’t take billions of page views to make money. A fuel line tube corroded on my leaf blower and the replacement was tricky. Two videos of dudes fixing the same problem on the same blower came up.

The videos saved me from buying a new blower (or paying a repairman). And the content creators made money through display ads on YouTube and can direct viewers to a website or other online product for purchase. Lots of entrepreneurs are utilizing YouTube for passive income.

To be successful, you need to find a niche, put in the work to create compelling or useful content, then promote it. YouTube and Google will send some organic traffic if people are searching for what you’re providing.

For someone with on-camera talent or video production skills, creating YouTube content may be a passive income idea for you.

9. Move Cash to a High-Yield Savings Account

The U.S. economy has experienced low interest rates since the financial crisis of 2008-2009. Young people are too accustomed to super-low rates and don’t bother with high yield savings accounts.

Most retail banks pay little to nothing for savings. But some online banks pay as high as 1% these days.

But prior to 2008, savings account interest rates of 2%, 3%, or even 4-5% were not uncommon. So instead of investing in stocks, you could just put your money in the bank and get a decent yield on your cash.

Those were the days. My first passive income stream was a passbook savings account at age eight.

In December 2015, the Federal Reserve started raising interest rates. It happened again last month. In 2017, economists are expecting more.

What that means is banks are going to start raising the rates they pay to savings and money market accounts. And as rates rise, banks will regularly increase their rates. The effect on your account is similar to dividend growth. The cash earns more and compounds while you sit and do nothing.

I recommend two high-yield savings accounts:

These rates don’t match the yields of solid dividend paying stocks yet. But when they do, your tolerance for stock volatility may change.

10. Write for Seeking Alpha

If you’re an active investor and know a thing or two about stocks, Seeking Alpha is always accepting high-quality articles. It helps if you already have writing experience, but anyone can create an account and submit articles.

Seeking Alpha pays $35 for a basic article, plus $.01 per desktop page view. So, for example, if you write a piece that gets 5,000 desktop page views, you earn the $35, plus another $50 on top of that.

But here’s the kicker, you earn $.01 for every page view in perpetuity.

Over three years I wrote a handful of articles for Seeking Alpha, and they still earn me money. Even though they’re old. Though outdated, they still get minimal search and organic traffic. So if you write consistently you can build a solid income stream.

Of course, fresh content earns the most. And article popularity varies. So for best results, you need to keep at it and write about widely-owned stocks.

Seeking Alpha offers an excellent opportunity to monetize by sending traffic back to your own website (see this article as an example… and I’ll earn a penny if you click that link!). They’ve also built a subscription platform option for well-established authors.

There’s probably a slew of other similar sites about topics other than stocks. Go find your niche!

Conclusion

Some of these passive income ideas may work for you while others may not. I personally have no interest in creating YouTube videos. I’m not comfortable on camera. Though maybe my son could do it!

Real estate crowdfunding is my top pick for the year and I expect to start one or both platforms before the summer. I’m also increasing planning to increase ETF exposure to match the market performance and keep fees low. I’ll also write more for Seeking Alpha if the right stock ideas come to mind.

You may have other passive income ideas you’d like to share. Please do so in the comments section. And remember, this list is just a slice of what’s available. Utilize these, go out and find more passive income ideas, or create your own.

Photo Credit: Jared Erondu via Unsplash

13 Responses to 10 Passive Income Ideas To Start This Year

  1. desidividend January 4, 2017 at 8:31 am #

    I already engage in 4 of the 10 listed activities.Need to look into reality shares.is this better than the fundrise.I started in fund rise last year with small amounts.

    • Retire Before Dad January 4, 2017 at 8:34 am #

      Desi,
      RealtyShares is more about property individual investments. FundRise is the eREIT. Higher risk, better rewards. More option in terms of both debt and equity.
      -RBD

  2. brian503 January 4, 2017 at 8:37 am #

    Great ideas RBD. I’m considering writing an e-book. I do have a few speaking events line up to earn extra cash in 2017, not really passive income, more of a side hustle.

    • Retire Before Dad January 4, 2017 at 8:54 am #

      Awesome Brian. Getting paid to speak is an excellent hustle. But not easy. I try to avoid public speaking! But it’s one way to build authority on topics. Good luck with your new hustle.
      -RBD

  3. Dividend Growth Investor January 4, 2017 at 12:20 pm #

    RBD,

    Those are some nice ideas to earn extra income. However, I would think that buying index funds or investing in equities in general are the only “passive” in nature. Blogging or writing a book are definitely more on the active scale.

    That being said, if you enjoy doing those things, any type of income is welcome and will improve your situation!

    Happy New Year!

    DGI

    • Retire Before Dad January 4, 2017 at 12:28 pm #

      All of these take some work up front, including investing. Although indexing less so. It is said that no income is truly passive. But hopefully people can use some of these ideas to earn residual income from their time and money. Happy new to you as well!
      -RBD

  4. JC January 6, 2017 at 10:32 am #

    I’d never heard of the real estate crowdfunding but it definitely sounds interesting. Something to look into for sure. I’ve got a few other ideas to try and create extra income, but they require upfront effort and time is severely lacking.

    • Retire Before Dad January 6, 2017 at 10:55 am #

      I hear ya, JC. That’s how I feel about a book. Hard to prioritize time when I’m still working a full time job. Plus, there are so many things I need to do around the house. Namely, declutter and optimize our space better. Maybe a few DIY projects. Kids make that tough. That’s why I like these real estate crowdfunding sites. Very little effort once you make your investment. RealtyShares takes more due diligence than FundRise. But I believe the returns are better based on the higher risk/return.
      -RBD

  5. Mark January 8, 2017 at 8:32 pm #

    I do/did 6 of these. Refinancing was a big one for sure. I highly recommend Fundrise (so far), P2P lending has been a nice boost as well. One that’s not on your list and so far offers a 5% return is StreetShares. I’m investing there too.

    • Retire Before Dad January 8, 2017 at 8:36 pm #

      Thanks for your input. Good to hear that FundRise is working for you. I’m planning to start an investment in the new year. I hadn’t heard of StreetShares until now. I see it’s investing in small businesses. Decent yield and patriotic! I’ll need to take a closer look. Here’s a link to StreetShares for anyone interested.

  6. Derek Hopper January 8, 2017 at 8:42 pm #

    You had my interest as soon as you mentioned real estate crowdfunding. I hope it opens to more than just accredited investors soon.

    I like how you include a disclaimer for some of these. Things like blogging, creating YouTube videos, and writing a book are usually active up front.

    To add to that: In a way, passive works because you invest a bunch of energy up front, like you said. Then once you get the ball rolling, you can take a more passive role.

    Although, once you have one passive stream, you have the experience and knowledge to create another one. So why stop? 🙂

    • Retire Before Dad January 8, 2017 at 8:49 pm #

      MDH,
      I think you’ve nailed it. Once you have success creating passive income streams, you’ll want to create more. And yes, most of these take a lot of work up front. But residual income is great. Passive income isn’t easy until it’s established.

      Keep in mind FundRise is open to non-accredited now. And RealtyShares can legally open up, but it’s chosen not to yet. So it’s definitely possible. Not to mention these are only two in the field. Plenty of others are out there, including StreetShares that a reader just mentioned.
      -RBD

  7. Get Rich Quick'ish January 17, 2017 at 3:12 pm #

    Not sure how this post has maned to elude me for so long, but I’m glad I finally found it! I’m on board for numbers 3, 4, 5, 6, 8, 9, and 10! Most intriguing to me for 2017 is writing a book and monitizing my blog through services. I’ve got ideas for both – I just need to execute on them. Thanks for the motivating post!

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