Residual Income For Beginners
Wouldn’t it be nice to make money while you sleep? This isn’t just a dream…. Residual income will earn you money even when you’re not on the clock. In other words, residual income will continue to earn you revenues long after the work is done. So, go ahead and snooze!
Active income comes as a direct result of our efforts. This is when we work for one hour and get paid a certain amount for that 60 minutes of work, typically an hourly wage or annual salary.
Earning a high active income is often a lot of hard work and most people aren’t that motivated. It also has limited potential, because no matter how much money you get paid, you still need to show up to work to earn the big bucks.
Earning Passive Income
Also known as passive income, some examples of residual are royalties from books, movies, or songs and also income that comes from real estate or business investments where you don’t actually have to be present to earn it.
A house earns money to the landlord being paid rent; a business is an asset to the business owner who does not need to be involved in the day-to-day activities anymore.
Many people dream about passive income in hopes that they will never have to do anything to keep that income going. The truth is, you will regularly have to keep your eye on things if you want it to run smoothly.
In order to get started bringing in residual income, you need to come up with something that people will continue to buy on a regular basis long after you’ve created it. A house is a great example of this, as people will continue to pay rent in order to live in the house.
It won’t happen overnight…you will want to find a path that transitions from active to residual income steadily over time. It’s highly improbable to start a new business today and create residual income tomorrow, so you must have equal amounts of patience and perseverance.
As you make more residual income, the idea is to scale back the number of hours you put into active income. This will hopefully mean your residual income will grow even faster once you put forth more time and effort.
Be aware that motivation is a huge part of the equation, especially at the start. Give it your all!
Residual Income Ideas
1. Invest In Real Estate
Investing Simple is affiliated with Fundrise.
Investing in real estate could be a great option for you to earn some residual income. Real estate is one of the longest standing, proven investments out there, and continues to create lots of buzz.
The reality is, for most people, buying a second property isn’t feasible by a long shot! Don’t throw in the towel on this form of residual income.
You may wish to consider investing in real estate via crowdfunding.
Crowdfunded real estate investing is similar to crowdfunded lending. Groups of people pool their money to invest in rental properties that would otherwise be waaaay out of reach.
You don’t have to break the bank or sell off all your belongings to start investing in real estate. Buying a rental property typically costs hundreds of thousands of dollars. One of the most startling things about crowdfunding is that you can get started with $500 by investing through Fundrise.
These crowdfunded real estate platforms like Fundrise buy, hold and manage the properties for investors. Plus, they give you several ways to invest.
But wait, there’s more: you don’t have to worry about managing properties. You won’t be getting phone calls in the middle of the night from a tenant with a leaky sink, or worry about clearing snow off a driveway for your tenant. You invest the money and let real estate experts do the rest.
The crowdfunding companies choose the properties, pay for them and manage them. They deal with tenants and repairs.
You simply choose your investment, buy and hold. It can be a great way to have your hand in real estate investing without a steep investment or hassle.
2. Make Money With Your Spare Room
Have a spare bedroom you’ve just been using to store junk? Let that room earn you money! How does a roommate sound? Rent out that extra room and earn residual income.
Look for a quality tenant who you’d be okay living with (a friend or family member would be ideal) and list your spare bedroom.
Live in an area popular for tourists? Consider vacating your house for a week or more and list it for rent during peak season. You could earn enough for your own vacation.
The most popular site for short term rentals is of course, Airbnb.
You can sign up fast and start listing your rooms or even the whole house today. Some brilliant people have even listed their backyard for people to camp or hold parties in. Be creative.
3. Invest In Peer-to-Peer Lending
Investing Simple is affiliated with LendingClub.
Peer-to-peer (P2P) lending, also called crowdfunded lending, is taking off like wild fire. Regular people like you fund all or part of the money for a loan a person needs. Then, the borrower makes monthly payments plus interest.
The process starts when loan officers at qualified P2P lending companies like carefully screen borrower applications, just like a regular bank does. The rest is in your hands. You can choose whether or not to invest in an approved borrower’s loan, and also the set dollar amount you have to leverage.
And the companies do even more footwork for you by evaluating risk. Lending institutions give grade assignments to potential borrowers. An “A” grade borrower might have excellent credit, while an “D” grade borrower might not.
Need help choosing which loans you want to help fund? Many have an automated system where they’ll choose loans for you based on criteria you provide. Doesn’t get easier than that, does it?
All P2P lending companies work a bit differently. However, the premise is the same: You help fund loans for borrowers and earn a higher rate of interest as they pay.
As with all investments, there is a risk of losing money when you invest in P2P lending. If one of your borrowers decides not to pay, you could lose money on your investment.
However, you also have the potential to earn a much higher interest rate. LendingClub, for example, boasts returns of between 3 percent and 7 percent on average per year for investors involved.
4. Start A Blog
Although they’ve been around a while, and may not seem cutting edge, blogs are still hot. Launching a blog means you have to do the research, find a niche, fact check everything you write, and motivate yourself to sit down at the laptop and do the work until you’ve given it your best. Do that every single day at least once, more if you really want to reap rewards.
To create a successful blog that’s a money-maker, you will absolutely need to invest time and a lot of hard work. But once you scale things up, blogging can provide a good amount of residual income.
So, how do blogs make money?
Blog generate revenue in two ways. First, through advertising. We’ve all seen those pop up adds and banners that we watch out of necessity to get to the good stuff. You may click through most of them, but many people are interested in the ads and may actually make purchases based on those ads. So, advertising revenues are generated through direct ads placed on the website.
The second way blogs can make money is through affiliate marketing. This is another form of advertising that gets paid to you when a member of your audience clicks on the link and completes an action, like buying a product or service. Every time someone makes that move, you will earn a commission of some sort. Perhaps it will be a set dollar amount, or a percentage of the overall cost of the product or service. Whatever you receive, it’s all good, because it’s all residual income you will earn over and over and over to infinity.
5. Create An Online Course
Investing Simple is affiliated with Teachable.
Come on, you must be an expert in a field or have some kind of specialized skills or knowledge that others might want? Figure out how to teach others what you know, and then create an online course. Think big! It could range from how to crochet baby socks to how to pickle cucumbers. Sometimes the most outrageous topics garner the most buzz.
Online courses are a phenomenal way to generate residual income. Simply create the course once, put it online, and sell it for years to come!
It doesn’t take a rocket scientist to create an online course. Set up your curriculum, or outline the way you will walk newbies through your vast wealth of knowledge. Determine what visuals you can use (generally, the more, the better!) Start with a few modules and then pull together your own focus group. Find some friends who don’t mince words, and ask for their honest, no-holds barred feedback on what you’ve produced. Then, tweak away! You can always update your online course along the way.
There’s a great online tool called Teachable to help you start, and it’s user friendly. The best part? They offer completely free plans for beginners to start out with!
6. Start A YouTube Channel
Always wanted to speak in front of the camera? You could be a good candidate to start a YouTube channel.
The first thing to do is find a niche. A great way to start is to ask yourself what you are passionate about. If you find a topic that’s irresistible to you, that enthusiasm will spill over to your audience. Maybe it’s tying knots for fly fishing. Maybe it’s baking the perfect banana muffin. Or watercolor painting. Anything that’s fun and a learning experience will resonate with an audience, and once you target that audience, it has the potential to thrive.
Keep in mind, the best channels are entertaining AND informative. People should feel like they are getting something in return for the 10 or so minutes they’ve watched your channel.
As with an online course, ad revenues are an exceptional way to earn residual income. Once you’ve built a good number of followers, you can use that to your advantage. Advertisers with products or services related to your channel will come knocking at your door. They could be banana growers, or yarn sellers, whatever, but all of the ads will have one thing in common: they will earn you a tidy residual income.
7. Open An Online Store
Who needs a storefront these days? All you need are items to sell and the initiative to set it all in motion.
Again, finding a niche is foremost in this residual income plan. Maybe it’s designer purses and wallets. Maybe it’s retro kitchen aprons. Or silver belt buckles. You name it, there’s probably a strong market for it out there.
Get creative! Come up with a catchy domain name and bling it out with graphics. Use marketing strategies like BOGO or anything else you can come up with.
Make sure to factor in the cost of shipping/handling in the price of your items. You want to maximize profits without ripping off your customers.
Selling unique, sought-after products through an online store is a solid way to make residual income.
8. Build An App
Here an app, there an app, everywhere an app, app….you name it, apps are everywhere. This makes it a great time to cash in on the trend and get some residual income flowing.
Simply build the app, list it in either the Google Play or Apple App Store (or both), and let the residual income start rolling in.
Have you come up with a great idea, but are sorely lacking in the techie know-how to create it? Hire an app developer to make it for you! This will be a monetary investment up front, but if the app takes off, you’re looking at a nice steady stream of residual income.
9. Come Up With “The Next Big Thing”
We don’t know what that is….but you might. Put some thought into it, get creative and jump in with both feet. The world is awaiting the next big thing, and that could just be something YOU come up with. And it could bring in a ton of residual income, so you can sleep in whenever you choose.