If you’re looking to add a passive income stream to your personal income statement, there has never been an easier time than right now. The internet has the capacity to give you instant access to anyone in the world and has created opportunities that didn’t exist just a few years ago. Additionally, since the creation of the Sharing Economy, more people are side hustling and creating passive income than ever.
Before we share our best passive income streams to add in 2020, first let’s talk about what passive income is and why it matters for you.
What is passive income?
If you’re not familiar with passive income, it’s income that is earned from a business or investment that you’re not actively involved in. In other words, income that you earn without having to work for it every day. The most classic example of passive income is a tenant paying rent to a landlord. The income that the landlord earns from the tenant is largely passive because it requires little day-to-day effort from the landlord. There are many different types of passive income, ranging from online businesses to passively managed rental property businesses.
Why would you want passive income?
Creating passive income streams is a key to achieving financial freedom. This is especially true in today’s world because of the rising cost of living in the U.S. coupled with stagnant wages over the past few years. By establishing multiple passive income streams, you’re able to divorce your income from your time. Passive income from businesses/investments will cover your expenses and you’re free to spend your time in any way you see fit.
There are quite a few ways that you can create passive income. We’ve broken it down into a few categories below to help you determine which ones might be best for you.
Financial Income Streams
Cash is still the easiest and best passive income stream around. If you have a decent amount of cash on hand, it’s easy to invest it in non-risky places and earn an income that is 99% passive. When you do this, you turn from a borrower (95% of the population) to a lender (5% of the population). After lending your money, you will enjoy an interest payment a few times a year. Some examples of good places to let your cash work for you are:
- Dividend Producing Stocks
- Corporate/Municipal Bonds
- Income Funds
- REITs
- Peer-to-Peer lending sites like Prosper or Lending Club
Chances are that you’re familiar with most of these instruments as they’ve been around for a while. However, what is relatively new is the ease at which they can be accessed. Platforms like Robinhood will let you purchase any of the above in minutes from your smartphone (with no trading fee!).
After purchasing any of the above, you will receive passive income in the form of interest payments that come either monthly, quarterly or bi-annually.
Business Income Streams
Passive income from businesses has the highest earning potential on this list as the amount you can earn is essentially unlimited. Business income stems from businesses that you own or invest in.
There are unlimited options for types of businesses you can start and platforms like Shopify make it super easy to get started. If starting your own business seems too intensive, head over to Flippa and you can buy one that is already up and running.
Another option for investing in businesses is Nextseed, a platform that vets local business opportunities and opens them up to be crowdfunded.
Online Income Streams
Online income streams have the second-highest earning potential on this list. As with businesses, creating a steady online income stream will usually require a lot of upfront work before you can reap the rewards. However, with many of the examples below, once the work is done the money is almost 100% passive.
Some ideas for creating passive income streams online are:
- Create an online course or eBook
- Gain a large following on social media and sell endorsements/promotions
- Create a blog and charge companies to refer their products
- Check out Royalty Exchange where you can invest in the intellectual property of other individuals and receive royalty payments when that property is used.
The key here is to determine what knowledge/value you have that you can offer to others. What value can you produce that other people will consume?
Sharing Economy Income Streams
Since the introduction of AirBnB in 2008, people have been scrambling to create other platforms that empower consumers. About 10 years later, the result is that you can make money by renting out just about anything you own. This list is a little long but bear with us. We’re confident there will be some new options you haven’t seen.
Renting Out Real Estate
- Airbnb – At this point, everyone knows Airbnb. Rent out your house/room and make money.
- VRBO – (Vacation Rentals By Owner) Airbnb but exclusively for vacation destinations.
- Homeaway – Another vacation rental site with 2 million listings in 190 countries.
- eVenues, Peerspace, Splacer, ThisOpenSpace – Rent out spare meeting rooms, creative spaces, or other similar venues.
- Venuelust – AirBnB for unique destinations.
- Glamping – AirBnB for luxurious camping destinations.
- Storeatmyhouse – Rent out your spare storage space.
Rent Out Your Camera
- Sharegrid – Rent any camera equipment from lenses to drones to audio.
- Kitsplit – Rent out gear for filmmakers, video producers, cinematographers, etc.
Rent Your RV
- Campanda – 26,000 RVs in 42 countries.
- Outdoorsy – Rent your RV and get paid.
- RVShare – Claim you can earn up to $22,000 per year depending on the RV.
- URentMe – List any type of recreational vehicles (RV’s, boats, ATVs, motorcycles, etc.)
Rent Your Motorcycle
- Riders Share – List your motorcycle for others to use.
- Twisted Road – Another similar company.
Rent Your Boat
- Boatsetter – AirBnB for boats. List your boat and get paid. Captain optional.
- Getmyboat – Incorporates water sports equipment as well as boats.
Rent A Bike
- Spinlister – Rent a bike/surfboard/snowboard anywhere in the world.
Rent Out Your Fancy Clothing
- Borrowing Magnolia – Rent out your wedding dress and get paid.
- Style Lend – Rent out any designer clothes including dresses, shoes, bags, and accessories.
- Rentezvous – Rent out designer clothing.
Rent Your Commute
- Roadie – Roadie will pay you to deliver products in a direction you’re already heading. Earn up to $650 on longer hauls.
- Citizenshipper – Online marketplace for peer-to-peer shipping.
Rent Your Car
- Turo – Have a spare car sitting in the driveway? List it on Turo and let people rent it from you!
- Maven – Another carsharing service launched by General Motors.
- GetAround – A carsharing service available in 300 cities around the world.
Rent Your Stuff
- Peerenters – List spare things you have around the house for others to use.
- Buro – A Toronto-based company that encourages people “don’t buy it! Buro it.” Make money lending your stuff to neighbors.
- Rentnotbuy – Another marketplace for renting your stuff.
- Loanables – Another marketplace for renting out your stuff.
Rent Your Driveway/Parking
- Pavemint – Get paid to share your parking spot.
- Curbflip –
- Rover Parking – The AirBnB of parking. A Canadian company that helps you make money off your spare parking space.
- SPOT – Make money by renting your parking space.
- Airgarage – Helps you monetize empty parking spaces.
Since many of these companies have been created in the last few years they don’t have the saturation that AirBnB has. It’s definitely worth creating a post just to see what happens!
We hope this article will be helpful in helping you create a new passive income stream in 2020! With so many options available, there’s really no excuse for not adding at least one new passive income stream in the new year. If you can think of any that we forgot, feel free to comment them below.
