Make More and Do Less: Passive vs Active Income

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Today I have a great guest post from Briana. Briana is a content creator from Austin with interests in finance and career development. When she’s not at her desk, you can find her out with her rescue dog, Miko, or enjoying a good book.

If you’ve maxed out your schedule with a day job, side hustle, and daily parenting duties, you may feel like you’re at the end of your rope and out of options to make some extra spending money. What you may not have considered is how you can make money while you sleep—literally. 

This brings us to the beauty of passive income. It’s just as it sounds—income that’s acquired passively vs. actively. Unlike your side hustle, you don’t have to dedicate several hours of your weekly free time to earn extra cash. Instead, you build a product or service that sells and functions with little to no continued attention from you. 

Passive vs Active Income

Passive income is money you earn with relatively little upkeep. You’ll likely have to invest some time upfront to create your income stream. This can be as active as writing an eBook or as simple and choosing an appropriate investment. In both of these cases, you’ll start accumulating an income when the work is completed with little effort on your part aside from the occasional promotion.

Active income is what you’re likely most familiar with. Your day job is an active income stream because you have to actively work some 40 hours a week to continue to receive your paycheck. The work never really ends, but active income tends to pull in more money and is a constant, guaranteed income. Depending on your choice of passive income, there may not be any guaranteed return on your work. 

At the end of the day, income is income. It’s up to you how hard you want to work for your money, which is why it’s important to first understand the difference between passive vs active income.

Passive Income Ideas for Everyone

The best part of passive income is there’s an opportunity to anyone to build a passive income stream with the skills they possess. Creatives, thought leaders, and financial gurus all have something to gain from passive income.


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1. Buy Index Funds

Index funds are a collection of stocks and bonds you can purchase for a specific financial market. While they may be a little risky, they’re quick to liquidate and easy to diversify. This way you’re better protected if one of your investments under-performs.

My recommended place for stocks is through a company called Webull. What I like about them is that when you sign up, they give you two free stocks. Not bad!

2. Try High Dividend Stocks

High dividend stocks can also get a little risky, but the payoff is higher than the benchmark average—which could really give a boost to your yearly income. Be sure you have the know-how to understand the fine print or find someone who does to help you make a smart investment. 

3. Invest in Money Market Funds

Money market investments are stable investments that allow you to make interest from interest. These investments are short-term and typically backed by corporate or bank securities, so there’s little risk. On the other hand, earnings are likely to be lower than other investment opportunities and there may be fees required to get started. 

4. Pay Towards Your Debt

While this doesn’t technically generate income, it does save you from spending more on interest and can help you put some money back in your wallet. This can help you build a more manageable budget and give you more to actually invest later, which returns more income than you would have otherwise. 

Related: How to Start a Budget You Actually Stick To

5. Check Out Real Estate Options

Real estate is a classic means to extra income, but it is a long-term investment. If you’re looking to settle down somewhere then consider purchasing your space rather than renting. Not only is it likely cheaper in the long run, but your home is likely to build in value over the years—giving you something to cash out on later. 

The big negative here is that you’re on the hook for any repairs and maintenance to the home. The flipside of that they’re investments that push your home’s value further and you get the direct benefit of these investments. 

6. Consider Peer-to-Peer Lending

If you have a friend or relative looking to buy a home or business space they may need some extra help covering the down payment or other startup costs. If you have the extra cash, consider being their loaner. You get to help a friend and make extra money off of interest, and they get the cash they need and may even get a better interest rate than the bank would offer. Just make sure you involve a lawyer to draft a proper contract to keep everyone safe. 

7. Rent Out Your Extra Space

Guest rooms, apartments, and even vacation homes can generate passive income from travellers or short-term renters. You have the space, so why not make money off of it? There are plenty of services that can help you advertise and exchange money with little risk to you and low startup costs. The only thing you’re responsible for is arranging for the space to be cleaned in-between uses. 

8. Save with High-Yield Accounts

If you’re new to investing, then high-yield savings accounts are a great place to start. They return higher interest rates than other savings accounts and you have full control of your investments and when you take cash out. You won’t get rich, but it can help you reach a long-term savings goal with little work on your end. 

9. Try Affiliate Marketing

This passive income idea requires a little more continued work than other options, but is still relatively easy and can help you earn more than low-risk investments would. If you have a following on social media, You Tube, or a blog then consider partnering with a product or service brand to make extra cash. 

The brand will provide you with a unique link to their service and all you have to do is promote it! For each click or sell that comes through your unique link you earn a profit. 

To learn everything you need to know about affiliate marketing, and I mean everything, I highly recommend taking the online course Making Sense of Affiliate Marketing. Click the link to check the course out.

10. Sell Stock Photos

Whether you’re a professional or hobbyist, stock photography is the easiest way to make money off of your camera skills. There are plenty of services that allow you to upload your photos for others to purchase the publishing rights to. There may be some service or commission fees associated with these sites, but if you’re an active photographer you can continue building your portfolio and increasing your cash flow with hardly any extra effort. 

11. Publish an eBook

Are you an expert at what you do? Or maybe you just have a great story you’ve been dying to tell? If you have the writing skills then you can write an eBook and self-publish online. This is especially great for career specialists and coaches who already have a trusted reputation in their industry. 

If your online following is more casual you can still find plenty of success through self-publishing, but you may have to be more active with promoting your work and building your network online.

12. Sell Your Items Online

Clean out your garage, closet, and hobby room and sell what you don’t need online. Some sites like eBay may include selling fees, but others like Facebook Marketplace are totally free and local buyers can save you on shipping. 

13. Create T-Shirt Designs

If you’re an artist and looking for new ways to sell your work then you may want to consider creating t-shirts. Not only are they great, wearable marketing for your business, but they’re just as much a utility as they are an art. This makes them easier to sell than other art pieces, and you can use any existing, t-shirt friendly designs you’ve completed. 

If you want to make some money selling tech online, Decluttr makes the process super easy.

14. Start Blogging

When comparing passive vs. active income, maintaining a blog falls somewhere in the middle. Yes, you have to continue producing content to make money. However, the income comes in from advertising, affiliate marketing, and even accepting guest posts—which all require little work on your end. So if you enjoy writing, starting a website is easier than ever and super affordable. 

If you’re interesting in blogging but not sure where to start, check out How to Start a Blog – Easy Quick Start Guide (2020).

Now that you know more about passive vs active income, which route will you choose?

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Passive Income Ideas

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