Typically, earning a passive income usually involves some sort of upfront investment of time and money. However, that may not be appealing to you. If you have money but don’t have the time available, there are still ways you can earn extra income on the side. While not all of the following methods yield major returns (although some absolutely can), all they require of you is a small amount of research and the willingness to spend some money.
Keep in mind, no investment is guaranteed. There’s always some degree of risk involved. It’s entirely possible you’ll make a lot of money on the side with the following strategies, but you should remember that it’s possible you’ll lose money. Understanding the risks is key to avoiding unwanted consequences. Most importantly, you should never invest more than you’re willing to lose.
That being said, if you are looking for a way to make a passive income as easily as possible, these methods may be perfect for you.
REITs
An REIT, or real estate investment trust, is simply a firm that manages your real estate investments for you. Because these firms use pools of money from users, they allow people who may not have access to large amounts of capital to invest in the real estate sector. More importantly, they’re ideal for people hoping to earn a passive income, because the company manages the actual investments. You simply provide the money, and the REIT decides where it goes. Again, there’s some risk in this, but if you don’t know much about the real estate market, you’re much more likely to be successful letting professionals determine which investments are safe.
Many REITs trade on major exchanges, so if you open an account with any major brokerage, you’ll be able to find several to potentially invest in.
ETFs
Like an REIT, with an ETF, or exchange-traded fund, customers provide the money while the ETF determines which assets to invest in. These assets are divided into shares, like stock. As the name implies, you can buy shares of an ETF on most major exchanges, the same way you would buy shares of stock.
It’s worth noting that tech innovations may potentially result in ETFs that are safer and more rewarding than ever (although, of course, that’s not a guarantee). That’s because deciding whether an investment is a safe bet typically involves analyzing data and trends to make predictions.
Artificial intelligence, however, can analyze data much more efficiently than a human can. It can also essentially analyze it 24/7. AIEQ, an ETF launched in 2017, uses AI, rather than human specialists, to choose investments for its customers. Although not enough time has elapsed to determine how successful it will be in the long run, AIEQ has consistently beat the market.
Online Savings Accounts
If you’re looking for one of the safest ways to make a passive income, put your money in a high yield savings account. While this likely won’t be as “fun” as other methods, which could yield surprisingly large returns if certain investments pay off, it is a smart way to turn your money into more money without much risk involved. Thanks to the rise of online banking solutions, you can also find high yield savings accounts that allow you to withdraw your funds earlier than most traditional accounts from the past.
Online banks also offer an additional benefit many people overlook: higher annual percentage yields. Most banks have to maintain their brick-and-mortar locations, limiting the annual percentage yield they can offer customers.
Online banks don’t have those expenses. Thus, they’re able to pass the savings on to you, letting you earn a higher percentage return each year than you would with a savings account from a traditional financial institution.
Different accounts offer different benefits, so it’s smart to do some research before choosing one. Simply searching for “online high yield savings accounts” will provide you with more than enough resources to help with this decision. New accounts are available every year, and there are plenty of experts who review them, too, helping you better understand which is right for your needs.
Again, you shouldn’t consider any investment to be 100 percent safe, but you should also understand that REITs, ETFs, and high yield savings accounts represent some of the easiest ways to grow your money on the side. Unlike some other passive income strategies, they don’t require you to invest much time or effort up front. All you need to do is provide some money. As far as earning an income goes, it couldn’t be much simpler.