Passive income is a goal for many.

We all work hard for our money, and the goal of creating passive income is to then get that money working for you. To make money while you sleep, and wake up a little wealthier than when you turned in.

So let’s first define our goal of passive income.

Passive income is achieved by investing time or money, or both, initially and letting that create more income over time.

So, a word on what passive income is not. It is not a job. But that is obvious. To be passive the income stream requires very little time, or significantly less than a full-time job…or more time, but for a defined period of time, followed by much less time spent while the income stream continues to flow.

And, it is not a side-hustle, normally. If the side hustle requires an hour of work to make $X dollars and will require the same hour of work to make a similar amount tomorrow, then you have created a great second income stream…but it is not passive.

Yet, if your second income stream goes to fund a then-passive stream, then you are headed in a good direction.

I do find it interesting that 65% of millionaires report having 3 streams of income. Not that they are all passive, but there are only so many hours in the day, so adding at least one passive stream can definitely help.

Let’s take a look at a few, with the hope that you will add at least one passive income stream.

High yield savings account

It’s not sexy. But it serves a purpose. Oh, and you will never get rich off of your high yield savings account. But you will have security, and a little money being made on your money.

In the world of real estate lending that I have lived in these past 19 years, I can tell you that a very small percentage of those whose financial statements I review actually have this. Please don’t confuse this one with a 401K that is funded. That is for later. The savings account with $30,000 or $50,000 is really just for peace of mind…and to earn a little interest on the principal amount along the way.

But I can tell you that those who have this account have confidence and peace about them that others just don’t have. I really want you to have that same peace, that same silent confidence.

Invest in REIT

A lot of people enjoy investing in real estate. And that certainly can be a passive income stream, receiving rents every month. A lot less passive if you hire a property manager.

But what if you don’t want the hassle at all of managing repairs and regular maintenance? Then investing in a real estate investment trust (REIT) may be your preferred way. With a REIT you gain from the cash flow and appreciation of the underlying properties, with no hassle other than watching your return on investment grow.

A REIT owns, operates, or finances income-producing real estate. And investing in a REIT, you receive a percentage of those rents as a return on your investment. And that’s what I love about a REIT, it’s very straightforward and easy to understand. A lot of REITs are publicly traded, so you just buy shares in them. Just look for REITs that pay dividends, so that it qualifies as passive ‘income’; or sell puts against them every 45 days to gain premium income (more on that in a later article).

Or, you can invest directly with Fundrise.

Either way, given the changing economy, you will want to steer clear of REITs that are heavily weighted toward office or retail…at least that would be my recommendation.

Invest in real estate

Very closely associated with the previous would be directly investing in real estate. And you can use leverage to help increase the ROI.

Here, I would keep it fairly simple and plan a buy and hold strategy. A 1 to 4 unit property is the easiest to get a loan on. For a single-family investment, you only need a 15% down payment – although the rate and cash flow will be better with 20-25% down. If you buy a 2-4 unit property, a duplex, or a quad, you will need the 25% down payment.

Oh, and I can help with the financing on the property. Just click here and you can get pre-approved rather quickly.

As far as finding the right property? Look for a local Realtor who sells a lot of homes and therefore really knows the area. That agent should be able to tell you where the best deals are, the up and coming parts of town where you stand to see the greatest appreciation, and where you can command higher rents.

And, one last thought. A good property manager is worth the fee that they will take – approximately 10% of the rent. That property manager can take the call when the water main breaks in the front yard at 2am on a February evening. True story, happened to one of my properties that I self-managed. I was cold and miserable that night.

Dividend stock investing

Even more passive, build a stock portfolio of good, long-term growth companies that pay dividends. Your portfolio should grow in value over time, while you are collecting quarterly dividends and growing even faster.

I enjoy options trading (which is not passive, so I have not included it in this list), and recently got put shares of a company I had sold puts against. Energy Transfer, stock symbol ET. I figured I would hold onto it for a while and try to recoup some of the loss by selling puts against the shares. Sort of like renting the stock out every month for a small premium return. It worked, several times over.

Then I realized that ET has a very high dividend, nearly 20%. Surprise. I was not even paying attention to that. But it is nice, and now I am holding this one for the long haul.

A portfolio of dividend-paying stocks can supercharge your return over time.

Refinance your home

Sounds odd, right?

A new mortgage, even a lower rate, is debt, not income. True.

But I consider paying off debt to be the forerunner of building wealth. So whether you have little to no debt other than the mortgage, or you have a pile of credit card debt, car loans, etc, refinancing at these historic low rates can propel you a long way toward your financial goals.

Here are two primary approaches to a refinance.

A. Shorten the term. Taking a 30 year fixed rate at 4.5% and going to a new 15 year fixed rate at 2.25% will save X in interest that you do not owe over the life of the loan.

B. Take out a new 30-year loan, let’s say at 2.625%, and reinvest the difference. In other words, keep paying the same as you were. Look at the interest you save there, as well.

C. If you have debt, most of us who have been in our homes for a while now also have equity. I just did a cash-out refinance to consolidate or pay off credit cards and a couple of installment loans. That homeowner improved cash flow by $714 a month. There’s found money that you can then invest. Start with passive income idea #1, above.

And the good news? I can help. Just click here to get started with your home loan application.

Options investing

Okay, I know I said I was not going to include this. But on second thought, it is, or can be, fairly passive.

First, you need to learn what options trading is – and jump into the world of Puts and Calls, Strike prices and Delta.

Don’t worry. The learning curve really is not that steep. And it’s a lot of fun.

If trading options appeals to you, then I recommend the trading platform TastyWorks. $1 commissions to get into a trade, and zero to get out. Plus, the platform is really simple to navigate…but be sure to use the desktop downloadable version. The web version is not so easy.

What I really like about this platform is the learning platform with it, TastyTrade. Start with a really simple introduction to options, just to get familiar with the basics, then step up to the next step in trading training. They have live shows throughout the day. I like to catch Liz & Jenny at 11 am EST. Funny, relatable, and they normally take a couple of trades that you can follow into and out of.

If you are new to options trading, go at it with an open mind to learn, and start with small ‘baby’ trades. One contract at a time, diversified over several sectors. You will be glad you did when others have a bunch of Calls on the big tech stocks, Tesla, Apple, Netflix, and that sort…and they all take a dive at the same time like they did last week.

This can be a very active way to earn income. I suggest you learn and keep it relatively passive for now. Small trades, put stop orders in, and you won’t have to watch them every day. Last week, for example, Chewy was declaring earnings. I opened a trade, set a stop at 50% profit, and as soon as the market opened the next day – surprise – I was out of the trade and $126 better off for it. Nice!

Create a course

Now here’s something I have not done. Yet.

But a lot of people have and with e-learning growing, they are serving people and making a nice income. If you have expertise that you can share and help better people, then you could create a coaching program and train one-on-one. But that is not passive. That is actively involved with each participant.

Or, you could create a course to share with many. It is active as you create it. And if you do it right you will always be somewhat active, answering the question and helping where students get stuck. But that can be via a platform that you invite them to, such as Telegram, or a simple Facebook group that members can join, and all share together.

What to teach? Whatever you have experienced and can coach others on.

Although I don’t know them personally, I love the story of Paul & Stacey Martino. On the verge of divorce, Stacey decided to change. To change herself. Paul changed, too, in reaction to his wife’s transformation. Their marriage strengthened. And they taught others to do what they had done, starting a movement that has been met with very much success.

And the examples are abundant. I will mention another in the next section.

Start a blog

Well, sort of like this one. And, starting the blog is not passive. It takes a lot of effort to get it up and running. So, be sure to start on a topic that you are passionate about.

Love to cook healthy? That’s your blog topic.

Over 50 and love to run marathons? A lot of 50-somethings who love to run will follow your content.

I am thinking of building out a campervan for use and to rent. In exploring the topic, I ran across this blog, which featured The Worst Parts of VanLife: The Stuff Nobody Talks About. Gotta get the good with the ugly before pulling the trigger on a campervan. And who knew you could have an entire blog about the topic?

So if you want to start a blog, I cannot recommend highly enough this quick course by Nate and Spencer. I had a fairly successful blog – all about mortgages – several years ago. So in starting this one I hesitated to jump into this $99 build a blog together style course, the 21 Day Blog Challenge. But I did, and I learned a whole lot that I just did not know before. If building a blog and monetizing it for somewhat passive income is your goal, I would not hesitate to jump in and join Nate and Spencer and build it along with them. You will be waaaay ahead of the game, and very glad you did.

Buy a Blog

Similar to building a blog. But what if the foundation of solid content, a following and design were in place. 

Especially if you can add fresh content, optimize the SEO and monetize the site differently, then you could be ahead of the game by buying an existing blog.

You can look on sites like Flippa.com for existing sites for sale, or simply approach blog owners directly. If you see a blog that has the foundation in place, but may be looking a little tired with a slow publishing schedule, that could be a blog owner whose interests are elsewhere, and may be happy to collect a payday for the work already put in.

It doesn’t hurt to ask if they will sell. There are only two possible answers…and one of them is pretty good.

Write a book

Definitely not passive as you are birthing this creation. And, being married to an author, I can tell you that it is not enough even to just write the book. At least an equal amount of effort should go into marketing and getting the word out about your book. Otherwise, your mother will be very proud of your for writing it; and no one will ever crack the cover of your book.

That said, once the initial work is put in, a book can sell for years and years. My wife’s first book still brings a royalty check every quarter, and she published that in 2007.

If you have a book in you, the very best strategy for writing and marketing the book, quickly, can be found in the One Funnel Away challenge. I recommend you join. Here’s a heads up – the strategy is to give the book away…the recipient only pays shipping and handling, and you create upsells with it as they check out.

Because unless you are the next Stephen King or Nicholas Sparks, you will probably not get rich writing books…unless you sell your book differently than most. And the One Funnel Away Challenge will walk you through the entire set up in just 30 days.

You won’t have the book complete in 30 days, mind you. You will have the marketing structure ready to launch, and the exact way to market it to make a splash and sell a lot when it’s complete. You may even have the confidence and know-how to market and sell your book before it is written. And that would be cool.

Build a software solution

Again, something that takes a lot of effort to create, and some to maintain and fix glitches and update. But, if can be a very good, fairly passive income once created.

In my industry, for example, Dave Savage created Mortgage Coach some time ago, and had continued to improve it over the years. It is a really great way to present mortgage options in a very user-friendly way, much more readable for the average home buyer than the traditional Loan Estimate. I used some screenshots from the software in #5 above.

I have no idea what Dave makes from his software creation. But I know he lives a very comfortable life – and helps a whole lot of us up our game and serve clients at a much higher level than our competition.

Do you have an idea that would make things in your industry or your life just a little easier? A better way to do something repetitive that would solve a problem for a lot of people?

Well, great. Just design and create the software that would solve that problem.

No programming skills? No problem. Just enroll in a four-year university course on programming…

Just kidding.

Hire a programmer on Upwork or freelancer.

I have hired several people on Upwork over the years, and one tip to succeed that I could offer is to really define what you want the person your hire to do. Get granular in the job description and desired outcome. Then hire three of the best candidates. Yes, three. And give all of them the same, very small, and relatively quick task to complete. Not the whole project yet, just something simple.

I have found nearly every time I hire someone that when I give all three the same task, one excels and exceeds my expectation, another will be slow and produce something, but inferior, and the third, almost invariably, will never complete the task.

Now you can pay the other two a bit and let them go because you found the right person for the job.

Oh, and I would not shy away from hiring from a different Country. I have had success hiring someone in India, the Philippines and even Denmark. And, your creation may come in at a much lower budget.

Then, as you add users to your software platform, that can create recurring income every month, or every year.

Save your spare change

Few things on this list are as passive as this one.

Similar to coming home and emptying our pockets of change into that change jar…remember when we used cash and had pockets full of change?

Well, the new and really simple way I love to do that same, digitally, is with Acorns.

You may be familiar with this one; but if not, you spend money on your debit card, and Acorns rounds that up to the nearest dollar and deposits that change into your Acorns account, which is then invested in ETF or stock funds.

I joined in April of this year, and have $706.15 in my Acorns account as of today. Sure, not ready to retire just yet on my Acorns account, but the invested money has a +3.49% return since then.

Every little bit adds up; and your Acorns account can be one more, very passive income stream, over time.

Rent your car

If you, like me, and working from home these days more than you used to, then your car is sitting in the garage for, sometimes, days at a time.

Why not rent it using Turo?

I have not done so, yet. But I could as we can make due during the week with my wife’s car if we coordinate together. That and one kids’ car, if we dare jump into my son’s car (does he ever clean that?…)

I do have friend who has been renting his car on Turo for some time. It more than covers his car payment, and last time I spoke with him about it he was seriously considering buying another car, just to rent it on Turo full time. It would be a money maker.

And that is fairly passive. List the auto on the site, and field requests to pick it up and use the car for a few days at a time.

Build a funnel

Well, I mentioned this one before when talking about marketing your book. But a funnel can do a lot more than market a book.

I am in the mortgage business, as you know. I have funnels that promote a home buyer webinar that I hold weekly. Several Realtors that I work with have a unique link that they can share with any potential home buyer – you know, the one’s who just want more information before jumping into the market.

Those people can sign up for the webinar and attend and get their questions answered in a non-committal environment. It serves those potential home buyers and helps build the real estate agent’s business at the same time.

Another funnel shows any real estate agent the exact method I use to get home buyer leads online. They can imitate it, replicate it in fact, and I give them the ads I use, the funnel I use, and everything they need to replicate it and grow their business.

Do you offer a service, a product?

I know a chiropractor who grew his business a whole lot using a funnel and running some inexpensive ads to it.

If you want to grow your business or a side idea, you can have your funnel built and functioning, the right way, in 30 days by following the One Funnel Away Challenge.

It will serve

you well. 30 days of work, about an hour a day, and you will have it up and running and working for you.

That’s it. A short list of passive income strategies. Some, of course, require work up front. But it will diversify your income and help build wealth over time. And it is not exhaustive. Think selling photos on Shutterstock or licensing your music…you can even buy the royalty rights to the movie Trading Places. Really.

A word of warning: just take on one at a time. Each one requires some setup or learning up front…or most of them do. Acorns or a high yield savings account really don’t. Others do.

I like to think of it like you are building a bridge across a stream. You are on this side of the stream; a bag of money is on the other side of the stream. But you cannot pick it up and bring it to your side of the stream until the bridge is complete. So, complete one, bring the bag of money back to your side, then perhaps pick up another and build that bridge as well.

Remember, 65% of millionaires have 3 streams of income. Some have multiple businesses. Many use some of these passive income strategies. So, choose one, add it, and you will be very happy that you did.