If there’s anything that the last few years have taught us is that every plan should have a backup plan. Financially, there are several ways to create security around an income. In the past, if you needed more income often the path meant getting a second job. The gig economy and advent of self-scheduling jobs like driving for a ride share company or doing food delivery have made earning extra cash easier than ever. But passive income could be an even better way to pad your accounts and not spend a lot of extra time doing it.
What is a Passive Income?
Passive income is just that, income that doesn’t require constant work to keep funds flowing. Common passive income used to mean rental income or royalties, but now there are more opportunities than ever to earn. While passive income implies that no work needs to be done, in most cases, you’ll have to put in a bit of upfront work and most likely some continued maintenance to keep your income flowing.
Types of Passive Income
There are no hard and fast rules as to what can qualify as passive income. Doing a quick web search can give you tons of ideas on how to create those earnings. For people who may have more expendable cash, real estate is usually a popular way to create income. Buying a rental home could create significant income in specific markets. Like all real estate, there are risks that need to be considered such as maintenance of the home, property damage by renters, or even no renters for elongated periods.
If you consider yourself a creative type, there are several paths to generating that passive income. Writing an e-book or creating and publishing a course can be great streams of income. Both require quite a bit of upfront work, but may require little follow up. If you are an idea person, creating or designing a product that can be used electronically could be a smart move for you. However, creative endeavors sometimes mean that in order to sustain the income, you will need to create more. Consider the balance you are looking for when it comes to work time versus income.
Even those with smaller cash flows can use investment money as additional income. United Heritage offers several different CD options
and our current members can open an account online in minutes with only $1,000. Putting your funds into these types of accounts offer lower risks than other investment streams. CDs, or certificates of deposit, have fixed return rates and offer a variety of term lengths. United Heritage offers several different CD options and our current members can open an account online in minutes with only $1,000. CDs are considered one of the safest types of investments and are ideal for creating income that you truly don’t have to constantly maintain.
Pay Off Debt
Getting rid of may seem like it isn’t an income generator, but consider that you’ll have more income when you have fewer debts. If you have credit card debt, consider consolidating or transferring your balance to a card with a lower interest rate. We’ve listed several ways to manage credit card debt here
There are no limits to how many streams of income you might have, so think out of the box and find a balance that works for you. Start small and see what generates your best rates of return for the amount of work you want to do. Remember, your passive income is just one other piece to having a secure and robust financial plan.