Inflation is high. Even if it is stabilizing, it’s stabilizing at a high rate, and the Federal Reserve seems to think that it will take a while for things to get back to any sense of normal. As a result, we’re all pinching pennies and looking for extra income. If you find yourself in that boat too, then you might want to find some opportunities to generate passive income.
Fortunately, those opportunities are abundant. They range from making smart investments to trading a little bit of time for income in the future. Below, you’ll find a varied list of some of the best passive income ideas for 2023.
1. Rental Properties
One of the most popular and reliable ways to generate passive income is investing in a rental property. The concept is simple. You buy a property, and then you rent it to someone who lives there. You can focus on single- or multi-family dwellings. It’s really a matter of what you can afford and what deals you can make.
You can also focus more on equity or more on income. Often, there are low-cost properties that you can buy to quickly start generating income, but they won’t appreciate as well. Meanwhile, there are more expensive properties that will generate less profit in passive income, but they appreciate better and provide you with more overall wealth. It’s all up to you.
One thing that can help you find good rental property opportunities is to look into wholesale real estate. Wholesalers can often find the very best deals, allowing you to break into the investment for less money today, and you can start generating your passive income that much faster.
Stocks and indices are common places to start investing. You can put money in, and over time, you expect your investments to grow. But, those investments focus on generating wealth more than income. The idea is that you can liquidate your portfolio over time if necessary.
If you really want regular income, then dividends are a better place to start. You can focus on stocks with the most reliable dividends. In that way, you can turn cash into income, and you can do it with much smaller investments when compared to real estate.
You can also generate passive income without spending money. Instead, you can sell advertising space.
There are a few ways to go about it, but two options are a lot easier than some of the others.
You can sell advertising space on your vehicle (or vehicles). Provided an advertiser is interested in your vehicle (they might not want to advertise on a clunker, for example), then they will pay to paint an advertisement on the car. They will also pay at regular intervals for you to keep the ad on your car. It’s a simple step to take.
The other common option is to sell digital advertising space. If you have a website, you can get pay-per-click ads that will generate a little revenue every time someone visits your site and clicks on the ad. Naturally, this works better if your site is more popular, but you can get passive income regardless.
It’s also possible to sell ads on content for popular social media accounts. It’s essentially the same thing, but they might have you post a picture or a video with the advertisement. You still get paid when people view the ad.
4. Local Business Investments
You can take a very different approach and invest in local businesses. You provide cash, and you get equity in the business — entitling you to a percentage of the profits.
Such investments are much riskier than those mentioned above. On top of that, you need a pile of cash for this to work. Typically, you won’t get a loan just to invest in a local business unless you’re already a founding member or an important part of the business. If you’re just looking to invest locally, you’ll need cash.
5. Peer-to-Peer Lending
This is another way to try to turn cash into passive income. You can do it very easily. There are a number of peer-to-peer lending sites. The way it works is exactly as you imagine. You loan someone money (for any number of things), and they pay you back with interest.
Naturally, there is a risk that the borrower won’t repay the loan, so you’ll have to take that into account.
The nice thing about peer-to-peer lending is that you don’t need a ton of cash to get started.
6. Digital Sales
Here is another passive income option that doesn’t require you to spend or invest money. You can market digital sales.
What does that mean?
Well, it’s pretty open, but basically, you’re going to sell things that only exist online. Some common options include online educational courses, ebooks, music, NFTs (which might be losing popularity), and graphic designs. In any of these cases, you make something, and then people can pay to download it. As long as access to paid downloads remains, you can keep generating passive income on the same digital creation.