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Real ways to make money from home

 Real ways to make money from home

Real ways to make money from home

Real ways to make money from home

Want to Make More Money in Real Estate Development? Use AI.

December 17, 2020 4 min read

Opinions expressed by Entrepreneur contributors are their own.

Technology is rapidly changing the way we do business. Across industries, the transformative effect of disruptive technology is driving change towards a more immersive, data-driven approach in various aspects of business in most organizations.

Machine Learning (ML) and Artificial Intelligence (AI) are helping businesses across various industries harness the present and forge a determined future for themselves and their consumers, and the real estate industry is no exception. 

While the adoption of tech in real estate might seem slow, significant progress has been made in defining use cases for tech and particularly, Artificial Intelligence in the industry. Tech-savvy real estate CEOs are aggressively adopting technology-driven strategies and are using the same to gain a comparative advantage.

Roy Dekel, CEO of SetSchedule, shares his view on the adoption of technology and the emergence of Artificial Intelligence in the real estate industry.

Technology in the real estate industry
Unlike similar industries, the process of technology adoption has been deemed slow in the real estate industry. But, we cannot discount the efforts of several players who are taking bold leaps and by so doing changing the narrative of the working processes of the industry. “There is a strong shift going on right now with regards to the adoption of technology in what used to be a strictly brick and mortar industry,” said Dekel, “and such moves are yielding unprecedented results by way of easing the process of doing business in the industry.”
Real ways to make money from home


Related: Making Smarter Homes and Comfortable Lives – Real Estate and Advanced Technology

The Impact of Artificial Intelligence (AI) on the business processes of the industry
Artificial Intelligence has made a strong incursion into the real estate industry, and it is already playing a significant role. Recently, most home buying and selling processes have become more digital than they were a decade ago, thanks to Artificial Intelligence. AI is also exerting firm pressure in the area of virtual tours. “Virtual open house tours are fast becoming the standard; in fact, an increasing number of new homeowners expect to attend a virtual tour as a prerequisite of visiting a prospective home,” Dekel said.

Related: How Visual AI Will Empower Real Estate Industry

This shift towards virtualization and remote appraisals has improved the home buying process for agents and home buyers.

AI is also playing a useful role in servicing and advancing online leads. “While all leads are worth pursuing, AI can immediately help to further advance communications with potential clients and offer customer support on-demand, any time of day,” Dekel said. “By actively harnessing the power of AI you set the stage to start the sales cycle.”

The real estate industry has benefited and continues to benefit from the impact of Artificial Intelligence in the areas of marketing, lead generation and communication.

The advantages of AI for the industry
“It’s a win-win situation for everybody,” Dekel said. For the client, the broker, for everyone. 

Nothing is easy but Artificial intelligence helps you take a few steps in the sales cycle.  For agents, AI can nurture and identify valuable opportunities. This way, they are able to focus attention on leads that are realistic and close deals much quicker.


AI is also leading a new wave of decision making for the client. Dekel says that “almost everything is virtual from staging to tours, and even document signing. Much of this tech has made the process of buying or selling a home easier than ever and will be here to stay long term.”

The emergence of the coronavirus pandemic has shown that technology can play an increasingly beneficial role in the industry and can be a driving force for change and dynamism for all players. “It makes perfect sense for real estate businesses to look to technology to meet the current demands,” Dekel said.

Related: The Switch From Physical to Digital: Technology Transforming the Real Estate Industry

Limitations to the implementation of technology in the real estate industry
There has never been a business better than its people. The same is true for the real estate industry. The people are the most important factor in the proliferation of technology in the industry but unfortunately, they are the most potent deterrents. “If you take an in-depth look into the industry, you would discover that there is this penchant for wanting to stick to old ways,” Dekel said.

Many of the old heads feel that technology would obscure the true essence of the business. However, expanding knowledge can help to reverse the trend and make for an even adoption of tech in the industry.

One Way to Get an Edge in Today’s Real Estate Market: Skip the Mortgage

The housing market is tight, and paying cash for a home could be your ticket to getting your offer approved.

There’s a reason so many people are trying, and struggling, to buy homes right now. Mortgage rates are extremely competitive — in fact, they’re sitting at record lows. That makes it very appealing to buy a home.
But on the flip side, housing inventory is extremely limited, as it has been for months. Many sellers have held off on listing their homes, due at least in part to the ongoing pandemic. As such, there’s been an uptick in buyer demand, which has driven home prices upward.
Sellers have set higher and higher asking prices for their homes. On top of that, many buyers have been forced to outbid each other because the market’s been so tight. That, too, has resulted in higher home prices and left a lot of potential buyers feeling rejected and disappointed.
If you’ve been struggling to buy a home this year and really want to get in on that action, there’s one tactic you may want to try. But be warned — it won’t work for everyone.
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Real ways to make money from home

Learn More Could a cash offer be your ticket to homeownership?
Most people who want to buy a home can’t afford to do so outright. Rather, they need to get a mortgage to afford that property. But if you do have the ability to pay for a home in cash — say, you’ve saved a lot, have other assets you can liquidate, or are buying a home well below your means — then it could give you the edge in getting an offer accepted.
In fact, all-cash sales now make up about 36% of the housing market, reports CNBC, despite the attractive mortgage rates available. Many buyers are not in a position to pay for a home outright. But if you can swing it, it could help you not only snag a home, but pay less for it too.
It’s in a seller’s best interest to accept a cash offer for a number of reasons. First, there’s no delay. When you apply for a mortgage, you have to wait for that loan to close. It typically takes at least 30 days to finalize a mortgage loan. But it can easily take 60 days, especially when lenders are backed up due to high loan volume, as they are now. A cash offer means a home sale can close immediately, which is a plus for sellers who need to move quickly.
Also, when there’s a mortgage involved, there’s always the risk that the home loan could fall through. You could apply for a mortgage only to lose your job or have another issue that ultimately kills the deal. This would leave your seller in the lurch. With a cash offer, that’s not a concern, and so a seller may be willing to accept a slightly lower price to get that money quickly without a hitch.
Don’t go to extremes to pay cash
While some people may be able to buy a home in cash and avoid a mortgage, you shouldn’t push yourself too far to make that happen. If you’re buying a $250,000 home and happen to have $250,000 in cash and investments you can comfortably liquidate, go for it. But you shouldn’t, for example, deplete your emergency fund to buy a home in cash. Nor should you sell investments at a loss or raid your retirement plan to come up with the money.
Mortgages exist for a reason, and at today’s rates, taking one out makes a lot of sense. You may have to wait a bit longer to buy a home if you can’t come up with an all-cash offer. But if you hold out for a seller who’s willing to take a buyer with a mortgage, you’ll be in very good company.
Today’s Best Mortgage Rates
Chances are, mortgage rates won’t stay put at multi-decade lows for much longer. That’s why taking action today is crucial, whether you’re wanting to refinance and cut your mortgage payment or you’re ready to pull the trigger on a new purchase. Click here to get started by scanning the market for your best rate.

12 passive income ideas to help you make money in 2021

Passive income can be a great way to help you generate extra cash flow, and the economic upheaval largely caused by the COVID-19 crisis is a testament to the value of having multiple streams of income. With the pandemic throwing the job situation of many Americans into disarray, passive income helps you bridge the gap if you suddenly become unemployed or even if you voluntarily take time away from work.
With passive income you can have money coming in even as you pursue your primary job, or if you’re able to build up a solid stream of passive income, you might want to kick back a little. Either way, a passive income gives you extra security.
And if you’re worried about being able to save enough of your earnings to meet your retirement goals, building wealth through passive income is a strategy that might appeal to you, too.
What is passive income?
Passive income includes regular earnings from a source other than an employer or contractor. The Internal Revenue Service (IRS) says passive income can come from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends.
“Many people think that passive income is about getting something for nothing,” says financial coach and retired hedge fund manager Todd Tresidder. “It has a ‘get-rich-quick’ appeal … but in the end, it still involves work. You just give the work upfront.”
In practice, you may do some or all of the work upfront, but passive income often involves some additional labor along the way, too. You may have to keep your product updated or your rental property well-maintained, in order to keep the passive dollars flowing.
But if you’re committed to the strategy, it can be a great way to generate income and you’ll create some extra financial security for yourself along the way.

Vanessa Bryant Claims Mom Is Trying To 'Extort A Financial Windfall' With Lawsuit: It's 'Unimaginably Hurtful' Vanessa Bryant is speaking out against a lawsuit her mother has filed against her. On Dec. 15, Sofia Laine sued her daughter and the estate of her late son-in-law, Kobe Bryant, for money damages – a legal move that Vanessa claims is an attempt to "extort a financial windfall from [her] family." In court documents filed in California Superior Court and obtained by Access Hollywood, Laine claims among other things that she worked as the Bryant family's, quote, "longtime personal assistant and nanny," but was never paid, despite her claim that Kobe promised that she'd be financially taken care of for life. Vanessa denied her mother's claims in a statement to People; she claimed Laine was never working for the family and that she was "now trying to get more money than [she and Kobe] ever spent to provide for her while he was alive."Access LogoAccess UP NEXT UP NEXT  A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper or LendingClub. Other players include Funding Circle, which targets businesses and has higher borrowing limits, and Payoff, which targets better credit risks.  Opportunity: As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you face the risk of default, meaning you could end up with nothing.  To cut that risk, you need to do two things:  Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com and LendingClub, the minimum investment per loan is $25. Analyze historical data on the prospective borrowers to make informed picks. Risk: It takes time to master the metrics of P2P lending, so it's not entirely passive, and you'll want to carefully vet your prospective borrowers, and because you're investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build income.  Economic recessions can also make high-yielding personal loans a more likely candidate for default, too, so if COVID-19 continues to hurt the economy, these loans may go bad at higher than historical rates.  6. Dividend stocks Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.  Opportunity: Since the income from the stocks isn't related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account.  Risk: The tricky part is choosing the right stocks. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock.  "You've got to investigate each company's website and be comfortable with their financial statements," Graves says. "You should spend two to three weeks investigating each company."  That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks.  "ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive and have far better potential returns because of far lower costs than mutual funds," Graves says.  Another key risk is that stocks or ETFs can move down significantly in short periods of time, especially during times of uncertainty, as in 2020 when the coronavirus crisis shocked financial markets. Economic stress can also cause some companies to cut their dividends entirely, while diversified funds may feel less of a pinch.  Compare your investing options with Bankrate's brokerage reviews.  7. Create an app Creating an app could be a way to make that upfront investment of time and then reap the reward over time. Your app might be a game or one that helps mobile users perform some hard-to-do function. Once your app is public, users download it and you can generate income.  Opportunity: An app has huge upside, if you can design something that catches the fancy of your audience. You'll have to consider how best to generate sales from your app. For example, you might run in-app ads or otherwise have users pay a nominal fee for downloading the app.  If your app gains popularity or you receive feedback, you'll likely need to add incremental features to keep the app relevant and popular.  Risk: The biggest risk here is probably that you use your time unprofitably. If you commit little or no money to the project (or money that you would have spent anyway, for example, on hardware), you have little financial downside here. However, it's a crowded market and truly successful apps must offer a compelling value or experience to users. You'll also want to make sure that if your app collects any data that it's in compliance with privacy laws, which differ across the globe.  8. REITs A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.  Opportunity: You can purchase REITs on the stock market just like any other company or dividend stock. You'll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.  Like dividend stocks, individual REITs can be more risky than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks - and you'll still get a nice payout.  Risk: Just like dividend stocks, you'll have to be able to pick the good REITs, and that means you'll need to analyze each of the businesses that you might buy - a time-consuming process. And while it's a passive activity, you can lose a lot of money if you don't know what you're doing.  REIT dividends are not protected from tough economic times, either. If the REIT doesn't generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most.  9. A bond ladder A bond ladder is a series of bonds that mature at different times over a period of years. The staggered maturities allow you to decrease reinvestment risk, which is the risk of tying up your money when bonds offer too-low interest payments.  Opportunity: A bond ladder is a classic passive investment that has appealed to retirees and near-retirees for decades. You can sit back and collect your interest payments, and when the bond matures, you "extend the ladder," rolling that principal into a new set of bonds. For example, you might start with bonds of one year, three years, five years and seven years.  In a year, when the first bond matures, you have bonds remaining of two years, four years and six years. You can use the proceeds from the recently matured bond to buy another one year or roll out to a longer duration, for example, an eight-year bond.  Risk: A bond ladder eliminates one of the major risks of buying bonds - the risk that when your bond matures you have to buy a new bond when interest rates might not be favorable.  Bonds come with other risks, too. While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal. And you'll want to own many bonds to diversify your risk and eliminate the risk of any single bond hurting your overall portfolio.  Because of these concerns, many investors turn to bond ETFs, which provide a diversified fund of bonds that you can set up into a ladder, eliminating the risk of a single bond hurting your returns.  10. Invest in a high-yield CD or savings account Investing in a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income and also get one of the highest interest rates in the country. You won't even have to leave your house to make money.  Opportunity: To make the most of your CD, you'll want to do a quick search of the nation's top CD rates or the top savings accounts. It's usually much more advantageous to go with an online bank rather than your local bank, because you'll be able to select the top rate available in the country. And you'll still enjoy a guaranteed return of principal up to $250,000, if your financial institution is backed by the FDIC.  Risk: As long as your bank is backed by the FDIC and within limits, your principal is safe. So investing in a CD or savings account is about as safe a return as you can find. However, while these accounts are safe, they're returning even less these days than before. And with the Federal Reserve targeting 2 percent inflation, you're likely to lose out to inflation in the short term at least. Nevertheless, a CD or savings account will yield better than holding your money in cash or in a non-interest bearing checking account where you'll receive approximately zero.  11. Rent out your home short-term This straightforward strategy takes advantage of space that you're not using anyway and turns it into a money-making opportunity. If you're going away for the summer or have to be out of town for a while, or maybe even just want to travel, consider renting out your current space while you're gone.  Opportunity: You can list your space on any number of websites, such as Airbnb, and set the rental terms yourself. You'll collect a check for your efforts with minimal extra work, especially if you're renting to a tenant who may be in place for a few months.  Risk: You don't have a lot of financial downside here, though letting strangers stay in your house is a risk that's atypical of most passive investments. Tenants may deface or even destroy your property or even steal valuables, for example.  12. Advertise on your car You may be able to earn some extra money by simply driving your car around town. Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you're a match with one of their advertisers, the agency will "wrap" your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.  Opportunity: While you do have to get out and drive, if you're already putting in the mileage anyway, then this is a great way to earn hundreds per month with little or no extra cost. Drivers can be paid by the mile.  Risk: If this idea looks interesting, be extra careful to find a legitimate operation to partner with. Many fraudsters set up scams in this space to try and bilk you out of thousands.  How many streams of income should you have? There is no "one size fits all" advice when it comes to generating income streams. How many sources of income you have should depend upon where you are financially, and what your financial goals for the future are. But having at least a few is a good start.  "You'll catch more fish with multiple lines in the water," says Greg McBride, CFA, chief financial analyst at Bankrate. "In addition to the earned income generated from your human capital, rental properties, income-producing securities and business ventures are a great way to diversify your income stream."  Of course, you'll want to make sure that putting in effort into a new passive income stream isn't causing you to lose focus on your other streams. So you do want to balance your efforts and make sure you're choosing the best opportunities for your time.  Minimize your taxes on passive income A passive income can be a great strategy for generating side income, but you'll also generate a tax liability for your effort. But you can reduce the tax bite and prepare for your future, too, by setting yourself up as a business and creating a retirement account. This strategy won't work for all these passive strategies, however, and you'll have to be a legitimate business to qualify.  Register with the IRS and receive a tax identification number for your business. Then contact a broker who can open a self-employed retirement account such as Charles Schwab or Fidelity. Determine which kind of retirement account might work best for your needs. Two of the most popular options are the solo 401(k) and the SEP IRA. If you stash the cash in a traditional 401(k) or SEP IRA, you can take a tax break on this year's taxes. The solo 401(k) is great because you can stash up to 100 percent of your earnings into the account, up to the annual maximum. Meanwhile, the SEP IRA allows you to contribute only at a 25 percent rate.  If you're thinking of going this route, compare the differences between the two account types.  Learn more: of default, meaning you could end up with nothing. To cut that risk, you need to do two things: Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com and LendingClub, the minimum investment per loan is $25. Analyze historical data on the prospective borrowers to make informed picks. Risk: It takes time to master the metrics of P2P lending, so it’s not entirely passive, and you’ll want to carefully vet your prospective borrowers, and because you’re investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build income. Economic recessions can also make high-yielding personal loans a more likely candidate for default, too, so if COVID-19 continues to hurt the economy, these loans may go bad at higher than historical rates. 6. Dividend stocks Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout. Opportunity: Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account. Risk: The tricky part is choosing the right stocks. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock. "You’ve got to investigate each company’s website and be comfortable with their financial statements," Graves says. "You should spend two to three weeks investigating each company." That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks. "ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive and have far better potential returns because of far lower costs than mutual funds," Graves says. Another key risk is that stocks or ETFs can move down significantly in short periods of time, especially during times of uncertainty, as in 2020 when the coronavirus crisis shocked financial markets. Economic stress can also cause some companies to cut their dividends entirely, while diversified funds may feel less of a pinch. Compare your investing options with Bankrate’s brokerage reviews. 7. Create an app Creating an app could be a way to make that upfront investment of time and then reap the reward over time. Your app might be a game or one that helps mobile users perform some hard-to-do function. Once your app is public, users download it and you can generate income. Opportunity: An app has huge upside, if you can design something that catches the fancy of your audience. You’ll have to consider how best to generate sales from your app. For example, you might run in-app ads or otherwise have users pay a nominal fee for downloading the app. If your app gains popularity or you receive feedback, you’ll likely need to add incremental features to keep the app relevant and popular. Risk: The biggest risk here is probably that you use your time unprofitably. If you commit little or no money to the project (or money that you would have spent anyway, for example, on hardware), you have little financial downside here. However, it’s a crowded market and truly successful apps must offer a compelling value or experience to users. You’ll also want to make sure that if your app collects any data that it’s in compliance with privacy laws, which differ across the globe. 8. REITs A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders. Opportunity: You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time. Like dividend stocks, individual REITs can be more risky than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks – and you’ll still get a nice payout. Risk: Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy – a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing. REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most. 9. A bond ladder A bond ladder is a series of bonds that mature at different times over a period of years. The staggered maturities allow you to decrease reinvestment risk, which is the risk of tying up your money when bonds offer too-low interest payments. Opportunity: A bond ladder is a classic passive investment that has appealed to retirees and near-retirees for decades. You can sit back and collect your interest payments, and when the bond matures, you "extend the ladder," rolling that principal into a new set of bonds. For example, you might start with bonds of one year, three years, five years and seven years. In a year, when the first bond matures, you have bonds remaining of two years, four years and six years. You can use the proceeds from the recently matured bond to buy another one year or roll out to a longer duration, for example, an eight-year bond. Risk: A bond ladder eliminates one of the major risks of buying bonds – the risk that when your bond matures you have to buy a new bond when interest rates might not be favorable. Bonds come with other risks, too. While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal. And you’ll want to own many bonds to diversify your risk and eliminate the risk of any single bond hurting your overall portfolio. Because of these concerns, many investors turn to bond ETFs, which provide a diversified fund of bonds that you can set up into a ladder, eliminating the risk of a single bond hurting your returns. 10. Invest in a high-yield CD or savings account Investing in a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income and also get one of the highest interest rates in the country. You won’t even have to leave your house to make money. Opportunity: To make the most of your CD, you’ll want to do a quick search of the nation’s top CD rates or the top savings accounts. It’s usually much more advantageous to go with an online bank rather than your local bank, because you’ll be able to select the top rate available in the country. And you’ll still enjoy a guaranteed return of principal up to $250,000, if your financial institution is backed by the FDIC. Risk: As long as your bank is backed by the FDIC and within limits, your principal is safe. So investing in a CD or savings account is about as safe a return as you can find. However, while these accounts are safe, they’re returning even less these days than before. And with the Federal Reserve targeting 2 percent inflation, you’re likely to lose out to inflation in the short term at least. Nevertheless, a CD or savings account will yield better than holding your money in cash or in a non-interest bearing checking account where you’ll receive approximately zero. 11. Rent out your home short-term This straightforward strategy takes advantage of space that you’re not using anyway and turns it into a money-making opportunity. If you’re going away for the summer or have to be out of town for a while, or maybe even just want to travel, consider renting out your current space while you’re gone. Opportunity: You can list your space on any number of websites, such as Airbnb, and set the rental terms yourself. You’ll collect a check for your efforts with minimal extra work, especially if you’re renting to a tenant who may be in place for a few months. Risk: You don’t have a lot of financial downside here, though letting strangers stay in your house is a risk that’s atypical of most passive investments. Tenants may deface or even destroy your property or even steal valuables, for example. 12. Advertise on your car You may be able to earn some extra money by simply driving your car around town. Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you’re a match with one of their advertisers, the agency will "wrap" your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record. Opportunity: While you do have to get out and drive, if you’re already putting in the mileage anyway, then this is a great way to earn hundreds per month with little or no extra cost. Drivers can be paid by the mile. Risk: If this idea looks interesting, be extra careful to find a legitimate operation to partner with. Many fraudsters set up scams in this space to try and bilk you out of thousands. How many streams of income should you have? There is no "one size fits all" advice when it comes to generating income streams. How many sources of income you have should depend upon where you are financially, and what your financial goals for the future are. But having at least a few is a good start. "You’ll catch more fish with multiple lines in the water," says Greg McBride, CFA, chief financial analyst at Bankrate. "In addition to the earned income generated from your human capital, rental properties, income-producing securities and business ventures are a great way to diversify your income stream." Of course, you’ll want to make sure that putting in effort into a new passive income stream isn’t causing you to lose focus on your other streams. So you do want to balance your efforts and make sure you’re choosing the best opportunities for your time. Minimize your taxes on passive income A passive income can be a great strategy for generating side income, but you’ll also generate a tax liability for your effort. But you can reduce the tax bite and prepare for your future, too, by setting yourself up as a business and creating a retirement account. This strategy won’t work for all these passive strategies, however, and you’ll have to be a legitimate business to qualify. Register with the IRS and receive a tax identification number for your business. Then contact a broker who can open a self-employed retirement account such as Charles Schwab or Fidelity. Determine which kind of retirement account might work best for your needs. Two of the most popular options are the solo 401(k) and the SEP IRA. If you stash the cash in a traditional 401(k) or SEP IRA, you can take a tax break on this year’s taxes. The solo 401(k) is great because you can stash up to 100 percent of your earnings into the account, up to the annual maximum. Meanwhile, the SEP IRA allows you to contribute only at a 25 percent rate. If you’re thinking of going this route, compare the differences between the two account types. Learn more:” width=”320″ />
12 passive income ideas for building wealth
If you’re thinking about creating a passive income stream, check out these 12 strategies and learn what it takes to be successful with them, while also understanding the risks associated with each idea.
1. Selling information products
One popular strategy for passive income is establishing an information product, such as an e-book, or an audio or video course, then kicking back while cash rolls in from the sale of your product. Courses can be distributed and sold through sites such as Udemy, SkillShare and Coursera.
Alternatively, you might consider a “freemium model” – building up a following with free content and then charging for more detailed information or for those who want to know more. For example, language teachers and stock-picking advice may use this model. The free content acts as a demonstration of your expertise, and may attract those looking to go to the next level.
As a third alternative on this theme, you could use advertisements (or sponsors) to generate your income, while you provide information or content to a growing audience on a free platform such as YouTube. For example, take your love of video games or music and turn it into content.
Opportunity: Information products can deliver an excellent income stream, because you make money easily after the initial outlay of time.
Risk: “It takes a massive amount of effort to create the product,” Tresidder says. “And to make good money from it, it has to be great. There’s no room for trash out there.”
Tresidder says you must build a strong platform, market your products and plan for more products if you want to be successful.
“One product is not a business unless you get really lucky,” Tresidder says. “The best way to sell an existing product is to create more excellent products.”
Once you master the business model, you can generate a good income stream, he says.
2. Rental income
Investing in rental properties is an effective way to earn passive income. But it often requires more work than people expect.
If you don’t take the time to learn how to make it a profitable venture, you could lose your investment and then some, says John H. Graves, an Accredited Investment Fiduciary (AIF) in the Los Angeles area and author of “The 7% Solution: You Can Afford a Comfortable Retirement.”
Opportunity: To earn passive income from rental properties, Graves says you must determine three things:
How much return you want on the investment.
The property’s total costs and expenses.
The financial risks of owning the property.
For example, if your goal is to earn $10,000 a year in rental income and the property has a monthly mortgage of $2,000 and costs another $300 a month for taxes and other expenses, you’d have to charge $3,133 in monthly rent to reach your goal.
Risk: There are a few questions to consider: Is there a market for your property? What if you get a tenant who pays late or damages the property? What if you’re unable to rent out your property? Any of these factors could put a big dent in your passive income.
And the pandemic has posed new challenges, too. Due to the economic downturn, you may suddenly have tenants who can no longer pay their rent, while you may still have a mortgage of your own to pay. Or you may not be able to rent the home out for as much as you could before, as incomes decline. So you’ll want to weigh these risks and have contingency plans in place to protect yourself.
3. Affiliate marketing
With affiliate marketing, website owners, social media “influencers” or bloggers promote a third party’s product by including a link to the product on their site or social media account. Amazon might be the best-known affiliate partner, but eBay, Awin and ShareASale are among the larger names, too. And Instagram and TikTok have become huge platforms for those looking to grow a following and promote products.
You could also consider growing an email list to draw attention to your blog or otherwise direct people to products and services that they might want.
Opportunity: When a visitor clicks on the link and makes a purchase from the third-party affiliate, the site owner earns a commission. The commission might range from 3 to 7 percent, so it will likely take significant traffic to your site to generate serious income. But if you can grow your following or have a more lucrative niche (such as software, financial services or fitness), you may be able to make some serious coin.
Affiliate marketing is considered passive because, in theory, you can earn money just by adding a link to your site or social media account. In reality, you won’t earn anything if you can’t attract readers to your site to click on the link and buy something.
Risk: If you’re just starting out, you’ll have to take time to create content and build traffic. It can take significant time to build a following, and you’ll have to find the right formula for attracting that audience, a process that itself might take a while. Worse, once you’ve spent all that energy, your audience may be apt to flee to the next popular influencer, trend or social media platform.
4. Flip retail products
Take advantage of online sales platforms such as eBay or Amazon, and sell products that you find at cut-rate prices elsewhere. You’ll arbitrage the difference in your purchase and sale prices, and may be able build a following of individuals who track your deals.
Opportunity: You’ll be able to take advantage of price differences between what you can find and what the average consumer may be able to find. This could work especially well if you have a contact who can help you access discounted merchandise that few other people can find. Or you may be able to find valuable merchandise that others have simply overlooked.
Risk: While sales can happen at any time online, helping make this strategy passive, you’ll definitely have to hustle to find a reliable source of products. And you’ll have to really know the market so that you’re not buying at a price that’s too high. Otherwise you may end up with products that no one wants or whose price you have to drastically cut in order to sell.

5. Peer-to-peer lending
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A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper or LendingClub. Other players include Funding Circle, which targets businesses and has higher borrowing limits, and Payoff, which targets better credit risks.
Opportunity: As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you face the risk of default, meaning you could end up with nothing.
To cut that risk, you need to do two things:
Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com and LendingClub, the minimum investment per loan is $25.
Analyze historical data on the prospective borrowers to make informed picks.
Risk: It takes time to master the metrics of P2P lending, so it’s not entirely passive, and you’ll want to carefully vet your prospective borrowers, and because you’re investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build income.
Economic recessions can also make high-yielding personal loans a more likely candidate for default, too, so if COVID-19 continues to hurt the economy, these loans may go bad at higher than historical rates.
6. Dividend stocks

Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.
Opportunity: Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account.
Risk: The tricky part is choosing the right stocks. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock.
“You’ve got to investigate each company’s website and be comfortable with their financial statements,” Graves says. “You should spend two to three weeks investigating each company.”
That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks.
“ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive and have far better potential returns because of far lower costs than mutual funds,” Graves says.
Another key risk is that stocks or ETFs can move down significantly in short periods of time, especially during times of uncertainty, as in 2020 when the coronavirus crisis shocked financial markets. Economic stress can also cause some companies to cut their dividends entirely, while diversified funds may feel less of a pinch.
Compare your investing options with Bankrate’s brokerage reviews.
7. Create an app
Creating an app could be a way to make that upfront investment of time and then reap the reward over time. Your app might be a game or one that helps mobile users perform some hard-to-do function. Once your app is public, users download it and you can generate income.
Opportunity: An app has huge upside, if you can design something that catches the fancy of your audience. You’ll have to consider how best to generate sales from your app. For example, you might run in-app ads or otherwise have users pay a nominal fee for downloading the app.
If your app gains popularity or you receive feedback, you’ll likely need to add incremental features to keep the app relevant and popular.

Risk: The biggest risk here is probably that you use your time unprofitably. If you commit little or no money to the project (or money that you would have spent anyway, for example, on hardware), you have little financial downside here. However, it’s a crowded market and truly successful apps must offer a compelling value or experience to users. You’ll also want to make sure that if your app collects any data that it’s in compliance with privacy laws, which differ across the globe.
8. REITs
A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.
Opportunity: You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.
Like dividend stocks, individual REITs can be more risky than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks – and you’ll still get a nice payout.
Risk: Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy – a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing.
REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most.
9. A bond ladder
A bond ladder is a series of bonds that mature at different times over a period of years. The staggered maturities allow you to decrease reinvestment risk, which is the risk of tying up your money when bonds offer too-low interest payments.
Opportunity: A bond ladder is a classic passive investment that has appealed to retirees and near-retirees for decades. You can sit back and collect your interest payments, and when the bond matures, you “extend the ladder,” rolling that principal into a new set of bonds. For example, you might start with bonds of one year, three years, five years and seven years.
In a year, when the first bond matures, you have bonds remaining of two years, four years and six years. You can use the proceeds from the recently matured bond to buy another one year or roll out to a longer duration, for example, an eight-year bond.
Risk: A bond ladder eliminates one of the major risks of buying bonds – the risk that when your bond matures you have to buy a new bond when interest rates might not be favorable.

Bonds come with other risks, too. While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal. And you’ll want to own many bonds to diversify your risk and eliminate the risk of any single bond hurting your overall portfolio.
Because of these concerns, many investors turn to bond ETFs, which provide a diversified fund of bonds that you can set up into a ladder, eliminating the risk of a single bond hurting your returns.
10. Invest in a high-yield CD or savings account
Investing in a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income and also get one of the highest interest rates in the country. You won’t even have to leave your house to make money.
Opportunity: To make the most of your CD, you’ll want to do a quick search of the nation’s top CD rates or the top savings accounts. It’s usually much more advantageous to go with an online bank rather than your local bank, because you’ll be able to select the top rate available in the country. And you’ll still enjoy a guaranteed return of principal up to $250,000, if your financial institution is backed by the FDIC.
Risk: As long as your bank is backed by the FDIC and within limits, your principal is safe. So investing in a CD or savings account is about as safe a return as you can find. However, while these accounts are safe, they’re returning even less these days than before. And with the Federal Reserve targeting 2 percent inflation, you’re likely to lose out to inflation in the short term at least. Nevertheless, a CD or savings account will yield better than holding your money in cash or in a non-interest bearing checking account where you’ll receive approximately zero.
11. Rent out your home short-term
This straightforward strategy takes advantage of space that you’re not using anyway and turns it into a money-making opportunity. If you’re going away for the summer or have to be out of town for a while, or maybe even just want to travel, consider renting out your current space while you’re gone.
Opportunity: You can list your space on any number of websites, such as Airbnb, and set the rental terms yourself. You’ll collect a check for your efforts with minimal extra work, especially if you’re renting to a tenant who may be in place for a few months.
Risk: You don’t have a lot of financial downside here, though letting strangers stay in your house is a risk that’s atypical of most passive investments. Tenants may deface or even destroy your property or even steal valuables, for example.
12. Advertise on your car
You may be able to earn some extra money by simply driving your car around town. Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.

Opportunity: While you do have to get out and drive, if you’re already putting in the mileage anyway, then this is a great way to earn hundreds per month with little or no extra cost. Drivers can be paid by the mile.
Risk: If this idea looks interesting, be extra careful to find a legitimate operation to partner with. Many fraudsters set up scams in this space to try and bilk you out of thousands.
How many streams of income should you have?
There is no “one size fits all” advice when it comes to generating income streams. How many sources of income you have should depend upon where you are financially, and what your financial goals for the future are. But having at least a few is a good start.
“You’ll catch more fish with multiple lines in the water,” says Greg McBride, CFA, chief financial analyst at Bankrate. “In addition to the earned income generated from your human capital, rental properties, income-producing securities and business ventures are a great way to diversify your income stream.”
Of course, you’ll want to make sure that putting in effort into a new passive income stream isn’t causing you to lose focus on your other streams. So you do want to balance your efforts and make sure you’re choosing the best opportunities for your time.
Minimize your taxes on passive income
A passive income can be a great strategy for generating side income, but you’ll also generate a tax liability for your effort. But you can reduce the tax bite and prepare for your future, too, by setting yourself up as a business and creating a retirement account. This strategy won’t work for all these passive strategies, however, and you’ll have to be a legitimate business to qualify.
Register with the IRS and receive a tax identification number for your business.
Then contact a broker who can open a self-employed retirement account such as Charles Schwab or Fidelity.
Determine which kind of retirement account might work best for your needs.
Two of the most popular options are the solo 401(k) and the SEP IRA. If you stash the cash in a traditional 401(k) or SEP IRA, you can take a tax break on this year’s taxes. The solo 401(k) is great because you can stash up to 100 percent of your earnings into the account, up to the annual maximum. Meanwhile, the SEP IRA allows you to contribute only at a 25 percent rate.
If you’re thinking of going this route, compare the differences between the two account types.
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