By choosing the right type of revenue stream, you can realize a potentially endless return on your original investment. Let’s take a closer look at 7 passive income ideas that still work in 2020, so you can decide which ones are best-aligned with your skills, interests, and goals.
1. Dividend Stocks
To calculate a dividend yield, divide the amount the company pays in dividends each year by the stock price. If a stock pays annual dividends of $1.00 per share and trades at $10, the yield is 10%. When you invest in a business that schedules its dividend payments, the money can become a reasonably reliable source of income, but bear in mind that stocks with higher dividend yields involve risk and can drop in value.
2. Real Estate
Real estate investing is another popular source of passive income. You can buy or rent a property, make it available as an Airbnb and, depending on where you’re located, earn up to $10,000 per month. The initial financial outlay will also vary according to location: this host estimated that a one-bedroom unit in Silicon Valley cost between $6,000 and $7,000 to set up.
Investing in a business can be highly risky, but there is also the potential for high returns. Many of those who invested in Uber and Houzz at the beginning are super-wealthy today.When you’re getting started, you can reduce the risk by investing small amounts in different businesses. Two popular options that provide a passive annual return of 5% are:
4. Peer to Peer Lending
Peer-to-peer lending platforms like the Lending Club match lenders with borrowers. You can invest in different kinds of loans (each of which involves its own risk level and return) and receive a passive income when the borrower makes payments.
5. Vending Machines
Vending machine franchises are an appealing microbusiness because of the low overhead and minimal startup costs (as little as $150 per machine plus inventory). Depending on what you’re selling and the location of the machine, Vendsoft estimates that you can make anywhere from $5.00 to over $100 per week.
6. Display or CPC Ads
Like affiliate marketing, making money from display and CPC ads require you to have an online presence like a website or blog. With display ads (also known as CPM ads), you received a fixed amount of money based on how many people view them. In general, you get paid for a thousand impressions.
7. Drop Shipping
With drop shipping, you can start a business with little to no money. After opening an online store, you work with a drop shipper to deliver products to buyers. You don’t stock anything yourself: instead, you transfer order and shipment information to a wholesaler, manufacturer, or other retailer, and they send the goods.