6 High-Paying Passive Income Ideas In 2020
Making passive income allows you to spend less time working and more time doing what you want!
Are you ready to make money while you sleep in 2020? Well here are 6 great passive income ideas to get you started today!
What is Passive Income?
Passive income is income generated without you being actively involved in the money-making process.
You will consistently generate cash with little maintenance after you have completed the initial setup.
For example, when purchasing an index fund on the stock market, you must work to generate capital for this investment.
However, you will start making passive income after you click to buy—in the form of regular dividends.
Your passive income sources probably won't make enough money for you to retire straight away, but you're definitely on the right track!
Eventually, you may even generate enough passive income to cover your regular expenses.
This is known as becoming financially independent.
Most people aim to be financially independent by age 60-65—but it doesn't have to take that long.
You could retire much earlier if you take the time to aggressively build your passive income sources.
In the next section, I will give you an idea of the earnings you can expect to generate passively.
How Much Can I Earn?
There is no limit to how much passive income you can generate.
Over the past 100 years, the S&P 500 has paid an average dividend of 4.3% annually.
This means that $1,000,000 invested in an S&P 500 index fund would provide you with an average income of $43,000 annually.
This is only one type of passive income, and don't worry, I will explore stock market investing further below.
I'm sure you've heard stories about bloggers generating $50,000 a month passively. While this is possible, it will certainly not happen overnight.
Often, people who have achieved this level of success have been working on their blogs for years.
Also, it's important to know that your passive income sources can take a while to propagate and grow. Especially to a level that would allow you to quit your day job and make this your primary source of income.
It's time to explore my favorite passive income ideas—now that you know what passive income is and how much you can expect to make!
1. Invest in Stocks
Investing in the stock market is a great way to generate income passively. A great way to buy stocks through Webull.
Webull is a trading platform that gives you the tools you need to analyze and buy stocks—commission-free.
This makes Webull a great option whether you’re new to investing or an experienced trader.
Webull specializes in the following investments:
- Exchange-traded funds
As mentioned earlier, you can generate an income passively in stocks through dividend payments.
So, not only will you receive dividend income (from most stocks), but you can also expect your portfolio to grow by 6-7% annually.
This is assuming you have invested your money into an S&P 500 index fund.
However, not all stocks pay a significant dividend—or a dividend at all.
If you want to generate income with stocks you should have a look at some blue-chips (large companies).
Blue-chip stocks are more likely to pay out dividends, as they are typically well-established companies with a consistent history of earnings.
Stocks have an average yield of 4.3% in the S&P 500, as mentioned above; however, some stocks have dividend yields of 7% or higher.
And you don't need to make a huge investment to generate income with stocks.
An investment of $10,000 will pay out $430 of dividends in the first 12 months—assuming it pays out the average yield.
To sum up, investing in stocks is a great way to generate passive income consistently, in ever-increasing amounts.
Check out our list of the best investing books to learn more.
2. Invest in Real Estate
Investing in real estate is a classic way to generate passive income. You will receive regular income from people renting out your properties with real estate. Rent is generally paid monthly.
While you can make passive income with real estate—it's typically not as hands-off as stock market investing.
As the landlord, you're in charge of fixing any issues that may arise—as well as performing regular maintenance. This could be a case of termites or a faulty electric garage door.
You can fix these issues yourself, or hire a property manager to take care of these issues. But hiring a property manager will significantly drive up your expenses.
Real estate investing involves more than just investment properties, whether that be residential or commercial.
Another way you can gain exposure to the real estate market is through a “Real Estate Investment Trust” or “REIT”.
A real estate investment trust is a company that owns incoming-producing real estate.
Commonly, REITs are listed on the larger stock exchanges, giving you an easy way to purchase real estate.
As a part-owner of a trust, you're entitled to a portion of the profits. These will be paid out regularly in the form of dividends.
REITs are favorable if you don't have the capital to purchase an entire property—or would like to gain exposure to this market without making a significant investment.
3. Start a Blog
Starting a blog is a great way to generate passive income.
But building a successful blog will not happen overnight—despite what some people may tell you.
Keep this in mind before you consider starting your own blog.
If I haven't scared you off yet you can visit my how to start a blog article to learn how to start a blog of your own.
Now I'm going to show you some ways to monetize your blog.
One of the most popular ways to monetize your blog is through display advertising.
Display advertising-income is generally measured by RPM or “Revenue Per 1,000 impressions”. An impression on a site is simply someone viewing a page once. And an RPM of $50 means you earn $50 per 1,000 website views.
You can expect to earn anywhere from $5 to $50 per 1,000 views through display advertising. This number is dependent on multiple factors including how many ads you display per page, what size units you're displaying, and your niche.
Websites that are in the finance niche will typically make the most money per 1,000 views with display advertising.
It's important to do your due diligence before deciding on a niche for your blog.
Given an average blog RPM of $10 through Google AdSense, you would need to average 300,000 page views a month to make $3,000 in revenue consistently.
This is one way to generate passive income from blogging. Another way to monetize your blog is through affiliate marketing.
Affiliate marketing is arguably more lucrative than displaying ads—as I will explain further below.
Affiliate marketing is a type of performance-based marketing whereby you are paid by driving visitors or customers to your affiliate's website.
Affiliate marketing is generally commission-based, and you can expect to earn roughly 5-75% per sale.
Through Amazon's affiliate program, you can expect to earn a 5-10% commission on any products your visitors purchase through your affiliate links.
You will receive a commission on any products purchased through your Amazon affiliate links—even if it is not related to the product on your site!
Let's assume someone visited Amazon through your affiliate link and bought a $500 item. You can expect to earn $25-$50 in commissions from that one sale.
Affiliate marketing is one of the best ways to generate passive income online—and it's favored by many popular bloggers and YouTubers.
Blogging is one of the most time-consuming passive income ideas on the list, but it can also be one of the most rewarding!
Learn how to start a blog here.
4. YouTube Ads
Another way to make passive income is with YouTube ads.
You can start displaying ads on your YouTube videos once you have reached 1,000 subscribers and have had 4,000 watch hours on your videos—in the last 12 months.
A lot of people are making passive income with their YouTube channel—and you can do the same!
A 7-year-old kid made $22 million in 2018 from his YouTube channel. And all he does is play with toys and review them!
There are other ways to make money on YouTube, but display advertising is generally the biggest passive income stream for most YouTubers!
You can also make money on YouTube by reviewing and linking to affiliate products—so you make money every time someone buys that product through your link!
If you love getting in front of the camera and engaging with your audience—YouTube might be for you!
5. Kindle Direct Publishing
Another great way to generate passive income is to sell eBooks on Amazon Kindle Direct Publishing.
You can get your eBooks to market fast with Kindle Direct Publishing.
Publishing takes less than 5 minutes and your book will appear on Kindle stores worldwide within 48 hours.
You will earn up to 70% royalty on sales to customers from multiple countries worldwide. And you have the freedom to set your own prices and make any changes if needed.
Listing eBooks is also free with Amazon Kindle Direct Publishing.
eBooks are generally low-ticket items, typically selling for under $US10. So don't feel as though you must write an 800-page monster to publish an eBook on this platform.
There is no minimum or maximum word count on this platform; however, in the past Amazon has removed books that were shorter than 2,500 words.
So keep this in mind if you are planning to publish an eBook on this platform.
Visit Kindle Direct Publishing to start publishing today.
6. Create an App
Creating an app is a highly scalable way to generate passive income—and exploit the ever-growing mobile market. It's also one of the best passive income ideas for tech enthusiasts.
Supercell, a Finnish mobile game development company based in Helsinki, Finland, made $US5.56 million in revenue every day in 2016!
Without a doubt, there is money to be made on the app store, and today I'm going to show you how.
The app creation process can be summarized in 9 steps:
- Set a goal
- Find out who your competitors are
- Create your wireframe
- Test your wireframe—adjust as needed
- Start building the app
- Finalize the design
- Test your app
- Launch your app
Monetizing Your App
Once your app is up and running, it's time to monetize it. There are many ways to monetize a mobile app, as I will explore below.
Display advertising: With Google AdMob, you can place display ads on your mobile app to earn revenue. Google AdMob is one of the largest global ad networks and can fill your ad requests from anywhere in the world!
Google AdMob has multiple formats available and will earn you more revenue by integrating native, rewarded, banner, video and interstitial ads seamlessly into your app.
By integrating Google Analytics for Firebase with Admob, you will be able to analyze your ad performance, make better decisions and improve the user experience to further grow your earnings.
In-app purchases: In-app purchases are a great way to monetize your app. This also gives you the freedom to list your app on the store for free and drive in more potential buyers. When combining this with display advertising, your earning potential will become enormous.
As mentioned above, Supercell generated $US2.03 billion in revenue in 2016—with in-app purchases being their primary source of revenue. They sell in-game currency called “gems” and you can buy $1, all the way up to $150 worth in a single purchase.
As you can see, there are plenty of ways to monetize your mobile app. All you must do now is start!
I hope you found these passive income ideas useful and will begin to implement them today! Don't forget you can get a free stock by signing up for Webull below!
Don't forget you can get a free stock, valued up to $1600 when you invest $100 with Webull here.
For more money-making and passive income ideas, visit How to Invest 1000 Dollars and Grow It Quickly!
Also, here are some other great personal finance blogs.