What is passive income? imagine putting your money to work and that money then makes you money while you sleep. The concept of passive income is sometimes hard to grasp but it is very simple. Passive Income requires some upfront work/capital (sometimes a lot) but does not need constant work to maintain.

There are a lot of benefits to having passive income such as little work, more free time, and brings you closer to and maintains financial freedom.

With the new year being among us, setting up passive income for the end of the year is great way to get you closer to financial freedom. I have compiled a list of passive income ideas that you can try in 2018. In no particular order of importance here goes:

Real Estate

There are a few ways to make money in real estate.

The first way is to buy property that needs fixing, invest in renovation, and selling the property at a higher price. In other words flipping properties. This type of real estate investing is more active as it requires work at every step of the process. From looking to renovating to selling.

A more passive way of investing in real estate is buying and investing in rental properties. The upfront work involves looking for property and potentially renovating it for rental purposes. After that, it is simply a matter of filling up the property with tenants and maintenance.  There is a bit more that go into this investing but for the sake of avoiding lengthy posts, that gives you a general idea.

If you do not have the large capital to invest  in real estate, an alternative option is Real Estate Investment Trust’s (REIT’s) which are traded on the stock market. When you buy REIT’s, you essentially own a fraction of the properties in the REIT and you benefit the gain that comes from it.

Stock Market

The stock market has been a great place to put your money for the long term. Although there are ups and downs in the market, the overall trajectory of the market has been upwards with average returns of 8%-9%.

I personally like to use Exchange-Traded Funds(ETF’s) when investing in the stock market. My portfolio consists of dividend paying stocks and ETF’s for the purpose of passive income.

If you’re new to investing, I suggest looking into ETF’s that follow the S&P 500 index. The index is a portion of the top 500 companies in the US. Also, speak to a certified financial adviser to help you through it.

Note: Past results do not guarantee future returns.

Affiliate Marketing

If you already have a following on a platform then affiliate marketing is a great way to make passive income. For those who don’t know what affiliates marketing is, let me explain.

You present your audience with an affiliate link for a product or service (preferably one you personally like) and you get paid when your audience makes a purchase through your link. This does not cost your audience a penny.

Everyone wins in this situation because your audience gets a product, you get paid, and your affiliate make a sale.

Peer-to-Peer Lending

What is Peer to peer lending? It is basically banking without the bank. It is a borrowing and lending money without the use of the bank.

Borrowers can get hit hard with interest rates when taking loans from banks or credit cards; however, with peer to peer lending, borrows can pay lower interest rates depending on their credit score.

Lenders can earn an average of 7-10% on their money. The best part is you don’t have to buy the full debt of the borrower, you can buy a portion of debt and diversify.

Sites like Lending Club, Prosper, and Lending Loop (Canadian) are great tools to use to earn passive income.

Write a book or course

Are you passionate and well informed about a particular topic? Writing a book, e-book, or a course maybe right for you.

This idea is a very classic passive income case where you put all the work in the beginning and let the money flow afterwards.

Selling your book or course works best when you have an audience on a platform such as Instagram or youtube because promo is essentially free.

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