What’s the Difference Between Passive and Active Income?
Passive income involves generating regular earnings from a source other than an employer without putting in regular work. Often, it involves making an upfront investment of time and effort in return for long-term rewards. On the other hand, active income requires more consistent contributions and effort to generate additional income outside of your employer. We’ve categorized the additional income stream ideas below as either passive, semi-passive or active.
Six Distinct Ideas for Additional Income Streams
Cash Back Rewards – Passive
There are multiple ways to get Cash Back on everyday purchases you are already making. To get started, check out AstroWealth’s Cash Back platform. Another method to earn Cash Back is by getting a Cash Back credit card, which can provide rewards anywhere from 1% to 5% on the amount purchased.
Investing – Passive
Investing can be a great way to generate some additional income, often without needing to monitor it on a regular basis. For example, index funds provide a vessel to invest in the stock market without concerning yourself with choosing investments, rebalancing your portfolio, or knowing when to sell or buy.
Another investment technique is high dividend stocks, which create regular passive income at an annual rate that is much higher than that for bank investments. You can earn two sources of income from high dividend stocks – dividends and capital gains.
To get started do some research on different investment accounts, seek advice from knowledgeable friends and family, or speak with a financial advisor.
Real Estate – Semi-Passive
Investment in real estate requires a bit of work initially, but can create some passive income by renting out your property over time. You could also opt to use a professional property manager to manage your property for you in exchange for a percentage of the rent. This may be a good option if you are looking for a completely passive income stream.
Another option is to rent out a room of a house you already own on a website like AirBnB. However, this can be very expensive to get set up and requires a lot of work to maintain.
Paid Surveys – Active
There are many companies that will pay you to answer survey questions online. It is often free to sign up and can generate a little bit of extra cash on the side, all done from the comfort of your own home.
Check out Survey Junkie, Inbox Dollars, and Swagbucks and sign up for an account to get started.
Sell Unique or Vintage Finds – Active
Aside from selling your unwanted clothes and household items, consider making a more consistent side income from selling gems found in thrift stores. If you have a knack for finding bargains, you could easily turn them into profits on websites such as eBay.
Start by deciding what niche you want to focus on based on your skills, knowledge, and interests. Then, set up your virtual store on a platform of your choice, such as eBay, Instagram, or Depop. All there’s left to do now is start looking for gems in thrift stores, vintage shops, garage sales, and wherever else you can think of.
Create an Online Course – Passive
You can leverage your skill set to create an online course for a platform like Teachable.com or Udemy. Many of these companies are looking for courses on a huge range of topics from becoming a Rockstar to digital scrapbooking. In return for your skills and time, you can make some additional income on the side. From video games to specific brands of clothing, with a little research, it’s possible to turn your knowledge into cash with an eBay store. However, this project does require a lot of effort and time to make compared to other passive additional income streams.
Want to learn how to define your financial goals? Get started here.
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