Workin‘ 9-to-5, what a way to make a livin’! If you’re ready to get off the hamster wheel, take charge of your future, and grow your wealth so you can live life the way you find it most meaningful, semi-passive income is the right place to start. Always remember—there is no such thing as 100% passive income; hence why we refer to it as “semi-passive.”
Semi-passive income does require investment, thought, planning, and effort, and once you get the ball rolling, you can generate a steady cash flow. Whether you want to ditch the commute or have the funds to do anything you want in retirement, semi-passive income can get you there. If you’re not sure where to start, consider these 4 semi-passive income ideas.
4 Semi-Passive Income Ideas to Help You Make Money
1. High-Interest Savings Accounts and CDs
For many people, this could be the simplest and fastest way to get started. All you need is a bit of money you’re ready to sock away. You’re not going to make millions this way, but as your little nest egg grows, you’ll see more and more interest every year. If you grow your savings large enough, it could be the down payment on a rental property or something to invest in a startup.
Making the Most of Your Money
A high-yield savings account isn’t just a good place to stick a certain amount each month. It’s also a great place to put smaller amounts of money whenever you realize you have them to spare. As you debate whether you need that cappuccino, for example, simply stop the debate, make coffee at home, and put the $4 in your bank account instead.
CDs usually offer even higher interest rates, and they are available in terms that can run from months to years. However, with a CD it’s important to remember that you can’t withdraw that money until the term is finished without paying a fee. Also, note that most financial institutions will automatically roll your funds over into another CD if you don’t contact them in time.
Downsides to Consider
With both savings accounts and CDs, remember that you’re not going to be making a lot. You also want to watch out for temporary introduction rates that then drop well below market rates later. In short, these savings accounts can be a great way to get started, but you can do better as you learn the ropes.
2. Real Estate
If you have a bit more spare cash, real estate is one of the best ways to grow your income. Real estate is a type of investment, but it’s more reliable than stock markets. In fact, if you’re currently invested in the stock market, you’d be wise to start pulling away some of that money and investing it into something “real.”
Real estate is one of the best semi-passive income ideas, but it does take work. Most of that work is upfront, where you plan a sound business strategy, carefully research markets before you buy, decide what upgrades and repairs will make the property most valuable, and then choose a great property manager.
Single-Family Homes
This is usually the simplest way to get started. This is less complicated than owning an apartment building or commercial units, and single-family tenants tend to be more vested in taking care of the place. The downside is that when the unit is empty you’re not bringing in any cash at all.
Multi-Family Units
These are duplexes, triplexes, or even larger. In fact, what was once a large single-family unit can often be easily transformed into a multifamily unit. These are a bit harder to manage, but they give you better cash flow. If one unit is empty, the others are still generating income. These can also be easier to manage than a whole apartment building, allowing you the best of both worlds.
Apartments
An apartment building usually needs five or more units to qualify as such. If you go for an apartment building, you’ll need to take out a commercial loan rather than a residential one. The rewards are greater, but so are the responsibilities in management and oversight.
Commercial Properties
The draw commercial properties lies in high rents and long-term leases. However, should the unit go empty, these tenants can be much more difficult to replace than a residential tenant, especially as commercial tenants usually customize a unit for their business. Be sure to plan for longer vacancies and choose your property location wisely to draw tenets.
3. Lend Money
If you think that only established millionaires are able to lend money to startups, it’s time to rethink your wealth management strategy. Not only is it possible for you to build up enough savings to make a meaningful loan on your own to a single entrepreneur, but you can also join lending clubs (including one actually named Lending Club) where you share both the risk and the rewards with others.
How to Lend Safely
If you decide to do it on your own, don’t forget a few basics to keep your money safe. First, be sure that you’re always using your head and never your heart to make a lending decision. Many people don’t lend to family or friends for precisely this reason. Second, before you lend out any money, make sure you see a business plan and get a second and even a third opinion as to whether it’s viable. Finally, never land to someone who’s not putting their own wealth on the line. People who have something to lose if the business goes under will be much more motivated to make it work.
4. Buy a Business While It’s Small
When businesses are small, they are most affordable. This is the time for you to invest in something that’s already successful and showing promise. Here are a few ideas:
Blogs
If you never thought of investing in a blog, now’s the time to consider it. Blogs can be a great way to make money, but after a while, people may be looking to get rid of their blog. In some cases, successful bloggers just aren’t interested in doing it anymore. In other cases, the demands of children or business mean they don’t have enough time to keep it up.
To find a successful blog, look for one that’s at least a year old and gets a minimum of 12,000 visits a month. At least half of those visits need to be coming from search engine hits. That way, you know that the SEO is in good shape and all the hits aren’t just coming from the blogger’s friends, family, and social media contacts.
Online Businesses
Online businesses are typically much cheaper than brick-and-mortar ones, and the same issues plague an online business owner as those running a blog. Something that started out small may have grown too big for the original owner to deal with, or they might just be tired of the effort.
If you find a relatively successful online business with room for growth and a good foundation, your investment could give it the kickstart it needs to become even larger. Just remember that you’ll want to have enough income coming in to hire someone to do handle management, so it involves less (but still SOME) of your time.
Grow Your Wealth Through Semi-Passive Income
Working a 9 to 5 job isn’t the only way to make money. For more great semi-passive income ideas, tips on market trends, and everything you need to know about securing your own financial future, subscribe to the Creating Wealth podcast today.
