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Updated September 19, 2018

Passive Income: Practical Ideas to Build Wealth

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Want to make passive income? Here are 24 passive income opportunities and investments you can start today. Find the best ideas to build real wealth.

© CreditDonkey

Making money without working — now that's the real American dream.

We'll show you how. Read on to learn all about passive income: how to make it, mistakes to avoid and 24 great ideas that may be right for you.

What Is Passive Income?

© CreditDonkey

Passive income is money you make while doing basically nothing. Get started by investing some money OR with a big chunk of time.

But all that upfront work can pay off big time IF you stay patient.

Tommy Palm, creator of Candy Crush, earned more than $200 million per year and still makes royalties today despite leaving the company in 2015.

Leading up to that success, however, Palm went 6 months without a paycheck. But his passion and perseverance ultimately paid off…big time.

Think you have the resources and/or time for a passive income side gig? We've got 24 great ideas to earn you money.

In this guide, we'll cover:

If You Have MONEY to Invest:

If You Have TIME to Invest:

What's Involved?

© CreditDonkey

Keep this in mind: passive income DOES require some effort. You'll need an upfront investment in the form of money or sweat equity (hard work).

What are some examples of passive income? Passive income can mean anything from real estate rentals to investment portfolios to YouTube videos, book royalties, and drop-ship online businesses. Read on to find the right one for you.

Some patience wouldn't hurt, either. Very rarely will passive income lead to overnight profits. In fact, you may lose some money at first. Consider:

  • Rental properties need repairs
  • Investment portfolios need maintenance
  • Online businesses need upkeep
  • Ongoing marketing may be necessary
  • Any income will need to be tracked and reported to the IRS

Wondering how to transform your talents into profits. We've got you covered below.

What Skills Do You Need?

© CreditDonkey

This depends on the type of passive income stream you create:

Someone trading stocks needs a basic understanding of the stock market.

A person writing a blog needs subject matter expertise.

A real estate investor may need to be a jack-of-all-trades.

It all depends on your plans. Instead of asking what you'll need, consider the skills you already have. Start with these questions:

  • What are my passions?
  • Do I have any secret talents?
  • What are my "areas of expertise?"

Once you have the answers, find a way to carve out a passive income niche.

We all love extra money but don't waste time on a passive income gig that makes you miserable (you already have a dayjob for that!) Find an idea that's fun AND profitable.

Here's an example:

Let's say you have a knack for writing and DIY projects. You can combine both skills to create passive income.

Start a blog and monetize it. Or write an e-book on DIY. You do the hard work upfront (writing) and collect the royalties (passive income) later.

Passive income gigs aren't right for everyone. See if they're a match for your financial needs.

Low-Effort Passive Income Ideas: Some passive income ideas don't seem all that passive. A few, like writing an e-book, require quite a bit of effort, especially upfront.

Here's a list of our Top-5 low-effort ways to earn passive income:

  • CD Ladder
  • Investing with a robo-advisor
  • Opening a high-yield mone market account
  • Using Rewards Credit Cards
  • Advertising with your car

Top Passive Income Ideas If You Have Money

© CreditDonkey

Got some capital to get you started? Let your money MAKE money with these great passive income ideas.

What is the difference between active and passive income?

  • Active income is money you earn when you're actively working (hourly wages, weekly salaries, and tips).
  • Passive income is money that generates without your active participation (including rental income, investment income, and royalties).

  1. Buy Dividend Stocks
    Established companies like GM and IBM often pay dividends to their shareholders. These are regular (usually quarterly) payments from a company's profits.

    Dividends are separate from the profit or loss you'll take from buying or selling stocks.

    Note: A payout ratio is the percentage that companies pay in dividends compared to their total profits. Companies with a 70% payout ratio generally offer the most stability.

    Those paying out 100% of their profits can be risky. It's usually a better sign when companies save some of their profits.

    You don't need to be a financial guru to purchase dividend stocks. But you will need to do some research to make educated choices.

    The guidance of a reputable stock brokerage can also help. We did some research for you here.

    Take your time in choosing--the right dividend stock can set up a nice little passive income stream for the future.

    What you need:
    • Money:
      • Up-front: $500+
      • Ongoing: N/A
    • Time:
      • Up-front: Enough to learn stock market basics
      • Ongoing: Minimal monitoring

      Ally Invest

      Ally Invest: Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days

      Expires 1/31/2019

      New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.

  2. Invest with a Robo-Advisor
    If you have money to invest but are short on time, consider using a robo-advisor. Companies like Betterment offer automated investment programs.

    You begin by answering several questions about your risk tolerance and investment goals. The software program then creates a portfolio designed to match your investor profile.

    Several companies specialize in robo-advisor investing. Some offer features like human (meaning non-robo) consultations and tax advice. Traditional firms like Charles Schwab and Morgan Stanley are branching into this type of investment, too.

    What you need:
    • Money:
      • Up-front: $200+
      • Ongoing: N/A
    • Time:
      • Up-front: Just enough to set your preferences online
      • Ongoing: Almost no monitoring

      WealthSimple

      WealthSimple: Get $10,000 Managed for Free for Your First Year

      Expires 12/31/2018

      Get $10,000 managed for free for one year when you invest with Wealthsimple for the first time.

    How can you create passive income streams WITHOUT seed money? Time IS money, as the saying goes. If you're short on cash, consider investing your time and skills instead.

    Enjoy writing? Create an ebook. Know how to code? Make an app. Like taking photos? Sell your work online.

    You can even use the things you own like renting spare bedroom, your car, or some of your possessions.

    Scroll down for passive income ideas that require your time and energy, NOT money.

  3. Try a CD Ladder
    If the money you've stashed in a savings account isn't earning much interest, look into creating a CD ladder.

    This means investing in Certificates of Deposit that mature at different times. The "ladder effect" provides you with fixed income at set times. While CDs carry no risk of losing your initial capital (unlike stocks), the rate of return is usually lower.

    We review some of the best CD rates here.

    What you need:
    • Money:
      • Up-front: $3,000+
      • Ongoing: N/A
    • Time:
      • Up-front: Minimal
      • Ongoing: Almost no monitoring

  4. Become a Peer-to-Peer Lender
    Lending has taken on a whole new look thanks to the Internet. People who don't normally qualify for bank loans can now get financing through Peer to Peer Lenders…like you.

    That's right—you can use your money to fund loans for others using P2P platforms like Lending Club and Prosper.

    Investors interested in high rates of return often use these platforms. You may see returns between 5% and 10% on peer-to-peer lending loans.

    There is a high risk for default with P2P loans. If borrowers stop making payments, you can lose your investment. Companies like Lending Club and Prosper help, but defaults still happen.

    With Prosper, your investment in a loan can be as small as $25. Investing in multiple loans can minimize the risk of losing money in the case of a default.

    What you need:
    • Money:
      • Up-front: $1,000 (Lending Club account minimum); $200 (Prosper)
      • Ongoing: N/A
    • Time:
      • Up-front: Minimal
      • Ongoing: Minimal monitoring

  5. Invest in Real Estate
    Real estate investments are profitable but time-consuming. You need to:

    • Buy and maintain the property
    • Find (and replace) suitable tenants
    • Deal with legalities like leases and rental agreements

    Hiring a property manager can help, but it will shrink your profits. A more low-effort option is real estate crowdfunding through RealtyShares. Think of it as peer-to-peer lending for the housing industry.

    Private investors like you provide the funds borrowers need. You can choose which properties to invest in, which means you're in control. Real estate crowdfunding offers a good rate of return for its investors.

    What you need:
    • Money:
      • Up-front: $5,000+
      • Ongoing: Significant
    • Time:
      • Up-front: Lots of time to find the right investment
      • Ongoing: Significant if doing your own property management; minimal if paying a property manager or investing through RealtyShares

  6. Use Reward Credit Cards
    Shoppers rejoice! You can earn money just by making purchases with your credit card.

    Start by finding the right rewards credit cards for you. Some cards also feature their own shopping portals with additional discounts and rewards.

    You DON'T need to splurge on expensive purchases to earn rewards through you credit card. Just by charging your daily expenses, you can make money back. Think of it like an rebate on your regular purchases.

    Chase Freedom Unlimited
    Apply for Chase Freedom Unlimited
    Chase Freedom Unlimited lets you earn a $150 bonus after you spend $500 on purchases in your first 3 months from account opening. You earn unlimited 1.5% cash back on every purchase. There is also a 0% intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.99-25.74%. The balance transfer fee is 3% of the amount transferred, $5 minimum. The cash back rewards will not expire as long as your card account remains open. There is no annual fee.

    But be sure to pay off your card every month. The interest from carrying a balance will more than wipe out your cash back.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Very little time to apply.
      • Ongoing: N/A

  7. Get Cash Back for Shopping
    Use sites like eBates or other shopping portals when buying online.

    You can start an account online for free (often with a bonus). Then simply visit the site and clicking through to the stores you normally visit. You'll get quarterly cash back checks by mail (or other ways, depending on your preference).

    Some shopping portals require you to pay with certain cards to receive cash back. Others, including eBates, offer cash back regardless of how you pay.

    Standard deals offer between 2%-5% cash back on purchases. But eBates also often runs double cash back specials and other incentives.

    The website evreward tracks every shopping portals' current offers. Browse to choose the best deal for you.

    You'll only make money by shopping through your chosen portal. Get in the habit of starting with sites like eBates whenever you shop online.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: The same as you normally shop online.
      • Ongoing: N/A

  8. Save for Retirement
    A retirement fund is the ultimate passive income stream. Every dollar you set aside is money for when you've left the 9-5 grind.

    But saving for retirement saves you money now, too. By putting money from your paycheck into a 401k, you are lowering your taxable income. That's right, you're saving on taxes now AND giving future You a steady stream of passive income.

    Many employers match retirement contributions (usually up to 3 or 5%). Maximize your profits by seting aside the full amount toward retirement each paycheck.

    Be sure to invest in your employer's retirement plan. But don't be afraid to look at other options like IRAs.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: Significant, regular cash investments ($1,000+ yearly)
    • Time:
      • Up-front: Some time to learn about retirement investments.
      • Ongoing: Very little monitoring.

  9. Open a High-Yield Money Market Account
    If you've got a decent chunk of money lying around, High-Yield Money Market Account are a risk-free, low-effort way to increase your capital.

    Online banks in particular offer great interest rates. Some banks give even higher rates AND introductory bonuses depending on your balance. Best of all, your funds will be FDIC-insured which means unlike with stock and mutual funds, you won't lose your money.

    Check out our updated list of bank promotions.

    What you need:
    • Money:
      • Up-front: $25 or more
      • Ongoing: None though future deposits are welcome
    • Time:
      • Up-front: A little to find the right account
      • Ongoing: None

      CIT Bank

      Money Market Account

      • 1.85% APY
      • $100 Minimum Opening Deposit
      • No monthly maintenance fee
      • FDIC Insured

  10. Reduce your Debt
    Crazy as it sounds, NOT losing money is a great way to save money.

    The interest you pay on credit cards, car payments or mortgages is money you could be saving. Rather than invest in another passive income option, consider paying down your debt instead.

    For credit card debt, which carries the highest interest rate, you might want to transfer what you owe to a no balance transfer fee card to get you started. Here are our favorites.

    Once you're out from under, you'll see more profit in your pocket.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: Regular payments until you're out from under.
    • Time:
      • Up-front: A little to create a money-saving budget.
      • Ongoing: Very little monitoring.

Interested in passive income but short on funds? We've got you covered. Keep reading for ideas that require nothing but time (and some effort).

Top Passive Income Ideas If You Have Time

Just because you don't have money doesn't mean you can't make some. Here's a list of great passive income ideas if time is your investment.

  1. Rent Out Your Home
    You have more flexibility now ever when renting out your home. Sites like Airbnb allow you to rent the whole place or even just one room for as many days as you like.

    While Airbnb makes things easy, renting your home DOES require some work. Think of yourself as a bed and breakfast owner. Your tenants' comfort is your responsibility, especially if you want a great review.

    You determine availability and price, then post a listing with pictures on the site. Travelers book through Airbnb, which handles the payment. You'll be paid within 24 hours of your guests' check-in.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: Some upkeep for potential repairs or maintenance issues.
    • Time:
      • Up-front: Some time to prepare property and create online listing.
      • Ongoing: Varies.

    "One of the easiest ways to start earning passive income is to identify which assets you have that could be making you money. Sometimes that's a spare room you can list on Airbnb, sometimes it's your car you can share through Turo, and sometimes it's your parking space, which you can list on Pavemint.

    Pavemint hosts who make the most extra income have parking spaces near airports, beaches, and popular venues. Why not turn that piece of concrete into some extra cash flow?"

    Maggie Boles, Pavemint

  2. Rent Our Your Car
    If you own a car in a major city, you might be relying on public transportation more than driving. Why not loan your car out when you're not using it?

    A service like Getaround is free to join and lets you start making money off your idle ride.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: Possible increase in maintenance due to extra usage.
    • Time:
      • Up-front: Initial time to coordinate with Getaround.
      • Ongoing: Minimal monitoring.

  3. Become a Pet or Housesitter
    Watch TV, take a nap or go for a walk--and get paid for it. Pet-sitting and housesitting is a great way to make some extra money doing the stuff you'd be doing anyway (and often in a much nicer place!)

    Many owners would rather their beloved pets stay at home than a kennel while they travel. If you're responsible and love animals, this is a great gig. You'll be required to walk, feed, and play with them and that's about it.

    You can even register at sites like Rover.com to increase your chances of getting business.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Some to establish clients
      • Ongoing: Set dates for when you schedule jobs.

  4. Create an Online Store
    A store sounds like a lot of work. But if managing inventory isn't required, it gets a lot easier, right?

    Sites like Shopify use drop shipping, which allows anyone to start an online store.

    Shopify provides the e-commerce platform for you to sell your stuff. Basically, it works like this: You design a fun product, let's say an "I Hate Coffee" coffee mug (don't overthink it.) Through Shopify, you connect with a manufacturer who agrees to produce your mugs.

    You then create an online store through the site. When a customer places an order, Shopify notifies the manufacturer. They ship the product to the customer and everyone receives payment.

    All you need to get started is a good idea. But not an "I Hate Coffee" mug, that's already taken (by me).

    What you need:
    • Money:
      • Up-front: $500+
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to initially develop your store.
      • Ongoing: Moderate marketing and monitoring.

  5. Sell Your Photographs
    If you have photographic talents, consider selling your photos on Shutterstock or iStockphoto. One picture can earn serious cash if it's downloaded enough.

    Upload an entire portfolio to showcase your work. You'll increase your chances of making sales AND build a brand customers can recognize. With any luck, you'll also sharpen your artistic eye.

    Keep in mind, though, that each company offers a different payment structure. Read the fine print and choose the one offering the biggest profits for your masterpieces.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Time to develop your photographs and upload.
      • Ongoing: Some monitoring.

  6. Hawk Your Designs Online
    You don't need your own website to put your artistic flair to work. Sites like Etsy offer a user-friendly platform to sell digital files of your designs, such as invitations or cards.

    No physical products means no inventory or shipping hassles. Buyers simply purchase your design and download it to their computer.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Time to develop your design and upload.
      • Ongoing: Some marketing and monitoring.

  7. Make YouTube Videos
    Billions of people watch YouTube. In fact, there are billions of views a day. This built-in audience is always ripe for new content.

    You can create videos about anything. Ask yourself:

    • What are some interesting subjects people AREN'T talking about.
    • What kind of videos do I find entertaining?
    • What do I know that others don't?

    The goal is to find something unique, whether it be funny, educational or just plain weird. Give it time and hopefully, the viewers will find you.

    Content creators are constantly adding new videos to Youtube so you'll need to find a way to standout. Use social media sites like Twitter and Instagram to boost your Youtube channel.

    We recommend steering clear from controversial topics (like politics) but strive to find cool ways to "go viral."

    If you're successful, you can begin to pursue advertising revenue, which can lead to substantial passive income.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to create your videos
      • Ongoing: Mild upkeep and marketing

  8. Become an Affiliate Marketer
    Affiliate marketing is a way to make referral commissions from online retailers through your website or blog. You can do this 2 different ways.

    The most profitable is mentioning other companies' products on your site. You'll make a commission whenever your readers purchase a product using your link.

    The easiest way to get started is by buying an existing site with a built-in following. But you can also start your own and build an audience organically. Either method can provide passive income over time as long as your content stays fresh and current.

    Another option is using ads, such as with Google AdSense. You'll earn money when your readers click on an advertisement.

    There's less money to be made but also a lot less work.

    What you need:
    • Money:
      • Up-front: $100 if developing your own site; $1,000+ if buying an existing site
      • Ongoing: $100+/year
    • Time:
      • Up-front: Lots of time to develop your own site; moderate time if searching for an existing site to buy.
      • Ongoing: Moderate investments in updating content.

  9. Share Your Expertise in an Online Course
    Do you have a hobby you know inside and out? Chances are, others don't have the same knowledge. They may even pay for a course on the subject.

    That's right, even your intelligence can be used as capital to earn passive income.

    Developing an online course takes time but very little maintenance once its complete. Several websites offer platforms. Udemy and Teachable are among the most popular.

    Consider the market before making an online course. You'll need a subject that's obscure enough not to have been covered but interesting enough to find an audience. In other words, Introduction to Paint Drying is probably a bad idea.

    Take advantage of their built-in audience. You may also want to sell course packages of varying prices to appeal to the masses.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to create the course.
      • Ongoing: N/A

  10. Write an E-book
    If you've got specialized expertise and a craving to put it on paper (or computer screen), an e-book could bring in some extra cash. Self-published e-books are still the rage. And technology today makes publishing one easy than ever.

    Once you finalize your manuscript and design a cover, you can upload the book to a self-publishing platform. We like Amazon Kindle Direct.

    Develop a social media presence to market your e-book.

    For self-published authors without a following, non-fiction e-books like "how-to's" tend to fare better than fiction novels.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to write e-book.
      • Ongoing: Regular marketing updates.

  11. Make an App
    Okay, maybe you can't quite mimic the success of Candy Crush. But you can use creator Tommy Palm's story as inspiration to build your own app.

    Got a developer friend with whom you can split the proceeds on an awesome idea? Maybe you have some tech talent yourself?

    Research your idea BEFORE putting in the work. There's an app for almost everything today. Don't waste time on an idea that's already well-represented in the market.

    Start brainstorming an addicting new game OR a helpful feature to a common problem.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to develop your app.
      • Ongoing: Mild to moderate marketing and upkeep efforts to keep users engaged.

  12. Strive for Royalties
    Compose some music. Write a great book. Design a T-shirt or other fun product through CafePress.

    Make something valuable that people love, and you could collect royalties for a long time. Some writers and content creators receive checks decades after all their hard work ended!

    Get creative and be fearless.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Lots of time to create a good or service people will pay for in the future.
      • Ongoing: Minimal monitoring.

  13. Sell or Rent Your Stuff
    Remember yard sales? Like everything else, they've gone online.

    If you've got a bunch of stuff to sell, websites like decluttr can help. Decluttr gives you cash for:

    • Old CDs, DVDs and Blu-Rays
    • Video games
    • iPads, cell phones and electronics
    • Assorted other household products

    You simply scan the barcode on your phone to get an estimate, then ship your stuff using a pre-paid postage label.

    You can also rent out equipment, tools, and other household items using websites like Craigslist and Nextdoor.

    As always, use common sense when letting strangers borrow your stuff.

    What you need:
    • Money:
      • Up-front: N/A
      • Ongoing: N/A
    • Time:
      • Up-front: Some to sort and pack up your stuff
      • Ongoing: None

    Tips for Offering Your Stuff:

    • Think local: Only carry inventory that people visiting your area will want. For instance, if you live near a popular family hiking destination, stock up on some baby backpacks (and sunscreen, which you can sell).
    • Go with higher-end, quality gear. It will last you longer after multiple borrowings.
    • Look for great gear sales. The less you pay for your gear, the more quickly rentals will hit your bottom line.
    • Upsell. Potential customers tend to be looking for one item—at BabyQuip, a platform for renting baby equipment, they're more often than not looking for a wooden crib. Steer your customers to what else you have to offer. Providers who ask customers about additional rental items are more likely to see larger orders.
    • Request reviews equal rentals. Provide good service and clean, quality gear, and then be sure to ask for a review afterward. Reviews equal more rentals.

    Trish McDermott, co-founder, BabyQuip

Found an idea you like?

Now it's time to get that passive income stream flowing. We've got important first steps below.

How to Get Started

© CreditDonkey

Before plunging ahead with your awesome idea, you'll need to review your finances. Make sure you can afford the up-front investment right now.

  • Pay off credit card debt: If you get swept up in a new venture and ignore your debt, the interest rates will eat away your profits.

    Pay your debts down first.

  • Build up your savings: Going broke while develop your passive income source defeats the purpose. Make sure you're saving by setting up automatic withdrawals to your 401(k) and emergency fund.

  • Create a benchmark: Your passive income should exceed a basic investment's rate of return. Look up today's 10-year bond rate or average CD rates.

    That's how much you can make just by depositing your money in a bank account. If your passive income source can surpass this interest rate, you are on the right track.

  • Say Goodbye to Your Free Time: Not all passive income ideas require capital. But you will need to invest time that could be spent relaxing in front of the TV with a bag of chips.

Make sure you're ready to commit to your passive income stream, even when you aren't at the money-making stage yet.

Keep reading to find ways to avoid common mistakes.

Determine Your Risk Level

© CreditDonkey

Many passive income ideas involve some risk.

Real estate investors face deprecating property values. Writers risk spending a lot of time writing a book only to have it make no profit. Almost every opportunity has a chance for failure.

Consider what you can handle in terms of risk. Do you have retirement and emergency savings set aside?

If so, you can risk a little money, which we DO NOT recommend if you're living paycheck-to-paycheck.

What Is Your Why?

© CreditDonkey

Money is an obvious reason for making passive income. But it's what money buys that determines why you should pursue it.

How will you use your profits? Do you have a shopping habit? Are you saving for retirement?

Consider the reasons you need money then create a plan:

  • Short-term: things you will do in the next year
  • Intermediate: things you will do in the next 2 or 3 years
  • Long-term: things you will do in five or more years

Longevity is the key to successful passive income--your money won't start rolling in overnight.

Why It's Important to Have Passive Income

It's not just the satisfaction of making money without working. Here are some reasons passive income is important:

  • Reduces financial risk. Passive income sources mean less stress if you suddenly lost your job. You'll still have a stream of money coming in, which provides a little cushion during emergencies.

  • Frees up time to enjoy "the little things". Knowing your making money even during downtime means you can spend with your family or personal goals like travel.

  • Build long-term wealth. Working a regular job means the amount of money you earn is limited to the hours you work.

    But you don't have those limits with passive income. In fact, you can make money from MULTIPLE sources while you're busy doing other things (like napping).

Don't Forget the Tax Man

The government taxes passive income differently than active income (like your salary, wages and tips through a regular job.)

Passive income is money you make from all activities in which you don't actively participate.

So what constitutes actively participating? It can get confusing but here's an example: if you've started a business that you now run, it would be considered active, NOT passive activity.

But if you are a silent partner in a business, that would likely be considered passive activity.

The IRS has two separate categories for passive activity:

  • Trade or business in which you don't actively contribute.

  • Rental Activity (UNLESS you are a licensed real estate agent).

You can find more information on passive activity—and what classifies--here. But consider talking to an accountant or income tax professional BEFORE filing your taxes.

Bottom Line

© CreditDonkey

Pursuing passive income can be lucrative but it requires investment.

Choose an idea you can spend the time –or money--developing. Have fun with it but be patient.

It's going to take a lot effort, some failure and tons of learning along the way.

But every venture could set you up for more passive income profits in the future.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.

Editorial Note: This content is not provided by Chase. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through the Advertiser's affiliate programs.

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Chase Freedom Unlimited
Apply for Chase Freedom Unlimited
At Chase's Secure Site
  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.99-25.74%. Balance transfer fee is 3% of the amount transferred, $5 minimum
  • Unlimited 1.5% cash back on every purchase - it's automatic
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • No minimum to redeem for cash back
  • Cash Back rewards do not expire as long as your account is open
  • Free credit score, updated weekly with Credit Journey℠
  • No annual fee
  • Go to issuer's official application, terms, and details
Intro APR for PurchasesIntro APR for Balance TransferRegular APRAnnual Fee
0% for 15 months
0% for 15 months
16.99% - 25.74% Variable
$0

EquityMultiple Review

Think you don't have enough money to invest in real estate? Check out the opportunity that EquityMultiple offers. They are a real estate crowdfunding website.

December
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2018

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