Everyone wants to make extra money, however very few of us want to put in more hours on our jobs. The best way to work less and make even more cash is to discover new ways to create passive income. Passive income can be referred to as income that is received on regular intervals without requiring a great deal of work to sustain it — cash that you instantly make whether you work any more or not (Read Royalties: How the Average Person Can Work Once and Get Paid Over and Over and Over).

We have actually covered some wealth structure ideas in the past, like the listing of alternative ways to make extra money. If you want to earn more cash, following are 10 methods to earn money passively in no particular order for income potential:

1. Dividend Investing

Becoming a stockholder in a company is a wonderful way of earning income with extremely little time involved. Purchasing shares in the business, you can then decide whether you want to get quarterly dividend checks (cash made from your financial investment) or to reinvest the money back into more shares. Dividend investing is easily among the most popular sources of passive earnings.

2. Rental Property

When you purchase rental asset, you can begin receiving regular monthly earnings virtually immediately. The work involved needs buying the property one time only. After your mortgage on the asset is paid, anything left over is considered passive earnings.

3. Peer-to-Peer Lending, e.g., Prosper

Online you can find a large group of people financing other people’s debt, their businesses, their vacations even their weddings.. When you become an investor, you are simply providing a specific amount to various other people who need to obtain money for whatever reason. And hey, why not? Investors get better returns than the banks offer and borrowers get better rates than the banks charge. With Prosper, you can expect to earn a 9% interest on average.

4. Build Websites

If you have a flair for building websites that can create a high amount of traffic, you have a wonderful chance to earn passive income. Many individuals find that by merely developing an information site about a subject they are passionate about, they can get high web traffic and earn income by either offering the marketing area on the site or by joining an advertisement profits sharing program. Website structure is hands-down the most trustworthy way to make money online.

5. Bank Accounts

If you like money, you will like seeing it grow. Instead of putting your cash in low-interest earning accounts, shop around and find the banks and accounts that will pay you the most money. The cash earned on interest may appear small, however the longer you keep it in the bank, the even more cash you will make and then the magic of compounding returns takes hold.

6. Bonds

Many individuals are making a great deal of passive income by investing in bonds. Treasury bonds, also known as T-bills or T-bonds, are lasting financial investments. When the bonds develop or come due, you can money on them. For example, you could buy a $100 U.S. Savings Bond for $50, but when it comes due, you get the $100.

7. Writing a Book

If you write a book, you can make royalties for as long as people keep buying it. Lots of terrific authors receive monthly royalty checks on books they wrote twenty years prior. All you need to do is look at authors like Stephen King and Danielle Steele to know this is quite feasible. Even if your book in not on the best seller’s listing, you still have a great possibility of earning a passive income from it.

8. Writing for the Web

An additional method to earn passive earnings from your writing is to sign up with a few of the online short article sites, or become a freelance author. Many of them pay you for the views your articles get each month or when someone clicks on ad that has been placed on your short article’s page. Lots of authors are earning as much as $300 or even more each month in passive earnings from these websites. Squidoo, Yahoo Contributor Network, and Triond are just a couple of examples.

9. Residual Affiliate Marketing

When you become an online affiliate marketer, your goal is to simply to offer products for sale. Though some affiliate marketers allow you to recruit additional people and pay you a commission based on their sales, most online affiliate marketing is relatively simple. Generate page views and clicks. When someone makes a purchase, you get paid a commission.

10. Selling Insurance

When you sell insurance, whenever one of your customer’s renews, you make an additional commission. Registering a number of clients each week ensures your future earnings, as a number of your clients will restore their policy each year. Keep in mind that you will require a license to sell insurance; unless you do it as an affiliate.

As most individuals currently work forty to fifty hours each week (and some of us much much more … ), the last thing they want to do is put more time in to make even more cash when they could be earning passive income. Take it upon yourself to invest some time into finding out the various approaches of passive income generation. With passive income, you could stop working so many hours and still make even more money than you were before. It is all a matter of understanding the process of building wealth and learning ways to make it work for you.

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For all the wonderful advances Wall Street has made in making investing easy and economical for the normal person over the past couple of decades, investing still takes cash. The majority of stock funds require minimums that many people simply cannot afford, and brokerage commissions make getting individual stocks prohibitively costly if you just have a little to spend. However, the power of compounding makes it vital that you start investing as early as feasible, even if you don’t have a bunch of extra money. So, how to invest when you do not have much cash?

Understanding how to invest when you have little cash available is a simple matter of knowing ways to avoid being swindled by dishonest financial advisors. Lots of money-market funds out there have low minimums, however the many of them charge outrageous fees for the privilege of managing your cash or they have such a narrow financial investment concentration that they’re practically all but useless.

Search for All-In-One Funds With Low Minimums

There are plenty of inexpensive, varied mutual funds costing as little as $1,000 to get started. My personal preference is the Vanguard Star  Fund, which just may be the perfect all-in-one fund for beginners. It is a moderately-aggressive fund invested in 60% stocks and 40% bonds that acquires all the 4 major asset classes (domestic stocks, small-cap stocks, foreign stocks, bonds), has an expense ratio of just 0.34 % yearly, and costs merely $1,000 to get started. You probably won’t discover an easier way to get started investing.

Conversely, you might consider investing in a target retirement fund. Target funds generally set you back a little bit more to get started, usually i the neighborhood of $2,500-3,000. But these type funds are made to be a one-stop financial investment you can hold for life.

Open an investment account at E*Trade! Click HERE to get started!

Consider T Rowe Price Retirement Funds

T. Rowe Price is a well-respected stock fund company understood for its conventional investments and emphasis on safety over big returns. T. Rowe Price funds are often a bit more costly compared to their Vanguard counterparts, but are normally more easily accessible for smaller investors. T. Rowe Price currently has a method where they will permit you approve one of their excellent all-in-one target retired life funds for as little as $50 upfront if you accept instantly invest $50 in the fund every month. If you could save $50 per month, this is without a doubt the most convenient and most affordable way to get started spending for a top-quality fund. 

Don’t Fret Over Diversification

No, I have not gone crazy. Diversification is still extremely vital, but think about it. If you currently have a $3000 profile and save $1500 annually, your account balance will depend much more on your savings rate than on your investment returns.

The best solution would certainly be to get an all-in-one fund and build up your assets to the point of conveniently customizing your asset allocation, yet the fact is that tax strategies like these will only work in a tax-deferred account such as a 401k or an IRA. In a regular taxed account, it’s perfectly high fine to invest in one fund at a time and continue to be “un-diversified.” But since most funds are invested in hundreds, if not thousands of stocks and/or bonds, your diversification is pretty much taken care of by the fund manager.

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At least his heart was in the right place.

“I don’t want anything given to me that I don’t earn. I’m not a free-loader,” was his reply as he looked at me from under the brim of his cowboy hat.

“It isn’t ‘free-loading’ if it’s a normal service offered by a bank to attract customers, Jim.” I thought I had him roped in with that one.

“But Ron, I’ve been with my bank since I was 5 years old. My daddy and momma set me up a passbook savings account in 1971 and I’ve stayed there ever since.” Hmm, the old loyalty play.

“I understand and believe me, I can appreciate your loyalty. Does the bank appreciate it?” I asked nonchalantly.

“What do you mean? I don’t get gifts or nothing like that. Although I think I DID get a toaster or a hat or something when I opened my checking account in high school,” he trailed off.

“Jim, you’ve had that checking account for how long – about 30 years? And the average checking account monthly fee today is $13. My friend, that means you’ve paid FOUR THOUSAND SIX HUNDRED AND EIGHTY DOLLARS to that bank in checking account fees, not to mention the fees they charge for other services. I’d say their toaster was a good investment for them! What else have they given you?” I asked.

“How’d you do that math so quickly in your head?” he was distracted.

I had to turn the conversation back to the issue. “That doesn’t matter, just think about what you could do if the bank came to you today and said, ‘Jim, we’re sorry, here’s your $4,680 back.’ Would it make a difference to you today?”

“Of course,” he grunted, “but that’s not going to happen.”

“I know. But the best course of action, once you realize you’ve gone down the wrong trail, is to turn that pony around and get on the right trail.” The cowboy metaphors seemed to be working.

“Okay, okay, so where do I go for one of these checking accounts you’ve been talking about on that blog of yours?”

I opened up my Netbook and once the jokes stopped about it being a Shetland Pony computer, I showed Jim his options, reminding him that almost all online banks today offer free bill payment, free checks, free ATMs and a few other perks. Those aren’t differentiators anymore. You have to dig a little deeper:

Best Checking Account Options

• Perkstreet – this is a rewards checking account. You actually get cash back similar to a credit card rewards program but without the entanglements of credit.
• Everbank Checking – talk about a HUGE interest rate … on a checking account no less. Plus Everbank has a bonus rate for new customers. Beats a toaster hands down.

Jim DID get his account opened. I then shared with him about opening an online savings account and using the ideas in 17 Sneaky Savings Strategies to make sure he KEPT all those newly saved fees.

Are you still paying those checking fees?

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If you’re looking for ways to save money on your monthly bills, or to raise the value of your home, you have probably begun to consider the many energy efficient renovation options available to you. They range from small repairs and maintenance to large investments requiring extensive construction, and it can be difficult to determine which changes will pay for themselves and which will not. When evaluating the cost and benefits of green renovations, understanding the ways that your home uses energy will be the best place to start.

Usage Rates

The aspect of modern life that uses the most energy is the process of heating and cooling our homes. Between them these systems use an estimated 46% of the average home’s energy. While it is clearly the biggest percentage of consumption for most families, this estimate has gone down from 58% in the last few years, demonstrating that education and innovative products can and will impact our costs. Water heating, large appliances and lighting account for the next three largest categories, at 12-14% each. They’re followed by small appliances and electronics as the least wasteful aspects of our modern lives.

HVAC improvements

Clearly, the largest impact that homeowners can have on their own energy consumption and costs will be found in their HVAC systems. One of the most affordable improvements you can make is to improve and repair the insulation of your home. This step can save a great deal of money, and because of the lost cost of initial investment, it will pay for itself very quickly.

Some upgrades will require a little more investment, but the payoff will be worthwhile. Programmable thermostats, for example are available for as low as $40, and the installation process is relatively simple. Most homeowners won’t require a professional to install them, but if you do the cost should be fairly low.

The United States Department of Energy estimates that if used properly these devices can save homeowners between 5 and 15% of their home heating and cooling costs. That significant savings can be achieved simply by adjusting the desired temperature by 10-15 degrees for around 8 hours a day, either while you’re out of the house or at night when you’re asleep. Again, the money saved will outweigh the small initial investment fairly quickly in the life of the house.

Water Heating Updates

The next largest share of energy costs for most homes is water heating, and improving this system will require a bit more commitment. While simply managing usage can impact the monthly cost of this necessity, the best way to save money on water heating is to invest in a new tankless or on-demand water heater.

Although this newer model is more energy efficient by about 22% in comparison to the traditional models, Consumer Reports estimates that due to the high cost of purchase and installation, it would take up to 22 years for the average homeowner to recoup their costs in savings. At a rate of $70-80 per year, this may not yet be a worthwhile investment for homeowners. However, the technology is developing quickly, and innovations in this field will continue to improve as time goes on.

Upgrading Appliances

Saving money on large and small appliances has become a simple thing to accomplish in the last few years, with the advent of energy efficiency rating systems and the Energy Star certification process. While the certification alone doesn’t necessarily label something as the most efficient device of its kind, they do offer information about the rate and the way that the device uses power, and offer you an easy way to compare different products.

Upgrading appliances to Energy Star certified versions can save quite a bit of money each month, and over the lifetime of the appliance will more than pay for itself. The question of whether or not the upgrade is worth the investment for you at this time will depend on a number of factors. If you’re looking to replace old appliances anyway it would be foolish to do anything but choose the most efficient. If on the other hand your appliances are fairly new and in good condition, it may be worthwhile to use that money elsewhere for the time being.

Author Info:

Frank Newhouse is a homeowner and a freelance writer with many years of experience in property management. He enjoys passing his knowledge on to other homeowners to help them save money and reduce their environmental impact. He currently writes for Air Conditioning Florida, which helps people in the Miami area find the HVAC services they need.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

If you’re like me, you like to learn from the experience and wisdom of others. It’s much cheaper that way! When it comes to being an investor, few things can beat the knowledge you and I can absorb by reading books. Plus I just like to read.

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Five Books For Active Investors

The Intelligent Investor by Benjamin Graham. Graham was Warren Buffet’s professor and Buffet has declared that this book is “the best book on investing ever written.” Strong words from someone who’s used those investing strategies to make billions.

Payback Time or Rule #1 both by Phil Town. Town’s investment philosophy mirrors those of Warren Buffet and Ben Graham, that price and value are two different things. He shows you how to intensely scrutinize any business you invest in and how to make an educated guess about it’s value based on its past, present, and predicted future.

The Little Book That Beats the Market by Joel Greenblatt. The author’s private investment partnership, Gotham Capital, has produced 40 per cent a year returns over the past 20 years. The last time I checked, he was invested in only two stocks. 40 percent. Wow.

Irrational Exuberance by Robert J. Shiller. This Yale economist contends that emotion often determines prices in the stock market, resulting in prices that are often far higher or lower than values. Does anyone really believe that Yahoo was truly worth $500 billion in 1999?

One Up On Wall Street by Peter Lynch. This former manager of Fidelity Magellan Fund, the largest mutual fund in the world at one time, thinks you should be managing your own money. He wrote “The amateur investor has numerous built-in advantages that should result in outperforming the experts and the markets.”

Five Books For Passive Investors

How A Second Grader Beats Wall Street by Allan Roth. He believes you’re paying too much in fees, too much in taxes, and that the financial advisors you’re been using don’t have any idea where the market is headed. Our biases (and our financial planner’s biases) can cause us to lose big money over the long run. Invest in broad based ETFs or Vanguard funds and rebalance each year.

The Little Book Of Common Sense Investing by John Bogle. As the founder of the Vanguard Group, Inc., Boggle is THE guru of index investing, providing guidance to small investors in smaller and more direct terms than some of his other writings.

The Only Guide You’ll Ever Need for the Right Financial Plan by Larry Swedroe. In a easy-to-understand prose, Mr. Swedroe provides excellent information on the various types of equities, bonds, alternative investments, a valuable discussion on how to increase your tax-advantaged savings and important tips on asset location for maximum tax-efficiency.

Searching For Alpha by Ben Warwick. This is a great discussion of market efficiency versus stock picking from an active manager. This is a light-hearted book on a heavy subject that addresses such things as “the commonalities between catching monkeys in India and avoiding taxes on investments in the United States.” You want to read it now, don’t you?

The Wall Street Self Defense Manual by Henry Blodget. Though many people believe the author should be in jail because he was an insider and eventually was barred from the financial markets, no one knows more about how to spot a Wall Street scam than a former crook. His recommendation? “Diversify your assets, reduce your costs, and get out of the way.”

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