In recent years, passive income has become a highly popular strategy for generating additional income. For entrepreneurs, it can be a great way to generate wealth while still focusing on other business ventures. And, who knows, with enough time your passive income stream may even become your main income stream.
However, speaking from experience, passive income is not nearly as passive as many people think, at least at the start. Almost every passive income venture will require an initial investment of time and money to get things off the ground. And the actual income can take a while before it starts to roll in consistently. In some cases, you could be waiting quite a while before your efforts start to bear fruit.
Nevertheless, a passive income stream can still be highly lucrative when you have a clear strategy. The big question for an investor will be to decide which type of income stream will work best for their situation.
What to look for in a passive income source
Passive income is any regular earnings from investments or other income sources that require little to no effort to maintain. This definition is worth pointing out as it highlights what sets passive income apart from more “active” income sources. Passive income is not a job, nor is it a side hustle like freelance work or running an online business. Instead, passive income is something you set up that can essentially run itself.
A good example is rental property investment. While this does require a significant upfront investment, you can begin collecting money each month once the property is rented. This is considered one of the best forms of passive income and for good reason. That said, you will still need to set aside some cash reserves for routine maintenance every few months. The same can be said for a lot of other passive income types: some maintenance will be required from time to time.
Ultimately, I would advise anyone who’s considering setting up a passive income stream to look for something that you can afford, is low maintenance, and maximizes returns. To my mind, the following three passive income ideas fit these requirements perfectly.
Ice vending machines
Ice vending machines may seem like a quaint investment idea, but there are a lot of good reasons for giving this idea serious consideration. For a start, they’re very low-maintenance and can essentially run themselves. Recent technological advancements have also made them far more user-friendly, with touchscreen interfaces, cashless payments, and inventory tracking. They can also be surprisingly profitable, with annual incomes of $30,000 or more from just one machine. Just make sure to set some money aside each month for routine maintenance and restocking.
To get started on this venture, check out your local area to see who’s currently selling ice, how they are selling it, and what their pricing is like. This data can help you determine how to market your machines and price them accordingly. Next, choose a location that gets a lot of foot traffic, such as college campuses, park grounds, and pedestrian-only streets. With the right setup, an investor can easily start with one machine and purchase more as the profits start to roll in.
ATM machines
It may surprise some to know that anyone can purchase an automated teller machine (ATM) and collect income from the transaction fees of customer withdrawals. These fees can range anywhere from $1 to several dollars depending on the withdrawal amount and with just a handful of these machines, the annual income can be as much as $60,000. You also don’t need deep pockets to get started with this venture, nor do you need any specialized education or training to operate each machine.
As with vending machines, your success will depend on setting up each ATM in a high-traffic area. You’ll also need to decide on which brand and model type to choose from. Some machines only work with a bank card while others can be accessed through a smartphone. Lastly, be careful about where you place your machines as they can be a tempting target for thieves or scammers.
Dividend stocks
Along with real estate, dividend stocks are one of the most tried and true ways to earn passive income. Each time a company earns profits, shareholders will receive dividends in the form of cash payments or stock dividends. These dividends can come in every month, quarter, or year and can be a great way to boost your income without doing any additional work.
However, for those who are new to stock investing, a lot of research will be required to identify good stocks, not to mention cash investments for building your portfolio and diversifying it as much as possible. This can quickly become a full-time job, so start small with a few large established companies that have a strong track record of paying out dividends to their investors. With enough time, you can begin generating a steady return of three to four percent each year.
Final thoughts
Being able to earn money while you sleep is the dream for many and with any of the above options you can make that dream a reality. Yet as with any business venture, some upfront investments in time and money will be needed to get the ball rolling. And be sure to research potential downfalls to each strategy so you can go into your venture with your eyes open. The great thing about passive income, though, is that once you’ve made those initial investments, you won’t have to do a whole lot to keep the money flowing in.
About the Author:
Dan Doromal, Co-Owner and Vice President of Operations for Everest Ice and Water Systems has been instrumental in helping his company climb to the top in reputation, earning a number of prestigious awards ranking Everest as one of the fastest-growing and best-performing companies in the country. Under Dan’s leadership, Everest continues to set, meet, and exceed ambitious goals for growth in all arenas – sales, size, performance, and more.
