Earning passive income is a common aspiration because it represents money you make without working, even while you sleep. Most of the more common and lucrative sources require an often substantial upfront investment, such as buying a property to pursue rental income.
Such a hefty financial outlay is beyond the reach of many — but that doesn’t mean passive income has to be. The following free options offer ways to earn passive income, possibly even enough to quit your job and those that do require start-up funds eventually return your investment to you with interest.
Stock investors can trade their existing holdings for dividend stocks to earn regular passive income without spending any new money. You can’t access the value of non-dividend stocks without selling shares. However, dividend stocks distribute payments to shareholders periodically, typically quarterly, which you can harvest as income without selling shares, allowing your holdings to appreciate and, therefore, pay continuously bigger dividends.
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According to the SEC, the law requires real estate investment trusts (REITs) to distribute 90% of their taxable income to shareholders, providing ongoing passive income and a chance to invest in real estate without owning property — and you keep the money you invest by harvesting dividends without selling shares.
Lending can be better than spending in the pursuit of passive income. According to U.S. News and World Report, top P2P lending sites like Kiva and Prosper, which let you issue private loans to qualified borrowers, have repayment rates of 96% or more, meaning you get back the money you lend while harvesting loan interest as passive income.
According to Fidelity, crypto investors can lock up or stake, some of their holdings to support proof-of-stake (PoS) blockchains. In exchange for providing this vital collateral, the network rewards stakers with extra crypto when it returns the assets they staked.
Per Coinbase, nonfungible token (NFT) investors can stake their digital assets in return for compensation, just like cryptocurrencies, earning them passive income with no added expense.
If you create your own NFTs, Coinbase recommended pursuing royalties as passive income or as the publicly traded crypto exchange puts it, “a continuous flow of compensation for creators from their work.” Creators set the royalty percentage at the time of minting and collect that amount with each subsequent transaction on their NFTs.
