How to Earn Money While You Sleep
The idea of "earning money while you sleep" sounds like a pipe dream, but plenty of people do it. It's what's called passive income—money you earn on a regular basis that requires little to no effort to receive it. If Mick Jagger is still earning royalties on "Gimme Shelter," a track that debuted in 1969, every time it plays on TV, that's passive income. Whether the IRS taxes it as passive income is another story, but in the realm of earning money while you sleep, it still fits the bill. Those checks are just rollin' in for Jagger.
So what if you don't have a record deal or if you're not the next Monica Geller? There are actually plenty of ways to earn money while you sleep. In fact, Tim Ferriss, author of The Four-Hour Work Week, has gained much of his notoriety—and wealth—by promoting and using different passive income streams. Read on to learn about some of the most accessible ones.
Affiliate marketing is a super-accessible way to earn money. Anyone can do it. The way it works is that you build a website or blog (with a strong following!) on any topic of your choice, and you refer your readers to products from retail partners. Maybe it's a book you just read and loved, or perhaps it's the shoes you wore in your latest Look of the Day blog post. Every time one of your readers makes a purchase from one of your retail partners, you get a small portion of the sale (a pre-determined percentage, often between 3 and 15 per cent). Your reader doesn't even have to purchase the exact product you referred: So long as he or she makes a purchase within your allotted "cookie window" (often 30 days), you'll get paid. If he or she leaves the site and comes back a week later and then buys something, you'll still get paid. So on that note, in a very real way, you could actually be sleeping while your reader buys something you suggested, and you'd get a check for it.
There are a number of companies that faciliate relationships between affiliate pubishers and retailers. Some of the big ones are LinkShare, CJ Affiliate, eBay Enterprise, and ShareASale. They'll set you up with tracking links so you and your retail partners can see what sales you're driving.
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Peer-to-peer lending is an interesting and relatively new industry. A variety of online lending marketplaces (like LendingClub, Propser, and Harmoney) match lenders (who invest in consumer loans) with borrowers, consumers who may have had a hard time getting a traditional bank loan or other form of credit. Like making any investment, there is risk involved, but as a lender, you have the opportunity to earn great returns as the loan is paid back with interest. There are also peer-to-peer lending marketplaces for student loans (SoFi) and small businesses (FundingCircle). In any case, all you have to do is fork over some cash temporarily, sit back, sleep, and watch it grow.
Ferriss is the biggest cheerleader of this point. It's basically what's known as arbitrage: You buy something for less than you sell it. Find a service that people need or are willing to pay big money for—say, for instance, dog walking—and instead of doing it yourself, hire someone to walk dogs for you. Outsource. You're the middleman, and you can get paid for doing basically nothing beyond some minimal sales and marketing. And if you can hire staff overseas to work for you remotely, it's very likely that they'll be working while you're... you guessed it: sleeping!
Dealing with inventory, returns, customer service is costly (hello, overhead!) and a big pain in the you-know-what. So if you're going to sell a product, why not sell one that requires little to no brick-and-mortar storage space, and that you can easily reproduce? What would that be? A digital product! For example, an eBook, a zine, a digital magazine, and an album are all products that require only some server space, and better yet, your customers can pay for and download them basically endlessly. If you invest the time to produce it up front, once it's available for sale, you won't have to reorder any more product or pay rent on a storage facility.
Renting is one of the greatest sources of passive income. Buy a property and rent it out to tenants or vacationers, and then get paid. Be it a rental or a home you own, you can even just rent out your home temporarily on Airbnb or One Fine Stay while you're on vacation or travelling for work. It requires little to no work on your behalf beyond—and you can even outsource the property management, if you so please!
It takes money to make money, but if you have it, investing in stocks and funds is one of the most common ways to "earn money while you sleep," as it can reward you with great returns by basically doing nothing but waiting. There's also a lot of risk involved, so if you're gun-shy or new to investing, it's important learn about various types of investments and diversify your portfolio. If you have a nest egg ready to invest, hire a financial planner or investment advisor to help you navigate the choppy waters.
Running a brick-and-mortar retail business is costly. Beyond production expenses, rent and employee salaries (and benefits) are major expenditures—often prohibitively costly. Running a shop also usually requires your spend your own time in the store, as well. So, as an alternative, open an online shop! You can set up your digital storefront with software like Big Cartel or Shopify, and then while you are sleeping, somewhere across the world wide web, your customers will be shopping.
Have you tried any of these passive income streams? What were your experiences? Tell us below.
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