The idea of a passive income stream is to put your money to work and allow it to generate even more money. The ultimate end goal, of course, is to gain you financial freedom. Earning a passive income stream is a lovely thought except it also carries some inherent dangers. Some passive income revenue streams are high risk and require a high initial investment. They can be too good to be true and some are really are. Others are low risk and will allow you to earn some additional cash without putting all of your eggs in one basket. Here are three passive income ideas that are low risk. This won’t make you an instant billionaire, but they don’t need much in terms of monetary investment, hence they have a lower risk than others.
1. High Yield Bank Accounts
One of the quickest ways to improve your revenue stream is to improve the interest rate you are getting from your savings or checking accounts. Traditional checking and savings accounts are often the lowest yielding accounts you can ever have. You should just leave maybe just about 10% of your cash base in those accounts for easy access during an emergency. The rest should be transferred to various accounts that have a higher interest.
Most of the time, online banks and financial institutions offer higher interest accounts as compare to the traditional bank. It won’t be as high as, say, the stock market, but it will be a bit higher than what you are currently receiving. Another good choice is to open a reward checking account with the smaller banks. You don’t have to worry about risk because they are still insured by the FDIC. These banks could offer up to 4 times the interest rate being offered by the larger banks.
2. Creating Information Products
This is a good option if you are skilled in a certain area of two, say in gardening or crocheting. By establishing yourself as an expert, you are now in the position of spreading that knowledge to people who would like to find more about your area of expertise. The internet and other technology have made it so much easier to get your information product out there on the market. No longer will you have to rely on getting a book deal from a name brand publishing house.
With a plethora of software available to the regular person, you can create an eBook, tutorial videos, podcasts, DVDs, and the like. You can self-publish them on your website or even on websites such as Amazon. The great thing about selling information products is that you do not have to be innovative with your product. You don’t have to rack your brain trying to figure out something revolutionary to sell. All you need to do is to provide the public with the information they need in an accurate, relevant and timely manner.
3. Renting Out Items
Often times, when you think about rental income, you instantly default to renting out real estate properties such as houses, condos, apartments, and even storage facilities. The problem with real estate investment is that it often requires you to make a sizeable investment in purchasing the property you want to rent out. You may also need to renovate the property beforehand. The initial costs are high and this can drain your savings. The property market is not as stable as it used to be, and this would add to the risk factor.
However, renting doesn’t have to mean real estate. You can rent out any property that you own, from small things to big ticket items. Some people establish mini libraries and rent out books that they already own. A couple rent out DSLR cameras for use during family events or special occasions. You can rent out dinner party items such as nice plates and cutlery, crystal stemware and the like. Some people even rent out storage space if they have an attic at home. In fact, there is a long list of items that you can rent out. Just make sure you have properly insured these items in the event they get damaged while being rented out.
What Do You Think?
What other low risk passive income ideas can you think of? What have you tried?