passive income is an ideal way to bring in some extra money while you're focusing on other important things passive income can be generated while you're at work while you're on vacation or it could just be how you fund your retirement lifestyle income being made while you're not actively working for it can allow you to pay your bills so you can retire some believe that passive income only comes through simple common and traditional sources but there are many creative ways to make some extra money that you might not think of these are some ways you can
easily generate at least five hundred dollars per month passively my name is chris and i help teach people about money personal finance and investing if you're interested in improving your financial future make sure to subscribe to the channel and hit the like button if this video is helpful it's important to remember that passive income doesn't mean no effort is required to begin earning everything takes some amount of upfront work or money in order to start and usually require some additional time on occasion the good news is that this typically involves more managerial tasks as opposed
to active work rather than thinking of passive income as money coming in for doing absolutely nothing consider it money being made with very little effort so most of your time can be spent doing something else with the cost of housing always increasing there's more demand for rentals by the room for a single person a private home can be too expensive and simply a waste of money when they can live with a roommate if you have an extra bedroom in your house or apartment this can be an easy way to make money for doing close to
nothing since housing is the single largest expense of the average household this is also an excellent way to lower that expense just renting out one bedroom could bring in five hundred dollars to one thousand dollars per month while living with a friend family member or even a stranger isn't ideal for everyone it does have some benefits such as additional security some people even take this method of house hacking to the next level by purchasing a large home with many bedrooms renting all the bedrooms can far exceed the cost of owning and maintaining the home many
people live in an apartment condo or in a home with limited parking and need somewhere to keep a vehicle if you have extra space at your home you could rent it out to those who need it for a sizable amount of money depending on where you live you could charge fifty dollars to two hundred dollars or even more per month for a single parking space this idea doesn't have to be limited to just parking either you can rent a storage shed garage space or an unfinished basement to someone who needs some extra storage neighbor is
an app like airbnb that will allow you to rent these types of places with very little work you can also go a more traditional route in rent by word of mouth or with other forms of advertisement this is an excellent way to generate income from your home with very little work and doesn't require you to live with a roommate who won't wash their dirty dishes investing in the stock market is perhaps the most common method that comes to mind when people hear passive income there are multiple reasons for this including the fact that it takes
little to no time and doesn't require any expertise once set up it will continue to reward you with almost no management for a very long time the s p 500 averages about a 10 return every year by investing about 60 000 in an s p 500 etf such as vanguard's voo you could expect to earn 500 per month on average this dollar return will also increase each year as your investment principal grows furthermore unlike other passive income ideas this provides you the ability to earn compound interest each year your stock investments will generate exponentially higher
returns the downside is that not everyone has sixty thousand dollars to begin with and it can take quite a bit of time to grow a beginner's portfolio to a size that will produce five hundred dollars or more on an average month the previous example of investing in an s p 500 etf is a great way to generate passive income but some people prefer to separate capital gains and consider just the dividends as the passive income they'll receive they'll ignore the rising stock prices and only count the dividends received as their passive income the s p
500 has an average return including dividends of about 10 percent with the dividend portion making up about 1.5 percent of that total in order to generate five hundred dollars per month in dividends alone with an s p 500 etf you'd need a whopping four hundred thousand dollars invested by investing in a high dividend fund you could reasonably assume a four percent dividend yield meaning you'd need 150 000 invested to receive 500 per month in income furthermore the principle of your investment will likely rise over time like with the s p 500 fund just at a
lower rate investing in a rental property has the potential to provide huge returns and that's primarily because returns come in several forms and aren't just limited to one form cash flow is received when the rent exceeds the cost of owning the property simply put if the owner's expenses are two thousand dollars per month and the rent received totals twenty five hundred dollars your cash flow is five hundred dollars if you have a mortgage on the property the balance is paid down each month a 300 000 loan for 30 years will be paid down an average
of 833 dollars per month less towards the beginning of the loan and more towards the end additionally the property will usually appreciate in value you could reasonably assume a four hundred thousand dollar property would appreciate three percent or twelve thousand dollars per year being a landlord does require some work even if you plan on hiring a property manager but it still requires much less effort than a typical job there are many people who have excellent ideas for a new business but lack the funds to get started perhaps you have a friend or family member with
an excellent opportunity they just need some capital to get their business off the ground you could act as a private lender and invest in their idea and charge them an interest rate of 10 or 15 percent this is very common especially with real estate a house flipper would approach a private money lender who was looking for a return on their money the lender would finance the flip in exchange for interest payments if you're worried about the likelihood of success for the project it's common practice for the lender to have the right to the property in
the event that the loan can't be repaid similar to how a bank can foreclose on a property there are also websites that allow individuals to easily lend money such as prosper and upstart you might have seen people driving around town with cars that are covered in a company's advertisement the entire vehicle is probably wrapped in colorful logos and slogans while it might appear that those people are employees of that business they might just be driving their personal car and are on their way to work school or just doing errands some companies will pay a monthly
fee to those that are willing to use their own car as a rolling billboard how much you earn will depend on factors like how much you drive and where you're located but this is a valid option to generate income instead of spending a lot of money commuting to work you could actually be getting paid for this not all of these methods will be preferable for everyone as with almost all passive income sources they do require at least a little bit of money or effort it's unreasonable to expect to receive passive income from doing absolutely nothing
and chances are there's no method that's extremely desirable meaning there's no scenario where no money or time is required and money will just be deposited into your account like magic there's no realistic scenario well you'll deposit five thousand dollars ten thousand dollars or even fifty 000 and earn enough income to retire but these are some proven ways that an average person can make 500 or more per month if they're willing to set forth a little effort and drop the this wouldn't work for me mentality you
