The post How to Make $500 a Month in Passive Income appeared first on Millennial Money.
Creating a passive income is a great way to reduce dependence on your full-time job. And learning how to make $500 a month in passive income doesn’t have to be as overwhelming as it sounds. With a little effort, you can build a $500/month passive income, then sit back and watch your earnings grow.
The best way to consistently make $500 a month in passive income is to diversify your efforts. So, I’ve shared 5 effective ways to add extra money to your bank account each month.
How to Make $500/Month in Passive Income
- Stock Market Investing
- Sell Digital Products or Courses
- Invest in Real Estate
- Earn Interest on Your Cash
- Start a Side Hustle
1. Stock Market Investing
The stock market may seem intimidating if you’ve never invested, but there are many ways for beginners to jump in and enjoy the stock market returns.
Here are some ways to make $500 in passive income investing in stocks or ETFs:
- Dividend stocks: Dividend stocks pay shareholders a percentage of the profits, usually monthly or quarterly. These stocks typically aren’t growth stocks, so you won’t see them skyrocketing. But growth stocks are risky because they can bottom out at any time.
- Common stocks: If you don’t want to worry about dividends and would rather focus on capital gains, consider common stock investments. You can use a robo-advisor like Robinhood for commission-free trading and suggestions on how to reach your financial goals.
- ETFs: If you prefer a hands-off method to investing, consider a robo-advisor that invests in ETFs. For example, Acorns invests your spare change in a portfolio of ETFs that cover an entire index.
2. Sell Digital Products or Courses
If you’re creative, consider creating and selling digital products or teaching digital courses. This requires initial effort, but once you create the products or course, you can sell them as many times as people buy them.
- Sell digital products: You can create many digital products, such as planners, cards, journals, flyer templates, or other marketing materials. Sites like Etsy or eBay are great for listing your products. You’ll share a percentage of your sales but can leverage their large audience.
- Teaching courses: If you know a topic well, consider teaching it and putting it on a platform like Teachable. You can sell it to as many students as you want to take your course. There are courses on everything from how to take pictures to how to file your taxes. Find an underserved niche and create courses that help students achieve their goals.
Both digital products and courses offer opportunities for upselling to increase your earnings. Whether you offer a subscription for updated products or one-to-one coaching for your courses, you can continually add to your offerings to increase your earnings.
3. Invest in Real Estate
You should consider investing in real estate to consistently make $500 a month in passive income. There are many ways to reach your goal with real estate investing, whether you want to own real estate yourself or invest with others and not have the responsibility of managing the properties.
- Crowdfunding: Real estate crowdfunding enables you to invest in commercial real estate with a mere fraction of its costs. Many platforms like Fundrise allow you to invest with as little as $10 per investment, so it’s easy to diversify your capital and gain the desired returns.
- REIT: Real estate investment trusts (REITs) are commercial real estate investing companies. These companies own commercial real estate and manage and sell them. Your investment is in the real estate company itself. You’re at the mercy of their investing decisions, but if you do your due diligence, you may earn much more than $500 a month in passive income from the real estate investments.
- Real Estate Syndication: You can also join forces with other real estate investors in a real estate syndication, kind of like a partnership. You and your partners choose the investment strategy, including how you’ll own and manage the properties to earn $500 a month in passive income.
4. Earn Interest on Your Cash
Investing cash may not seem like a way to earn much, but if you do it right, you can earn $500 a month in passive income.
Here are some simple ideas to get started:
- High-yield savings accounts: HYSAs are a great way to earn $500 a month in passive income. Today’s high-yield savings accounts pay as much as 5% or more. You’ll find the highest yield accounts online, which is good because accessing your cash and needlessly spending it is harder. Just make sure you choose banks that don’t charge monthly maintenance fees.
- CDs: Certificates of deposit are a great way to invest cash and earn high yields. Banks offer CDs with terms as short as one month and as long as ten years. Choose the term you can invest your money and leave it since most banks charge an early withdrawal penalty of as much as three months of interest or more. You can also try a CD ladder, which means you split up your capital across CDs of various terms. When the CD matures, you can withdraw the cash or reinvest it.
- Bonds: Government bonds are another way to invest cash conservatively. The returns they offer are lower than the stock market but virtually risk-free. You can purchase I bonds with a yield of 5.27% through April 2024, as rates change every six months. You can cash them in after 12 months, but it’s best to wait five years to avoid the three-month interest penalty.
5. Start a Side Hustle
A side hustle requires some effort from you to start producing income, but once you get it going, it takes on a life of its own. I love this method because you have more control.
Here are some of my favorite side hustles to help you make $500 a month in passive income.
- Blog: Create a blog on topics you know a lot about and use good SEO practices. When you rank high in Google, you’ll get a larger audience and can add affiliate links to your blog, earning you a commission when your readers click on your links and purchase something.
- Stock photos: If you have photography skills, consider selling them on sites like Shutterstock and iStock. You upload the pictures once but can sell them as many times as people will buy them, earning you a commission on each sale.
- Write an eBook: If you have a lot to say, consider writing and selling an eBook with Amazon’s self-publishing tool. This is a great way to stake your claim to fame without going through the hassle of publishers’ rejection.
- Start a YouTube Channel: Like blogging, you can endorse products and earn money on YouTube, just without the need to write. YouTube also rewards accounts with a lot of views, but you’ll make the most money with sponsored ads, affiliate links, and brand deals.
Tips for Investing $500
Before investing $500, here are some key tips to consider:
Diversify: Split your capital across several investments. Don’t rely on a single investment to provide the $500 a month in passive income you desire. Diversifying ensures you don’t lose everything if one investment doesn’t perform as anticipated.
Use robo-advisors or financial advisors: Even if you only have $500 to invest, enlist the help of robo-advisors (many are free) or a professional advisor. You’ll learn how to best invest your funds to match your financial goals.
Watch the fees: Most investments have fees; if they are too high, they can eat into your profits. Look for investments with little to no commission and low asset under management fees if they charge them.
The post How to Make $500 a Month in Passive Income appeared first on Millennial Money.
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April 10, 2024 at 08:35AM
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