Money for Nothing: 4 Ways to Create a Passive Income Stream

Posted on: 15 December 2016


Creating a stream of passive income is one of the best ways to ensure a financially sound future. But you may feel that it's too difficult, too expensive, or something reserved for people with more money than you have. But the truth is that you can find the right passive income activity for any budget and personality. Here are four ideas to get you started.

Rent. Rental real-estate income is something that you can earn no matter where you live and that can insulate you against changes in the economy and stock market. It can also be tailored to your own management style. If you want to be actively involved, you can DIY many aspects of being a landlord. If, though, you want a passive income, you can hire a property-management company that handles things like regular maintenance, repairs, rent collection, and tenant screening. Visit sites such as to find a property-maintenance company near you. 

CD Ladders. "Laddering" CDs through a bank or investment firm provides income at regular intervals with little or no work. To use this method, you purchase CDs of equal value that have maturity dates at various intervals (for example, monthly, quarterly, or semi-annually). As each matures, you can count on a reliable source of income from the interest while reinvesting the principal to grow again. While not a source of large-scale income, CDs have the advantage of being stable—a perk particularly sought after by retirees.

Micro Businesses. Launching a business doesn't necessarily have to require large amounts of free time, capital, or help. Assess what skills you have that you can offer to others or what you can learn on the side. Such a side business—like web design, preparing taxes, bookkeeping, handiwork, or tutoring—can often be turned into a cheap startup that you can do in your spare time on a small scale. Eventually, you can often turn a successful micro business into a more serious endeavor in which you can hire help and outsource much of the work to create passive income.

Dividends. Investing in dividend-producing stocks is a way to gain a quarterly or annual passive income as these dividends are paid out by companies. While it is certainly less stable than getting returns from CD investments, it also carries greater reward (especially during the current bull market). You may have to start small, but by reinvesting your dividends at first, you can build up a larger pool of capital.

Whether you can put into practice just one of these ideas or all four, you will undoubtedly find that generating a passive income stream is a great tool to reduce stress and increase your financial stability for years to come.