Passive Income: What is It and How Do I Earn It?

Have you ever heard the term “mailbox money”?

Probably not, unless you’re a celebrity receiving royalty checks for an old chart-topping hit that always seems to come back around on the radio (I’m looking at you, Red Hot Chili Peppers). Mailbox money, also known as passive income, is a term that implies that people can receive checks in the mail for doing work that involves little to no effort. This could include earning income from being an affiliate marketer, participating in cash back and reward programs or even investing in rental properties.

Although passive income suggests there’s no work required, that isn’t always the case. There could be time and effort needed up front or even at random times throughout your venture. If you don’t mind putting in a little effort to earn extra cash on the side, you could see even more earnings. Keep reading to find out some ways you can earn passive income.

Affiliate Marketing

We see people all the time on our social media platforms promoting products through posts, videos and links. You may know them as “influencers” or “bloggers.” No matter what name they go by, they have the passive income game figured out. What they do is use their platform to promote a third-party’s product. It sounds easy, but the difficult (and most important) aspect is building a following. If you’ve already built such a base, you might want to look into this money-making method.

Wrap Your Car

If you don’t mind your car being a rolling advertisement, this could be the option for you. Here’s how it works: Drivers sign up and get to choose a marketer they want to work with to wrap their car. They accept an ad campaign, drop their car off to be wrapped and drive the ad around for the length of their contract. Be wary of scammers though. If you ever get offered a job that requires you to deposit or cash a check and send a portion of it back to your point of contact, roll out. Instead, seek out a well-known car wrap company like Wrapify or Carvertise.

Dividends

One effortless way to make money is through investing in companies that have dividend-yielding stocks. Not only will you make money in the long term if the business is successful, but also you’ll receive payouts, or dividends, out of their profit. This is one of the riskier ways to make money, but if it sounds right for you, you can always talk to a professional to get advice and guidance.

High Yield Savings or CD

Let your money work for you in a high-yield savings or money market account. All you have to do is deposit cash into an account to start earning interest on your balance. The more you put into the account, the more you get back. At VyStar, the dividends you earn on your balance are directly deposited into your account each month. Certificates of Deposit, more commonly known as CDs, have even better interest rates. The only difference with this route is that you’re required to keep it in the account for a certain amount of time before you can withdraw it. But like savings and money market accounts, you’ll still receive monthly income on the dividends.

Rent Out a Space

This option requires some cash up front and isn’t entirely passive, but it can be extremely profitable in the long run. If you have the means to invest in a rental property and if you borrow smart, you can increase your profit even more. You’ll collect regular rent payments from your tenants, which will pay down your loan and could leave you with some extra income each month depending on what you set as the monthly payment. If investing in real estate isn’t for you, some people even rent out a spare room in their home on websites like VRBO or Airbnb to make extra cash.

Get a Cash Back Credit Card

What if I told you that you can actually make money by shopping? When you use a cash back or rewards credit card, you either get points or a percentage back on whatever you spend. Either way, you’re earning free money for shopping. With a VyStar Visa Signature Cash Back card, you earn 3% on gas, 2% on groceries and 1% on everything else. Plus, getting a credit card that has no annual fee like VyStar’s cards can kind of be considered passive income too.

Online Rewards

What if I told you that you can make even more money by shopping online? On top of getting cash back and rewards points when you use your credit card, you can earn rewards through sites like Rakuten (previously Ebates), Fetch Rewards, Ibotta and others. These platforms scope out deals, discounts and coupons to get you the best savings, and they offer you rewards for making purchases through their platform. All it takes is installing a web browser or app to get started. With Rakuten, the savings you earn are sent to you every three months via PayPal — or you can get them in the form of a check if you want the true mailbox-money experience.

Remember to do your research and be wary of common scams before taking on a project or opportunity like the ones mentioned above. If you find one that’s right for you, passive income can be a big boost to your monthly budget.