There are so many different great ways to make a passive income outside of your 9-5 job. I have rounded up three of the easiest (in my opinion) ways to make money in your sleep and when you’re not even doing anything. Keep reading if you want to know the 3 easy ways to make money in your sleep!
1. Open a High-Yield Savings Account
A high yield savings account is a savings account that typically earns 20-25x more interest than the average savings account.
My Ally high yield savings account earns 0.50% interest on my money without me having to do anything. My Wells Fargo savings account was earning 0.06% interest!
Interest is FREE MONEY you get from trusting the bank with your money. Your traditional savings account earns virtually NO interest.
Keep Up With Inflation
Inflation decreases the value of your money over time.
For example, your $5 bill will not be able to buy as many things next year as it will today. Prices are increasing like crazy (especially with the help of Covid), and your money does not keep up with these changes in costs.
A high yield savings account earns more interest on your money. Thus, that $5 you have today will earn free money on top of that, which will help your money grow with inflation.
The basic savings account you have been using is earning LITTLE–TO–NO interest, so your money will lose value.
Boost Your Long-Term Savings
If you are planning for a purchase in the future (not within the year), you could put your money in a high yield savings account.
This allows your money to earn interest while you are saving for the purchase (down payment for a house, new car, etc.).
If you keep your money in your checking account or regular savings account, it will just sit there. You may as well earn some free money to expedite the savings process.
The Best High Yield Savings Accounts
There are several great places you can open a high yield savings account. I personally chose an Ally account because it was super easy to set up.
These are some of the most popular high yield savings accounts:
- CitiBank: 0.50% APY
- Ally: 0.50% APY
- Alliant: 0.55% APY
- Marcus by Goldman Sachs: 0.50% APY
APY= Annual percentage yield (aka the interest that your money will make)
High Yield Savings Account Example:
If you put $1,000 into a high yield savings account with a 0.50% APY, you will earn $5 in interest that year.
It doesn’t seem like much, but it grows as you put more money into your account. It is also a heck of a lot more than you would earn with a regular savings or checking account!
2. Invest Your Money in the Stock Market
You don’t need to be a professional stock broker to invest in stocks. I have multiple posts on how to invest in stocks here:
The stock market constantly goes up and down, so don’t feel too bad if the stock market is down one day because it will be back up another day.
Investing in stocks is great because you can earn money while you’re asleep.
3. Invest in Real Estate
Once you make the initial purchase of a piece of real estate, you will be able to benefit from the profit.
Don’t get me wrong – Making profit off of real estate is NOT a super easy way to make a passive income.
The process for investing in real estate is making the initial purchase, managing and supervising the property, and making profit. The “making profit” part will most likely not happen overnight, but it should happen eventually.
One option for investing in real estate is purchasing a rental property:
You can purchase a small run-down home, condo, townhouse, or duplex for a cheap price. Do some renovations to boost the value of the home. Then, you can live in one of the rooms while renting out the other rooms.
You can charge more for the rent than your living expenses actually are, which means you will be making a profit. Living in your own investment will also give you the ability to watch over it closely and make sure your renters are following your rules.
Another way to invest in real estate is through REITs.
REITs are Real Estate Investment Trusts, which are publicly traded trusts that own and manage rental properties. Great REITs are some of the most high-yielding and secure real estate investments. REITs are great for portfolio diversification, and some REITs give out high-yield dividends.
Some top REIT companies include the following:
- Public Storage
- American Tower
- Digital Realty
- Equinix
To invest in a publicly traded REIT, you can purchase shares through a broker (just like purchasing regular stocks).
Recap
These were three tips on how to make money in your sleep. To recap, you can make money outside of your 9-5 through many different passive income ideas. Investing is one of the main ways to boost your wealth without having to exert too much energy. The easiest way is through putting your savings into a high-yield savings account. There is also a way to invest through buying a rental property or purchasing a REIT.
If you have any questions, please feel free to email me at professionallypeony@yahoo.com, or just DM me on Instagram or Pinterest at Professionally Peony. Let me know what you decide to do for a passive income in the comments!
Xo,
Layton
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