Residual income is something that most people strive for but often don't understand.
I should preface, that you’re not likely going to become the next Warren Buffet with residual income alone, but you can surely earn passive income every day that can help you reach your financial goals and grow your net worth.
We’re a big fan of residual income here at My Millennial Guide — the ones we’re sharing are all pretty simple too, like Fundrise – you can start investing in real estate with only $10. It's one of our favorite ways to build residual income.
Today, I will share with you ways you can make extra money while juggling the chaos of a full-time job. Learn how to make passive income through these residual income ideas.
If you want to start earning residual income, let's get started with the basics.
What is Residual Income?
Residual income, often referred to as passive income, is the money you continue to earn on a regular basis from an effort or investment made in the past, with little to no ongoing effort required to maintain it. This contrasts with active income, where earnings are directly tied to the amount of work done, like a regular salary from a job.
Some common examples of residual income include:
- Rental Income: Money earned from renting out a property you own.
- Dividends from Investments: Earnings from owning stocks or other investments that pay dividends.
- Royalties: Earnings from intellectual property like books, music, patents, or licensing agreements.
- Online Businesses: Revenue from online businesses or content, such as blogs, YouTube channels, or e-commerce, where the initial effort continues to generate income over time.
- Affiliate Marketing: Earning commissions by promoting other people’s or companies’ products.
The appeal of residual income lies in its potential to provide financial security and freedom, as it can generate earnings without the need for continuous, active work. This allows individuals to potentially earn money while focusing on other interests, hobbies, or even retirement.
Residual Income Investments
I'll share some of the best residual income investments I've found that you can take advantage of easily.
It’s a common misconception that when people hear about investing they believe that they need “wealth” in order to invest when actually the opposite is true.
You don’t need millions of dollars or even tens of thousands of dollars in order to begin making residual income.
The best time to start investing is when you are just starting out with modest savings.
The reason for this is the magic of compound interest.
Compound interest is when you earn money on a deposit (a percentage that varies depending on the type of account), and then you earn more interest on that interest from the initial deposit, and then this process keeps continuing for 10, 20 or 30 years until your money has greatly increased in value!
Example of Compound Interest:
You invest $1,000 as an initial deposit into an account that pays a 6% interest rate (slightly lower than the average of the stock market), and then you deposit $300/month (About 10% of $50k/year salary).
After 10 years you would have $50k, then $141k after 20 years, and $307k after 30 years. And this is even without increasing your savings relative to your rising salary!
The best part is that you can start doing this right now with micro-investing apps available to the average person.
“SO YOU’RE TELLING ME THAT THERE IS AN ACCOUNT OUT THERE THAT WILL ALLOW ME TO GROW MY MONEY THAT MUCH?”
And my answer to this question is yes.
And the best part is that you don’t have to buy expensive blue-chip stocks (Apple, Amazon, Google, etc.), a life insurance policy, or an expensive rental property to generate this extra income.
All you have to do is deposit your extra savings from living cheap each month and be patient as time is your best friend.
When you only small deposits from your savings each month, over a 10, 20 or 30 year period you can grow your savings into multiple six figures.
Continue reading to learn about more residual income investments.
1. Do Research on Dividend-Paying Stocks
If you want to get into more advanced investing options, then take some time to learn about dividend stocks. It’s been said that the average millionaire has seven streams of income.
Dividend stocks are usually always in the mix.
Dividend stocks are similar to regular shares of stock, but they pay you a small portion of the company's earnings monthly or quarterly.
So it’s wise to build a portfolio of dividend-paying stocks that will give you passive income, or give you passive income while you’re sleeping!
If you are ready to get hip to dividend investing, check out Moomoo:
Moomoo makes it really easy to invest in dividend stocks, while still having plenty of features as you get more comfortable with investing.
You can also receive 15 free stocks by depositing money. Moomoo's promotion to receive 15 free stocks is available to anyone who makes a net deposit of at least $1,000.
To unlock the bonus, you must maintain average daily assets of $1,000 or more for 60 days. Each stock is worth between $2 and $2,000.
Moomoo offers zero-commission trading for stock, ETFs, and options on an advanced trading platform with robust research and analytical tools. New users can get up to 15 free stocks worth up to $30,000.
2. Take Advantage of a Residual Income Opportunity with Fundrise
Real estate investing is one of the most popular ways to generate residual income.
Real estate investment might seem big or only for the wealthy but the truth is, there are other ways an investor can generate residual income despite income stream.
Fundrise offers a platform that provides investors with an opportunity to make efficient investments with a minimum income.
One of the best parts about Fundrise is that the platform provides a diversified investment to anyone in the United States.
This diversification is great because it can help build a viable and stable stream of residual income.
Make your money work for you with Fundrise! Start real estate investing with just $10—no need for big bucks to get in. Fundrise gives you access to funds built to grow your money steadily. It’s easy, affordable, and designed for your goals. Want to let your cash hustle for you? Fundrise has you covered.
3. Earn Competitive Returns Investing
Everyone knows that investing can make you residual income, but what websites or apps are the easiest to use?
Well, we recently ranked and reviewed the top investing apps that are easy, fee-free, and a bright idea to use to earn residual income.
Residual Income Ideas
A lot of people learn about residual incomes and decide to also find a source – this is understandable considering residual income boosts your finances. Some residual income ideas include:
4. Create an App or Web Services Using AI
Another innovative way to generate residual income with AI is by developing AI-driven mobile applications or web services.
With the growing demand for AI solutions in various industries, creating an app that solves a specific problem or enhances user experience can be highly lucrative.
For instance, you could develop an AI-based personal finance app that helps users manage their budgets and investments, or a health and fitness app that provides personalized workout and diet plans using AI algorithms.
The key is to identify a niche where AI can add significant value. Once developed, you can monetize the app through in-app purchases, subscriptions, or ads. Furthermore, as AI technology evolves, your app can be continually updated and improved, keeping it relevant and increasing its income-generating potential.
This approach requires some technical knowledge and investment in AI development, but the potential for residual income is substantial, especially as the market for AI applications continues to expand.
5. Rent Out Your Car to Make Residual Income
Did you know that you can rent out your car when you’re not using it? And that you can bring in a lot of extra cash in your wallet by doing so?
Do you plan on heading on a vacation soon while your car sits unused at your home? Do you sometimes not use your car on the weekends? If so, renting out your car while you’re not using it could be an easy way to make passive income.
A well-known company, Turo, which has signed up nearly 5 million users to its website, according to Bloomberg, lets you do just that.
It’s also really simple to do (and free). Listing your car is quick and easy and takes less than 10 minutes to set up. According to a recent Turo review, somebody listed their car for 5 days every month and made $3,496 in a year.
6. Make Passive Income by Creating an Online Course
To make money by creating an online course, start by identifying a niche you are knowledgeable about and that has market demand.
Plan your course content meticulously, ensuring it's comprehensive and valuable. Create high-quality, engaging materials like videos, PDFs, and interactive elements. Choose a hosting platform such as Udemy, Teachable, or your own website, and set a competitive price for your course.
Implement effective marketing strategies like social media promotion, email marketing, and collaborations with influencers. Continuously gather student feedback to improve your course, enhancing satisfaction and encouraging more sales.
Once successful, consider expanding your offerings with additional courses to establish yourself as an authority in the field. This approach is actionable and focuses on the key steps needed to create and sell an online course effectively.
7. Publish an eBook Using AI
Incorporating AI into the process of creating and publishing an eBook can significantly enhance both its efficiency and quality, potentially leading to a more lucrative outcome.
Begin by employing AI tools for topic selection and market research; these can analyze vast datasets from sources like Google Trends or social media, helping you pinpoint in-demand subjects.
For content creation, AI writing assistants can be invaluable. They can assist in drafting initial versions, generating ideas, suggesting outlines, and even writing sections, although it’s vital to infuse your personal expertise to ensure the content’s originality and depth.
Editing and proofreading become more efficient with AI-powered grammar and style checkers, which can suggest grammatical corrections, stylistic improvements, and readability enhancements. This ensures that your eBook is of professional quality.
Finally, for marketing, AI tools can optimize your advertising campaigns, targeting the right audience and analyzing performance data to maximize your book's reach and sales. This AI-integrated approach not only streamlines the eBook creation process but also enhances the potential for generating substantial residual income.
8. Get Paid to Store Things
Do you have a garage, basement, attic, driveway, or even a closet that is empty for most of the year? Try renting it out with Neighbor.com.
Neighbor is a peer-to-peer storage marketplace that connects people with unused space to people in need of storage. Homeowners turn their garages, basements, and driveways into extra income and renters can find cheaper and closer storage.
Earn thousands of dollars a year renting out the space you don’t use to neighbors who need to store items or vehicles. The best part is that it’s free to list your space.
9. Make Residual Income by Blogging
I’ve tried over 100+ creative side hustles to make money and found that blogging is #1 in making passive income.
It’s very rewarding to share my passion (personal finance) with my readers, but I also rake in thousands of dollars a month from it — and it’s so easy to do!
I put everything I learned in the past 8 years of blogging and experience from running 4 different profitable blogs in an easy-to-digest 7-day FREE email blogging course. Don’t worry it’s totally free, I just wanted to share my experience on how to start a blog.
If you would like additional information about setting up a profitable blog as well as making money from it (in the first 30 days), I recommend that you sign up for my free blogging e-course below.
The best part? Starting a blog is easy. You can get the initial set up done in under 20 minutes.
If you don't have time right now to set up your blog, you can sign up for my how to start a blog email course. It'll teach you how to start your own profitable blog and generate passive income within the first 30 days.
Sign up here for the free email course:
10. Rent Out Rooms Through Airbnb
If you have a spare room or apartment, you can list it out on Airbnb to get tenants. The best thing about this idea is, the tenants are temporary. This way they can stay for a short period and leave so you can decide on whether to keep renting or not.
Despite being interchanged often, there's a difference between passive income and residual income.
While passive income is the income gotten with little or no effort(from stock investment property investments and so on), residual income is a leftover income you get after you have done your work. Passive income is good because it requires little or no effort to generate the income but with residual income, even after you've paid up all your bills, you still have some “disposable income”.
Best Residual Income Apps
To get you started with earning passive income on your phone, here are some of our favorite residual income apps or the best apps to make money fast:
11. Score Money Playing Fun Games on Your Phone
We all heard the old saying “time is money” right?
Instead of playing games on your phone like everyone else and feeling bad for wasting your time — now you can get paid for it.
Getting paid for playing games sounds like a dream. But if you download a free new app, and then download games from it and play, you earn money.
As you level up you can earn more money for cash rewards or gift cards.
This is a great opportunity for those looking to get paid for something they enjoy, like winning free gift cards and cash for playing games. I use it and it is legit and has over 35,404 positive reviews in the Google Play store.
If you’re interested, I recommend you download the app from the Google Play store for free by clicking here.
Earning money by playing games on your phone sounds like a dream. But Mistplay really pays you for playing new games with free gift cards. It is 100% free to play and you never have to deposit any money.
12. Join a Market Research Company Like Survey Junkie
To earn residual income with Survey Junkie, start by signing up and creating a detailed profile. This platform connects users with companies seeking consumer insights through surveys.
A comprehensive profile increases your chances of being matched with surveys that fit your demographics and interests.
Once you start receiving survey invitations, participate regularly. Each survey completed earns you points, which can be redeemed for cash or gift cards.
The key to maximizing earnings is consistent participation and completion of as many surveys as possible. While Survey Junkie won't replace a full-time income, it can be a simple way to earn some extra money in your spare time. Remember, the earnings are proportional to the time and effort you invest in completing surveys.
Survey Junkie is one of the highest-paying survey sites available. Complete three or more surveys a day, and you can earn as much as $100 monthly. With $76 Million paid out to date, Survey Junkie is one of the best survey sites available.
13. Build Your Savings Without Trying
Rocket Money is a real, much better, and desirable alternative to all the other money saving apps on the market.
With Rocket Money, they have saved over $15M for its users on their bills (think cable or cell phone bills) and canceling forgotten subscriptions.
Have a cable bill that has been increasing over the years? You can now simply download a free app, and they will negotiate it down for you.
Rocket Money will help you take control of your money, users have saved over $15M to date, and all without being a financial expert or dealing with staying on top of your bills, which can be a full-time job.
There is a reason why they currently have over 50,000+ users, this app really gets you back free money.
If you’re interested, I recommend you sign up for more information from Rocket Money by clicking here.
Rocket Money helps 3.4+ million members save hundreds. Get the app and start saving today. Save more, spend less, and take back control of your financial life.
14. Unlock $100 Rewards by Exploring New Apps!
With KashKick, your everyday online activities are rewarded. From answering intriguing surveys to downloading exciting game apps, you could earn up to $100 per app.
Not just that, there are opportunities to earn while playing games, watching videos, and even simply reading emails. Although surveys remain a major earnings avenue, the sky's the limit with the variety of tasks available.
The best part? As soon as your balance hits $10, you can swiftly cash out through Paypal. Picture this: making some extra cash while lounging comfortably, phone or computer in hand.
Ready to dive in? Signing up is a breeze, and as a warm welcome, you'll instantly receive $1 just for completing your profile. One step closer to your rewards!
This site pays you cash to play mobile games, save money, take surveys, and see offers — make $100 today. Over 2 million users agree that KashKick is a fresh and lucrative way to earn money and get paid directly to your PayPal!
15. Earn $60 in Residual Income for Downloading an App
By using the internet as you do every day, Nielsen invites you to make a difference – and you can make money too.
I downloaded this app and make around $60 passively… it's a legit app. You don’t have to do anything other than initially register your computer or phone.
This company will pay you $60 a year to keep their app on your favorite internet browsing device and they also give away $10,000 each month. You don’t have to do anything other than initially registering your computer or phone.
Need Money Now?
If you actually need money now, then you can opt for a personal loan. When you need money in a hurry ZippyLoan is where to go.
You apply for a loan through the Zippy Loan site, if approved they send your loan application to one of many loan providers.
You review the loan details and e-sign if you like what you see. No risk in checking what offers you'll get. You can borrow between $100 and $15,000 as soon as tomorrow.
Loans service up to 60 months.
ZippyLoan connects borrowers to lenders through their network of lenders. They'll find you the lowest interest rate and is one of the best no credit check loan. You can visit ZippyLoan here.
- Borrow between $100 and $15,000
- No risk in checking what offers you’ll get
- Quick approval and fund disbursement (if approved)
- No minimum credit score requirement
What to Do with Your Residual Income
Many of us have or are looking to develop, residual income to supplement the income from our main jobs.
But how should you categorize your extra income? Make sure every dollar from your side hustle income has a purpose with these 4 strategies:
Don't Double Count Your Earnings
I recall my first non-wage residual income. It was the simplest introduction possible: I started selling my old stuff on eBay. My primary motivation wasn't even the income, but rather the decluttering that selling my stuff would facilitate. I was looking to ditch dead weight, and focussing on physical clutter seemed like one way to begin.
But, when the sales actually began hitting my PayPal account, I began thinking of all the things that new income stream could offset. And I do mean all the things. I was full of excitement about how that $75 I earned selling an item could cover my groceries for a week! And half a plane ticket to Vegas! And a nice restaurant meal out! I needed to slow down and realize it might offset one of those areas of spending, but not all. And that it ultimately represented a net loss anyway given the item sold probably cost over $200 new.
Once your residual income starts flowing, check that you're not allocating it to more than one area. Give each dollar a singular purpose, be it covering day-to-day spending, bulking up your emergency fund, or investing.
Don't Spend it Before You Earn It
Closely correlated to the above, be mindful about adjusting your spending upward, especially before your residual income really starts materializing. My preferred way of looking at it is, earning residual income is not a good reason to spend recklessly, or in a way, you wouldn't have done otherwise.
An example of this is income earned from Airbnb, particularly if it's only when you travel. I list my apartment on Airbnb when I go away on travel, but I only do so for trips I would've taken (and would've been able to afford) anyways. If I started taking trips just for the purpose of earning more Airbnb cash, I'd want to be very mindful of the overall cost of that travel, relative to the potential income generated.
With that in mind, I would recommend Airbnb as a great way to make extra cash as it's worked for me.
The same could be said of buying items to flip, which is a really interesting area to look into. Just be conscious that the inventory you bought doesn't represent actual cash until you've successfully flipped it. And it should go without saying, but please don't go into debt chasing residual income.
Budget for Taxes
Depending on the character of your residual income, you may need to report it as self-employment income. One way or another, in most cases it will ultimately end up on your tax return. One exception would be when you have a loss on the sale of personal-use property, such as your car, home furnishings, or clothing (i.e. that $200 product I sold for $75), which is not reportable, as it's not a deductible loss. In general, any source that has paid you more than $600 is required to issue you a 1099, which is reported to the IRS, and is then your responsibility to report on your tax return.
For a broad overview, the Turbotax blog provides a summary of what to think about. You should consult a tax professional for the specifics on this as related to your personal circumstances.
Enjoy the Process
I've found delving into different residual income ideas to be a really fun process. Even just those first few eBay sales started building up my entrepreneurial drive. My residual income muscle, if you will. It's remarkable how different it feels earning your first independent income, versus getting the same old paycheck you're used to.
I've found, and have noticed in others, that it tends to spark the desire to do more, to seek out new opportunities, to optimize other areas of life.
As millennials, we've tapped into the power of developing multiple income streams, and we certainly love the freedom and flexibility that allows. Keeping a few key concepts in mind as we do this will serve us well as those income streams grow and change over time. Whether your goal is to replace your day job income, pad your savings, or fund your next adventure, thinking more like an entrepreneur is going to get you there faster.
Looking for more ideas? We put together a list of Ways to Make Money with Passive Income Ideas.
Have you started making money through residual income ideas? How's your residual income going?
