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Personal finance is about trying to increase how much you earn while trying to decrease your expenses so you can save more money for the future.
As we all know, there’s a limit on how much you can save before you deprive yourself of all joy. You may even find that there’s a ceiling to how much you can earn with your current career. With a limited number of hours in a day, you must find ways to earn money when you sleep to build wealth. This is where passive income comes into play.
We’re going to look at common passive income streams and how to adjust your passive income when you’re not generating enough of it.
Common Passive Income Streams
Before fixing your passive income, we need to consider the popular source of how you can earn money in your sleep. Here are the most common passive income streams:
Rental properties. Real estate is one of the most popular passive income sources because you can earn money from rent payments and property appreciation.
Investing in dividend-paying stocks. If you don’t want to manage property, you can find stocks that engage in profit sharing through dividend payments.
Savings accounts. With interest rates rising, you can keep your money in a savings account that earns you interest as you sleep.
Selling digital products online. You can start selling digital products online, where the market’s always open. This includes books, courses, selling advertising space and merchandise sales.
Affiliate marketing. If you don’t want to create your own products, you can try promoting other products for a commission.
Running an automated business. Many businesses could be purchased where you earn money without being required to work in the business.
How To Increase Your Passive Income
Your passive income will vary depending on how much effort and financial resources you commit. If you feel your passive income isn’t substantial enough right now, here are five ways to fix this.
Consider Short-Term Rentals
One way to increase your passive income in real estate is to get into the short-term rental market space. You can jump on a platform like Airbnb or VRBO, where you rent out the space for a shorter time but with a higher profit margin. Depending on the property’s location, you can earn much more money from shorter stays.
You also can add a new passive income stream if you’re not a real estate investor by taking advantage of Airbnb’s renewed focus on private room rentals. That extra guest room could bring in money for your family on the weekends without adding any hefty expenses to your bottom line.
Look Out for Higher Dividends
When investing in dividend-paying stocks, it’s important that you watch out for news releases and that you stay on top of dividend information. Companies are always changing dividend payouts, and it’s essential that you’re investing in the best possible places.
You can set aside an afternoon to look through dividend yields to see whether you could give yourself a substantial passive income pay raise by finding a new company to invest in. You also can consider investing more money into your dividend-paying stocks as you earn more and start to save more.
Add a New Product Offering
If you’re selling digital products or running an online business, you can try adding more products or higher-tier programs to your current offering. This will require an investment of time and effort up front, but adding a premium product to your current offering could significantly increase your passive income.
You also could mix up your offering of products and revenue streams with your online business. For example, if you rely on digital book sales, you can turn this resource into an online course where you can charge much more.
Invest in an Automated Business
If you find that you’re not generating enough income from real estate or your digital business, you could invest your funds into an automated business. Running an automated business may require a heavier capital investment, but you eventually could increase your passive income. The type of automated business that you can start will depend on your location, but some possible options include:
Laundromat.
Car wash.
Vending machine business.
Purchasing an established franchise.
It’s critical that you conduct your due diligence to see what market gaps exist where you live that would allow you to increase your passive income.
Try a Hands-Off Investment
When earning passive income from real estate or running a business, you could find thin profit margins due to expenses. The fees associated with rental properties and businesses add up quickly since you have to outsource work and deal with regulations. You can invest your money into a hands-off investment like a real estate investment trust (REIT), where you pool your resources with other investors without worrying about being a landlord.
You can also sell your rental property to purchase dividend-paying stocks to ensure that your passive income is truly passive.
Final Thought
While there are multiple ways to fix a current passive income stream, you can always increase your income by adding a new stream to your portfolio. If you’re a real estate investor, you could place your profits into dividend-paying stocks or use your money from that vending machine business to purchase a rental property. The end goal is to make money in your sleep so you can build wealth.
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https://www.gobankingrates.com/money/making-money/passive-income-not-enough-5-ways-to-fix-it/
