I’ve been focused on develop more passive income for almost a year now. The extra income that I have generated has enabled me to do many things that I wouldn’t have been able to do without it. Passive income has a way of becoming an addiction. When focusing on generating more revenue, you start to ask yourself if you can generate even more income without any additional income. In other words, if you can earn $5 per week, why not $10. Before you know it, you are wondering how you can earn an extra $1,000 without any extra time commitment.
This is where I find myself. I am already quite busy between working full-time, running a side business, and finishing up grad school. The last thing I need right now is more work. Instead of trying to take on more projects, I have decided that I need to focus on maximizing my current set up. In other words, how can I increase my passive income. Here are several ways that I have come up with that take no additional work:
Increase Your Return on Emergency Fund
If you are like me, you probably have your emergency fund in a high interest savings account or CD. It is fully protected while also earning a modest return. You would hate to have your money not doing anything. One of the easiest ways to increase your passive income is to look for higher interest rates. By finding the highest CD rates or highest interest savings account, you can generate just a little extra money. Finding the highest CD rates is going to require a little bit of time of research, but I don’t usually count this as work as I can do this while watching a sports game or movie.
Compare Returns on Investments and Allocate Appropriately
While many people are strong believers in traditional allocation for investments, I tend to stick to what has been performing lately. Of course, I do diversify to an extent where I feel comfortable, but I hate the idea of having too much of my investments in a low-return investment when I can easily move it to an investment with a higher ROI. For example, I am currently evaluating what is better between real estate, peer to peer lending, and dividend ETF’s. They all offer different advantages and disadvantages, but I want to know what is generating the highest return so that I can maximize my investments.
Increasing your passive income ultimately comes down to maximizing your investments. Allocating your money and investments in the highest earning assets so that you get more out of your money without having to do more work. I used to think that obsessing over one’s investments was a waste of time, but when you think about how much of a difference it can really mean, and how much more work you might have to do in order to “make up the difference,” it begins to be worthwhile.
How have you increased your passive income?