Key takeaways
- You can rent out everything from your home or car to your lawnmower or pool for extra income
- If you have spare time, clinical trials can earn cash, sometimes even while you sleep
- Some investments, such as stocks that pay dividends, can put money in your pocket every quarter and when you sell
- Assets such as rental real estate can also generate ongoing income now and long-term profits down the road
Can you really make money by just driving around, letting people “borrow” your stuff, or even while sleeping?
The surprising answer is yes. Call it residual or passive income, but there are many ways to make extra money without doing much extra work (or any at all). In some cases, it takes money to make money. In others, you may already have everything you need.
This may not be the Lazy Person’s Way to Get Rich. But here are several ways to generate extra income, and some even work while you sleep.
Rent your way to prosperity
What happens to your stuff when you’re not using it? Nothing. But your car, your basement or spare room, your vacation home, and even your lawn mower can be earning money rather than gathering dust.
Your car can make money for you in two ways: First, by allowing an advertising firm to wrap your car in an ad for one of their clients. A specialized advertising agency will evaluate your driving habits, including where and how many miles you drive. If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost and pay you a one-time or monthly fee.
Make sure to conduct some due diligence, though: if a company wants the payment upfront or you see other warning signs, move on. As in many industries, there are scammers.
If your car sits most of the time, you can also list it on a car-sharing platform such as Turo, Hyrecar, Getaround, and others.
Similar platforms exist for boats, RVs, and bicycles. Make sure you understand the terms and insurance coverage before you sign up. If you’re nervous about a stranger “borrowing” your car, boat, RV, or bicycle, you can also rent your pool and keep an eye on your property while making money.
You can also make a spare room, your whole house, or even a vacation property available to rent, either on a rental site or on a local site such as Facebook Marketplace or Craigslist.
Interested in renting out other stuff? Several peer-to-peer sites exist for tools (SpareToolz) and virtually everything else (FriendWithA). That lawnmower you use once a week could be making you money the other six days. Have a two-car driveway and only one vehicle, or an extra parking space? Rent it to someone who needs a parking spot.
Participate in trials or focus groups
Pharmaceutical manufacturers and other healthcare companies are always conducting paid studies and clinical trials. A quick search will turn up trials in your area, as well as national trials such as those funded by the federal government. Generally, these will have specific requirements, such as age, gender, or medical conditions. And, yes, there are studies where participants are paid to sleep.
Make your money make money
If you regularly invest in individual stocks or mutual funds, choosing stocks that pay dividends, or mutual funds composed of dividend-paying stocks, have the potential to offer both regular income and long-term growth. With bank interest rates still low, many well-known companies pay dividends every quarter that can be significantly higher than what a bank pays. (Unlike a bank, dividends can fluctuate, and your investment isn’t insured.)
You can also invest in peer-to-peer lending on sites such as Prosper or Lending Club. Investments start at only $25. There are obvious risks in lending to strangers, so don’t skimp on due diligence before investing.
If you’d rather invest in buildings than people, you can also put your money in a Real Estate Investment Trust (REIT) or crowd-funded real estate (Fundrise, CrowdStreet, FundThat Flip, and others). Projects are vetted and managed by others, but again, do your due diligence.
Invest in real estate
Rental property has the potential to provide both steady income and long-term growth. With rental rates soaring, homes in many areas can generate rents that will cover the mortgage, utilities, maintenance, and other expenses, with income left over. Years from now, that property may be worth more (or much more) than it cost, meaning an extra income boost when you sell it.
Owning rental property requires a lot of upfront research, and there are potential financial and tax considerations. As noted above, invest some time in due diligence before investing your money.
Do you have assets that could be earning money? A CFP® Professional at Facet can help you create a dynamic, ongoing, and evolving financial plan for all aspects of your life, including residual income sources.
