5 Tools You Need to Build Your Passive Income 'Empire' How can you make your money work for you while you sleep? With these tools.
By Sujan Patel Edited by Dan Bova
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Passive income -- money you make on the side with little effort -- is the hottest way to build wealth, and for good reason: Millionaires, entrepreneurs and the average Joe all understand that passive income makes it easier to compound your overall returns even further.
Related: 7.1 Steps to Create Multiple Streams of Income
Generate enough passive income, and suddenly you have the chance to become truly wealthy.
But, wait: nothing is ever that easy; And, there's no such thing as 100 percent passive income. Building passive income actually requires hustle and an investment of time upfront to get your money off the ground and growing while you eat, sleep and play. Maintaining that growth means making sure that you're using the right tools and strategies to automate the work for you.
Here are five recommended passive income tools to help your build your wealth.
1. Streamline your systems
Whether you run a business or hold investments of any type, the money, time, teams, technology and communication you add in all need to be managed.
So, start with the right organizational systems, to maximize your time, minimize your headaches and transition any income streams, from hands-on investments to passive cash generators.
Collaboration platforms, like Slack, keep conversations open, searchable and conveniently stored in one place. These platforms are also known for cutting down email clutter. Task management tools, such as Trello, enable everyone involved to keep things moving with any given project. And when those things seamlessly integrate, it's an added bonus.
Fine-tuning a system that removes you from daily cash-flow generation takes time, but it's worthwhile when your system runs like a well-oiled machine. The more organized you are, the more you can get done. And when everyone, from employees to contractors to assistants, is on the same page, it makes going from active to passive much easier.
2. Hire virtual assistants.
You don't have to be a big corporate executive to need an assistant. Filing, emailing, scheduling and organizing the results of your moneymaking ventures takes time. And that's time you don't want to waste while building your passive income empire. Nor do you want to expend any more time and money training and paying a new employee than you need to. Instead, consider hiring a virtual assistant.
Virtual assistants can do anything that doesn't require a physical presence: Scheduling appointments, making calls, sending emails, creating and processing invoices and general project management can all be done virtually. And tasks beyond administrative work are possible, too: Virtual assistants can be trained for customer prospecting and other key business operations. In short, it's worth learning how to use their talents to your benefit.
Outsourcing day-to-day tasks saves you time in the long run, and makes it possible for you to focus time and energy on growing revenue. It's not a fantasy; it's a virtual assistant.
Related: Passive vs. Active LLC Members: Who's Paid What?
3. Rent out your stuff.
You don't always need to invest in something to grow passive income. You can start with what you already have. From bicycles to wifi networks and everything in between, renting platforms allow you to make money with items you already own.
Renting out your stuff is also easy and convenient. Rental services do the work, and you make the money. Popular services like Airbnb and VRBO make it easy to rent your home whenever it works for you. But you don't even have to rent something as big as your home. Bicycles, parking spots, and household goods are options, too.
So, if something is lying around the house unused, why not do something with it? Rental services let you decide what, where and when. And most established platforms offer protection or insurance plans for both parties involved.
Opportunities to build passive income are out there waiting for you. With the right tools, an appetite for wealth and the drive to do some initial work, you could be making a steady stream of automated profits.
4. Lend money to your peers.
Crowdfunding is more than a trend. It's a movement. And it's a way for you to grow your passive income. By the end of 2016, more than 2,000 crowdfunding sites will exist worldwide. Lend Academy predicts that platforms will merge and mature in 2016, resulting in better security, service and product mix.
With the help of websites like Prosper and LendingClub, individuals can generate returns from lending money to other people. It's a win-win option for everyone. Investors provide capital in exchange for earning interest, and borrowers have access to capital without the hassle of large financial institutions.
Peer-to-peer lending is straightforward and simple and can offer strong returns. Make the right choice, and your investment will do the work for you.
5. Invest in crowdfunded real estate.
If you're looking for an investment that offers a seamless user experience, real estate crowdfunding is your tool. Companies like RealtyMogul.com connect investors to debt and equity investment opportunities online, without the hassle of dealing with large banks or financial institutions. The online functionality appeals to all skill levels, from first-timers to veteran investors. In just a few clicks, investors can access the best real estate deals.
Historically, investors needed $50,000 or $100,000 and inside connections to get into the real estate investing game. Thanks to crowdfunding, investors can put up a little as $5,000, and a wide segment of the public can access quality deal flow that wasn't available in the past.
Related: 3 Reasons Why Focusing on Impact Instead of Income Makes You More Money Sooner
Real estate is an attractive alternate asset class beyond stocks and bonds. It generally tracks lower volatility than other assets. Plus, it offers a hedge against inflation, as properties with tenant occupancy generate cash flow that rises with inflation and cushions against market crashes.
Have another tool for building passive income? Let me know in the comments below.
