Could your wallet benefit from some extra income? Most of us would answer that question with a resounding “yes”, and if that’s your answer you’ve probably wondered how to start making extra income.
Imagine the impact of an extra $100 or $300 a week. While it might seem out of reach, these practical ideas for generating extra income can make it a tangible reality.
What are the Seven Sources of Income?
Most people have one source of income: their job. Building multiple streams of income is one of the keys to financial resilience and long term wealth. If you’re looking to diversify your income sources, start by considering these seven sources of income.
- Earned Income: This is money you earn by doing something.
- Profit Income: Money you make when you sell something for more than it cost you.
- Interest Income: This is money you earn when you lend your money to someone or something else. For the benefit of having access to your money, you receive a fee. That fee is called interest.
- Dividend Income: When you buy shares of stock in individual companies, they will return some of the profits to shareholders in the form of dividend payments.
- Rental Income: Historically, rental income has derived from real estate investments, like a house, warehouse, or storefront.
- Capital Gains: When you invest in an asset and later sell that asset for more than what you paid, the difference is capital gains. If you purchased stock at $20 a share and sold at $23, then the $3 per share increase represents your capital gains.
- Royalty Income: This is money you receive when someone else sells your products, and you receive a share of the sales. Some common examples include book royalties paid to authors and song royalties paid to songwriters.
👉 Many wealthy people are exploiting all seven of these income sources. Those of us who aren’t wealthy may not be able to use all seven, but even a few can make a big difference.
Are you ready to find out how to tap multiple income streams? Let’s take a closer look.
How You Can Tap into Five of the Seven Income Streams on a Modest Salary
You don’t have to be rolling in the dough to benefit from multiple streams of income. Here are some practical ways to diversify:
Boost Your Earned Income with a Side Hustle
If you work for an employer, you have no control over how much you make. Sure, you can always ask for a raise, but the decision rests with your boss. However, you can start a side hustle, a gig you work on the side of your regular job to bring in more cash.
☝️ When I wrote for a newspaper, I looked for ways to earn extra income and stumbled onto an online course that taught search engine optimization. What started as an idea for a side hustle ultimately led to a business offering SEO, writing, and social media management services.
But what about you? What can you do to earn extra income? Surely you have a valuable skill somebody wants.
- Are you good with arts and crafts? Sell your wares on Etsy. While some people can make a lot of money, that’s not the case for most. Be realistic and realize it is challenging to capture what a handcrafted item is worth.
- Are you good at teaching others? Consider creating a Udemy course. If you are good at videography, search for the classes offered there, what the lessons look like, and the price of the class. Then come up with something better. Because of Udemy’s pricing, you might not have full control over the cost of your course. About 28% earn between $500 and $5,000.
- If you have a bachelor’s degree and like to teach, you can teach English to children and adults all over the world via online video lessons. One of the most popular platforms for teaching English to children from China is VIPKid. You will earn $7-$9 per 25-minute lesson. Through incentives, you can earn up to the equivalent of $22 an hour. It’s a very flexible gig. Learn how it works directly from one of the teachers working on the platform: Teaching English With VIPKid: How to Earn Full Time Pay Without Ever Changing Out of Your PJ’s. We even made a calculator that helps you estimate your VIPKid earnings: VIPKid pay calculator.
AUGUST 2021 UPDATE
VIPKid stops selling foreign-based tutoring to students in China
On July 24, 2021, China issued a new regulation that bans out-of-school tutoring in core education. Soon after that, VIPKid announced it would stop selling online classes taught by foreign-based tutors in China in order to comply with this new law. You can still sign up to teach their students outside of China.
- Another way to find side hustles is to visit Indeed.com or other online job boards and enter searches like “remote work from home,” “freelance” or “virtual assistant.”
- Have a driver’s license? Deliver food with Doordash. I talked with a Dasher who said he earned an extra $300-$400 a week about what he took in as an Uber/Lyft driver.
- With more and more people preferring to stay home and avoid crowds, you can earn extra cash delivering groceries with Instacart.
If you want to earn some extra income, find a way. Get in your car and drive. Fire up your computer and teach kids in China, do a targeted search on a job site, or unleash your creative side. Serve as a tutor for students in your city or give music lessons. Spend some time brainstorming the best path for you to earn extra cash.
Generate Profit Income by Selling Stuff
Profit income refers to selling items for more than you paid for them, but let’s look at this just a little differently. You can also earn a profit selling something you no longer need or use. People still have garage sales, but you can sell your stuff online and not worry about strangers coming to your home.
If you decide to go the online route, you have some options. Many people are selling used clothes, shoes, electronics, toys, and other items through Mercari. You can sell your items on Facebook Marketplace, Craigslist, Amazon, or eBay. There may even be a buy-and-sell website or Facebook pages serving your community.
If you have ever watched a Gary Vaynerchuk (aka Gary Vee) video, then you know he is a big proponent of “retail arbitrage.” This is a fancy way of saying, “Buy undervalued items and resell them for a higher price”. This is a great way to use your hobbies and interests to make money. If you’re interested in clothes, books, or almost anything else, you can use that knowledge to spot undervalued products. Then you buy them and resell them at a higher price.
Start sorting through things you don’t need or use and try to sell them.
💡 If you don’t find willing buyers, consider donating those unused items to a local thrift store. You’ll declutter your home and help out a worthy nonprofit in your town. Either way, you win!
Yes, You Can Earn Interest Income
It’s possible to earn interest income, but let’s get real: it’s getting harder all the time. You earn interest when you invest in a CD or a high-yield savings or money market account, but interest rates have been unbelievably low for a long time.
Your best bet is to open a high-yield savings account with an online bank (they have lower overhead because they aren’t maintaining physical branch offices), but even there, the interest paid has dwindled.
What if we approach “interest” from a different perspective? Credit card companies offer reward cards. Before you even think about trying to earn a little extra cashback using rewards credit cards, recognize that if you do not pay off your credit card bill every month, you will end up paying a lot more in interest.
⚠️ Be very careful with this one, especially if the credit card company charges you an annual fee for the card. The fees could cancel out your benefits.
Airline companies offer credit cards that reward you with extra miles. Fuel companies offer credit cards that will save you a few cents off a gallon of gasoline and give you 1% cashback rewards on other purchases. Credit card companies will offer cards with 1 to 2% cashback on purchases.
☝️ I have a business card that pays me 1% cashback, and every August, I get a break (usually around $200+) on my credit card bill, thanks to the rewards. The mayor of the small town where I live put his son’s college tuition on his Discover card to earn 1% cashback.
Earning income interest is not as difficult as you might think. If you decide to use a credit card, though, you need to pay off the entire balance at the end of the month. If you don’t, then your interest charges will wipe out any cashback rewards. Annual percentage rates can range from 14 to 24% (or more), and you could pay up to $99 a year for the privilege of using a credit card. Choose wisely!
You Can Earn Rental Income Even if You Don’t Own Rental Properties
So, you think you cannot earn rental income because you don’t have income-producing properties in your investment portfolio? Think again. You might have what it takes to make some extra income from renting assets.
- Rent out your home: Services like Airbnb and VRBO can help you rent your house out. If you live in a development with a homeowners association, you will need to consult the HOA rules.
- Rent out a spare room: With Airbnb, you don’t even have to rent out your entire home — you can rent out just one room.
- Car rentals: Did you know some Uber and Lyft drivers do not own a car? They rent cars. Getaround and HyreCar are two services that allow people to rent out their vehicles.
- Rent your personal possessions: FatLlama lets you rent out your stuff at a daily rate. I searched my city, and people were renting camera lenses, laptop computers, Seinfeld Seasons 1-9 DVDs, stand mixers, popcorn machines, musical instruments, and even a drone (for $21 a day).
If you decide to rent your home, a room, your car, or anything else, remember that whatever you rent will see some wear and tear and will have to be kept in good condition. Consider those factors when setting your prices.
👉 Set aside some of your rental income to cover the needs associated with your rental.
Turn Your Creativity Into Royalty Income
Royalty income is an excellent way to make money because you create once and earn repeatedly. My wife wrote two small books and sold them on Kindle. She wrote the books once but earns a royalty every time Amazon sells one.
One of my favorite musicians sells his songs online. He was in a band that became popular for a time and then faded from the limelight. He started messing around in his recording studio and offering the songs for sale on Bandcamp. After releasing a few singles he would bundle around five together in an EP (a mini-album).
Though not a strict royalty payment, I have a friend who creates printable sheets to help people track their income, expenses, and budget items. She makes them and sells them on her website as digital downloads. Over the years, she was able to create workbooks and organizers.
If you can write computer programs or mobile apps, you can sell them and earn a royalty every time someone purchases or subscribes to your app.
It’s Never Been Easier to Earn Extra Income
It is easier than ever to earn extra income, but that income won’t come to you. Before any money flows in, you have to start doing something. At the heart of every business venture is the notion of solving a problem for somebody. If you have a solution to their problem that fits their budget, you can use that solution to earn extra income.
To earn some cash on the side, you will need to follow through on these things:
- Determine if you have a service or product (even if it is unused stuff in your house) to solve somebody’s problem.
- Find the person that needs what you have. Perhaps they are on Facebook looking to purchase something in the marketplace. Maybe they are on LinkedIn looking to hire a freelance writer or social media manager. It could be that the local store manager needs someone to update the company’s website.
- Always start looking for customers or clients through “warm calls.” Cold calling is picking up the phone and calling someone you don’t know, asking if they need your service. Warm calling is calling friends, neighbors, colleagues, even relatives. Remember that every satisfied customer can be a link to many more!
- Have a plan for what you will do with the extra money, or else it will get absorbed into everyday living and you won’t see a return on the time you have invested.
Do you want to earn a little extra income to help save for a computer, a car, a vacation, or a home? You have what you need to get started! The most important part is to begin. Nothing will happen if you stay glued to this screen reading about the possibilities.
When you look at a potential way to earn money, you will need to evaluate whether it’s worth it. A side hustle should do one of two things: provide an infusion of cash to help your finances or provide some joy in life. If you’re lucky and select your hustle well, it could do both!
If your side hustle starts to compete with your main livelihood for time and attention, you’ll have to assess which brings more value (financial and otherwise) to your table. Getting absorbed with a side hustle to the extent that you’re taking time away from your primary work can leave you losing money, not earning it.
So, should you pursue a side hustle? Why not? I once had a desire to earn some extra money. I studied SEO. It became a business. Now, I am getting paid to write this story. That is my success story. Now, start yours … and be sure to let us know if these extra income ideas helped put cash in your wallet.