Make Extra Cash

Start Making Residual Income: How to Make More By Doing Less

Table of Contents  
  1. Is anything really passive?
  2. Our favorite residual income ideas.
  3. The Listen Money Matters residual income formula

There are few things in life as beautiful as residual income. Over the past few years, there has been epic growth in people seeking opportunities to put more money in their pockets. And this is great!

This could be because of the explosion in online platforms that allow people to earn residual income and open them up to different income streams. It could be because Americans are seeing record levels of consumer debt. No matter the cause, people are finding innovative ways to earn residual income.

Although it’s easier than ever to earn residual income with online platforms and tools, getting started and figuring out exactly where to start can be mystifying.

Kind of like Valentine’s Day planning. Do we stay in and watch a romantic comedy, like American Psycho, or do I just buy her a nice gift like a gym membership?

Fun fact: Buying your wife or girlfriend a gym membership for Valentine’s Day is the third leading cause of death among men in America (reference pending).

But let’s face it, if you screw up Valentine’s Day, you’ll be celebrating Palm Sunday until spring.


If you screw up your finances, you could be in for some long-term pain. So let’s learn how to make more money and do less work.

What is residual income?

Residual income is defined in the official Listen Money Matters Dictionary (not a real thing!) as:

Income resulting from cash flow received on a regular and predictable basis, requiring minimal to no effort by you to maintain it over the long-term.

residual income define

Or, as one of our financial hero’s Robert Kiyosaki puts it:

My rich dad taught me to focus on passive income streams and spend my time acquiring the assets that provide passive and long-term residual income…income from capital gains, dividends, residual income from business, rental income from real estate, and royalties. 

There are a few key points here. Residual income a predictable and regular income stream. That is, think of payments that are relatively the same amounts coming in on a monthly basis.

Second, residual income requires minimal to no effort by you to maintain it…over the long term! This means that you shouldn’t be putting in 20 hours a week to keep that income coming in. That’s a business.

Your residual income must be passive in nature, and there’s a lot of opportunities to add this type of income to your financial tool belt. But first, let’s clear a common misconception.

Is anything really passive?

Despite the passive nature of your ongoing Valentine’s Day planning, when it comes to earning money, nothing is really passive.

Yes, passive income ideas have become buzzwords around the personal finance interwebs as of late. We don’t want you to get the wrong impression, so we feel like we have to clarify what we mean by passive.

We aren’t talking about those spammy bloggers who assure you that you can earn thousands while you sleep. All you need to do is give them $10,000 for their program and you’ll be all set. Yes, they take credit card.

What could go wrong? I’m a sleep ninja, so this will be easy!

NOT! There’s no such thing as get-rich-quick schemes; ignore the hype and scammers. And, there are very few examples of completely passive streams of residual income.

Except for Chumbawamba, who still get residual income from their hit single Tubthumping.

residual income chumbawamba

Yes, that hair happened. Thought you’d never see them again? You’re welcome. Don’t pretend like you don’t know all the words!

To be fair, they did spend 32 seconds writing Tubthumping, so not completely passive.

The truth is, nothing is really passive.  Everything requires effort and some hard work front, especially when it comes to finances. What we mean by residual and passive, is that once you have put in the initial effort, the income generated becomes a passive stream of extra cash requiring little to no additional effort.

The key here is to know there is work up front, and you must do it! Taking action is the most important skill you can learn to improve your finances.

So, that Uber driving you’ve been doing on the weekends…not passive! That part-time gig as a dog groomer, otnay assivepay!

residual income dog grooming

How about that kitten mitten e-commerce store that you set up a few years ago and is now generating a few hundred in monthly income? You only spend an hour or two a month maintaining the site. Bingo!

See where we’re going with this? Residual income is extra cash flow where you did the work up front, and are now reaping the benefits with minimal ongoing work.

Got it? Ok, let’s move on to the good stuff.

Our favorite residual income ideas.

Residual income is no longer relegated to stock market dividends, real estate, and royalty streams of cash flow. Thanks to innovative digital platforms, there are now more opportunities than ever to turn on the residual income tap.

Let’s take a look at 15 of the best residual income ideas that you can work on now, to reap the passive cash flow down the road.

Real estate

One of our favorite residual income ideas is probably the oldest: real estate investing. There are a number of ways you can tap into the residual income power of owning an interest in real estate, here are a few:

REITs: A real estate investment trust, or REIT, is a publicly traded company that owns and operates various forms of real estate. You can invest in these funds directly in your stock trading account. 

Fundrise is a crowdfunded platform that allows average investors access to real estate returns they could not access on their own or through a traditional REIT. Their bread and butter are real estate deals that are overlooked by large institutional investors and out of reach for most individuals.

Loans: Don’t want to deal with tenants and toilets? You may want to become the bank. You can use excess cash to loan it out to people who want to do that kind of landlord work. Platforms like PeerStreet and Patch of Land allow investors to loan cash to real estate projects for future residual income.

Rental property: My favorite way to earn money from real estate is to become a landlord. Simply put, you find a great market in your area, look for a cash-flowing property, buy it, and rent it out. Sounds easy right? There’s actually a lot to this approach, so you have to educate yourself first before buying a rental property.

The beauty of this approach is you’re leveraging OPM (other people’s money) to line your pockets down the road. You put up the initial capital (down payment) borrow the rest from a bank (up to 80%), and then your tenant pays down that loan. Simple as that.

There are dozens of online platforms like Roofstock that allow you to become a direct investor in specific real estate projects either by yourself or with other investors.

Crowdfunding:  RealtyShares is an online investing platform that allows you to make real estate investments and a virtual space for companies who need financing for their real estate projects to find investors who will buy shares in that project. The first makes them like Betterment. The second makes them like Indiegogo.

Flips: A variation of buying a rental property to become a landlord, flipping real estate means you’re buying something that needs work.

residual income real estate investing

A little TLC!  

You, or a contractor, invest time and money to fix up that property, and then you either rent it out, sell it, or refinance it through a bank to get your initial investment back. For a detailed discussion of this approach, check out our chat with the awesome Justin Williams

Peer-to-peer lending

Yes, you can become a loan shark, but without the prospect violence. There are dozens of platforms out there that will allow you to loan your money to people or businesses for various purposes. This can be a personal, business, or real estate loan. You will set the terms of the loan and then collect interest.

Here are some of the most popular peer-to-peer lending platforms:

Dividend Stocks

One of the more stable and traditional forms of earning residual income is to invest in high-quality dividend stocks. You have to make sure the specific company has a history of raising dividends over the long term. These payments are then disbursed to you as the stockholder on a regular basis despite the performance of the stock itself.

Here’s everything you need to know about investing in dividend stocks for residual income.

The wonderful world of ATMs

Instead of lending people money, give them the money they already have! ATMs are a great way to earn residual income every time someone withdraws money.

Yes, those fees are SUPER annoying, but they’re earning someone sick residual income. That jerk could be you!

Here is an expert guide on how to get started in the ATM world.

Investing in coffee

Weren’t expecting this one were ya? We all love coffee, so why not invest in a coffee farm? There are companies out there who buy coffee farms and then sell out parceled portions of that land to investors. Simple as that.

One of the more popular is International Coffee Farms, who operate in South America. You can buy parcels of land and then collect residual income from the harvesting of coffee beans on that land.

Investing in coconuts

Coconuts and its by-products are extremely popular these days. I know, I couldn’t live without my strawberry-coconut exfoliating shaving cream!

Manscaping aside, you can invest in agriculture holding companies that buy and manage coconut tree farms. Similar to the coffee example above, you can invest in a parcel of land within a larger coconut farm, and then receive regular residual income as the coconuts are harvested.

Write a book

It is now easier than ever to self-publish a book. Whether you want to write fiction or nonfiction, you can write your book, get it professionally edited, formatted, and get a cover design for well under $1000. It’s then free to upload it to Amazon.

How about writing that romance novel and dedicating it to that special someone on Valentine’s Day? VD planning done!

You can even turn your eBook into a physical book with Amazon’s CreateSpace. It’s amazingly easy these days to write and publish a book.

Given we are looking for residual income, make sure the topic you pick is evergreen. That is, if you write a book make sure it will be just as relevant ten years down the road as it is now. This will help you ensure that people will keep buying your book.

Rent a room

Do you have a spare room, basement, or office space? You can easily rent that out to vacationers, long-term tenants, or people looking for office space.

For vacationers, it’s best to use platforms like Airbnb and VRBO, and Craigslist for longer term tenants. If you have an office or a space that can act as an office, check out LiquidSpace, which allows you connect with those looking for a place to work.

Start a blog

Are you passionate about something? Kitten mittens? Dog grooming? Tom Selleck? Then starting a blog might be a great way to create residual income down the road through affiliate marketing.

The strategy looks like this:

  1. You pick a niche to write about, something you’re passionate about.
  2. You start your blog, and post articles on a weekly basis for at least a year.
  3. Once you’ve built traffic to your site, you can monetize it by placing ads or selling a product (like your new eBook!).

Obviously, this strategy is a lot more involved, and you should educate yourself first before jumping into the blog world head-first.

License photos

If you enjoy taking photos and are a good photographer, then there are websites out there like iStockPhoto that will allow you to license your photos to others for residual income.

Buy an online business

If all of this is sounding like a lot of upfront work for potential future residual income, this option might be right for you. There are websites out there that sell established, and often profitable, online businesses, including Flippa and Empire Flippers.

Instead of going through the growing pains of starting your own online business, you can simply buy an already established one for residual income. For more on this, listen to our fun interview with Ace Chapman on buying online businesses.

residual income podcast

Start a podcast

But don’t compete with us, we’ll come after you with wooden mallets and colorful language. Kidding! Or are we?

Like starting a blog, a podcast can help you create an audience that can then be monetized through advertising and affiliate marketing. The key is to pick something you’re passionate about so you can speak intelligently about it and people will listen.


Do you like the real estate idea, but don’t want to deal with broken plumbing and whiny tenants? Self-storage units are a great option to create regular income with a minimal amount of ongoing work.

Many people buy vacant land to build storage units or use their already existing property to build on. Once the storage units are built, the ongoing effort is minimal, and can even be automated with digital kiosks and smart locks.

The average revenue in the U.S. per square foot for self-storage is $1.42. Not too shabby for an empty space!

Robo advisors

Automate your savings with popular robo advisor services like Betterment, Wealthfront, or Acorns. We’ve even reviewed these platforms for you so that you can choose the best one for your situation.

Robo advisors are the ultimate ‘set it and forget it’ strategy to invest. You simply choose up front how much and the frequency, and the platform does the rest. You choose the types of stocks and funds you’d like your money invested in, and they do the rest.

Smarten up! (i.e., Get out of debt)

Kill all of your consumer debt! One of the biggest challenges facing Americans is their level of consumer debt. It’s the highest interest, and it can be a drain on your financial and personal resources. Come up with a plan, today, to get yourself back on track.

This is obviously a larger discussion topic, but the best way to help yourself earn extra money in the future is to not pay high-interest rates for consumer debt today.

Get our best money lessons:

The Listen Money Matters residual income formula

Here’s the deal. You have a number of solid residual income options above, so now it’s time to take action. Commit to trying out at least one of these strategies over the next few days, and promise yourself that you will see it through, and if it’s not working for you, then pick a new idea.

The hardest part of getting on track financially is taking action. What will residual income idea you try today?

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