The Best Simple Passive Income Ideas For a Beginner Investor
By: Isaiah Mccall
Tags: Investing, Money, Stock Market, Retirement, Finance

The Best Simple Passive Income Ideas For a Beginner Investor

Would you rather make it drizzle — or make it rain?

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Wealth is letting your money work for you. You won’t get wealthy from a paycheck. You likely won’t get wealthy from Medium. Wealth comes from investing.

Whether it’s starting your own brand or pursuing lucrative passive income ideas. Let your money know who it’s working for.

Both of the aforementioned ideas may seem lofty on paper. But take the stock market for example, which has been proven to be so easy that a monkey could do it. And that’s not speaking figuratively.

Every year since 1964, business website Research Affiliates have simulated 100 monkeys throwing darts at stock pages in a newspaper. The pages the monkeys hit in turn became their portfolio.

As you might’ve guessed, the monkeys didn’t do as well as the average investor — they did better.

The average monkey outperformed the index by an average of 1.7%, and have been doing so since 1964. If a monkey can beat the market, why can’t you?

When I started out investing I was intimidated by the stock market. So, here are 3 simple passive income ideas if you’re a total beginner.

1. Resell Your Old Clothes (The Fastest Growing Industry)

According to Statista, eCommerce sales amounted to $504.6 billion in 2018. This number is projected to surpass $735 billion in 2023. And apparel and accessories alone should generate over $138.7 billion by 2022.

While many have turned to designing and selling their own t-shirts online, that market has taken a bit of a hit in 2020. Instead, consider selling your old clothes online.

Today the resale market is valued at $28 billion and is predicted to double to $64 billion by 2024, according to a CNBC report.

The resale market grew 25 times faster than the overall retail market last year, with an estimated 64 million people buying secondhand products in 2019. And instead of the resale industry taking a hit from the pandemic — it grew even faster.

“Americans could begin to change their spending habits in the fallout from this pandemic…More people are embracing frugality or thrift.” — Marketplace.org

Online reselling is also predicted to overtake fast fashion within the next decade.

Actions to Take:

Sort through your closet and find old but fashionable clothing that you think someone would be interested in buying.

Set up an account on one or all of the following resell sites: thredUP, eBay, Etsy, and Depop

Sell your clothes online and pad your pockets.

2. Focus On ONE Great Business Idea

It’s definitely not a traditional passive income. But the only way to get a business idea off the ground is to pour everything into it.

We all have great ideas floating around. Whether it be starting a website, creating a product, or writing more on Medium. Anything that gets us out of the boring 9–5.

COMMIT to one of these ideas. Throw the word “multitask” out of your lexicon. Saying you’re “too busy” is a lousy excuse. You shouldn’t be too busy for something you love.

Would Steve Jobs have said he’s too busy to start Apple? How about Elon Musk — would he rather go binge on Netflix than change the world?

Don’t shortchange yourself from other successful people. You know what you should be doing every day to change your life.

Putting everything into one great idea could be the best decision of your life.

Actions to Take:

Read Tim Ferriss’s The Four Hour Workweek, a classic amongst bloggers and investors alike

Read Scott Fox’s Click Millionaires: Work Less, Live More with an Internet Business You Love

Put together a team that stands behind you and your idea

3. Invest Within a Roth IRA Account

Passive income ideas don’t always have to result in immediate paychecks. Investing within a Roth IRA account is how most 20-year-olds will become millionaires when they retire.

Roth IRAs offer a unique tax advantage when compared to a 401(k): You can withdraw your money in retirement tax-free.

That means, your money will be growing 5–7% annually, and you can withdraw every penny tax-free when you’re older. Because of compounding interest, the more money you contribute the more you make from a Roth IRA account.

Important to note: You’re only allowed to invest $6000 per year if you’re under 50 years of age ($7000 if you’re over 50). This means you could invest $500 a month to max out your earnings.

Assuming you earned a 6% return, it would take you a little over 41 years to hit the million-dollar mark. And if you only earned 5%, it would take you about 46 years to get there.

Actions to Take:

Use this guide to find the best Roth IRA account for you

Read this to learn more about Roth IRAs

Set aside a small sum each month to invest

Takeaway

Success is the best revenge. I think about that every day. A little financial literacy and investing can change your life forever. 2020 doesn’t have to be a moment you regret for not investing your money.

For example, I learned so much about Bitcoin this year that I know this will be a period I look back on fondly.

Make smart, prudent moves now. These beginner passive income ideas are a great place to start. Now I want to see where you end up next.