Disclaimer: I am an engineer. I have nothing to do with finances and I do not give any financial advice. Thank you.
Many people hope they could start investing money, to be able to secure their future and create a better life for themselves and their families. But many people also assume that in order to be able to start investing and create a passive income source for themselves, they need to have a lot of money first, and this is where they are wrong.
If you really want to start investing and create some passive income sources for yourself, you can start investing right this second. Even if you have $0 in your bank account.
- Investing if you have anything between $500 and $50
- Investing if you have $0
Investing if you have anything between $500 and $50
1. Mutual funds
Investing in a mutual fund is like investing in a large group of stocks. The money is pooled from multiple investors to invest in these assets.
Many mutual funds require thousands of dollars as a minimum investment, but there are some that can be as low as $50.
What you will need to do to know if this is a good fund for investment or not is to track this fund’s performance over the years to see its pattern and how and when the rates of interest are affected.
You would also want to pay attention to the annual fees deducted from your account and compare it to the interest you would be getting to make sure that the fees are not too high.
While investing a 50$ in a mutual fund, where maybe your annual interest would be something around 7%-10% for most funds, does not seem like much of profit maker, if you can manage to increase this amount over time, like maybe add $50 every month to your profile, this would create a much better profit over time.
You may also want to read this breakdown of how studying the history of a certain fund and investing something as little as $500 can make you more than $520,000.
2. Real estate crowdfunding
Real estate crowdfunding is defined as an online pooling of capital from investors to fund mortgages secured by real estate, such as redevelopment of distressed or abandoned properties, equity for commercial and residential projects, acquisition of pools of distressed mortgages, home buyer downpayments and similar real estate related outlets.
So for someone who is looking to invest a small amount of money, there are a number of crowdfunding websites that work on connecting investors to these kinds of projects that need funding in exchange for a profit from the project.
One of the most well-known real estate crowdfunding websites is Fundraise where you could start with only $500 to invest in real estate and start gaining annual profits. For similar real estate online investing options check this article.
You can also find crowdfunding websites that would accept investments for as little as $100.
The above options are mostly available for US residents only, though. For European countries, you can check the options listed here.
I haven’t been able to find ones that would accept funds from other countries (specifically Egypt since this is where I am), if you happen to pass across one, please let me know in the comments.
3. Retirement account
A retirement account is a form of individual retirement plan, provided by many financial institutions, that provides tax advantages for retirement savings.
In the US, there is the 401(k) which in most cases is available for employees through their employers, and the good thing about this is that you can actually decide how much money you would like to have deducted from your salary to put into this account.
You also get to choose the kind of investment you would like to have your money put into. Investment options available include individual stocks, mutual funds, and ETFs. You can read more about the benefits of this plan here.
So if you do have that provided through your job, you already have an investment going, you should just decide how much of your salary you would like to deduct to make for a better long-term profit.
However, if you don’t have a retirement account, you probably should. You can start your own retirement plan by following the steps in this article.
Here, in Egypt, it’s not the same process. Because what employees get is mainly a pension. It is a fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments.
So I would suggest starting your own retirement plan through any of the available insurance companies. I am more inclined to registering with ones that are advertised through banks, I don’t know if this makes any difference integrity-wise or security-wise, but it’s just a personal preference.
Some well-known examples include AXA (through CIB) and Allianz (through Emirates NBD). Some of these plans you can start with as little as a 600-pound payment per month.
If you’re in Egypt, you may also want to read Passive Income In Egypt: How To Invest In Egypt With Little To No Money
Investing if you have $0
Now let’s say you don’t even have a dollar/pound to spare, you literally have no money, can you not start an investment that can bring you passive income?
Of course you can!
This is a company that facilitates tourists’ stay in a country by providing them with an online service to rent apartments, rooms, and hostel beds, etc, for the short period of their stay.
The best thing about Aribnb is that you don’t need to have a spare house to be able to make money renting, you can simply rent a room in the house you already live in and gain income with literally no extra cost on your part.
What you will be required to provide your guests with will all be things that you already have in your house which are the basic amenities for living.
You can read more about the requirements here.
One other great thing about Airbnb is that even if you don’t have a spare room at your place, you can still make money with them through providing an experience instead.
This is not exactly a passive investment; however, I couldn’t bring up Airbnb and not mention it, since you will be making really easy money.
An experience, as defined by Airbnb, is an activity designed and led by inspiring locals. They go beyond typical tours or classes by immersing guests in each host’s unique world. It’s an opportunity for anyone to share their hobbies, skills, or expertise without needing an extra room.
So, offering an experience can be anything from cooking them traditional home made dishes to taking them on special tours in places they wouldn’t be able to reach on their own, and many more examples.
This would be an easy and fun way to earn money. If you want to learn more about how you can easily make money with Airbnb, you can read this article I published earlier Passive Income: How To Make Money With Airbnb
5. Use your skills
If you have certain skills that can be put into use (or are willing to learn) this could be a great source of passive income for you. But what kind of things can you create that would help you generate passive income?
5.1 The world of design
If you’re a graphic designer, you have various options to make money, you can design and sell book covers, or printables that you can provide as PDF files (downloadable material) such as calendars and planners, or even create print-on-demand designs for notebooks, T-shirts, and mugs, etc..
You can make money simply by taking photos and putting them up for sale on the various websites available such as iStockphoto or Shutterstock.
All it takes is the camera which is already in your phone, given that most smartphones at the moment have a good camera quality, and a few videos, like this one, to help you take good photos, and probably some passion for photography in the first place.
5.3 Create an online course
Another option where you can make passive income is if you put together an online course. If you have a particular skill or an expertise in any field, you can put together a course material and upload it as a series of lessons on a teaching website. And every time someone enrolls in this course you get paid.
There are plenty of websites available where you could create and sell such course. Teachable is one great example where you would also find resources and a lot of useful material to help you create a professional looking course.
5.4 Write an ebook
The last and probably most time consuming option (maybe it’s a tie with the online course) on this list is to create an ebook.
This can be something as simple as a how-to guide to walk someone through using a certain device or create something DIY or anything else that you think someone might need help with and is not already available or that you think you can deliver in a better and easier way.
Or you can create a more in-depth book where you share extensive information through your knowledge and experience in a certain topic. And here is a list of websites where you can sell your ebook.
If you feel like this is something you want to do, then don’t miss reading this in-depth 5-Step Guide To Create, Publish, And Promote Your eBook FOR FREE
Till next week, happy days!
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