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5 Types of Passive Income That Can Make You Rich in 5 Years

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Are you looking to create a steady stream of passive income that can help make you rich, or at least richer than you are today? Regardless of why you’re interested in building passive income streams, having multiple sources of reliable income can open up many new opportunities and bring financial stability. 

In this article, we’ll explore passive income and the five types of passive income that can make you rich within five years if managed correctly. From real estate investing to creating an online course, there are plenty of ways to generate residual wealth today.

What Is Passive Income

When you think of income, you probably think of active income. Active income is what you earn from a job or business. Passive income, on the other hand, requires minimal work to earn. Passive income usually takes effort to set up initially but then pays out repeatedly and automatically in the future. 

Passive Income Ideas That Can Make You Rich

There are many different ways to earn passive income. There are passive income opportunities for people starting with an initial investment and even opportunities for those with very little money to start. 

Dividend Investments

A dividend is a regular cash payment from investing in a company listed on a stock exchange. Another way to earn dividend income is to invest in dividend-yielding ETFs or mutual funds. No matter if you invest in individual companies or through a fund, dividends are usually paid out quarterly.

The more shares you own, the more dividend income you will receive. However, because most companies with dividend yields only pay a few percent for each share held, you must own many shares to make significant money. But on the bright side, investing in stocks requires little work, and you can continually invest more money over time.

After you receive the dividend, you can reinvest that money into the stock or withdraw it as income. 

Rental Property

If you have extra cash, investing in rental properties can help create a large amount of passive income. You will need to have the cash upfront to cover the down payment, plus the ability to qualify for a good loan. However, you’ll then be able to lease the property to tenants and earn money through rent payments. Ensure that your monthly rental income exceeds your expenses, including the mortgage payment, maintenance, taxes, utilities, etc. Also, remember that you’ll benefit financially when the property appreciates.

Investing in real estate can be as passive as you want. If you hire a management company to take care of everything, you can sit back and collect the checks each month, but you’ll need to pay the management company’s fee. However, if you want to keep more income, you can do more of the work involved.

Royalties from Book or Course

Creating a book or course to sell requires quite a lot of effort upfront, but you can continue to earn passive income from sales and royalties for years. 

If you are knowledgeable about specific topics like dog grooming, investing in the stock market, or fitness programs, you could create a course to teach others. You can control everything about the course, including the content, the sales price, and who you want to market it to.

Books require a lot more work and time. You may need to find a publisher, or you can self-publish. However, you can earn royalties from book sales for years, perhaps longer than courses. 

Having an established following can make selling your book or course easier. If you have a following on social media, in a specific community, or elsewhere online, you can advertise your book or course to these people. They will likely purchase your product since you already have a relationship with them.

Affiliate Marketing

Affiliate marketing is when you share and recommend a product to others and earn a commission when someone purchases the product. Affiliate marketing can be done on social media, email, or website. 

Affiliate marketing only requires a little money upfront to establish, but it does require time and work. You will need to reach enough people before making meaningful money. The more followers or website traffic you have, the more money you are likely to earn from affiliate marketing. 

Peer-to-Peer Lending

Another option for passive income that can help make you rich is peer-to-peer loans. These loans are from one person to another. They are personal loans that cut out the financial institution as the middleman.

You will earn interest based on the individual loan terms when you lend money to others through peer-to-peer lending. Websites like Lendingclub or Propser can be great tools because they will help facilitate the loan and provide a risk profile for the person you’re lending money to. Peer-to-peer lending does come with some risk, but you can mitigate some of the risk by lending to highly qualified individuals.

How To Choose a Passive Income Source

Deciding which passive income sources to pursue will depend on a few factors, including the amount of money you can invest, your interests, talents, or skills, and the time you can give to get something started. This will be different for each person. While one passive income model might be great for one person, there might be better fits for some. 

Once you have one passive income stream started, many people decide to create multiple streams. This will require more time and potentially a more significant financial investment, but creating multiple passive income streams can be good financially.

The Bottom Line

Passive income can significantly increase your overall income without working additional hours at your day job. You can earn good money from passive income opportunities, but it depends on your financial commitment, how much work you’re willing to put into it, and a little luck.

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This 20-Year-Old’s Summer Side Hustle Earned $150,000

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This 20-Year-Old's Summer Side Hustle Earned $150,000

This Side Hustle Spotlight Q&A features 20-year-old college student Jacob Shaidle, founder of Ontario-based barbecue cleaning business Shaidle Cleaning. Responses have been edited for length and clarity.

Courtesy of Shaidle Cleaning. Jacob Shaidle.

What was your day job or primary occupation when you started your side hustle?
I was a 15-year-old high school student when I started my side hustle, Shaidle Cleaning. I always liked physical labor, so this was a natural fit. Before I started my business, at the age of 14, I worked full-time summers at a tree farm, but when my parents told me I had to pay my way through university, I wanted to make more than minimum wage to ensure I could pay tuition. I was shocked when I found out how expensive school really was! Today, I am a full-time university student during the school year and a full-time business owner during the summer. I plan on pursuing Shaidle Cleaning full-time after I graduate.

Related: This 52-Year-Old Started a Side Hustle That Brings People Joy — and It Earns Up to $30,000 During Wedding Season: ‘There Was Real Demand’

When did you start your side hustle, and where did you find the inspiration for it?
I started Shaidle Cleaning in the summer of 2021. My mom asked me to clean our barbecue at home and suggested that I go knocking down the street after I did such a good job. My parents mentioned cleaning neighbors’ grills to make more money than what I made at the tree farm. I never would have thought to start a business cleaning grills if they didn’t suggest it!

What were some of the first steps you took to get your side hustle off the ground?
I needed the proper cleaning supplies to get Shaidle Cleaning off the ground. Luckily, I already had a pressure washer at home from my Dad, and I spent $400 on other equipment (100% of my savings at the time). That first summer in business, I put everything into two grocery bags and walked about a half-mile radius from my house to clean grills — I didn’t have my driver’s license or a car, so walking was my only option. By the second summer, I made enough money to buy my own car, which allowed me to expand my service area and double my revenue.

Related: She Started a Creative Side Hustle That Made $100,000 in 10 Months — Now It Earns Up to $10 Million a Year: ‘Find Your Niche’

What were some of the biggest challenges you faced while building your side hustle, and how did you navigate them?
My three biggest challenges with the business have been ensuring amazing quality even after hiring people, maintaining a great online presence and managing such a high volume of clients. To ensure quality of service, I found that good, well-planned training was very important. Even more important, though, was hiring hardworking, passionate people — people who had similar goals and mindsets as me and could work toward a shared goal. Having an amazing team has been the driving factor in our business’s success.

Maintaining a great online presence is really challenging as a small business competing against all these “sharks” with more clients and money to outspend us on ads. With the help of my friend Aran Giffen, we have been able to establish a great online presence, selling people on the story and our youth, passion and drive rather than the actual service we provide. We want to make it clear that we are all students with the goal of helping other students, and that is how we present ourselves.

Lastly, going from managing 100 clients a summer to more than 700 has been a huge jump. As the owner, I want to have personal conversations with each client, get them excited about the service and make sure they have the best experience every time. Unfortunately, there just isn’t enough time in the day for me to do that. Instead, I have utilized the great personalities of my own workers to message, follow up and ensure the happiness of customers. We have also made client management easier with Jobber, which automatically stores all of our clients’ information, sends automated messages and keeps everything organized for me as the owner.

How long did it take you to see consistent monthly revenue? How much did the side hustle earn?
Since this is a seasonal business, I work hard each summer to ensure I increase my revenue from the previous season. In my first two months of operation in 2021, I made $5,000. The following summer, when I had my car, I doubled my revenue to $10,000. These were two-month summers in grades 11 and 12. In my first university summer, I hit my first $10,000 month and finished the summer with around $30,000.

This summer, which was my fourth summer in business, we did $100,000 in revenue in 75 days, ending the summer with roughly $150,000 in top-line revenue. As a one-man operation, it wasn’t too challenging to see consistent revenue in the summers. This is because I would typically knock on doors for one or two days to fill up my schedule for the week. This past year, we had seven technicians and 20 people in total, so it was much more challenging to stay consistent with the revenue. We had to learn quickly how to train employees, manage our sales team and deal with hundreds more customers. My best friend, Aran Giffen, has been a huge help in ensuring revenue stays consistent by managing our website, reach-out and online ads.

Related: The Side Hustle She Started in a High School Locker Room Hit Multimillion-Dollar Revenue — and Taylor Swift Is a Fan: ‘Invest in Yourself’

What does growth look like now?
I’ve been able to expand my one-man side hustle into a thriving business that has allowed me to hire dozens of high school and university students, helping them pay for their own education. With a growing, passionate and hard-working team, we aim to eventually break seven figures in revenue. Automation is a large part of being able to scale a business. We recently automated our customer communications by partnering with Jobber last summer, which has helped us tremendously. This partnership has allowed us to expand our customer base to hit 1,000 grill cleanings and six figures in revenue this year. Before Jobber, I spent a lot of my time scheduling cleanings and manually sending reminder messages to customers about their appointments — it ate up most of my day. Jobber completely takes that over by allowing customers to book their appointments online, automating reminder messages and sending invoices at the end of our service, which has freed up my time to focus on growing the business. We wouldn’t have been able to hit six figures in revenue or hire employees without this partnership.

What do you enjoy most about this side hustle?
By far, the most rewarding part of owning Shaidle Cleaning has been enabling my employees to afford their tuition and university costs. I am so proud of my team and happy with what we have accomplished so far, and I sincerely only want what is best for them. We are building a company around hardworking, dedicated and passionate students, and I value their work and effort more than anything else. My business is so much more than just cleaning grills — we’re creating a tight-knit community of students and helping them build and grow as people.

Related: She Started a T-Shirt Side Hustle as a Recent Grad Working at ‘People’ Magazine. It Led to a DM From Levi’s and $400 Million.

What’s your advice for others hoping to start successful side hustles of their own?
Find great people to surround yourself with. I used to think it would be so great to reach my big dreams on my own — more rewarding, efficient and impressive. But I was totally wrong. One of my favorite parts of my job is meeting new people who can help and enable me in different ways. It is much more rewarding to gather a group of people around a singular goal and lead them all to success than it is to do it alone. It is way quicker to build off the amazing knowledge of others to propel yourself forward in business, and it is more impressive to stick with the plan with the people around you than to hike up the mountain alone, leaving people behind.

With this message, there are four very important people I would like to mention who have helped me do amazing things in business. Aran Giffen, Brendan Quinlan and my parents. Aran joined along for the ride in year three and has been one of Shaidle Cleaning’s biggest assets. Brendan has acted as my mentor for just over a year now and has given me more knowledge, skills and advice than anyone else in business. Along with my mom and dad — who have always been by my side encouraging me no matter what and have had the pleasure of watching this grow since the very first BBQ — I am eternally grateful for these people and only wish to continue growing with them.

This article is part of our ongoing Young Entrepreneur® series highlighting the stories, challenges and triumphs of being a young business owner.

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He Overcame Dyslexia and Built a $1 Million Language Learning App

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He Overcame Dyslexia and Built a $1 Million Language Learning App

Entrepreneur Ventures is an early-stage venture capital firm partnered with Entrepreneur Media that is dedicated to backing passionate and innovative founders as early as day one. In this series, we are profiling the amazing entrepreneurs that Entrepreneur Ventures is working with to share their insights on building and growing a thriving business.

Michael Peled is the co-founder and CEO of Singit, an immersive English education platform that teaches the language through music. “People pick songs that they like, then select words in the lyrics for instant translation, and expand their vocabulary faster and easier,” Peled explained on a call with Entrepreneur.

SingIt is currently being used by 500,000 students across 12 countries and has recently surpassed $1 million in annual recurring revenue. “With our new consumer channels, especially focusing on the Latino population in the U.S., and over 5,000 paying customers, we’re poised to disrupt the market,” Peled says. Read on to learn more about the innovative teaching tool, and the driving force behind the 23-year-old tech founder’s passion for learning.

Please give us the company elevator pitch.
SingIt is transforming English language education by integrating AI-driven technology with a library of over 5 million songs. We deliver personalized learning experiences, tailored to each learner’s needs, turning the most addictive apps into powerful tools for mastering language.

What gave you the idea?
My father learned English in the ’70s from John Lennon and Bob Dylan songs. This sparked my realization that music could be an incredible tool for language learning, particularly for people like myself with dyslexia. I had to work eight times harder in school to achieve the same results as my peers. This determination, combined with having entrepreneurial parents who always believed in me, propelled me forward. I firmly believe that having just one person who pushes and supports you can make all the difference.

Related: Teacher’s Successful Side Hustle Made Over $22K in One Month

How did you get started?
I developed SingIt as my final project in a gifted kids program at the Weizmann Institute. It grew into an app now used by 500,000 students globally, and it’s been approved by Ministries of Education worldwide.

What kind of training did you have before developing Singit?
By the age of 17, I was mining Ethereum on my school’s lab computers, but that’s not where my business success stems from. My passion for technology and curiosity about how money is made started when I was 9. Though I’m not materialistic and consider myself quite frugal, I was always drawn to entrepreneurship. By 16, I was earning over $100K a year photographing events while others partied. Growing up in a family of investment bankers also opened doors to key relationships, including a mentor who introduced me to underwriting.

Related: How This Entrepreneurial Couple Is Revolutionizing Brand Loyalty

Ultimately, my success came from being relentlessly curious, always seizing opportunities, and having a strong desire to learn from others. Since then, my focus has been on creating lasting impact, not just financial gains. SingIt’s mission is to democratize education and make learning accessible for everyone.

What do you hope to accomplish with SingIt?
I want SingIt to become a cornerstone of education, enabling millions of children to learn English in a fun, engaging, and accessible way. My goal is for English to become a second language globally. In many countries, fluency in English can increase one’s salary by up to four times and open new opportunities, especially in poorer regions, connecting them to the global economy.

What is your best advice for entrepreneurs who are pitching investors?
Persistence is key. Be relentless in pursuing your vision and ensure that your product solves a real problem. For instance, when securing music licenses for SingIt, I didn’t stop until I won over the biggest players in the industry.

Do you have a personal mantra that helps keep you motivated?
Be prepared to outwork everyone in the room, including your toughest competitors. True success demands relentless effort, grit, and unwavering perseverance. Every obstacle is an opportunity to rise above. Remember: “If you will it, it’s not a dream.” Lead with passion, push your limits, and show the world what’s possible when you refuse to give up.

Related: All True Entrepreneurs Share This One Personality Trait, Says the Founder of Spicewell

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CVS Is Laying Off Thousands in Cost Cutting Initiative

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CVS Is Laying Off Thousands in Cost Cutting Initiative

CVS Health is laying off around 2,900 people to cut costs, the company announced on Tuesday.

“We’ve embarked on a multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work,” a spokesperson said in a statement, per CNN.

Related: ‘Tough Day For All of Us:’ Intel CEO Announces Layoffs Affecting 15,000 People

Experts say several factors are causing the industry to struggle as a whole, including online shopping. Consumers are buying toiletries and personal items from Amazon, Walmart, and other large online retailers. Meanwhile, big box stores like Costco are cutting into what was once considered staple buys at drugstores, like toilet paper and snacks.

CNN also reports that Dollar General’s growing market is causing slower sales at drug stores in rural areas. Falling reimbursement rates for prescription drugs are also a big factor.

Related: Apple Just Conducted a Rare Round of Layoffs. Here Are the Teams and Roles Affected.

“Our industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations,” the spokesperson said. “The reductions will not impact front-line jobs in our stores, pharmacies and distribution centers.”

“The vast majority of impacted colleagues will be notified this week,” the CVS spokesperson added.

The cuts will affect around 1% of CVS’s total workforce.

On Monday, the Wall Street Journal reported that CVS has been exploring the possibility of breaking up the company.

Reuters reported that the move would potentially separate its retail and insurance units.

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