Beyond stocks and rental properties, a handful of surprisingly accessible investments let you earn money from things like hit songs and hungry strangers, and most people never think to consider them.
For many investors, the ultimate goal is to make money without having to work for every dollar. Stocks, bonds, and rental properties are some of the traditional ways to earn passive income, but they aren’t the only options. Today, investors have lots of creative opportunities to generate income. Of course, passive income almost never means doing absolutely nothing. Most investments require upfront money, research, and ongoing management. Still, for those willing to think outside the box, there are some surprisingly unique ways to bring in extra money each month. Here are three options worth considering.
1. Invest in Music Royalties
Most of us listen to music without giving much thought to who gets paid every time a song plays. But behind the scenes, the process is quite complex; songwriters, publishers, performers, and other rights holders can earn royalties every time their music is streamed, broadcast, licensed, or used in any way. Few people know that investors can sometimes buy a share of those royalty rights and earn a portion of the income themselves.
Specific platforms and marketplaces have made certain music royalty investments accessible in ways they weren’t in the past. Depending on the arrangement, someone might purchase rights to a single song, a chunk of a catalog, or an interest in a royalty-generating asset. The idea is that a song can keep earning money for a long while after its original release. And there’s always the possibility that a hit from decades ago could find a new audience, which tends to happen after it appears on a popular television show (“Running Up That Hill” by Kate Bush is a prime example).
Of course, there’s no guarantee that a past favorite song will once again generate income. Like we said, the process is complicated; algorithms change, streaming popularity changes, royalty contracts can have stipulations, and some investments have limited terms. It’s also worth noting that payments aren’t always made monthly. Still, the idea of earning money from a song you had nothing to do with creating is a pretty unusual alternative to traditional investing.
2. Rent Out Parking Spaces or Storage Space
Real estate investing usually brings to mind buying houses, renting out property to tenants, and dealing with the occasional broken toilet. But real estate investors don’t need an entire building to get a bit of rental income. Sometimes, a parking space or a small storage area can be lucrative.
In crowded cities, parking can be valuable. Someone who owns a parking spot near a downtown area, an office district, or popular entertainment spot might be able to rent it to drivers for a pretty penny. Someone looking for a reliable place to leave their cars might be willing to pay top dollar for your space. Similarly, empty garages, sheds, and other unused spaces can sometimes be rented for storage. Depending on local demand, renters may pay monthly for the convenience.
The advantage is that these arrangements can involve considerably less maintenance than renting out a house, which comes with tons of upkeep and systems maintenance. Parking spaces don’t need new appliances, and storage renters won’t call you because the dishwasher stopped working. Location is key. A parking space next to LSU stadium during football season would be valuable, while one on the other side of campus may not be at all.
If you’re thinking of doing this, you need to consider insurance, property rules, local regulations, and liability. For someone who already owns a great space, this can be a relatively simple, but inventive, way to turn space into recurring income.
3. Invest in Vending Machines
Vending machines are essentially tiny retail businesses that operate with zero employees and very little oversight. Investors can buy or lease machines, arrange to put them in certain locations, and earn passive income whenever customers buy something.
Traditional snack and drink machines are the mainstream option, but today’s vending businesses can get pretty darn creative. Airports in particular these days are full of machines selling things like phone chargers, travel-sized beauty products, and personal care items. Japan is known for their “buy a banana” vending machine, although we’re not sure the yellow fruit would sell as well in the obesity-rich USA. Regardless, a well-placed machine offering novel products or necessities can generate a decent chunk of money.
The biggest challenge is finding a profitable location. Vending machines in airports and hospitals do so well for good reason: people are trapped sitting and waiting for long periods of time. A vending machine in a busy apartment building may be worthwhile, while the one tucked into the corner of the nearly abandoned park won’t be worth your time. Investors also have to think about inventory, restocking, electricity, maintenance, payment processing, and any fees paid to the property owner.
The cool thing about these three options is that they approach passive income from very different directions. And they are all ways to earn passive income that many people don’t consider. None guarantees a monthly profit, but they each offer less conventional ways to put your money to work.
Contact [email protected] for any questions or corrections.
