10 passive income ideas for Black entrepreneurs

The internet has no shortage of people peddling the promise of financial freedom that comes with passive income. And rightfully so. But just like the cash flow that comes with a strong passive income generator, there are also an abundance of so-called “influencers” peddling programs that can potentially net thousands of dollars each month — if you’re willing to pay for program.

We’ve seen this before. The internet is now rife with the type of “self-made millionaire” pitches that used to only get exposure at 2 a.m. on your local TV station.

There are many legitimate passive-income opportunities that many Black entrepreneurs may find suit them well, and could boost their household income.

Here are 10 passive income ideas that could be worth exploring.

10. Vending machines
If it seems like vending machines are virtually every public you wait, there is a reason. Vending machines are an often overlooked, but potentially lucrative business. In the U.S., the industry is projected to see a marginal decline in revenue this year, according to IBISWorld, but the industry has only a projected decline of an average of -0.1% between 2018 and 2023, which is not bad considering vending machine operators are expected to take in $10.1 billion this year. For new owners, the most expensive cost is often new or newer vending machines, which can cost up to $15,000. Springing for a used machine will shave thousands off of your startup expenses. Securing contracts with business owners will be your next step, and this can be tricky if you want to keep your business profitable. Business owners will likely not only expect a fee for leasing space to store your machines, they may also want a cut of the profits. Considering they can purchase their own vending machines and maintain them on site, it may be a fair proposition. Just make sure the profits always skew in your favor.

9. Certificate of Deposit accounts
Technically, almost any profitable investment could be considered passive income, but Certificate of Deposit (CD) accounts certainly qualify as passive income. A CD account is arguably one of the easiest short-term interest accruing to sign up for — and ubiquitous; nearly every commercial bank and credit union offers a range of certificate of deposit accounts that can generate sometimes as much as 5% interest. The terms of a CD can range from as little as 3 months to over 5 years in length. Five percent interest may sound meager, but for your investment to require you literally do nothing but wait, CD accounts are the quintessential example of easy money.

8. Sell old video games
If you have an old Xbox, PlayStation or Nintendo laying around, or more importantly, the games, it could be the start of a light side hustle. Video games are a hot commodity, as evidenced by GameStop’s stock. If you have a small collection, there may be a few high-value gems in your inventory that brings in more than you originally paid. But don’t stop there. Network and make offers to friend and family members to leverage a side hustle that allows you to sell your inventory online on markets like Mercari or in person through apps such as OfferUp. Just keep your safety in mind when conducting transactions.

7. Stocks
This is where the “money” is. Every morning, we are reminded money has its place in making the world turn yet many Black Americans don’t take advantage of equity investments such as stocks when compared to White families. According to a 2019 survey by the Federal Reserve Board, only 34% of Black households in the U.S. owned equity investments, but 61% of White households owned equity investments. Stock investing isn’t just stuffing your money in blue chips and collecting your dividends, for entrepreneurs who have done their homework, day trading and swing trading, which involves more transactions can carry higher risks, but of course, with higher risks come higher rewards. With a solid strategy and reliable advisor, if you are willing to keep routine track of your investments, stock investing could take your annual income to new heights.

6. Personal lending (peer-to-peer)
Most consumers have been on the receiving end of a loan, or applying for one, but there are many people who do not qualify for traditional lending and are willing to pursue less conventional options to achieve their goals. Peer-to-peer lending is a way to personal loan cash using an intermediary to collect the interest. This may sound risky, but since you set the terms of the loan, that includes the interest, assuming the other party agrees the income generating potential is higher than any traditional investment of your money, so peer-to-peer lending may be worth a closer look.

5. Laundromat
The initial investment on a laundromat can be steep, but so can be the profits. Entrepreneurs should be thorough when researching high-demand areas where they can set up shop.

4. Teaching/Lecturing
If you have a career or are an expert in a hobby, there is always someone willing to listen. And chances are, you don’t mind sharing what you know. Network with your local colleges to find paid speaking engagements, and search for events where you can establish a reputation. Teaching can generate modest income, but speaking fees are often set by the guest speaker or lecturer. Get your personal brand off the ground and you could turn yourself into walking money.

3. Angel investing
Believe it or not, in business there is a way to do a good deed and get paid too. Angel investors provide capital to start-ups who have a product or service that need seed money. Angel investors have lots of flexibility in setting the terms of repayment. The initial investment will likely be significant, so a contract and attorney are must haves before coming to an agreement.

2. Write a book
This opportunity for passive income nearly tops the list for several good reasons. Writing a book costs nothing. It is perhaps one of the easiest products to make — and one of the oldest. Much like earning your stripes makes for a rewarding teaching or speaking experience, putting your words on paper in way that provides insight or utility someone is willing to pay for. With digital publishing on the rise, and the ability to set virtually any price for your content, a generous income could be a few keystrokes away.

1. Rental properties
It may come as no surprise that real estate comes in at number 1. Home ownership is the American dream not just for homeowners but entrepreneurs as well. If you can find a profitable property in a high-demand area, and reliable, responsible tenants, flipping a property could yield thousands of dollars in passive income each a month.

Remember, passive income should be methods to generate cash with minimal or no effort other than getting the foundation started. Passive income should not feel like a part-time job or side hustle, and putting your energy into these 10 opportunities are great examples of what passive income can do for budding entrepreneurs.

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