One of the goals of financial independence is to build wealth that doesn’t eat up your time, so you can enjoy life and do the things you choose to do. The truth is that building an income stream to generate real wealth usually isn’t passive at first. It requires time, money, skills, or all three.
Building multiple passive income streams has an additional benefit in the short term: it can make you more resilient and better able to weather economic shocks, such as what was experienced with the housing crisis in 2008 or during the COVID-19 pandemic.
Passive income is a long-term choice that requires short-term tradeoffs. If you’re willing to commit your resources to the steps and ideas below, you could earn residual income effortlessly for years to come.
You just need to know where to start and decide what resources you’re willing to expend for your passive income ideas to take flight. Let’s take a look at 24 of the top income ideas that can help you generate incremental income and build wealth.
- Invest in a high-yield CD or savings account
- Invest in Real Estate
- Invest in the stock with Dividends
- Invest in stocks with Growth Potential
- Monetize a blog, YouTube channel or Podcast
- Refinance your Mortgage
- Rent Commercial Properties
- Rent your Home on Airnbnb, VRBO
- Rent Your Car, Boat, Truck, Tools and other Assets
- Rent Residential Properties
- Sell e-books
- Sell Unneeded Assets Online
- Invest in REITs, ETFs, Mutual Funds and Other Equities
- Invest in Crypto Currencies
- Invest in Bonds
- Invest in a Business
- Flip Properties
- Eliminate or Reduce Debt
- Dropshipping – Start an e-store and use Third Party Order Fulfilment
- Design an Online Course
- Buy and Sell Website Domains
- Buy a Business
- Become an Angel Investor
- Become a Tutor, Trainer or Coach
1. Invest in a high-yield CD or savings account
Investing in a high-yield certificate of deposit (CD) or savings account at an online bank can allow you to generate a passive income and also get one of the highest interest rates in the country. You won’t even have to leave your house to make money.
Read Also: Top 20 Ways to Earn Revenue on Your Website
To make the most of your CD, you’ll want to do a quick search of the nation’s top CD rates or the top savings accounts. It’s usually much more advantageous to go with an online bank rather than your local bank because you’ll be able to select the top rate available in the country. And you’ll still enjoy a guaranteed return of principal up to $250,000 if your financial institution is backed by the FDIC.
As long as your bank is backed by the FDIC and within limits, your principal is safe. So, investing in a CD or savings account is about as safe a return as you can find. However, while these accounts are safe, they’re returning less these days than before.
And that return can pale in comparison to inflation, which hit mid-single digits last year, hurting the real purchasing power of your money. Nevertheless, a CD or savings account will yield better than holding your money in cash or in a non-interest-bearing checking account where you’ll receive nothing.
2. Invest in Real Estate
The best way to earn passive income is by investing in real estate. When you look at the wealthiest investors across the globe, one of the most common assets they own is real estate.
Real estate investing has been a way to build wealth for a long time. It used to take a lot of time, personal capital, and expertise, but that’s no longer the case.
However, real estate investing apps have democratized access to this asset class – making it easier for you and me to create no-work, passive income.
Below are resources we recommend checking out if you’re interested:
- Fundrise
You may not have millions or even thousands to start an investment property – and that’s okay! Because you can invest as little as $10 into a company named Fundrise and start generating passive income asap.
Fundrise specializes in REITs (real estate investment trust). If you live in an expensive city or don’t have the time to manage a rental property, REITs are the way to go.
REITs own and manage income-producing properties and distribute the profits to investors. Investing in REITs was once expensive and required accreditation, but Fundrise has changed all this. The minimum investment on Fundrise is only $10.
- Roofstock
Here’s another real estate platform for a little additional income. Roofstock is a marketplace of turnkey single-family homes for sale. The term “turnkey” means the numbers have been crunched, the home may have been rehabbed, and may already include tenants!
All you, as the investor, have to do is put up the cash. Once you purchase the home, it is 100% yours, and the rental income goes straight to you.
- RealtyMogul
For something between Fundrise’s REITs and Roofstock’s single-family homes, we recommend checking out RealtyMogul.
Realty Mogul is a real estate crowdfunding platform that pools investors’ money to purchase large-ticket properties (office buildings, retail space, etc.). The minimum investment is $5,000.
Real estate investing is the best passive income idea!
3. Invest in the stock with Dividends
Although the stock market might have a steep learning curve and can be confusing, it’s a great way to build lasting wealth. A common mistake most people make with investment funds is thinking short term instead of playing the long game to reach financial goals.
The goal for investing in stocks is to diversify your portfolio and reduce risk. You can do this through investing in mutual funds, exchange-traded funds (ETFs), and high-dividend stocks that earn you income slowly over time. To start investing in the stock market, you need to open up a brokerage account at a quality financial institution and fund it.
4. Invest in stocks with Growth Potential
Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.
Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account.
The tricky part is choosing the right stocks.
For example, companies issuing a very high dividend may not be able to sustain it. Graves warns that too many novices jump into the market without thoroughly investigating the company issuing the stock. “You’ve got to investigate each company’s website and be comfortable with their financial statements,” Graves says. “You should spend two to three weeks investigating each company.”
That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks. ETFs also diversify your holdings, so if one company cuts its payout, it doesn’t affect the ETF’s price or dividend too much.
“ETFs are an ideal choice for novices because they are easy to understand, highly liquid, inexpensive and have far better potential returns because of far lower costs than mutual funds,” Graves says.
Another key risk is that stocks or ETFs can move down significantly in short periods of time, especially during times of uncertainty, as in 2020 when the coronavirus crisis shocked financial markets. Economic stress can also cause some companies to cut their dividends entirely, while diversified funds may feel less of a pinch.
5. Monetize a blog, YouTube channel or Podcast
Are you an expert on travel to Thailand? A maven of Minecraft? A sultan of swing dancing? Take your passion for a subject and turn it into a blog or a YouTube channel, using ads or sponsors to generate your income. Find a popular subject, even a small niche, and become an expert on it. At first, you’ll have to build out a suite of content and draw an audience, but it can create a steady income stream over time, as you become known for your engaging content.
You can leverage a free (or very low-cost) platform, then use your great content to build a following. The more unique your voice or area of interest, the better for you to become “the” person to follow. Then draw sponsors to you.
You’ll have to build out content at the start and then create ongoing content, which can take time. And you’ll need to be really passionate about the product, since that can help you maintain the motivation to continue, especially at the start as your followers are still finding you.
The real downside here is that you can outlay a bunch of your time and resources, with little to show for it, if there’s limited interest in your subject or niche. Your area of expertise may be too niche to really draw a profitable audience, but you won’t be sure of that until you experiment.
6. Refinance your Mortgage
Refinancing a mortgage means you get a new home loan to replace your existing one. If you can refinance into a loan that has a lower interest rate than you’re currently paying, you could save money on your monthly payment and interest you pay over the term of the loan. You might also be able to take advantage of a cash-out refinance, which allows you to tap into your home equity essentially as a lower-interest loan.
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan, or helps you build equity more quickly. When used carefully, it can also be a valuable tool for bringing debt under control. Before you refinance, take a careful look at your financial situation and ask yourself: How long do I plan to continue living in the house? How much money will I save by refinancing?
Again, keep in mind that refinancing costs 3% to 6% of the loan’s principal. It takes years to recoup that cost with the savings generated by a lower interest rate or a shorter term. So, if you are not planning to stay in the home for more than a few years, the cost of refinancing may negate any of the potential savings.
It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money, and eliminate their mortgage payment. Taking cash out of your equity when you refinance does not help to achieve any of those goals.
7. Rent Commercial Properties
Investing in rental properties is an effective way to earn passive income. But it often requires more work than people expect.
If you don’t take the time to learn how to make it a profitable venture, you could lose your investment and then some, says John H. Graves, an Accredited Investment Fiduciary (AIF) in the Los Angeles area and author of “The 7% Solution: You Can Afford a Comfortable Retirement.”
To earn passive income from rental properties, Graves says you must determine three things:
- How much return you want on the investment
- The property’s total costs and expenses
- The financial risks of owning the property
For example, if your goal is to earn $10,000 a year in rental cash flow and the property has a monthly mortgage of $2,000 and costs another $300 a month for taxes and other expenses, you’d have to charge $3,133 in monthly rent to reach your goal.
There are a few questions to consider: Is there a market for your property? What if you get a tenant who pays late or damages the property? What if you’re unable to rent out your property? Any of these factors could put a big dent in your passive income.
And economic downturns can pose challenges, too. You may suddenly have tenants who can no longer pay their rent, while you may still have a mortgage of your own to pay. Or you may not be able to rent the home out for as much as you could before, as incomes decline. And home prices have been rising quickly due in part to relatively low mortgage rates, so your rents may not be able to cover your expenses. You’ll want to weigh these risks and have contingency plans in place to protect yourself.
8. Rent your Home on Airnbnb, VRBO
If you’re interested in making money in real estate but want more of a hands-on approach, renting out your vacation home, house, apartment, or even a single room can be a stellar way to earn passively.
- Airbnb
Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels. Their site breaks rentals into three categories: private room, shared room, and the entire home.
Airbnb charges you 3% on every booking for their services, but you can set the nightly rate at whatever you want. People around the world are making impressive passive incomes through Airbnb.
- VRBO
With over 2 million rental properties, most of which are entire home rentals, VRBO has established itself as a legitimate service for renters and owners alike.
VRBO charges 5% per booking plus another 3% if the guest pays with a credit card. But again, you can set your own rate and easily make these fees worth their while.
- Vacasa
Vacasa is a vacation home rental management company. In other words, you can’t rent out a spare room in your house on Vacasa like you can on Airbnb, but have an extra home in a vacation destination?
Then Vacasa is a great option to make passive income, they do all the work for you.
Pro Tip: The key to your rental success is reviews. The more four and 5-stars you get, the more people will rent your space (and the more money you’ll make).
9. Rent Your Car, Boat, Truck, Tools and other Assets
It used to seem weird to rent out a spare room to a stranger or to stay in a stranger’s home when you go on vacation. Thanks to the likes of Airbnb and others, these sharing economy services have shown us it’s not so scary!
So let me ask – how do you feel about renting out your car?
Think about it. Rental car agencies (Enterprise, Avis, Budget, etc.) are awful to deal with and too expensive.
A company called Turo has disrupted the industry, just like Airbnb disrupted the hotel industry. People across the country are earning money from lending their cars out to strangers.
If you aren’t using your car for a couple of days, or if you have a spare one, simply join Turo’s free platform, list the car, and charge whatever you want for the day.
10. Rent Residential Properties
Despite the different ways to invest in real estate, many investors choose rental houses. They are easy to find and finance, and almost everyone knows how a house ‘works.’
Let’s begin by taking a quick look at some of the key benefits of renting residential houses:
- Passive income from monthly net cash flow
- Property appreciation over the long term
- Easy to finance using OPM
- Good for remote real estate investing
- Tax benefits unique to real estate
- Low correlation with the stock market
Although renting houses may be one of the more popular ways to make money in real estate, there are other options as well:
- Small multifamily dwellings including duplexes and triplexes
- Real estate investment trust (REIT) or real estate stocks
- Crowdfunding
- Short-term vacation rental properties like Airbnb or VRBO
- House-hacking by renting out a room in your home
- Fix and flip
- Wholesaling
- Commercial real estate
11. Sell e-books
Writing an e-book can be a good opportunity to take advantage of the low cost of publishing and even leverage the worldwide distribution of Amazon to get your book seen by potentially millions of would-be buyers. E-books can be relatively short, perhaps 30-50 pages, and can be relatively cheap to create, since they rely on your own expertise.
You’ll need to be an expert on a specific topic, but the topic could be niche and use some special skills or abilities that very few offer but that many readers need. You can quickly design the book on an online platform and then even test-market different titles and price points.
But just like with designing a course, a lot of the value comes when you add more e-books to the mix, drawing in more customers to your content.
An e-book can function not only to deliver good information and value to readers but also as a way to drive traffic to your other offerings, including audio or video courses, other e-books, a website or potentially higher-value seminars.
Your e-book has to be very strong to build up a following and then it helps if you have some way to market it, too, such as an existing website, a promotion on other relevant websites, appearances in the media or podcasts or something else. So you could put in a lot of work upfront and get very little back for your efforts, especially at first.
And while an e-book is nice, it will help if you write more and then even build a business around the book or make the book just one part of your business that strengthens the other parts. So your biggest risk is probably that you waste your time with little reward.
12. Sell Unneeded Assets Online
Most businesses will have unused assets on their premises they could turn into capital, but they simply get overlooked as they’re no longer used. Just because they’re not valuable to you, don’t underestimate their value to someone else. says Henry Spencer, sales director at BPI Auctions.
However, a word of caution from Spencer: “Make sure you are clear on terms and costs before agreeing to any sale. Work with transparent and cost-competitive outlets offering options to sell from your site with no fees on unsold goods. You can quickly eat away at any sale return if you get lumped with costs you didn’t expect.”
13. Invest in REITs, ETFs, Mutual Funds and Other Equities
A REIT is a real estate investment trust, which is a fancy name for a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.
You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.
Like dividend stocks, individual REITs can be riskier than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks — and you’ll still get a nice payout.
Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy — a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing. Like any stock, the price can fluctuate a lot in the short term.
REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most.
14. Invest in Crypto Currencies
Investing in several cryptocurrencies, or “staking crypto,” can be a great way to earn anywhere from 5% to 10% in passive income. You can think of it as earning interest on your savings, except with higher returns.
How do you get started? First, educate yourself on proof-of-stake cryptocurrencies and how you can get access to a crypto wallet. Then you’ll want to learn about the different coins you can choose from to make an educated decision on which to invest in. Once you’re ready, crypto exchanges like Kraken or Coinbase can be great places to buy crypto.
From there, it’s a matter of waiting to see the returns on your investments and checking them periodically. The more you educate yourself about the world of crypto, the better investment decisions you’ll make, and the greater your passive income stream will be.
Keep in mind that, just like any investment, staking crypto comes with its own set of risks. There’s also a lot of upfront time you’ll need to spend learning about your options so you can invest wisely.
15. Invest in Bonds
Because bond yields are low and short-term bonds pay next to nothing, locking up your cash in long-term bonds presents interest rate risk.
One of the best passive income investments is a bond ladder, which has appealed to individuals seeking more certainty with their money or in need of cash more than capital appreciation.
You can sit back and collect interest, which helps turn your capital into a more stable stream of income.
When the bonds with the shortest maturity date get fully repaid, or mature, by the issuer, you can extend the ladder by rolling that principal into a new set of bonds.
When constructing a bond ladder, the recommended approach to take is to invest in bonds of different lengths: 1-year, 3-year, 5-year, 7-year, 10-year and longer.
That way, in one year’s time, when the first bond matures, your bond ladder still holds bonds with two years, four years and six years left until maturity.
You can reinvest the proceeds from your current bond issue by buying more bonds that are due to mature in the next few years or you could switch your investments into long term bonds.
One way to manage the risk of buying bonds is to create a bond ladder, which includes creating short-term and long-term investment plans for your investments.
One risk in bond investing comes from having a bond mature and you wish to reinvest the proceeds in a bond paying a lower rate of interest.
Bonds come with other risks, too. Not all companies will be able to repay their debt. Credit rating agencies place grades on bonds based on the issuer’s ability to repay, allowing you to determine the likelihood of receiving the money you invest in bonds.
Treasury bonds represent a riskless form of investment because they come backed by the full faith and credit of the federal government. Corporate bonds, on the other hand, do not. So, you could lose your principal if the company defaults.
Because of this, you’ll want to diversify your bond holdings across many issuers as a way to eliminate the risk of any single bond issuer defaulting and crippling your portfolio.
One other risk to owning bonds comes from interest rate risk. If you own longer-term bonds in a rising interest rate environment, this will push down the value of your bonds as investors flock toward the newest, higher-yielding bonds.
These concerns push many investors toward bond ETFs and mutual funds because they provide a diversified fund of bonds useful for setting up into a bond ladder. This eliminates the risk of one series of bonds tanking your portfolio’s returns.
Consider bond funds through an automatic investing platform like M1 Finance. The service offers automated investing into a portfolio that keeps your portfolio balanced in alignment with your wishes.
Simply add money to your investment account and it’ll handle all the dirty work or rebalancing and reinvesting cash as it enters your account. All for free.
Consider opening a taxable investment account or even a retirement account like a Roth IRA on M1 Finance.
If you want to invest for your kids, you can even open a custodial Roth IRA for kids to get them started on their investing journey early.
16. Invest in a Business
If you don’t like the stock market, a better way to build passive income is to invest in tangible assets that you can see, understand and watch grow over time. Entrepreneurs are a special breed, and when you come across the right one with the right idea… there’s no doubt that money is in their future!
So how to jump on the bandwagon? It’s simple: Provide them with the funds they need in order to grow.
Often, investments in private businesses are reserved for “high net worth” individuals, but there are other ways you can invest in a business. Chances are you know a local business or two that could use some capital, help, or both. You can provide services such as social media consulting or operational consulting for a share of the cash flows of the business. If you have capital and meet certain qualifications, you can buy a percentage of the business.
17. Flip Properties
House flipping typically refers to buyers who purchase distressed properties, fix them up, and then resell them for a profit. They’ll typically find these properties via foreclosures, bank short sales or property auctions.
If you want to be successful in real estate flipping, then you need to be able to spend your money wisely and invest in undervalued properties. These are usually properties that require quite a bit of work.
From there, you’ll need to invest in renovations that will increase the resale value of the property and attract a potential buyer’s attention. Once the renovations are complete, you’ll need to list and market the property.
Potential to Make a Good Profit
The most obvious reason for flipping a house is to make money.
For companies and individuals that do this full-time, flipping homes is a lucrative business. Not only can you make significant returns on your investment, but you can do so relatively quickly given the right scenario.
Personal Development
Though it will take a lot of time and money, there is a lot of valuable experience to be gained from flipping a house.
Regularly purchasing homes and materials will help you develop your negotiating skills. The ability to delegate tasks, manage your time, and hold people accountable will translate to all kinds of businesses. Of course, you will also learn about construction and real estate.
Rehabbing Homes is Rewarding
Even if you’re only interested in flipping houses for the money, you will quickly learn that there are other rewards.
When you renovate and sell an old home, you’re giving it a new ‘lease’ on life. You’re taking what is often an eyesore and creating something new for a family to make memories in. You may also be improving the quality of life on the street and in the neighborhood where the house is located.
18. Eliminate or Reduce Debt
The less obvious way to increase your net worth is to reduce debt!
Mortgage Debt
If you haven’t yet refinanced your mortgage, it is another option to consider. If you can save 0.50% or more on your loan, you’re potentially adding tens of thousands of dollars back into your pocket. Not many investments can beat that.
Student Loan Debt
Don’t have a mortgage? Chances are good you have student loans, so be sure and refinance if you qualify. It could save you thousands in the long run! The math when paying down debt is simple – if your loan is currently at 7% and you refinance at 3%, that’s equivalent to a 4% return on your money!
Credit Card Debt
Credit card debt is slowly creeping up in America as consumers feel stretched at the end of the month. If you have credit card debt, we highly recommend implementing a strategy to pay it off as soon as possible.
19. Dropshipping – Start an e-store and use Third Party Order Fulfilment
Dropshipping is one of the best passive income ideas to earn money from wherever you are, even if you don’t have a lot of cash flow to begin with. Some dropshippers report making upward of $100,000 per year. Dropshipping is not a get-rich-quick scheme, however, as it takes some upfront investment of time in order to generate income.
The dropshipping business model involves creating an e-commerce store where customers browse and buy products. What’s interesting about dropshipping is that you don’t have to see or physically manage the products you sell.
With dropshipping, your supplier handles everything from manufacturing to packaging to fulfillment. And since you don’t need to send money to your supplier until your customers pay, this passive income business has limited cash risk.
Another risk you get to avoid is the one that comes with investing in a product that doesn’t have a market. You can use a platform like the DSers to find trending products in different niches to sell in your store.
Depending on the product you choose and your pricing, you can earn solid passive income and learn how to run an e-commerce business.
20. Design an Online Course
It’s easier than ever for educators to sell courses online. Whether it’s marketing, illustration, or entrepreneurship, you can create pre-recorded courses and start selling with a few limitations. Similar to digital products, you can sell online courses repeatedly without holding any inventory or stock, generating passive income.
Teaching online requires some upfront investment in time. You’ll need to outline your course, record it, and create downloadable assets like templates for students to walk away with.
Take Yegi Saryan, founder of Yegi Beauty, for example. After creating an online beauty brand selling eyelash extension products, she created an educational branch called Yegi Academy. Her lash classes help entrepreneurs around the world jumpstart their beauty careers, offering both online and on-site training.
Because your online course is recorded ahead of time, you can shorten, lengthen, or edit it to apply to a broad range of class sizes and experience levels, expanding your passive income streams. You can create fully downloadable courses that students can finish at their own pace, or use software to automatically release lectures and materials at regular intervals.
Whichever way you look at it, teaching an online course is a great way to generate passive income at a low startup cost, other than an investment of time.
21. Buy and Sell Website Domains
Did you know that you can trade website domain names like stocks on the stock market? As trends change, demand rises for different topics and their related keywords.
You can use domain registrar services like NameCheap or GoDaddy to search for and purchase domains in the hopes of selling them for a later profit.
Check out this story about a friend who turned DOWN a $45,000 offer for one of his domains! He estimates that he’s made more than $50,000 trading
22. Buy a Business
In business, cash is king. In addition to providing financial stability, investing can help you meet your obligations, grow your business, and much more.
For many businesses, the business itself provides a significant cash flow or investment potential that can be reinvested back into the company or used for personal means.
It is not every business that needs to be high-octane in order to provide solid investment returns for the owner.
In fact, Richard Ruback and Royce Yudkoff teach a class at Harvard Business School which promotes the idea of buying an existing small business for the right price and running it yourself as CEO.
In many business schools, students are taught to become managers in existing companies and drive them to even greater success.
These professors suggest going the opposite route. Instead of starting with a large investment, start small by purchasing an existing business and managing it toward financial gain.
Established businesses, usually ones that are already in operation and have loyal customer bases, present an opportunity to generate passive income.
If done well, you can generate cash flow freely and either grow the business further or pay yourself a handsome salary from your profits.
Some common examples include:
- Car washes
- Laundromats
- Pest removal services
- Specialty cafes and bistros
- Commercial building window-washing businesses
- Private ambulance services
- Medical testing clinics
- Chemical supply businesses
- Electrical utility equipment supply businesses
- Pool repair and supply businesses
- Boat and RV storage facilities
23. Become an Angel Investor
Today, getting started investing in historically inaccessible business opportunities is absolutely possible. Platforms like Mainvest.com make it easy to invest passively with a $100 initial investment without any of the investor fees.
The returns? As with any investment, it depends. But Mainvest aims to earn you anywhere from 10% to 25%. You don’t even have to vet the businesses yourself. Mainvest takes care of the vetting process for you. You simply invest the capital to get started.
As a passive income idea, this is a great, safe way to step into the business investment world and learn as you go.
24. Become a Tutor, Trainer or Coach
A tutor is basically a private teaching coach who helps a student with a specific learning concept or subject. Most tutors have niche subjects and age groups they work with so they can effectively market their talents and reach their core clients.
Although most tutors have a background in education it is not a prerequisite for the position. The key requirements are an ability to effectively convey knowledge and a complete knowledge of their subject matter. Tutors traditionally work face-to-face with their clients but may utilize live chats, emails, or video conferences if meeting in person is not convenient.
Step 1: Earn your Bachelor’s degree
A degree in education or a specific subject such as mathematics will demonstrate you have a well-rounded education. An education degree will give you valuable teaching skills; if you choose a specific subject you should strive to add teaching courses to your curriculum.
Because many tutors are self-employed, you should also consider taking basic business courses so you can run your business efficiently. If possible, consider tutoring other students while you’re in school, as this will give you valuable experience as well as references to showcase your tutoring abilities.
Step 2: Become an expert in your field
Although many tutors work with several subjects you should find a niche and expand on it. For example, many tutors are in demand to help coach high school students with the SAT; likewise, the GRE often presents a challenge for college students wishing to pursue their graduate degree.
If math is your forte, you should focus on advanced courses, such as calculus and statistics, that many struggle with. Look at the areas where tutoring is in demand and you will most likely find a need you can fill.
Step 3: Complete tutor training
Look for a reputable tutoring association and complete the basic training requirements. This will give you the ability to share your knowledge in a proven format and will help you adapt to different learning requirements you may encounter with future students. You’ll learn to tutor in different formats, tutoring software, how to communicate with parents, and gain access to a support system as well as a network of other tutors.
A tutor training course will also give you credibility when you enter the field, as your clients will know you have the ability to teach what you know.
Step 4: Become certified and licensed
Many states require tutors working within the public-school system to be certified or licensed, so check the requirements for the state you live in. It’s an excellent plan to become certified even if you don’t plan to work with the school system because certification will show you have measurable expertise in the tutoring field.
Read Also: Can a Student on an F-1 Visa Earn Money From Youtube?
If there are no state requirement guidelines, you can earn certification through a national tutoring association such as the American Tutoring Association, the National Tutoring Association, or the Association for Tutoring Professionals.
Step 5: Set up a business system
Many tutors are self-employed, so you should be prepared to set up your own scheduling system, as well as a bookkeeping system to invoice clients and track your income and tax payments. As a tutor, you’ll be required to provide progress reports and test results, and you’ll need to be able to access your information quickly and efficiently.
You’ll need dedicated folders and files on your computer as well as an organized file for hard copies of paperwork. Membership in a professional organization will give you access to proven business strategies for tutors.
Step 6: Advertise for clients
Marketing will be important as you launch your business, so plan an advertising campaign to reach your niche market. Consider job boards, posting informational flyers on community boards, social media, and using your personal network to spread the word about your business. Consider signing up with an online tutoring agency if you don’t have time to market yourself but be aware they charge a percentage of your tutoring commission.
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