Are you interested in earning some extra income while investing minimal effort and time? It’s possible to earn a passive income using innovative strategies and ideas.

Here are 5 secrets to creating a passive income:

Look for Better Interest Rates on your Savings

If you have invested your money in deposits or savings accounts, you can increase your passive income by looking for more lucrative interest rates. In the consumer-centric UK market, customers can choose where they want to invest their hard-earned pounds and pence. You can use online interest rate comparison tools for an overview of UK bank interest rates.

Create CD Ladders for Higher Returns

CD stands for ‘Certificate of Deposit’. CD laddering is a financial strategy that is capable of generating higher returns on your investment. The concept involves breaking up your investment into smaller chunks and then purchasing different CDs. CD laddering combines the benefits of both long term as well as short-term CD investments. Speak to your personal banker or customer service executive for more information on CD laddering and its benefits.

Social Lending Networks or Peer-to-Peer Lending

This concept is also referred to as ‘lend-to-save’. Social lending means lending money to people/friends and earning interest from it. You can generate an impressive income with lending your money at attractive interest rates. There are reputed websites that connect prospective lenders and borrowers. You can register as a lender at a nominal fee, which is usually 1% of the lending amount. It’s important that you choose only trustworthy, established websites to work with.

Invest in Stocks that Pay Dividends

The UK has its own vibrant share market called the ‘FTSE’ (Financial Times Stock Exchange). UK residents can buy shares/stock of companies that are doing well. Companies pay their shareholders what they call a ‘dividend’. A dividend is a portion of the company’s profits. For example, if you own 300 shares of stock at XYZ, they might pay you a dividend of 0.25% which means that you will receive a cheque of £75 every quarter.

Affiliate Marketing

If you own a website or blog, you can earn money through affiliate marketing. Affiliate marketing means allowing other products and services to place links on your website. You can earn passive income every time a customer clicks the link or buys the product. You can work as an affiliate directly with a site such as Amazon or you could work through an ad network such as Affiliate Window who provide publishers with access to hundreds of potential sites with whom to become affiliated with.

Passive income has the potential to grow and yield high returns if done with adequate fore-planning and thought, and there are many ways to implement a passive income stream into your financial planning.

Are you generating a passive income stream yourself, or are you hoping to in the future? Share your experiences with us in the comments below?