I can only guess what you’re thinking. Here we go, Nick’s come up with some dodgy money making schemes. You know, the type you find when surfing the more unsavoury areas of the net. Well. Rest assured there’s no dodgy money making schemes here. You really can make money while you sleep. And no, you don’t really need to be sleeping. These aren’t crazy science experiments where you need to sleep in a lab for a few side hustle dollars. No, no. What I’m talking about here is passive income. Passive income is money you earn through little or no effort. Make money with little or no effort. What is this sorcery? All our lives you and I been taught that hard work pays, yes? So how is it that passive income can go against this conventional thinking. The one part that’s not commonly taught when defining passive income is that earning passive income does require some effort, at least upfront. The great thing about it though is once you have a passive income stream set up, it normally requires little or no effort but will keep bringing in those dollars. So without further adieu, here are 9 ways you can make money whilst sleeping. #1 Invest in Stocks/Shares When you buy stocks you benefit from the increase in value of the company and the dividend income stream. I’m going to focus on dividend’s here as they’re more closely related to income. A dividend is basically your share of the company’s profits. You don’t actually play a role in managing the company, you’re just a part owner, but nevertheless you still get paid your share! The company pays people to manage the company, which comes out of the possible profits. The good thing about this is that the company is effectively self managed all you have to do is collect the dividend cheques, and take naps as necessary. A good way to look stocks when investing for dividends is to look at historical dividend yield. Dividend yield is a financial ratio, which is measured as a company’s dividend payment divided by the current share price. A higher number is better and indicates that a company pays a higher dividend for every dollar you have invested in their company. ccording to the AFR Share Tables, the average dividend yield on 200 of the largest Australian companies was approximately 5.5%. This means that for every $1000 invested you would earn $55. #2 Buy a Rental Property Buying an investment property can be a great way to make money while you sleep. You benefit from earning passive rental income from the tenants as well as having the value of your property grow. According to Property Observer the average rental yield on Australian rentals was 3.7% for houses and 4.5% for units. Not too shabby eh? When buying a rental property one of the main things to consider is whether the average rental income will exceed your loan and interest repayments. If it does it means that your rental property is cash flow positive. When a rental property is cash flow positive it means that the rental income you make from it is higher than the loan costs. This is not always the case, some investors rely on the property growing in value rather than earning an income in order to earn a decent return on investment. A good way to see if a rental property is likely to be cash flow positive is to look at average rent prices for similar properties in the area. You can get this data from your real estate agent or by searching for similar places to rent online. This should give you a feel for the income you’re likely to get from your rental property. If the income is higher than the loan costs it’s likely that the property will be cash flow positive and that you can have a snooze whilst raking in the rental dollars. #3 Earn Royalties Able to shred a guitar? Write a love story maybe? You can make passive income from these skills by receiving royalties. Not to be confused with Her Majesty, a royalty is a payment you receive for someone using your work or creative assets. It’s a common form of payment for musicians, actors and authors. They get paid an ongoing sum of money as people listen to their music, watch their movies or buy their books. You can do it too. There are a number of ways for you to earn royalties. Fancy yourself an upcoming YouTube star, upload your videos and get paid for impressions and ads. If you’re more of a non-video person you can also sell digital products online through websites like Shopify and FetchApp. If you’re a little more like me and not exactly musically gifted you can always buy the rights to royalties from other people. This means that owner sells you the right to collect their royalties for a fixed sum of money. You can find royalties for sale on Royalty Exchange. #4 Earn Interest This one’s pretty straightforward. If you’ve got money in the bank, make sure you’re earning interest on it by putting it into a savings account or term deposit. Easy sleeping money. #5 Lend Money Through P2P lending Peer-to-peer lending is like the Uber of the banking world. It allows you to earn interest by lending money to other people. This is effectively what banks do with your deposits; they lend the money on to someone else and charge a margin. P2P lending allows you to earn higher interest on your money by dealing directly with the borrowers. The interest rates on loans vary depending on the creditworthiness of the other parties and the length of the loan. Say for example you lend money to a pool of borrowers that have a good credit history and stable jobs. In this case the interest you earn is likely to be lower than if you loaned money to a pool of borrowers that had bad credit history. You can get into P2P lending through sites like SocietyOne and RateSetter. If you’re in the states, check out Prosper and Lending Club. #6 Start A Blog My personal favourite. If mum, dad or your friends ever told you that there’s no money in blogging. They were wrong. Very wrong. Online Income Teacher reported some of the highest earning blogs, in top spot was The Huffington post at an almighty $29,896 daily income. Chances are we’re not all going to be able to create the next Huffington Post, but having a look at some of the other blogs on the list there’s definitely potential in this area. What’s more is that there are definitely other blogs out there earning the same if not more than some of the bloggers on this list. Starting a blog isn’t that hard, in fact you can do it in four minutes. What you should know though is that it takes hard work and effort to product a successful blog. However once you’re there every now and then you can nod off knowing that your blog is earning passive income. #7 Drop Ship I always remember reading posts about people making ridiculous amounts of money by selling their old junk. But what happens when you don’t have old junk to sell? The answer is drop shipping. Drop shipping allows you to sell a wholesaler’s products without taking ownership of them first. You act as a middleman between the customer and the wholesaler. The key to succeeding is making sure you negotiate ‘true’ wholesale prices from the supplier and making sure that you can generate enough sales to earn a decent profit. Once you’ve established a decent amount of traffic to your site you can start automating the processes and let the passive income roll in. Give yourself a head start by hosting your store on shopify. They’ve got a large number of sellers who are already successful drop shippers. #8 Earn Commissions Through Affiliate Marketing This is similar to drop shipping in that your goal is to sell another parties’ product. You earn passive income through your website by helping other companies sell their products. By doing this you earn a commission from the products that are sold as a result of customers coming from your site. The best way to pick affiliates is to look for companies that sell products that your audience or existing customers would benefit from. Reach out to them and find out how to become an affiliate. #9 Sell Products On Niche Sites Finding a niche that you can sell products to allows you to profit by being a specialist within a very small range of products. This could be a site that sells custom jewellery boxes or baseball pitching machines. The key to succeeding here is to pick a niche that you can be competitive in. Once you become dominant in that niche there’s no stopping the passive income. Check out Niche Site Duel to see the step-by-step process Pat Flynn used to build one of his hyper successful Niche Sites. So there you have it, 9 ways you can earn money while sleeping. The key thing to remember is that a large majority of the ideas here will earn you money as long as you’re willing to put in some effort upfront. Put in those hard yards and earn those dollars.