3 Surprisingly Easy Ways to Earn Passive Income

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If you want to get your hands on extra money, a side hustle is a great way to go about that. But if you're a busy person with a full-time job and other responsibilities, it's not exactly easy to incorporate a side gig into your schedule.

The good news is that a second job isn't your only option for earning extra money. Here are three easy ways to get your hands on additional cash without having to lift a finger.

1. Put money into a savings account

The nice thing about savings accounts is that they allow you to access your money at any time without having to worry about penalties. And based on today's savings account rates, you have a solid opportunity to earn a nice amount of interest without having to do a thing.

Of course, in time, savings account rates might fall. At that point, you'll have to consider whether you should keep cash in savings beyond what you might need for your emergency fund. But for now, why not snag 4% or more on your money?

If you have $20,000 in a savings account with a 4% APY, that'll have you earning $67 per month. A side hustle could make you more money if you're willing to put in the time, but you may be in a place where a little bit of extra cash does the trick for you.

2. Open a CD

When you open a certificate of deposit (CD), you're guaranteed a specific interest rate on your money for the entire length of the CD term. And thanks to today's CD rates , you might easily score a 5% APY on your cash.

As is the case with savings account rates, CD rates are likely to fall over time. But right now, if you have $20,000 and you put it into a 12-month CD with a 5% APY, you're earning $83 per month. That's a nice boost to your cash flow.

That said, remember that when you open a CD, you're making a commitment. There can be penalties for cashing out a CD before it matures.

3. Invest in a brokerage account

Savings accounts and CDs are great for generating passive income on a short-term basis. But on a long-term basis, your best bet is to invest your money in a brokerage account.

Over the past 50 years, the stock market has rewarded investors with an average annual 10% return. Putting $20,000 into a stock portfolio for a year only isn't a good idea; that's not enough time to ride out any potential market downturns.

But if you put $20,000 into a stock portfolio over 10 years, you might grow it to about $52,000. That's a gain of $32,000 over 10 years, or $3,200 per year/$266 per month.

Plus, on top of the gains you might enjoy from a stock portfolio, you might also get paid dividends, depending on the companies you choose. Those are extra payments that'll hit your account (usually every quarter). You're free to cash out those dividends if you want the money, or you can reinvest it to grow your balance even more.

As you can see, it does take a fair amount of upfront money to generate a notable amount of passive income. But if you're sitting on some cash you can put to work, you might as well do so. It's certainly an easier path than taking on a side job that may not pay all that well.

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