Posted by Lending Club :: April 30, 2008 @ 7:30 am

Most people earn the majority of their money through their primary job. To improve our cash flow each month, we can cut expenses or increase income. Just as we can only cut expenses to a limited degree, our jobs can only take us so far in trying to increase our income.

As you can imagine, working twice as hard at your job will not double your income. In fact, rising expectations likely mean that you’ll have to work harder just to keep your same level of pay. Salary increases tend to be largest, on a percentage basis, earliest in your career when you are paid a lower amount. Giving a 10% raise to a young worker making $30,000 a year is much easier for a company than giving a 10% raise to a seasoned employee making $100,000 a year. This means that as you become more valuable to your company, you’ll probably see your salary increase at a decreasing rate. Large raises are more likely to come as the result of promotion, a change in job title, or even moving to another company. While these are all possibilities, they too are limited in number and effect.

If you can’t count on your job to bring a surge to your income, where else can you look? Obviously taking on additional work or a second job is an option for some people, but you only have so many hours in the day. This leads to a search for passive income, i.e., money you bring in that isn’t directly tied to your labor. Even if you don’t realize it, you probably have some passive income already.

If your bank account pays interest, you have gotten a small taste of passive income. The bank pays you interest for keeping your money on deposit with them. There are much more elegant and profitable ways to earn passive income than earning interest, but it is probably the easiest.
Unfortunately, it doesn’t pay much at a bank. Even direct banking websites, which boast interest rates “8x the national average,” are only returning about 3%. Earning money without having to work for it has long been a method used by those who get ahead. While earning interest isn’t the only way to achieve passive income, it offers a great balance of simplicity and return.

There are some entrepreneurial ways you can boost your income stream without working too hard, although there is some effort required vs. sitting back and earning interest on your deposits. Examples include selling your books, CDs and DVDs on Amazon or Half.com (eBay’s fixed-price marketplace). You can also sell used clothing, jewelry and various household items at consignment shops in your local community. If nothing else, these are great ways to make money while you do your spring cleaning!