Are you ready to take your professional growth to the next level in 2024?
Whether you’re hoping to get a raise, clinch that promotion, or switch careers, the beginning of a new calendar year can be a great time to sit down and reflect on where you’ve been, where you want to go, and how you’re going to get there.
Why bother setting professional development goals? Without a specific direction in mind, it can be easy to fall back on what you’ve always done, or just take any opportunity that comes your way without thinking critically about what you want. This can leave you feeling unsatisfied and rudderless in your professional life.
Even if you’re just starting out, you have more agency over your work life than you might think. Setting clear and specific goals can set you on the right path, help you take control of your career, and lead you to the job you’ve always dreamed of.
To help unleash your full potential, here’s a look at four examples of career goals to consider for this year.
Get That Raise
When was the last time you got a pay increase? If it’s been longer than a year, it may be time to speak up. To build a case for a bump up in pay, consider doing some research into the going rates for your job in your area. If your compensation is below par, you can use this information as leverage for requesting an increase.
You can also increase your odds of getting a raise if you can effectively communicate your value to management. Rather than say you need more money, you might point out the hours and dollars you’ve saved the company, how you’ve improved productivity, or the additional responsibilities you’ve taken on since your last pay increase.
Asking for a raise isn’t easy, but you can do it. Even if the answer is no, you’ve started the conversation. This gives you the opportunity to ask what specific actions would be needed to merit a raise. If tight budgets are the issue, you might ask about a one-time bonus, either now or after a set time period.
The saying “it’s not what you know but who you know” has some truth to it. So in addition to polishing your professional skills, consider making 2024 the year you focus on expanding your professional community. You can build your network by attending networking events and connecting with other like-minded professionals via social media. You might also ask colleagues, friends, and family members to introduce you to contacts that may be a good professional fit.
Meeting professionals and keeping in contact with them can help you learn more about the industry, including job opportunities down the line. Individuals in your network may also be willing to serve as mentors and help you develop important career skills.
Climb the Ladder
Earning a promotion enables you to assume a more important role in your company, earn a higher salary, and gain a heightened sense of accomplishment. If your goal is to land one, start taking extra measures to become a prime candidate for your desired position. That might mean going above and beyond in your role, seeking out opportunities to get noticed, and demonstrating your leadership skills.
If you haven’t recently had a performance review with your manager, the new year is a great time to set one up. Let them know that you would like to discuss your career path, and come prepared with data on what you’ve accomplished and a clear ask on where you’d like to go next.
Recognize that while you may not get what you’re asking for tomorrow, you’re taking an important first step in the process. This meeting will allow you to get clear on what you’d need to do to earn a promotion, and discuss a timeline for next steps.
Not getting any traction on a pay bump or promotion? This might be the year to pursue a more challenging role at a different company. If you’re ready to move on (and, ideally, up), start scoping LinkedIn and networking with recruiters or HR representatives in your field.
Not happy with your current career? Pursuing an entirely different career path might be your main professional goal. You could find greater satisfaction and happiness in a new career, as well as a higher salary and more opportunities. Consider what your ideal career is and how you can reach it from your current job. What challenges seem exciting to you? What are you well-prepared to do, and what would you rather avoid? What other experiences can you draw on as examples of your skill set — for example, previous jobs, volunteer work, side hustles? Reach out to professional connections you have in other industries to determine whether they might be a good fit for you.
Whatever your professional objective for the coming year, here are some steps that can help you get there.
• Write down your goal and steps involved. It’s important to get your goal out of your head and down on paper. In addition, think through and list out the steps you’ll need to achieve it. This will help you remember and accomplish each step. Post your list where you will see it often.
• Set deadlines. Turn “some day” into a specific day by setting deadlines for each step in your plan. Deadlines will keep you on your toes, and give you a sense of accomplishment as you meet your targets.
• Reward yourself. Taking steps toward your career goals requires hard work and commitment. Think of small rewards to give yourself when you complete any step to help you stay motivated and on task.
• Have a goal partner. Consider recruiting a friend or coworker to help you stick to your plan. Discuss your goals, and check in with them when you complete steps. If possible, do the same for your partner.
• Connect with a coach. If you’re feeling unsure about your career direction, a professional coach can be a big help. Coaches are skilled at asking impactful questions to help you reflect and build more self-awareness. A coaching experience can provide clarity on what’s important to you and empower you to set realistic, flexible career goals.
The Takeaway
Setting — and working towards — goals isn’t easy, especially when it comes to your career. But the process can really pay off, both literally and figuratively.
Creating clear professional objectives prompts you to think about what you want, so you can pursue a position or career that truly satisfies you. While you may not achieve your goal overnight, simply having professional goals can give your work direction and purpose — you have an action plan and are working towards something you really want to achieve in your life.
Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
The acronym “DINK” stands for “dual income, no kids,” and references a household in which two adults are working for an income (dual incomes) but do not have children (no kids), and as a result, fewer expenses. DINKs have become more common over the years as many young adults have opted not to have children, often due to the financial resources required to raise them.
What Does DINK Mean?
As noted, DINK is short for “dual income, no kids,” or “double income, no kids.” It refers to households where there are two active incomes and no children. The two incomes can either come from both partners or one partner having two incomes.
Some couples opt to wait longer before having kids, so they fall into the “DINKY” category, which stands for “dual income, no kids yet,” allowing them to save money.
💡 Quick Tip: Investment fees are assessed in different ways, including trading costs, account management fees, and possibly broker commissions. When you set up an investment account, be sure to get the exact breakdown of your “all-in costs” so you know what you’re paying.
The Significance of Dual Income, No Kids
Without the added expense of children, DINK couples might have more disposable income available for spending and investing. Marketing campaigns for luxury vacations, homes, and other high-end items often target DINK couples.
However, just because a household has two incomes doesn’t automatically mean they have more money – there’s always room for improving your financial life, after all.
There are some reasons why they may still struggle financially, including:
• Their two incomes are not very high
• They live in an expensive area
• They have spending habits that eat up a large portion of their income
Why Are More Couples Choosing the DINK Life?
One of the main reasons couples choose to wait or forgo having children is the financial cost, which can range well into the hundreds of thousands of dollars over the years.
Further, when the Great Recession hit in 2008, many Millennials were just graduating from college or starting their careers. That recession made it challenging to get jobs and begin investing for the future. On top of recovering from the recession, nearly half of Millenials and a third of Gen Xers have a significant amount of student loan debt.
These factors have made it difficult for young people to achieve financial milestones and start families earlier in life. However, there are some couples who choose to wait a few years before having kids after they get married for non-financial reasons. They prefer to use their time as a young couple to travel, make life plans, and enjoy an untethered lifestyle.
Types of DINKs
DINKs come in a variety of types, including new couples and empty-nesters.
New Couples
New couples can be newlyweds, or simply those living together in a single household who are not married. They may be young or older, too, and are still feeling out their relationship and planning out their next steps. Children may or may not be a part of those next steps, but for the time being, new couples are standing pat with double-incomes.
Empty Nesters
While empty nesters may be parents, they may be at the point in their lives where their children have grown up and moved out, no longer presenting a financial burden. With that, they have some significant space in their budgets unshackled, with which they can make different spending, saving, and investing decisions.
Same-sex Couples
While many same-sex couples do have children, many do not, and they might also fight into the DINK category.
Structuring a DINK Household
There are many costs associated with having children, including clothing, food, healthcare, and education. Partners who don’t have children might instead choose to splurge or save up for early retirement.
DINK couples with disposable income have many options for how to spend or invest their money. Some couples may choose to buy nice cars, while others may enjoy going out to eat. They also potentially have more free time to travel and spend money. In general, clothing, food, or travel that may have been too expensive for couples with children can be accessible for DINK couples.
A couple with no children likely won’t need as many bedrooms or as much space in terms of housing. They can either choose to save money by renting or buying a smaller place to live. They can also choose to use the extra space for other purposes, such as a home gym, art studio, or rent out a room for extra income.
Kids also take up a lot of time and have fairly rigid schedules. Some DINK couples may choose to take more time off for travel and leisure, while others might choose to work longer hours or find ways to earn supplemental income.
In addition to purchasing and leisure options, dual income couples may have the opportunity to invest their extra money. They might purchase stocks, bonds, real estate, or explore other opportunities.
They could also try and get by on a lower income, too – for some DINKs, one earning a salary of $40,000 is enough to make ends meet in certain circumstances, especially if the other partner earns more.
7 Financial Tips for DINKs
Learning about each other’s financial habits and goals is important so that couples can get on the same page, whether they’re planning to have children or not. It also helps to have productive conversations about finances.
Establishing open and honest communications before having kids may make things easier in the long run. There are some crucial areas for couples to work on if they want to live a successful DINK lifestyle or get their finances set up before having children:
1. Paying Off Debts
Before setting off on a lavish vacation, it’s wise for DINK couples to have a plan to pay off high-interest debts such as credit cards and student loans.
Without kids, home loans, and other monthly bills, couples may have more available funds to tackle their debt and. Once they’ve paid down the debt, they can use the extra money they’ve saved from monthly interest payments to invest or spend elsewhere.
2. Creating Sustainable Spending Habits
Whether a DINK couple is waiting to have kids or doesn’t ever plan on having them, practicing responsible spending habits is crucial for financial success. If a couple is always in debt, having kids probably won’t change that.
Similarly, not having kids could make it tempting to go out to eat or travel a lot. Having conversations about the type of lifestyle each person wants both now and over the long-term helps make day-to-day spending choices easier. Earning $100,000 is a good salary, but if you have bad spending habits, it may still not be enough.
3. Traveling Smart
Travel is a huge draw for many DINK couples, but it can quickly get expensive. If couples want to travel a lot, they might consider staying in less expensive places and skipping the luxury trips.
If luxury is important to a couple, they might think about only going on one big trip per year and taking advantage of points, credit cards, and other offers to maximize their ability to see the world.
4. Planning Ahead and Investing Early
The more couples can figure out what they want in life and get their finances organized, the easier it is to plan their finances. If they plan to have kids in the future, they might consider saving now for college and other child-related expenses that may come later.
Factoring in future raises, inheritances, and other additional income or expenses is also helpful. Even if couples don’t start with high incomes, the earlier they can start saving, the more their portfolio has time to grow.
5. Consolidating Stuff
Just as couples without kids may not need to live in a large home, they may not need as many things. DINK couples might choose only to have one car or bicycle. There might be other items that each person has been buying for themselves that could be shared.
6. Acquiring New Skills
Couples without kids may choose to invest some of their time and money into additional training and education. If they plan to have kids in the future, this might help them move up the career ladder or earn a larger salary when the kids do come.
7. Getting Wise About Taxes
DINK couples can make smart financial choices to minimize their taxes. Contributing to an HSA or putting pre-tax income into a 401K can help reduce the tax burden. Owning a home may also provide tax breaks to some homeowners.
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The Pros and Cons of a DINK Lifestyle
There is nothing dinky about the DINK lifestyle. Not having kids, or waiting to have kids presents a huge financial opportunity for many couples. However, if they aren’t smart about their savings and spending, couples may risk running into financial trouble.
Pros of Becoming a DINK Couple
• More free time and money to travel for work or pleasure.
• Ease of mobility — moving or traveling to a new house, city, or country is more manageable without kids.
• Disposable income to spend on cars, clothing, food, or other items.
• Ability to save money by living in a smaller house and not paying for children.
• Opportunity to save and invest extra income.
Cons to Remaining a DINK Couple
• Potential for overspending and splurging on travel and luxuries rather than saving and investing.
• DINK couples may be in a higher income bracket and have to pay more taxes.
• There may be less family support for caregiving as they age.
Planning for a Life Without Children
Life without kids might be an excellent decision for many couples. The extra free time and money can be used in many meaningful ways.
However, couples need to be on the same page about whether they want kids, and there are some things to keep in mind about a childless future.
Couples will need to figure out:
• How they’ll spend their retirement years
• Who will visit or take care of them when they’re older
• And who they will leave their money and assets to after they die
Saving up extra money for caregivers, retirement, and unforeseen circumstances can be an intelligent strategy for DINK couples. DINK couples must also make sure that they create an estate plan, so that their assets get distributed according to their wishes after they pass away.
Key Financial Baselines To Keep in Mind
When doing financial planning for the future, a few things are certain. Couples will have to pay taxes, and they’ll need food, shelter, and basic necessities. Beyond that, there are some baselines couples can look to as they plan for retirement, investing, home buying, and any kids they might plan to have.
The 4% Rule
Using the 4% rule, most couples will likely need to sock away more than $1 million for retirement, in order not to outlive their savings.
Home Costs
As of the fall of 2023, the average house costs nearly $500,000 in the U.S. — something to keep in mind.
Although these numbers may sound like a lot of money, couples with two incomes and no children can start saving some of their extra cash early and take advantage of compound interest over time. If they are savvy about their savings and spending, couples can potentially retire early and enjoy more free time for travel and personal pursuits.
Planning for the Ultimate DINK Lifestyle
To recap, “DINK” stands for dual income, no kids, and refers to households with two earners and no children. These households do not have the financial responsibilities associated with children, and thus, tend to have greater purchasing power than other families or households that do have kids.
Going kid-free has many upsides, but it’s important to be money smart, plan, and work together to create a prosperous and secure future. Couples who are planning to never have children or to wait to have them, often have more disposable income to put toward their financial goals, including investing.
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FAQ
What does the term DINKs refer to?
“DINKs” refers to households with two earners and no children. It’s an acronym that stands for “double income, no kids,” or “dual income, no kids.”
What are the benefits of dual income without kids?
The primary benefit of DINK households is that they do not have the financial responsibilities associated with raising children, and as a result, have more purchasing power or discretionary income. They may be able to save and invest more, accordingly.
What percentage of married couples don’t want kids?
While it’s hard to say exactly, a rough estimate would be that around 20%, or one out of five adults say they do not plan to, or want to have children.
About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
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With inflation and interest rates rising, many people are looking for ways to generate additional income these days — and finding reliable sources of passive income, which require less effort than most jobs — has become particularly desirable.
Creating and managing passive income streams isn’t a truly passive activity, however. Generating passive income usually requires upfront work, or sometimes a substantial investment to get the ball rolling. And depending on what your passive income ideas are, whether you’re renting out property or selling a product via online platforms, you’ll likely have ongoing tasks to keep the money coming in.
That said, passive income can in some cases deliver more income with less effort than a traditional job that requires a fixed number of hours per week.
Key Points
• Passive income is money earned without active involvement.
• High-interest savings accounts, investing in business, P2P lending, and rental properties are some ways to generate passive income.
• Benefits of passive income include extra money with less effort, freedom, and flexibility.
• Initial work and investments are often needed to set up a stream of passive income.
• The opposite of passive income is active income, which usually involves a job and is also known as earned income.
What Is Passive Income?
Passive income is money that you earn without active involvement. In other words, it is income that isn’t attached to an hourly wage or annual salary. Passive income ideas could include things like cash flow from rental properties, dividend stocks, sales of a product (that requires little or no effort), royalties, and more.
Essentially, these side hustles can help you earn money without contributing much, if any, active effort. If you are paid for a service you perform, that’s active income — you have to put in time and energy in order to get paid. If you can continue making money while staying mostly hands-off, that can be a form of passive income. That doesn’t mean you won’t have to put work in up front to get started — you probably will. But besides some maintenance, passive income shouldn’t require your active involvement.
There are obvious benefits to these low-effort side hustles over traditional active income. Earning more money without putting in more hours offers the opportunity to make extra cash without burning yourself out. If you’re successful enough, it might even give you the freedom and flexibility to quit your day job and do whatever you want instead, whether that’s going to school, traveling, writing, or making art.
39 Passive Income Ideas to Help You Make Money
There are a number of ways to earn passive income. Some options, like the following types of passive income, take relatively little active supervision.
A high-yield savings account (HYSA) is an alternative to traditional savings accounts, and they’re attracting more attention these days thanks to higher interest payments that might be 2% or more. By simply putting your money in the bank, you may be able to start to earn passive income on it. If you invest in an FDIC-insured account, the first $250,000 of your money is protected. There are both banks and online platforms which offer a high-yield savings account.
Savings accounts are generally appealing because they are a separate place to store money you don’t necessarily want to use on day-to-day expenses. For example, it could be a good place to save for emergencies, or even to save for a vacation or a move across the country.
When you find a high-interest savings account, take a look at the fine print. What conditions are attached for you to get that rate? The financial institution may require you to have a certain amount of money deposited into that account each month, maintain a certain balance or have your bills automatically deducted from it. You may need to use your debit card a predetermined number of times, as yet another example — or be limited in the number of transactions that can take place each month.
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2. Invest In a Business
Although this may take an up-front investment, buying into a business and becoming a silent partner can be another passive income source.
Even if the company you are thinking of investing in seems solid, it’s important to have an understanding of the challenges the organization may face. There are some red flags to look out for, such as a company whose revenue is earned from just a couple of clients — or just one client — as opposed to several.
It’s also important to lay out the exact terms of your investment and compensation.
3. Become a Peer-to-Peer (P2P) Lender
Peer-to-peer (P2P) lending platforms are another type of crowdfunding that allows people to borrow money from individual investors. Through these sites, you can be matched with an individual seeking a loan, and lend your money at a rate that could be higher than the usual bank rates.
That’s because investors taking part in peer-to-peer lending tend to bear the bulk of any risk. It is possible that borrowers will default on their loans, leading to a higher risk if an investor were to lend money with a lower credit rating, for example. Returns are never guaranteed and while investors will receive a return on the money they invest, they could also lose some or all of it in the long run.
Another popular passive income source is rental property. You might want to purchase a home to rent out to an ongoing tenant or list a property on a short-term rental site. Hiring a property management company lessens your day-to-day involvement, thereby making this venture a more passive income strategy than active.
Obviously, setting up this type of income requires a pretty big outlay, and it may be a while before your investment property generates a profit over and above the many expenses required to run it. In addition, there are always risks in the rental markets to keep in mind.
If you don’t have thousands of dollars to spend on a piece of property, you can always check out your options on crowdfunded real estate sites. These may require a smaller initial investment, and likewise the costs are also shared.
Crowdfunded real estate investments can be complex, however, and you’ll want to balance the risks and rewards.
6. Invest in Dividend Stocks
When companies choose to share a portion of their profits with the investors who own shares of the firm, those payments are called dividends, and they work generally the same way from company to company.
Typically, dividends are paid in cash (though some might be paid in stock), on a regular schedule. Dividends are usually paid quarterly, though there are variations.
Investors might receive dividends from companies they’re invested in, or from mutual funds they’re invested in that hold shares of dividend-paying companies.
There is no guarantee that investing in dividend stocks will continue to earn you passive income. As Liz Young Thomas, Head of Investment Strategy at SoFi, points out, “A stock’s dividend yield will fluctuate because it’s based on the stock’s price and prices can be volatile. You should also consider other factors like a company’s track record of increasing the dividend, the dividend payout ratio, debt load, and cash on hand when determining the overall health of an investment.”
If you’re just getting started with investing, you may want to use automated investing tools to help you choose the appropriate allocation of assets for your goals.
Typically, an automated platform — also called a robo-advisor — is a digital investing service that provides you with a questionnaire so you can establish your financial goals, risk preferences, and time horizon.
On the backend, a sophisticated algorithm then recommends a pre-set, automated portfolio that aligns with your responses. These portfolios often have lower account minimums compared with traditional brokers, and the portfolios themselves are typically comprised of low-cost exchange-traded funds (ETFs) — which adds to the cost efficiency of some robo products.
You can use a robo investing as you would any account — for retirement, as a taxable investment account, or even for your emergency fund — and you typically invest using automatic deposits or contributions. The allocation in each portfolio is usually pre-determined, and investors cannot change the investments.
Tools such as SoFi’s Automated Investing allow you to automatically invest each month and potentially grow your portfolio over time.
One way to earn income in a retirement account is by investing in mutual funds. You can choose the level of risk you want to take with your money by finding a mutual fund that is higher or lower risk.
When you join a company’s affiliate program, you earn a commission from every product that someone purchases from that company. All you have to do is post the link on your blog, website, or social media pages. Amazon Associates is a great place to start.
10. Rent Out Your Car
Another one of the best passive income opportunities is renting out your car on a site like Turo. It’s basically the Airbnb of cars, and, according to Turo, the average annual income for one car on the site is $10,516.
11. Advertise on Your Car
If you have a clean driving record as well as a newer car, consider getting in touch with a car advertising agency. You simply drive around town with ads on your car and easily generate passive income.
12. Rent Your Parking Space
Do you have space in your driveway that you aren’t using? Then rent it out on platforms like Stow It, where you can find people who will pay to rent out the space.
13. Rent Storage Space
If you have extra space in your garage, shed, or storage unit, then you could start earning passive income by using a peer-to-peer storage site like Stashii to find people who need your space.
14. Invest in Real Estate Investment Trusts (REITs)
An alternative to becoming a property owner or landlord are real estate investment trusts, or REITs. REITs are publicly traded companies on the stock market that own income-producing real estate. They give you the chance to invest in real estate portfolios. REITs sometimes come at a higher risk than other funds.
You might consider investing in a REIT that focuses on storage units. For example, one option is Public Storage, which has ownership or interest in 2,548 properties located in 38 states.
Perhaps you don’t have a car, but you do have a bike that’s just sitting around. Your bike could be a lucrative passive income source, especially if you live in a high-traffic area. List your bike on Spinlister to get started.
16. Airbnb or Rent Out a Room
Even if you don’t own an investment property, with your landlord’s permission, you may be able to rent out a room in your apartment or list it on Airbnb.
17. Pet Sit in Your Home
If you love pets, you can earn passive income by welcoming pets into your home while their owners are on vacation. For instance, you could charge $30 to $80 per day just for running a doggy daycare. You can gain clients through word of mouth or use a site like Rover to find customers.
18. House Sit for Someone
When your friends go out of town, they may need someone to stay in their home and do simple things like water their plants and collect their mail. You can easily make money and have somewhere new to stay for a little bit. Along with making yourself available to friends, you can sign up to be a house sitter on HouseSitter.com.
19. Buy and Sell Domain Names
Some domain names are cheap, while others cost a lot of money because they are in high demand. One thing you could do to start another passive income stream is to purchase domain names you think will be popular. Purchase low for around $10 to $100 and then sell them for a much higher price later on.
20. Rent Your Tools
Have you ever done a home improvement project that required you to purchase tools? You may never need to use those tools again. Thankfully, now you can rent tools, and rent out your tools, on peer-to-peer platforms such as Sparetoolz to earn passive income.
21. Invest in Royalties
Let’s say you don’t have any songwriting ability, but you would like to make money on other artists’ work. You can invest in royalties through Royalty Exchange and earn passive income on the intellectual property.
22. Purchase a Billboard
You can make thousands of dollars per month if you own a billboard where companies can advertise their products and services. Do your research and make sure you get the right permits before committing to a billboard.
23. Purchase a Blog
If you don’t have the time or energy to create content for your own blog, then look into ones that are already successful and see if the owners are willing to sell. You could also hire someone to manage your blog so that you’re truly earning in a passive way.
24. Create an Online Course
If you have a special skill or knowledge about a certain topic, you may be able to create a video course where you teach people about that topic and charge them to take the course.
25. Sell Digital Products
You may want to research online platforms where you can sell everything from digital art to e-books. Whether you’re an artist, graphic designer, or writer, you can create digital products to sell online.
26. License Your Photos
Many companies, bloggers, and individuals use stock photos on a regular basis. You may be able to upload your best photos to stock media platforms and earn passive income on them.
27. Create a Mobile App
If you’ve been dreaming about an amazing phone app that you think a lot of other people would use, you may want to look into hiring a development team to create it.
28. Sell a Product
You may be able to earn passive income through sales of a product that you create. This could be a book that you write or a physical product that you design and make. You might also list items you already own on sites like eBay and earn extra income through those sales.
29. License Your Music
Do you love to write songs? Then you could license your music and start earning passive income. You’ll just have to team up with a music licensing company to get started.
30. Self-Publish a Book
Through platforms like Amazon’s KDP, you can self-publish a book and earn a royalty on it every time someone makes a purchase. You will be able to set the price of your book and be in full control of your book’s Amazon page, where you can list pictures of the book, reviews, and videos promoting it.
31. Sell Blank Books
You can start selling books online without having to write anything. How? By focusing on blank books, such as journals, sketchbooks, and planners. Simply find a design you believe will appeal to people and begin collecting royalties when people buy your books.
32. Create Greeting Cards
Another artistic endeavor that could be a good passive income stream is creating greeting cards that you sell to a wholesale or retail stationery company that accepts independent artist submissions.
33. Sign Up for Dropshipping
If you want to sell products and make money online but don’t want to store any of the goods, you could always look into dropshipping to create passive income. With dropshipping, you don’t have to have much money to start since you don’t need inventory to fulfill orders for customers.
34. Start a Blog
Blogging seems like a pretty cool space to operate in and gives you a lot of creative freedom. You can make your blog all about crafts, share tutorials, ideas, and more. It’s up to you how your space operates.
Blogging might seem like too much work to many people, but it doesn’t have to be a full-time job for everyone. For some people, blogging can be fun after a day at the office — and, with time and effort, it could turn into something more lucrative.
Here are a few ideas on how you can make passive income from blogging:
• Affiliate marketing
• Google AdSense: Cost Per Click and Cost Per Impression
• Sponsored posts
• Selling products
35. Start a YouTube Channel
If you enjoy creating videos more than writing, then consider starting your own YouTube channel. Once you get enough viewers, you can begin to generate passive income through YouTube advertising.
36. Publish an Ebook
Like an online course, an ebook is a way to share your expertise with the world. Anyone can self-publish a book online through services like Amazon’s Kindle Direct Publishing, iBooks Author, or Kobo Writing Life.
The percentage of royalties you earn varies depending on the publisher. Of course, the more marketing you do, the more copies you’re likely to sell — and there’s no shortage of online marketing strategies to investigate. But once you write and publish the e-book, it’s out there ready to generate passive income for you.
37. Create a Podcast
Podcasts are still popular, and they can generate some passive income for you. If you start a podcast that resonates with people, then you can grow your audience and monetize your show by sponsoring with ad partners. If you get enough listeners, you may be able to sign up for podcast advertising networks.
38. Start an ATM Business
When people are out at a bar or nightclub or they’re frequenting a cash-only business, they may need cash right away. If you own an ATM business and you place your ATM in high-traffic locations, you could start to generate passive income through surcharge fees. Typically, you could earn around $3 per withdrawal.
39. Start a Vending Machine Business
Similar to an ATM business, a vending machine business allows you to use your creativity and determine high-traffic areas where you could make a lot of money. If you buy in bulk, you’ll be able to save on the snacks and drinks you purchase for your machines.
Potential Benefits of Earning Passive Income
There are only 24 hours in a day. If you go to a job each day that pays you a set amount of money, that is the maximum amount that you’ll ever make in a 24-hour period. That is called earned income.
By investing some of that earned income into different passive income ideas, you may be able to increase your earnings. Diversifying your income stream may also improve your financial security. Some benefits of passive income are:
• More Free Time: By earning money through passive income sources, you might be able to free time in your schedule. You may choose to spend more time with your family, pursue a creative project or new business idea, or travel the world.
• Financial Security: Even if you still plan to keep your 9-to-5 job, having multiple sources of income could help increase your financial security. If you lose your job, become sick, or get injured, you may still have money coming in to cover expenses. This is especially important if you are supporting a family.
• Tax Benefits: You may want certain legal protections for your personal assets or to qualify for tax breaks. Consulting with an attorney and/or tax advisor to explore setting up a formal business structure like a sole proprietorship, a limited liability company (LLC), or a corporation, for example, might help you decide if this is a good route for your particular situation.
• Location Flexibility: If you don’t have to go into an office each day, you’ll be free to move around and, possibly, live anywhere in the world. Many streams of passive income can be managed from your phone or laptop.
• Achieve Financial Independence: The definition of financial independence is having enough income to cover your expenses without having to actively work in order to cover living expenses. This could allow you to retire early and have more freedom to live your life the way you choose. Whether you’re interested in retiring early or not, passive income can be one way to help you reach financial independence.
• Pay Off Debt: Passive income may help you to supplement your income so that you will have the opportunity to pay off any debts more quickly.
Potential Downsides of Earning Passive Income
Although it might sound like a dream come true to quit your job and travel the world, earning through passive income is not quite that simple.
• Earning Passive Income Is Not a Passive Activity: Whether you’re generating passive income through a rental income, running a blog, or in another way, you will still need to put in some time and effort. It takes upfront investment to get these income sources up and running, and they don’t always work out as planned.
If, for example, you run an Airbnb, you have to maintain the property, ensure a high-quality experience for guests, and address any issues or concerns guests may have to secure positive reviews.
• Passive Income Requires Diversity: In order to earn enough passive income to quit your job and cover all your expenses, you would most likely need more than one source of income. Although you may no longer need to clock into a 9-to-5 job, you will likely still need to spend time managing multiple income streams.
• It’s Lonely at the Top: It might sound great to never have to go to the office again and to have the freedom to travel, but earning money through passive income can become lonely.
Not having anyone to talk to during the day might make you feel lonely, and if you aren’t self-motivated, you may find it difficult to stay on task if you need to manage your passive income streams.
• Getting Started May Require Investment: Depending on how you plan to create passive income, it may require an initial financial investment. You may need money for a down payment on an investment property, the development of a product you plan to sell, or for investment into dividend stocks.
Managing Passive Income Streams
No matter which type of passive income you choose to pursue, it’s important to keep track of your personal finances and both your short-term and long-term financial goals.
Tracking multiple sources of income in a monthly budget can be a complex task. To be profitable, it’s important to pay attention to how much money you put into the maintenance of your passive income stream(s), such as property upkeep or monthly online services.
SoFi is one option to simplify how you manage your income streams because it allows you to see all of your financial information in one place. In the app, you can keep track of your monthly income and create goals for your passive income, such as a home, vacation, or retirement, and automate your personal finances.
The Takeaway
Establishing passive income streams is one way to diversify your income and can help you build wealth and achieve financial freedom in the long term. There are a variety of ways to earn passive income, such as through investing, rental properties, and automated investing.
Some passive income sources require a financial commitment or upfront investment, such as purchasing a rental property, and others may require a time commitment. And passive income, of course, is rarely 100% passive. Often there is considerable time and effort that goes into setting up a passive income stream. And some sources of passive income (from investing, real estate, running a business or creative endeavor) require ongoing maintenance.
Once you’re earning passive income, you can think about where to put that money. Whether you’re able to generate a passive income stream from your investments, or that’s a goal of yours, consider opening an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds, and SoFi also offers an automated portfolio.
Opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
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Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
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Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Here’s the definition of disposable income: It’s the amount of money you have available to spend or save after your income taxes have been deducted.
You may also hear this sum of money called disposable earnings or disposable personal income (or DPI). Another interesting fact: Disposable income is carefully watched by economists because it is a valuable indicator of the economy’s health.
What’s more, as you may realize, disposable income is the basis of your own personal budget. It’s an indicator of your financial status as well as the foundation for deciding how to spend and save your cash.
Key Points
• Disposable income refers to the money available for spending or saving after income taxes have been deducted.
• It is an important indicator of an individual’s financial status and is used to determine how to allocate funds.
• Disposable income is different from discretionary income, which takes into account essential expenses.
• Calculating disposable income involves subtracting taxes and other mandatory deductions from gross earnings.
• Budgeting disposable income involves tracking spending, setting goals, and allocating funds for basic living expenses, discretionary spending, and saving/investing.
What Is Disposable Income?
Simply put, the disposable income definition is money you have left over from your earnings after taxes and any other mandatory charges are deducted.
This money (which may also be referred to as expendable income) can then be spent or saved as you see fit. You will likely use it for your basic living expenses, or the needs in your daily life, such as housing, utilities, food, transportation, healthcare, and minimum debt payments.
You may also spend that money on the wants in life, such as dining out, entertainment, travel, and non-vital purchases, such as a cool new watch or mountain bike.
Your disposable income can also be allocated towards your goals, such as saving for your child’s college education, the down payment on a house, and/or retirement.
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Why Disposable Income Is Important
There are different types of income, and disposable income is usually defined as the amount of money you keep after federal, state, and local taxes and other mandatory deductions are subtracted from gross earnings. Consider these details:
• Mandatory deductions include Social Security, state income tax, federal income tax, and state disability insurance.
• Voluntary deductions, such as health benefit deductions, 401(k) contributions, deductions for other employer-sponsored benefits, as well as any assignments of support (such as child support) are excluded from the calculation. These costs are considered part of your disposable earnings.
• Disposable income is an important number not just for consumers, but also the nation as a whole. The average disposable income of the country is used by analysts to measure consumer spending, payment ability, probable future savings, and the overall health of a nation’s economy.
• International economists use national measures of disposable income to compare economies of different countries.
On an individual level, your disposable income is also a key economic indicator because this is the actual amount of money you have to spend or save.
For example, if your salary is $60,000, you don’t actually have $60,000 to spend over the course of the year. Federal, state, and possibly other local taxes will be deducted, as will Social Security and Medicare taxes.
What is left over is what you would have to spend on everything else in your life, such as housing, transportation, food, health insurance and other necessities.
Of course, that doesn’t mean you should spend all of your disposable income. Another thing to consider is disposable vs. discretionary income. This will tell you actually how much money you have to play with.
Although they’re often confused with one another, disposable income is completely different from discretionary income.
While disposable income is your income minus only taxes, discretionary income takes into account the costs of both taxes and other essential expenses. Essential expenses include rent or mortgage payments, utilities, groceries, insurance, clothing, and more.
Discretionary income is what you can have leftover after the essentials are subtracted. This is what you can spend on nonessential or discretionary items.
Some costs that fall under the discretionary category are dining out, vacations, recreation, and luxury items, like jewelry. Although internet service and your cell phone may seem like necessities, these expenses are considered discretionary expenses.
Similarities
Both disposable and discretionary income are a way of looking at income after taxes.
However, discretionary income goes a step further and deducts essential expenses, such as housing and healthcare.
Differences
As you might expect, discretionary income is always less than disposable income. When you subtract discretionary income from disposable income, the amount that remains is how much you can put towards wants (fun spending) and savings.
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Calculating Disposable Income
Disposable income refers to the amount of earnings left over after mandatory federal, state and local deductions. But disposable income is not necessarily the same as your take-home pay.
Deductions from your paycheck may include additional items such as health insurance, retirement plan contributions, and health savings accounts. These deductions are voluntary, not mandatory.
To calculate your disposable earnings, you can simply subtract federal, state and local taxes, Medicare, and Social Security from your gross earnings. Be sure to include any passive income streams, such as rental income, or side hustle earnings (more on that in a moment), when doing the math for your gross income. The resulting amount is your disposable income.
Some of the finer points to note:
• You may want to keep in mind, however, that taxes deducted from your paycheck are an estimate. If you have a history of getting a large refund or having a large amount of taxes due, it may be worth reviewing your withholdings through your employer.
This could help you adjust the withholdings so it is closer to the actual expected tax that will be calculated when you file. You can then plan accordingly.
• Even if you’re a contractor or freelancer, or if you made additional income from side gigs along with your salary, you can still calculate your disposable income.
This requires subtracting your quarterly tax payments and any additional taxes you will owe from your overall income. You can then determine your monthly after-tax income.
Setting aside money to pay taxes can also help you budget with your disposable income.
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Disposable Income Budgeting
Calculating your disposable income is a key first step in preparing a budget. You need to know how much you have to spend in order to plan your monthly spending and saving.
A personal budget puts you in control of your disposable income and helps you make financial decisions. It forces you to take a closer look at how you’re spending your money.
Here are a few ideas that could be helpful when developing a budget based on disposable income.
Tracking Spending
Disposable income is what’s coming into your account every month. It’s a good idea to also determine what is going out each month.
To do this, you can gather up bank and credit card statements, as well as receipts, from the past three months or so, and then list all of your monthly spending (both essential and discretionary/nonessential).
To make this list more accurate, you may want to actually track your spending for a month. You can do this with a phone app (your bank’s app may include this function), by carrying a small notebook and jotting down everything you buy, or by saving all of your receipts and logging it later.
This can be an eye-opening exercise. Many of us have no idea how much we’re spending on the little things, like morning coffees, and how much they can add up to at the end of the month.
Once you see your spending laid out in black and white, you may find some easy ways to cut back, such as getting rid of subscriptions and streaming services that you rarely use, brewing coffee at home, cooking more and getting less take-out, or getting rid of a pricy gym membership and working out at home.
Setting Goals And Spending Targets
Tracking income and spending can provide a great starting point for setting financial goals and spending targets.
• Goals are things that a person aims for in the short- or long-term — like paying off student loans or buying a new car.
• Spending targets are how much you want to spend each month in general categories in order to have money left over to put towards your savings goals.
Since essential spending often can’t be adjusted, spending targets are typically for discretionary income.
One option for budgeting disposable income is the 50/30/20 plan. This suggests spending about 50% on necessities, 30% on discretionary items, and then putting aside 20% for savings and other long-term goals.
These percentages are general guidelines, however, and can be adjusted as needed based on individual circumstances. For example, if you live in a competitive housing area, rent may take up a larger portion of your expenses, and you may have to bump up necessity spending to 60% and decrease fun money to 20% instead.
Or, if you are saving for something in the near term, like a car or a wedding, you may want to temporarily bump up the savings category, and pull back unnecessary spending for a few months.
3 Uses for Your Disposable Income
Once you have calculated your disposable income, you can consider the ways you might divide it up:
Basic Living Expenses
Some of your disposable income will go towards necessities, such as:
• Housing
• Utilities
• Food
• Healthcare
• Transportation
• Insurance
• Minimum debt payments.
Discretionary Spending
Next, there are the wants in life. These are things that are not vital for survival but can certainly make things more enjoyable:
• Eating out
• Entertainment, such as streaming platforms, movies, concerts, and books
• Clothing that isn’t essential (like winter boots)
• Electronics, like the latest mobile phone
• Travel
• Gifts.
Saving and Investing
In addition to the spending outlined above, you will likely want to save money or invest it for your short-term and/or long-term goals. These may include:
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Disposable income is a key concept in budgeting, as it refers to the income that’s left over after you pay taxes. Knowing how much disposable income you have is the foundation for putting together a simple budget that allows for necessary expenses, having fun, while also saving for the future. Finding the right banking partner is another important element of planning for tomorrow.
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FAQ
What does disposable income mean?
Disposable income (or what may be known as disposable earnings) is the money you have left after taxes and other mandatory deductions are taken out of your income.
What is an example of disposable income?
An example of disposable income would be a $100,000 gross salary, minus $30,000 in taxes and $15,300 in Social Security and Medicare deductions. The remaining $54,700 is disposable income.
What is the difference between disposable income and discretionary income?
Disposable income refers to earnings minus taxes and mandatory deductions, such as Social Security and Medicare. Discretionary income is a subset of disposable income. It is the money left once you have paid for essentials, such as housing, utilities, food, and healthcare. The money that is left can be used for non-essential spending and for saving.
SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
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Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
