Forget the Side Hustle: This 1 Trick Earned Me $1,000 Last Year
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I'm a big believer in side hustles -- mostly because they changed my life. Freelance writing started as a nights-and-weekends gig for me, and it eventually turned into a full-time career. That little "extra income project" ended up taking over my entire professional path.
But here's the truth I've learned along the way: earning more is only half the game. What you do with the money after you earn it is where the real freedom happens.
That's the part nobody teaches you early on… and it's the whole reason I no longer rely on side gigs to move my finances forward. I put my money to work for me.
Right now, the easiest passive-income move in personal finance is simply putting your savings in a higher-earning account. That's how I earned over $1,000 in interest last year.
The trick: let your money earn money
Passive income sounds like a gimmicky phrase. But it's really just regular money you've already saved, put into a smart place to slowly grow in the background.
And it comes in a bunch of different flavors. It might be the interest your cash savings earn in a high-yield account, the return from a short-term CD, dividends from low-cost index funds, or even the rewards that certain brokerage cash accounts pay out automatically.
My own setup is a simple mix of those pieces.
Right now, all my liquid cash lives at LendingClub in a LendingClub LevelUp Savings account, where I'm earning a solid 4.20% APY with $250+ in monthly deposits. This is how I'm on track to earn over $1,000 in interest for the year.
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LendingClub LevelUp Savings
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- Competitive APY
- No fees
- Easy ATM access
- Unlimited number of external transfers (up to daily transaction limits)
- Requires you to make monthly deposits to earn the best APY
- ACH outbound transfers limited to $10,000 per day for some accounts
- No branch access; online only
The LendingClub LevelUp Savings account has a lot to offer. At the top of the list is its high APY, though you must deposit monthly to earn the best rate. Next is zero account fees, a strong and straightforward perk. Finally, you get a free ATM card, which you can use to withdraw from thousands of ATMs nationwide. Interested? You can open an account with $0.
Most people overestimate the amount you need to save to make your money work for you. It's not millions -- you only need enough to let percentages actually do something.
A few examples:
- At 4.20% APY, $25,000 earns about $1,050 a year in a savings account.
- At 4.00%, a $25,000 certificate of deposit (CD) earns $1,000 a year.
- A stock portfolio with a 5% dividend yield needs $20,000 to generate $1,000.
That's the entire trick.
You might have to spend a few years saving aggressively, keeping your expenses tight, or running a side hustle while you're young and have the energy -- just like I did. But over time you'll hit a point where you can step off the hamster wheel and let your money take over the job.
Start small and build over time
Building passive income is a two-part journey:
- The earning stage, where you trade time for money.
- The compounding stage, where your money starts doing the work.
Most people get stuck in part one forever because they either never save enough to graduate into part two, or think it requires a ton of money to get started.
If you're sitting on even $1,000 right now, that's enough to put to work. Move it into a higher-earning account, let it start generating interest, then add to it whenever you can. Small deposits, automatic transfers, random windfalls -- it all stacks over time.
If you want your money to start pulling its weight, compare today's best high-yield savings accounts and make the switch.
Our Research Expert
Joel O’Leary is a full-time Personal Finance Writer at Motley Fool Money, covering credit cards, bank accounts, investing, mortgages, and other personal finance topics. Joel has been writing about personal finance since 2018, previously leading editorial content for the How To Money podcast and serving as a resident writer at Budgets Are Sexy. He bought his first rental property at age 18, funding the down payment with savings from his high school job at McDonald’s -- a testament to his lifelong passion for smart money decisions. His work aims to make personal finance accessible and actionable for everyday readers. When he’s not writing, Joel enjoys surfing and spending time with his family.