If I were to give you a list of the best passive income ideas would you be interested in? If the answer is yes, keep on reading.
Most people want to be able to make an income while they sleep. They want an income that is productive, but not necessarily something that will take all their time and energy.
This list of 15 ideas will help you get started with passive income or broaden your search if you are already receiving passive income.
What is passive income?
The simplest definition of passive income is “earning money with little effort.” Passive income is a bit of an income that flows to you without you having to exert a great deal of effort.
Instead, it comes to you without having to work hard and it continues to flow in after the initial effort.
Think of passive income as the money you make even when you’re asleep. While the definition is simple, generating passive income can be very complex and take a long time to set up.
Use this guide to consider various passive income ideas that best align with your business goals.
1. Invest in real estate
Investing in real estate is one of the most popular ways to generate passive income. Investing in rental properties is certainly risky and requires a significant amount of capital.
But, it can be profitable if you know what you’re doing and have some accomplishments. Achieving financial freedom through real estate investing is many people’s desire. Yet, it’s also very difficult for many people to do on their own.
You have a variety of property types to choose from, including single-family homes and multi-unit buildings. Each has its own set of financial advantages and disadvantages.
To be successful in real estate investing, you must first understand the fundamentals of purchasing, selling, and managing properties.
Learn more: how to make money in real estate.
Social media influencers are individuals who use their social media channels to drive sales or brand awareness.
Becoming a social media influencer can be a great way for growing brands to connect with highly engaged audiences, and for you to make money from your passion.
Make money off your following by influencing companies! This is a great passive income idea because it’s simple to set up and doesn’t require much self-promotion.
If you already have a large following on social media, this type of income stream could be worth looking into.
3. Create and sell an online course or guide
If you have expertise in a certain area, like blogging, marketing, or even cooking, you can create an online course to sell directly to other people.
For example, if you have experience in making jewelry or you’ve been able to start your own successful business online but have gained a good amount of knowledge because of it, why not create an e-course that teaches others how to do those things?
This is probably one of the easiest ideas to work from home, especially for those who are just getting their feet wet in creating content.
Creating a course or guide can be extremely helpful for your target audience, which leads to passive income when they take the action you want and buy your course!
Learn more: Best online course platforms
4. Rent your car
Need to make some extra money? Why don’t you profit from your car while you’re not using it? Nowadays, people travel a lot. Finally, there are new ways to earn money from their car by renting it out to other people who need one.
People who do this are becoming side business gurus because of the increasing demand for cars and the growing popularity of “sharing economy” developments. Renting out your car can be an amazingly lucrative side hustle that allows you to make money with little effort.
Also, this is another great way to earn money from home if you live in a city or college town where people are always looking for ways to get around. The key is getting the word out, so put up flyers at local businesses and campuses announcing your new business venture.
5. Sell your photos
Selling photos online is another passive income idea. You never know where your photography hobby can take you. Uploading your pictures to a stock photo website or blog and selling them is a great way to earn passive income.
There are millions of people on the internet with cameras, and many of them are looking for royalty-free stock photography. You can get started by spending a few dollars on a cheap digital camera and uploading your own images to sites like iStockPhoto or Shutterstock.
Each image you upload will attract hundreds, and maybe thousands, of potential customers. You don’t have to be a professional photographer—you don’t even have to be that great at taking pictures.
Learn more: how to make money with photography.
6. Dropshipping
Dropshipping is the ability to sell products without ever seeing the product you are selling. It has become a huge boom in recent years because of how effective it is.
This method of business involves selling a product without holding any stock. You are simply the middleman who possesses no inventory.
Thus, it’s easily scalable and you do not have to spend money upfront. Also, your online store can be created within just two hours. Also, there are even many millionaire entrepreneurs that have made a lot of money using dropshipping.
Yet, to understand how it works you need to know about affiliate marketing first. You must sign up for an e-commerce website like Shopify and select a theme depending on your niche.
For example, if you sell video game accessories, pick a gaming shop template and go on, creating your inventory from the wide range of products available in the store such as Nintendo, Sony, and Xbox games and accessories.
7. Start a blog and monetize it
The Internet has given rise to a variety of ways to make money. Blogging is one of them. A blog is an extremely simple, easy-to-run Internet business. You can launch your own website, sell your own products and also promote affiliate goods or products.
A blog can be a fantastic passive income idea. It takes a lot of work to get one going, but once you do, you’re sitting on top of a money-making machine.
When it comes to blogging just be sure to choose a category that will have enough interest and enough content for you to generate income on.
Furthermore, you can monetize your blog through advertisements, generating affiliate links to e-books, or other internet sales deals. You can also charge for e-content, depending on your tastes and needs.
8. Become a silent business partner
Have you ever wished to start a business but didn’t because of the time, money, and dedication that it seems to take? Well, there is an alternative if you want to make a little passive income without losing your day job… Silent business partner.
Being a silent business partner is one of the best passive income ideas. This way you do not have to put in any work or make any effort. Moreover, it does not require any investment at all, and you just get paid for doing nothing but agreeing to be a silent partner.
The entrepreneur gets help with the work, while you receive a share of the profits. Partners invest their own capital and share risks and rewards. Typically, the effort you put into the partnership does not significantly affect your share of the profit.
9. Use money-making websites or apps
Over the last decade, there has been a surge of interest in making money online. There are literally thousands of websites that aim to help you do this.
Money-making websites or apps are one of the best passive income streams. You don’t have to worry about customer service, theft, shipping the product, or doing it yourself. It can run on its own and make you money all by itself.
Many websites and apps can help you make money. If you’re crafty and have an eye for detail, you could get paid to do something as simple as taking photos of items in your home or neighborhood for a virtual market.
Once you know what you are interested in, explore a few of the popular money-making websites for that niche. What’s more, many of these sites will pay you in points or rewards that you can cash out from your account.
10. Podcasting
Podcasting has taken off over the past few years, it not only continues to dominate in the podcasting world but also has seen a surge in popularity. People are listening to podcasts on all different kinds of devices.
Therefore, this could be the ultimate passive income venture for you if you have a successful podcast hosting business. To make money from podcasting, you must first create great content that makes people want to listen.
It can be an interview show or even something like an informative how-to podcast. It will be your job to get celebrities and other public figures on your show.
Learn more: How to start a podcast.
11. Invest in mortgage notes
If you already have a house, there are some things you can do to increase your passive income by investing in mortgage notes. The largest asset-based companies in the world are those that deal in a variety of mortgages.
Making money from collecting mortgage payments is one of the many passive income ideas that many people don’t think about, and indeed, it’s a very profitable business! The “pay off” on a mortgage note comes from the monthly mortgage payments made by the borrower.
Since these payments are fixed on a monthly basis, the most important factors in determining return are the interest rate, length of a note, and property value. Whether you invest in residential or commercial mortgages, notes are an excellent way to add steady income to your portfolio.
This option for making passive income has to do with something that you may not have thought of before. Selling or sharing assets including but not limited to your car, boat, and even houses can be an incredible way to bring in some extra income while doing very little work.
Of course, you are leaving a bunch of money on the table if you never sell these things, but when was the last time you really used your car or boat? If you need some extra cash and never use it, why don’t you consider sharing your home or selling it during the next real estate collapse?
You can make a lot of money from the things you own. Whether your car seat has seen better days or you want to share the fruits of your labors with others, it’s possible to turn your things into cash.
13. Rent out your garage or attic
Space you don’t use can be a great source of income. Especially if you live in an expensive city like San Francisco or New York. Look into renting out your garage or attic space for extra cash.
This is a very popular method of creating passive income. You rent out or loan out your garage or attic to those who need it for storage. This way, you’re able to earn rental income from your unused living space.
But, be sure that the city laws regarding the rental property are strictly adhered to. Often they have restrictions on how long you can rent the space. So, it’s good to check and see how long you can do this before renting out a room in your home.
14. Peer-to-peer lending (P2P)
P2P lending is a way to earn passive income by lending your money to borrowers who typically don’t qualify for traditional financing.
It is the process of lending money to other individuals or businesses through online services that match those seeking funds with those that have funds to lend.
In its most basic form, a peer-to-peer loan works when one individual wants to borrow money from another individual—think “lend a buck to your neighbor” or “I’ll give you $25 if you pay me $10 next week.”
Furthermore, with the advent of the internet, peer-to-peer lending platforms have made it possible for investors to help out family and friends who need a hand with their finances.
Peer-to-peer lending platforms are set up to connect those that have money to lend to those that need money. Instead of interest, you generally earn a percentage of the principal loaned—a lucrative business model.
15. Rent out useful household items
Everyone has some sort of useful household item that they no longer need, whether it is an old baby swing or a playpen to keep toddlers from running underfoot.
Renting out useful items that you’re not using can be a great way to make passive income. You can rent out useful household items to make some extra cash.
While many people rent out their spare bedrooms, others have found ways to rent out other assets, like tools, toys, and even crafts.
Besides, you can also start a business renting household items to people who may not trust Craigslist or other online marketplaces.
The idea of earning money renting things that you already own sounds too good to be true, but it can easily be done. It doesn’t take much time.
You don’t have to engage in a lot of work to do it, either. Simply rent out your stuff and use the money you make as income to purchase more things to make even more money.
3 tips to start building passive income
Assess your skills, time, money, and effort
To start your passive income journey, first, you need to assess what resources you have available. Consider the following questions:
- What are your abilities and strengths?
- Can you commit time and effort to create a business or stream of income?
- Do you have money to invest?
- What do you like doing and what do you have knowledge of?
The worst thing you can do at this stage is rush into an idea without really knowing what it would take to accomplish it.
If you get started but realize later that it will be almost impossible for you to reach your goals, then you’ve wasted your precious time on a fruitless project.
Be realistic about your commitments
Remember that before you can be successful in any endeavor, you need to be realistic about what you can commit to.
It doesn’t take a balanced budget and a surplus of leisure time to make passive income. It only takes an honest assessment of your abilities.
You might be surprised at how much money you’ll start making when you narrow your areas of focus and put your heart into it.
So, when the time comes to start investing your passive income, you need to look at your schedule and consider how you can make the best use of your time.
Don’t just pick a few passive income ideas and set to work on them in a random fashion. What you choose now will be with you for years to come, so choose well.
Do your research
Most of us agree there is nothing better than passive income when it comes to making money, whether it be online, via stocks, or real estate. Yet, not everyone knows how to start getting it.
To be able to generate the income you want from your passive sources, it is important to do your research. One of the things to do is to clearly define your income target and how much time you have before reaching it.
There are many possibilities to earn an income passively. Yet, you need to make sure they match with your current situation and have a plan of action.
Also, you can’t expect to only have one source of income and achieve financial freedom. You need multiple streams of income in order to achieve financial freedom.
FAQs
Should you have a passive income stream?
Yes, a passive income stream is an effective way to generate income.
When you are having a passive income stream it means that you will get paid while working on something else.
Starting one now greatly increases the value of your future life.
Why do you need multiple passive income streams?
Because each month you need a certain amount of money to maintain the same lifestyle you have right now. If your job fails, it will be very hard for you to make a living.
Therefore, if you have one passive income stream, and this source fails, you face a major problem.
It is always better to have multiple passive income streams because then if one source fails, you can turn to another source to generate income.
How much passive income can you earn?
There is no limit to how much passive income you can make. The more passive income streams you have the more money you will earn over a certain period of time.
The answer to this question is not a simple one – it completely depends on the approach. Many passive income experts say you can earn $1,000 a month or even more with these ideas.
Can passive income make you rich?
True. Especially if you define wealth as financial independence. The only means of achieving true financial independence is to create a passive income stream.
If I had to guess, I’d say that the majority of people who achieve financial independence do so through passive income.
That being said, before pursuing your money dreams, make sure you have a solid plan in place because there are always pitfalls in this pursuit.
Does passive income get taxed?
Yes, most of them do. It’s a fact you have to face. Just because it’s passive income doesn’t mean it gets tax-free.
Like ordinary income, passive income falls under the category of taxable income.
Conclusion
Everyone wants to know how to make more money with less effort. That is why the popularity of passive income ideas is skyrocketing.
Passive income is a stream of income earned with little effort after initial setup efforts have been completed.
In this article, I have compiled 15 of the best passive income ideas that can be used to bring in money while you sleep and take care of your core business.
Some of these ideas may seem to be common-sense ideas to many and some are indeed quite obvious. But, the simple fact is that people overlook them for various reasons.
Most of all, if you enjoy the topic and would like to start earning passive income today then make sure you take action on at least one or two of these 15 best passive income ideas.
