Do you have a job? If so, then you’re working for someone else. Passive income is the holy grail of financial freedom. It’s what sets people up for retirement without worry or stress. And it doesn’t require a lot of effort to start earning most of the time, either. This article explores 25 ideas that can help you create passive income streams with your spare time and money. Heck, maybe you’ll make enough to quit your job! If so, that’s awesome.
What is a Passive Income?
Passive income is defined as income you regularly receive, with little effort required to maintain it. It’s called “passive” because the money from passive income streams keeps coming in, even while you are sleeping or spending time doing things you enjoy. It’s very different from the active income you get from a day job or business that takes a lot of your time and work.
Best Passive Income Ideas
The best passive income ideas have two things in common. For one, they are easy to do, and two, they have a massive audience willing to pay for your product or service. Of course, some passive cash opportunities might require a great deal of time dedication to generate income. But that’s not bad news. You can start slow and work your way up the income ladder.
All of this has probably got you saying, “Where do I sign up?” If so, you want to check out our list below, which contains 25 passive income ideas. Some of these might be new, and others you’ve done before. But we are pretty sure at least a handful will make you think: “Hmmm … I hadn’t thought about that.”
In no particular order, here it goes …
1. Start a High Yield Savings Account
According to Bankrate, regular savings accounts offer 0.06 percent APY, which is the national average. Online banks like Ally have savings rate interests with an annual percentage yield that is currently at 0.50 percent. In addition, the interest payouts compound over time, so your earnings will grow even more.
2. Invest in the Stock Market
Investing in the stock market is an excellent way to earn passive income if you don’t mind taking risks with your cash. On the other hand, if you have less than 1000 dollars lying around, you can start slow—making it not THAT risky to invest. If the stock market seems like a big bad kitty cat you don’t want to mess with, you can take beginner courses at places like Coursera that show you the ropes of investing. As a bonus, many of these courses are free.
3. Utilize Real Estate Investment Trusts
A REIT is a fancy term for a real estate investment trust or company that operates, owns or finances income-producing real estate. They can be publicly traded on an exchange or privately held. What’s great about them is that you can invest in them just like any other stock. You don’t even need a lot of money to get started with REITs, either. If fractional share investing is available with publicly-traded REITs, the minimum to get started can fall under $5 or less.
4. Invest in Rental Properties
Upfront investment property is real estate purchased ‘upfront’ with the intent of earning a return either through future resale or rent. Adding a rental property to your investment portfolio can be a great source of passive income. You can buy rental properties, for example, and collect your rent income each month from tenants. Plus, your renters basically pay your mortgage payments, meaning your rental income is off the charts!
5. Sell Stock Photos
Shutterbugs unite! Taking great photos is not out of your reach if you have a decent camera and savvy editing skills. If these skills are already in your wheelhouse, why not turn them into a business model of selling your pics? Macrostock photography companies source their images almost entirely through the internet. You can get paid up to $300 for each photo downloaded by users, depending on the website.
6. Buy an ATM
It may not have occurred to you, but you can actually turn an ATM into a passive income stream. Some companies will let you buy and install an ATM in your home or business for around $5,000 to $15,000. Just make sure it’s legal where you live before buying or renting an ATM. There may be licensing requirements too. Once installed, there is no need to do anything else except collect the money.
7. Own Vending Machines
Entrepreneurship saw a surge during the pandemic. Vending machines were one of the bandwagons that solopreneurs hopped on to earn some residual income. So how much passive income can you expect if you are starting out? On average, one vending machine parked in a prime location can bring anywhere from $50 to $100 per month. That’s some nice extra cash. But multiply that by 100 vending machines in premium locations, and that’s around $1,000 per day!
8. Practice Peer to Peer Lending
This type of lending is quickly becoming one of the easiest ways to generate passive income. The process allows you to take out a loan from an investor instead of a traditional bank. You can expect returns to range in the 6-10 percent range, and that’s not bad. But, of course, with the higher returns comes a significantly higher risk too.
9. Get in on the Virtual Office Craze
Covid-19 shutdowns led to the rise of virtual offices, and companies in big cities have pretty much flooded the market—not so in the suburbs and small towns, where there are ample opportunities to rent a space and set it up with WIFI and equipment. Telecommuters wanting to escape from the distractions at home will flock to your place, making it one of the best passive income strategies on this list.
10. Sell Vintage Clothing Online
If you’re not afraid of the possibility that your vintage clothing could get damaged during shipping or might take longer than expected to sell (which is likely), then this low-risk passive income idea is for you. You can easily set up a shop on social media platforms like Facebook and Instagram, where you can share your pieces with people from all around the world. Even better, if something ends up being in high demand by local buyers, you might just be able to turn it into a pop-up store in your area.
11. Earn Cash Through a Money Making App
Money making apps are a fast-growing market and require little to no passive income investments. These apps typically allow ‘giggers’ and side hustlers to earn income from three sources: Watching videos, performing tasks and shopping online. With most of these money making apps, the more active your account is, the higher chance you have earned even more money.
12. Rent Out Extra Space in Your Home
Here’s another passive income idea for aspiring landlords. If you have unused space in your home, consider renting it out to tenants. This method can be a great way to make some extra money and build equity simultaneously. Of course, you’ll need to do your research to find the right tenant. However, you can also use Airbnb or any other online rental platform to find tenants for your space.
13. Sell Digital Products
Digital products range from online courses to art prints and embroidery patterns. The possibilities are endless as long as you have a product that people want to buy from the comfort of their phone or laptop without having to go anywhere else. So where do you sell your electronic wares? Online marketplaces like Amazon, Etsy, and eBay are great sources if you want to start on know how to sell digital products.
14. Start a Blog
Another great way to make passive revenue is by starting your own blog. It’ll require a little bit of upfront work, such as registering a domain name and setting up hosting. But it’s well worth it in the long run. Later, you can really get serious about monetizing your blog. Then, it’ll become a true source of passive revenue.
15. Affiliate Marketing
Affiliate marketing is another form of passive income idea that requires very little work from you. For the curious, an affiliate program is an advertising model in which a business compensates third-party publishers for generating leads and traffic to the business’s products and services. Affiliates do this by promoting other people’s products through social media marketing or email outreach campaigns.
16. Drop Ship
This is another business model that can be set up relatively easily and doesn’t require a lot of ongoing work from you. With drop shipping, you’ll partner with a supplier who will ship products directly to your customers on your behalf. All you need to do is create an account with a dropshipping platform like Oberlo and list the items that you want to sell.
17. Start Your Own Podcast
Another great way to make passive revenue is by starting your own podcast. You can talk about any topic you want, share your original thoughts and insights, and even sell advertising or digital products. You can download an app like Anchor to start recording your own podcast, or you can use free services like SoundCloud or Spreaker.
18. Become a Social Media Mogul
You don’t have to be famous to become a social media mogul. This could involve starting your own blog or YouTube channel, building up a large following on Twitter or Instagram, or even creating a popular Facebook group. Once you’ve established yourself as an authority in your field, you can start charging for sponsorships and advertising deals.
19. Rent Out Your Garage
One in 11 Americans shells out cash for extra storage space. That’s a lot, and it’s one reason the self-storage industry is booming. It’s a fairly simple business model for earning income too. All you need is a garage or storage unit that you can rent out. After that, you’ll be able to collect monthly payments from your tenants while you are sleeping or reading a book.
20. Publish an Ebook
One of the best ways of earning passive income is by publishing your own ebook. This can be a great way to share your knowledge and expertise with the world, and it can also be a lucrative source of revenue. You can self-publish on Amazon or through other platforms, or you can even create an online course based on your ebook content.
21. Use Crowdfunding Platforms
Crowdfunding platforms allow investors to pool assets and match with interested sponsors and real estate developers. It’s an excellent way to diversify your income stream and invest in things that will earn money for years or even decades. How it works: The two main types of crowdfunding, lending-based and equity-based. They pay you dividends and interest. That’s pretty much it. Using both methods, it’s entirely possible for the passive income you earn to exceed what you put in.
22. Invest in Business or Real Estate
If you have a decent amount of money to invest, then consider looking into investing in real estate or other businesses. These could be everything from crowdfunding ventures and rental properties all the way up to large-scale commercial buildings that will earn income for decades or more. With this type of investment, it’s possible to enjoy steady returns every month or every year, making it a great way to create passive revenue.
23. Rent Out Your Car by App
Renting out your car by app is another great passive income idea, but make sure you are on legit money-making apps. It requires little work on your part but will generate significant returns over time. People will book your car through apps like or Turo for short-term rentals and you can set your own rates. Likewise, you can rent out your parking space. That option is perfect for people who live in big cities where parking is at a premium.
24. Pay Off or Reduce Debt
One of the best ways to make income that’s passive is by eliminating debt. There are two ways you can tackle your debt: Through balance transfer and pay down or refinance or consolidate. If you can get your debts paid off or reduced, then you’ll be able to pocket all of your monthly payments rather than spending them on interest and fees. This will help free up a lot of extra money that would otherwise be going towards things like credit card minimums and car payments.
Most of the passive income strategies on this list accelerate your financial goals tremendously. Therefore, if your goal is to eliminate debt, then you can use one or more of the strategies to pay it off.
25. Invest in Dividend Stocks
Dividends can be a great source of passive revenue, and the best part is that you don’t have to do anything other than buy shares in solid dividend-paying companies like AT&T Inc., Microsoft Corporation and AbbVie Inc. These three stocks have a history of paying dividends, and they’ve been successful companies for many years. These companies pay cash dividends to their shareholders quarterly or yearly. The dividends can be reinvested into more company shares, or you can take the cash and do whatever you want with it.
What is the easiest passive income stream?
There is no definitive answer, as each passive income stream has its own unique set of requirements and challenges. However, some of the more popular options include investing in real estate, stocks or mutual funds, leasing out property or a car through an app and selling digital products.
What is the most profitable way to generate passive income?
Here’s one of our favorite passive income ideas of all time, just for the sheer gravitas of it! IBM bought Internet Security Systems Inc. from Georgia Tech engineering student Christopher Klaus in 2006 for the tune of $1.3B. That is a big wad of residual income!
So what did Klaus do after that? He didn’t rest on his laurels and founded passive income source #2: Kaneva, a company that works toward delivering 3D virtual worlds.
However, for the rest of us mortals, there are other ways to make passive income. Again, there is no one-size-fits-all answer to this question.
So what is the most profitable way to generate income?
Some of the most profitable options for generating income include creating an app, investing in real estate or stocks, starting a business that you can run from home and leasing out property or a car through an app. Of course, it’s always best to do your research and find the option that best suits your interests and skill set.
There you have it! 25 different passive income ideas to get you started earning money. Choose one or two that interest you and give them a whirl. Who knows? You may be able to quit your day job sooner than you think!
Image: Depositphotos
This article, “25 Passive Income Ideas” was first published on Small Business Trends
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