Tired of living paycheck to paycheck? That means it’s time to check out the exciting world of passive income. With the gig economy at an all-time high, it’s never been a better time to get a stream of passive income flowing into your pockets.
If you’re not sure where to start, no worries – we’ve put together a list of 20 of the best passive income ideas anyone can do. After all, I’ve been having different passive income streams for over a decade…
What is Passive Income?
Passive income is a type of income that is earned with little to no active involvement. It’s income that’s generated from investments, rental properties, or businesses in which the recipient is not working to run them all day long.
The idea behind passive income is to create a source of income that requires minimal work to maintain and generates income passively over time. This can include dividends from stocks, rental income from real estate properties, or profits from a business that is run by someone else.
Really, the goal of passive income is to generate a steady stream of income without having to actively work for it, allowing individuals to have more financial freedom and flexibility to do something they truly want to do.
Top 20 Passive Income Ideas
1.
Investing in dividend stocks allows you to receive regular payments from the profits of the companies you invest in. Dividend stocks are stocks of companies that pay a portion of their profits to their shareholders in the form of dividends.
When you invest in dividend stocks, you own a piece of the company and are entitled to receive a portion of the company’s profits in the form of regular payments. This provides a steady source of passive income that can complement your other income streams and help you achieve financial stability.
2. Rental Properties
Got a spare piece of property? Willing to buy one? Rental property can be a source of passive income if managed correctly. When you own rental property, you can earn money by renting out the space to tenants.
The rent collected from your tenants can provide a regular source of passive income, which can help to supplement your other income sources.
3. Investment in a REIT (Real Estate Investment Trust)
Investing in a Real Estate Investment Trust (REIT) is a simple way to earn passive income from real estate. REITs are like a stock investment, but instead of investing in a company, you’re investing in a portfolio of several real estate properties, such as apartments, office buildings, shopping centers, or hotels.
When you invest in a REIT, you become a shareholder and are entitled to a portion of the income generated by the real estate properties in the REIT’s portfolio. This money is paid to each shareholder in the form of dividends, which can provide a steady source of passive income.
4. Online Courses or e-Books
Online courses and e-books are both digital products that can earn you quite a bit of cash if you play your cards right. Because they’re digital, you can keep selling them over and over again while still making a profit every time.
Once you have created the course or written the book, it can be sold to an unlimited number of people without requiring any additional time or effort from you.
For example, if you create an online course on a topic you’re knowledgeable about, you can sell it on platforms like Udemy or Teachable for a one-time fee or a recurring subscription. These digital items can provide a source of income for months or even years to come, especially if your course becomes popular with your target audience!
5. Dropshipping
Do you want to run an online store without worrying about stocking up on products or shipping them to customers? Dropshipping can help you with that!
With this business model, you work with a supplier who keeps all the products and sends them straight to your customers for you. You just need to concentrate on promoting your products, and the supplier takes care of everything else.
When a customer orders from your store, you buy the product from the supplier at a lower price and they send it directly to the customer. The difference between the lower price you paid and the higher price the customer paid is your profit!
Keep in mind that dropshipping has changed from listing on Amazon and ordering it from AliExpress, as it used to be years ago. You can have a great product and have have Amazon take care of shipping it to customers, or set up your own website and have other companies deal with shipping for you.
6. Affiliate Marketing
Affiliate marketing is a great way to earn money without doing much work. You make money by promoting other people’s products and getting a commission when someone buys them through your special link.
That’s really how many blogging websites make money. You add Amazon product links or Getyourguide links to your favorite Eiffel Tower tour to your blog posts and earn when someone buys something through your link.
Once you set everything up, all you have to do is show the products to your audience. The company you’re working with takes care of everything else. This includes helping customers, sending out products, and taking care of payments.
7. Digital Products (i.e. Photos, Music, & Videos)
Just like with e-books, other digital products are an easy form of passive income because they can be sold repeatedly with little to no additional effort on your part. Once a digital product has been created, it can be sold over and over again to an unlimited number of customers, providing a continuous stream of income.
Examples of digital products include software, digital art, stock photos, and more. These products can be sold on platforms like Amazon Kindle Direct Publishing, Udemy, Gumroad, or on your own website.
8. Renting an AirBnB Room
You’ve probably heard of AirBnB before, and perhaps have even rented one! AirBnB is an app that connects travelers with places to rent besides hotels. Providing a spare room to rent on AirBnb is an opportunity to earn passive income just by opening your doors.
You can rent out your room for as many or as few nights as you’d like, and you have the option to decline bookings if you’re not available during a period of time. Plus, Airbnb has good customer service to help you with any questions or issues that may arise with your guests.
To get started with AirBnB, you’ll need to create a listing for your room, including photos, a description, and availability. You’ll also need to set a price for your room, taking into consideration factors like location, amenities, and the time of year. Plus, these days it might require a license depending on the location.
9. High-Yield Savings Account
With a high-yield savings account, you can earn interest on your savings without having to keep an eye on your investments all the time!
With a high-yield savings account, you put your money in a special savings account at the bank of your choosing. The bank or financial institution will pay you interest on the money you have saved.
The interest you can earn with a high-yield savings account is usually higher than what you would earn with a regular savings account. This means you can make more passive income just by saving your money in a high-yield savings account.
10. Bond Funds
Bond funds are a way to earn passive income by investing in bonds. Think of a bond fund like a basket of bonds – and you own a piece of it. When the bonds in the fund pay interest, the fund collects that money and distributes it to its investors in the form of dividends.
By investing in a bond fund, you can earn regular income without having to buy individual bonds and manage them yourself. Bond funds are managed by experts who choose several different bonds to invest in at once, which reduces your risk of loss.
The idea behind bond funds is to earn a steady income from the interest payments of bonds. This can provide a more predictable source of passive income compared to some other investments.
11. Renting Out Storage Space
Having a storage space to rent out allows you to earn money by renting out unused or extra space to individuals or businesses in need of storage space. This can be a garage, attic, basement, or even a spare room in your home.
The demand for storage space is high right now. This is especially true in urban areas where living spaces are smaller and people are looking for extra storage options. By renting out your extra space, you can earn passive income without having to actively manage the space or handle any operational tasks.
12. Peer-to-Peer Lending
Peer-to-peer (P2P) lending lets you earn interest by lending money to people or businesses. With P2P lending, you can act as a lender and give loans directly to people who need them, without going through a bank.
When you invest in P2P lending, you give money to someone who needs a loan. They pay you back with interest over time. The interest you earn is usually higher than what you would get from a savings account or a bond. This makes P2P lending a good way to make passive income.
Make sure the reason for the loan is sound and sturdy though. If the borrower is unable to pay you back, you’ll end up with less than you started with.
13. Starting a Franchise
When you start a franchise, you own a business that has already proven to be successful.
To start, you give money to the owner of the business you want to copy. They then give you help and support, like training, marketing help, and advice on how to run the business well. Then, you let the cash roll in.
14. Turnkey Rental Properties
A turnkey rental property is a house or apartment that is ready to rent and is managed by a company that knows how to take care of rental properties.
When you invest in a turnkey rental property, you buy the property and the company takes care of everything else, like finding renters, collecting rent, and fixing things when they break. You earn the money, but they handle the maintenance!
15. Investing in a Business
Investing in a business can provide a form of passive income because it allows you to earn money through profits and dividends generated by the business. There are several ways to invest in a business, including:
- Stock ownership
- Business Partnership
- Business lending
- Private equity.
The key to success when investing in a business is to thoroughly research the business, its management team, and its financials before investing. Additionally, it’s important to diversify your investments across multiple businesses to minimize risk.
16. High-Yield Certificate of Deposit (CD)
A high-yield certificate of deposit (CD) is like a special kind of savings account that pays you more interest than a regular savings account. But you have to keep your money in the account for a set amount of time, like a few months or a few years.
To make money from a CD, you put a big sum of money into the account for a set amount of time and you can’t take it out until the time is up. The bank then pays you a set amount of interest on your money for the whole time it’s in the account.
17. Investing in a Managed Index Fund
A managed index fund is a group of investments that follow a certain market, like the S&P 500. When you invest in a managed index fund, you buy a part of the group of investments.
The person in charge of the fund uses the money from all the investors to buy different types of investments that follow the market they chose. The investments make money, and the fund distributes that money with all the investors.
18. Mutual Funds
A mutual fund is when multiple people put their funds into a group of several investments. When you invest in a mutual fund, you buy a part of this investment group!
The person in charge of the mutual fund uses the money from all the investors to buy different types of investments, like stocks and bonds. The investments make money; and the mutual fund shares that money with all the investors through a distribution.
After you invest, you’ll earn money from dividends and profit from investments in the fund.
19. Cryptocurrency Index Funds
A cryptocurrency index fund is like a group of digital currencies, like Bitcoin. When you invest in a cryptocurrency index fund, you buy a part of the group of digital currencies.
The person in charge of the fund uses the money from all the investors to buy different types of digital currencies. Digital currencies can go up in value, and they can give out money. The fund shares that money with all the investors.
You earn money from the value of the cryptocurrencies in the fund going up, and from any money the cryptocurrencies give out.
20. Creating and Selling a Mobile App
Making and selling a mobile app can make you money without doing much work. You earn money from people downloading your app, buying things in your app, and ads.
To make your financial dream a reality, you need to make an app that people actually want and need. If your app is useless, it won’t get much traction.
You then have to tell people about your app and get them to download it. This can be done through app stores, social media, and other ways of promoting your app.
Bonus Passive Income Idea: Blogging about your passion or your favorite hobby
Starting a blog is another great way to make a passive income that’s far from dead. Find a topic you’re passionate about, or find a few topics you’re passionate about, and turn them into a blog.
There is always a learning curve, but once you’ve understood the ins and outs of blogging, you can easily turn your favorite hobby or passion into another stream of income. For example, this lifestyle blog that I started two years ago, is doing pretty well.
Motherhood and the second baby changed my lifestyle, and I went from being a popular travel blogger and recipe creator to also being a mom of two amazing boys. Between testing a zillion baby products to find the best stroller for my kids to finding the right schooling system, starting a parenting blog was a natural outcome, and well worth it!
Passive income is only getting more popular by the day, and it’s an easy way to make some decent side money if you can figure out a good system for you.
You should note that each of these ideas comes with varying levels of risk and potential returns, so make sure you do your research and consider your personal financial goals and risk tolerance before investing.
Before you know it, you’ll be raking in the big bucks and the best part: there’s no limit to what you can make!
Leave a reply