Need more money but don’t have extra hours in your day? Good news: there’s a such thing as making money while you sleep, and I can help you start earning it today. I’ve put together a list of my best passive income ideas – legit ways to capitalize on your passions and strengths to earn extra income without investing time and energy.
The post 31 Passive Income Ideas to Build Real Wealth (Updated for 2023) appeared first on Good Financial Cents®.
“Making money while you sleep” has a nice ring to it, doesn’t it? After all, one of the goals of financial independence is to build wealth that doesn’t eat up your time, so you can enjoy life and do the things you choose to do.
The truth is that building a passive income stream usually isn’t passive at first. It requires time, money, skills, or all three. But where do you start?
The first step is to build a small savings account that you can use later.
This is your nest egg. We’ll come back to this.
Building multiple passive income streams has an additional benefit in the short term: it can make you more resilient and better able to weather economic shocks, such as what was experienced with the past housing crisis and global pandemic.
Passive income is a long-term choice that requires short-term tradeoffs.
If you’re willing to commit your resources to the steps and ideas below, you could earn residual income effortlessly for years to come.
You just need to know where to start and decide what resources you’re willing to expend for your passive income ideas to take flight.
In this post, I will break down passive income and show you how to create several passive income streams.
Now let’s get started. The best way to start making passive income in investing in real estate. When you look at the wealthiest investors across the globe, one of the most common assets they own is real estate.
You may not have millions or even thousands to get started – and that’s okay! Because you can invest as little as $10 into a company named Fundrise and start generating passive income asap.
> Skip to the Passive Income Ideas
What is Passive Income?
Passive income is money earned with minimal activity through any venture that requires little daily effort or upkeep on the individual’s part.
Let’s break that down a bit more:
- Passive – requiring little or none of your most precious resource, your time!
- Income – generating cash inflow that either represents income you use during daily life or that you re-invest.
A good litmus test is that you should be able to go out and get a full-time job that takes up the majority of your working hours and still be able to run your passive income streams. If you need a more formal definition, IRS Pub 925 has you covered.
The golden rule of passive income – protect your time.
Passive income is more about time than anything else. You could do many things to make money, but not all income streams are passive.
For example, if it takes you 2 hours to generate $100 today, and it takes you the same 2 hours to generate $100 next week or a year from now, that income stream is not passive because it takes the same effort (money, time, etc.).
On the other hand, if I open an investing account today, that takes some effort. But as that account grows and I check it four times a year, my returns go up, and my effort goes down.
Same if I build an online course. At first, I’m earning no money, and my effort is very high. But I expend a ton of effort at first.
Once the course is complete, I do some continued marketing and client support which amounts to just a few hours per week, while sales roll in month after month.
Do you get the picture? Now let’s talk about what passive income is not.
Passive Income is all about protecting your time.
What Passive Income is not.
❌ Your job.
Obviously. This is active income. The idea of passive income is to supplement, augment or get you out of your job so you can retire, travel, or spend more time with loved ones.
❌ Side hustles.
Side hustles are great ways to make money, but not all side hustles are passive. Side hustles are usually active, and maybe with systemization, they can turn into passive income streams.
If you need to continually invest the same (or more) amount of time for the same amount of financial output, the venture is not passive. Remember, in the beginning, a passive income stream could require more time, money, or work than it produces.
You have to evaluate the passive income opportunity in its long-term state for you.
❌ Consulting.
Consulting is just another job – perfect for a side hustle, but not exactly passive. For consulting to be passive, you’ll need to build the practice with other people and be able to step away from the work eventually.
❌ Investing for speculation.
Here’s where I split hairs. I do not consider stock investments for capital appreciation only to be passive income. Why? Because stock appreciation is not income.
On the other hand, investing in stable companies that throw off cash in dividends is a passive income strategy.
The difference is, are you getting a cash-on-cash return, or will you only see a return if you sell the investment?
Also, investments like cryptocurrencies and commodities are reserved for price speculation. There are many times when these investments should get some allocation of your portfolio, but investing like this is not a stable passive income strategy unless you earn yields or grit bot trading.
Examples: What is and is not passive income
| Active Side Hustle Income | Passive Income |
| Consulting by the hour | A course on your area of expertise that you sell online |
| Freelance computer programming | Building a program, you can sell over and over |
| Freelance writing | Writing a book |
| Working construction | Investing in real estate |
| Driving for Uber | Renting out your car |
| Photography sessions | Building your photog Instagram account |
How to Start Building Passive Income
There’s no magic trick that turns your time directly into money. Instead, you plant seeds so your money will grow, even when you’re sleeping or at the park walking your dog.
The initial downtime you put into passive income can be as involved as starting a blog or as simple as logging into a robo-advisor platform and investing $100. You can earn passive income whether you’re an entrepreneur with a brilliant business plan, a talented artist, or just happen to have extra cash to invest.
1. Start building a nest egg
Remember earlier I said to create passive income you need time, money or skills? Let’s start with money. Open a high-interest savings account and park even $100 dollars in it. Boom, you just made passive income!
It may not be much, but you’ll earn interest on that money and many online banks even offer cash bonuses for opening accounts. Our favorite right now is UFB Direct.
| Bonus: UFB Direct has a top yielding savings account that earns 4.55% APY and has no minimum balance requirements. Open an account here >> |
2. Assess your skills
When I started GoodFinancialCents I was a Certified Financial Planner looking to grow my business and answer common client questions. I figured out that I could use these skills to create great content online, and that I could make money with this blog over time.
I have friends who were stock traders and now have communities around that skill or write for financial publications. Other friends have gotten good at management, and now are building career websites.
What are you good at? What are you passionate about? Take a quick inventory, and research the ways others have used those skills to build income streams.
3. Assess your time, money and effort. Be realistic about your commitments
Time is a tricky one, because it’s our most limited resource. Trying to make more money or create passive income can be a trap because it usually requires you to learn new topics or new skills, and that can be a time suck. Remember, you may have to bite the bullet in the short term, but in the long term your goal is to minimize your time investment.
Are you fully committed? Current work, family and social activities eat up a lot of time. If you don’t have much time, you’ll need to lean more towards investing or getting someone else to do the work for you.
In this guide, we’ve labeled each idea with an effort level (1-5, 5 requires the most effort) to help you match your current abilities to the idea.
4. Ideate and choose
The final step is to put some ideas down on paper and choose how to begin. We created the following list to help you kick off your brainstorming. To help with that, we’ve created this list of ideas to get you started. Here’s to your wealth and freedom!
31 Passive Income Ideas
Generate Passive Income With Money Investment (Effort Level: 1-2)
1. Invest In Real Estate From Your Couch
4. Passively Invest In The Markets
Generate Passive Income With Time Investment (Effort Level: 3-5)
9. Build An Online Course or Guide
13. Build An App Or Product You Can Sell
14. Become A Social Media Influencer
Semi-Passive Side Hustles
Easy Wins To Boost Your Income Or Start Your Nest Egg
31. Sell Lesson Plans (for Teachers)
1. Invest in Real Estate
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰💰💰💰
The best way to earn passive income is by investing in real estate.
When you look at the wealthiest investors across the globe, one of the most common assets they own is real estate.
Real estate investing has been a way to build wealth for a long time. It used to take a lot of time, personal capital, and expertise, but that’s no longer the case.
However, real estate investing apps have democratized access to this asset class – making it easier for you and me to create no-work, passive income.
Below are resources I recommend checking out if you’re interested:
Fundrise
You may not have millions or even thousands to start an investment property – and that’s okay! Because you can invest as little as $10 into a company named Fundrise and start generating passive income asap.
Fundrise specializes in REITs (real estate investment trust). If you live in an expensive city or don’t have the time to manage a rental property, REITs are the way to go.
REITs own and manage income-producing properties and distribute the profits to investors. Investing in REITs was once expensive and required accreditation, but Fundrise has changed all this.
The minimum investment on Fundrise is only $10.
Roofstock
Here’s another real estate platform for a little additional income. Roofstock is a marketplace of turnkey single-family homes for sale. The term “turnkey” means the numbers have been crunched, the home may have been rehabbed, and may already include tenants!
All you, as the investor, have to do is put up the cash. Once you purchase the home, it is 100% yours, and the rental income goes straight to you.
RealtyMogul
For something between Fundrise’s REITs and Roofstock’s single-family homes, I recommend checking out RealtyMogul.
Realty Mogul is a real estate crowdfunding platform that pools investors’ money to purchase large ticket properties (office buildings, retail space, etc.). The minimum investment is $5,000.
Real estate investing is the best passive income idea!
2. Peer to Peer Lending
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰💰
Peer-to-peer lending, or P2P Lending, is a favorite of mine. The idea is to lend money to individuals or a business. They then pay you back, plus interest.
Let’s say someone needs to borrow $10k to consolidate their debt. They create an account with Lending Club (for example) and, depending on their credit history, income, etc., are given an interest rate on the loan.
The investor (you) also creates an account with Lending Club and buys the debt. When the borrower makes monthly payments, the principal and interest are paid to you in your Lending Club investment account.
Several companies underwrite P2P lending; some, like Lending Club, facilitate personal loans, while others, like Worthy, facilitate business loans (the process is the exact same).
Expected returns are in the 5% range (depending on platform and loan type). While not exactly stock returns, 5% or more is better than most national bank interest rates.
3. Invest in High-Yield Savings
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰
Savings accounts might be the most boring investment ever invented, but they are also the safest passive income opportunity.
At 0.15 percent interest or lower, you’d need to exceed the FDIC-insured $250,000 account limit to see any real action.
However, online savings accounts offer rates well above typical banks. Better yet, these rates are competitive with CD rates without locking in your money for several years.
Our favorite high-yield savings account option currently is UFB Direct.
| Bonus: UFB Direct has a top-yielding savings account that earns 4.55% APY and has no minimum balance requirements. Open an account here >> |
4. Invest In the Stock Market, Passively
Effort Level: 1
Upfront time commitment: ⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰💰💰💰
Investing in public stocks and bonds is the main way people build long-term wealth and passive income through their retirement plans or brokerage accounts. The data is pretty good; however, the average person like you and I should make passive income investments through ETFs, a mutual fund, or index funds with low fees.
There are two ways you can do this:
Set it and forget it with a robo investment advisor
Letting an algorithm manage your investments is about as passive as you can get. Robo-advisors like Betterment allow you to set your willingness for risk, then sit back and let the income flow. And the fees are much lower than what you’d pay a human account manager. Below is a rundown of a few of the leading robo-advisor platforms.
I have been a long-time supporter of Betterment and even did an interview with their CEO in my Betterment investing review.
Betterment is great at reducing any taxes you have to pay on your investments, and they work with you to give you the best financial advice through their algorithms.
Unlike other robo-advisors, with Betterment, you can talk to a human being if you want to. Betterment charges the same fees as Wealthfront but does not waive the fee on the first $10,000 you invest.
Pick your own Dividend Stocks or ETFs with an online brokerage like M1 Finance
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate much higher than what you get on bank investments.
Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation. That way, you can earn passive income from two sources – dividends and capital gains.
You can make this process easy and affordable by opening an account with any of the brokerages listed below. Most brokerages no longer charge trading commissions which is a huge saving for us!
Online brokerages give you more flexibility to choose which ETFs (and individual stocks) you want to invest in. Incumbent online brokers like TD Ameritrade and E-trade have done very well with low fees for individual stock and bond trades.
However, my favorite online broker right now is M1 Finance. They make it super easy to passively invest in ETFs, and are rounding out their portfolio of services to get you access to your money seamlessly.
5. Invest in CDs
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰💰💰💰
CDs (or certificates of deposit) are simple and straightforward, and if I’m being honest, it’s not one of the most exciting passive income ideas or investment strategies out there.
But if your goal is to make money while you sleep, there isn’t anything more passive than CDs. Investing in a certificate of deposit is a great-low risk strategy to accrue interest risk-free.
CDs are like savings accounts with a catch. You can’t touch your funds before they reach maturity, based on the time frame you set when you open the account. That time period can range from months to years.
Be sure and buy your CD with an FDIC-insured financial institution (up to $250k is insured), and make sure to get the best CD rates. The longer the duration of the CD, the more interest the financial institution will pay.
6. Buy a Blog or Website
Effort Level: 2
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰💰💰💰
A few years ago, my partners made several good investments by purchasing blogs others created and then “monetizing” them. While it’s not as easy to get a screaming deal anymore, there are very healthy resell marketplaces for online businesses that connect buyers and sellers.
Thousands of blogs and websites are abandoned by their owners every year.
It could be a perfect passive income source if you can buy blogs with a reasonable amount of web traffic and demonstrated cash flow.
You’ll need to have some digital marketing know-how to make the most out of your new blog or website. Most blogs employ Google AdSense, which provides a monthly revenue stream based on ads that Google places on the site. There may also be affiliate marketing programs generating money online for you.
From a financial perspective, blogs usually sell for 24 times their monthly income. So if the site generates $250 a month in income, you can likely buy it for no more than $6,000.
Translation: a $6,000 investment will buy you $3,000 per year in cash flow.
Some sites have good evergreen content that will continue generating revenue even years after the site has gone silent, so a simple $5,000 investment can net you ongoing passive income.
Bonus tip: If you buy such a site and then reinvigorate it with fresh content, you may be able to increase the monthly revenue and sell the site at a later date for substantially more than what you paid for it.
Where can you buy a blog or website? I recommend buying a blog on Flippa. Here are some quick facts on this awesome marketplace:
- Includes everything from small sites to ones that garner millions
- Currently has more than 2,000 web-based businesses for sale
- Based on a bidding system and fulfilled by the Flippa Escrow program to ensure your money and business are safely secured.
My partners continue to buy web-based businesses on sites like Flippa and Empire Flippers. There are apps, blogs, SaaS businesses, and online retailer opportunities all over those sites that may help you earn extra money.
7. Invest in a Business
Effort Level: 2
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰💰💰💰💰
If you don’t like the stock market, a better way to build passive income is to invest in tangible assets that you can see, understand and watch grow over time.
My favorite way to do this is by investing in a small business. Entrepreneurs are a special breed, and when you come across the right one with the right idea… there’s no doubt that money is in their future!
So how to jump on the bandwagon? It’s simple: Provide them with the funds they need in order to grow.
Below are platforms and websites that connect entrepreneurs and businesses with investors seeking a return.
Often, investments in private businesses are reserved for “high net worth” individuals, but there are other ways you can invest in a business. Chances are you know a local business or two that could use some capital, help, or both. You can provide services such as social media consulting or operational consulting for a share of the cash flows of the business. If you have capital and meet certain qualifications, you can buy a percentage of the business.
I have made both passive and active private business investments across a range of businesses, including venture capital deals and local small businesses like restaurants. This is a great passive income opportunity!
8. Start a Blog
Effort Level: 5
Upfront time commitment: ⏱⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰
My favorite! This is the main way I ultimately created passive income for my family – I started Good Financial Cents!
Blogs and websites are an unbelievable source of passive income. But there’s more to making bank with a blog than just posting good content.
If you’re looking for an extremely cheap yet highly scalable way to create a passive income for yourself, you might want to take a moment and consider starting a blog.
Did you know?: you can start a blog for as little as a penny for your first month and just a couple of dollars per month after that.
Here’s the idea: If you can consistently use your blog and create a lot of value for many people, you can generate an extraordinary amount of passive income. As you post to your blog, more and more, your site will start bringing in traffic whether you put in any additional time or not.
A blog is the most cost-effective method to creating a truly passive income stream I know of. Hour after hour, day after day, your blog is out there doing work for you.
What’s the catch? It takes time to get it rolling. That’s it. The sooner you start, the sooner an income stream can begin to grow.
You’ll also want to access our Make 1k Challenge, a free email course that walks through the steps to start your first blog and make your first $1,000.
The first step is to register a domain and select a hosting plan for your blog. I recommend Bluehost to get started.
9. Create An Online Course or Guide
Effort Level: 5
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰
Online learning is an exploding business opportunity. You can create a course on just about anything. How to tie a fishing knot, cat grooming, and talk to girls (or guys). My friend Holly has a successful course on becoming a freelance writer.
How?
One very simple way to produce and share your course is on Teachable.com. Teachable has over three million students and is a great way to get your content in front of others.
What do you put in your online course? Good question. You can add:
- video lessons
- checklists for completing steps you recommend in your video lessons
- small ebooks to supplement the lessons
- audio files for people listening while traveling
- informative interviews with like-minded experts
- and a whole bunch more!
Pro Tip: Create several packages at different price points. Some people want everything, so you can include ‘the works’ for the highest price point and have two lower price points to receive the largest possible volume of orders.
If writing articles or creating videos isn’t your thing and you want to make money online, try creating an online guide. A good example of this income source comes from Pat Flynn’s website, SecurityGuardTrainingHQ.com. On the website, his map allows someone to click on any state to see the security guard requirements for that state.
By providing specific information in a guide-like format, you can make money online through some of the means already addressed: display ads powered by Google AdSense, affiliate marketing, and even memberships to your online guide.
It’s a fantastic idea!
10. Sell An E-book:
Effort Level: 5
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰
I wrote Soldier of Finance to help my clients and others struggling with the same financial issues over and over again.
While not exactly an ebook, it’s also available on Kindle and paperback; this book still nets me passive income years after I wrote it. To sell on Amazon, you can set up a Kindle Direct Publishing account and then begin selling your book. You don’t have to be a big publisher to do this!
11. Sell Stock Photos
Effort Level: 3
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰
Are you a photographer or someone who enjoys snapping pictures? Put that talent to use!
If you want to make extra money for your photos, you could consider selling your images as stock photos. Make your pictures available for sale as stock photo images by enrolling in a third-party site, such as Adobe Stock, Shutterstock, Alamy, Unsplash, etc.
If you have the skills and resources to do so, you could also sell your stock images on your own website.
12. License Your Music
Effort Level: 3
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰
Are you passionate about making music but not passionate about performing live? Or have you tried to perform live and not make enough income? One solution would be to license your music.
Licensing your music means that in exchange for the rights to use your music in a project, people and companies pay you. Here are six different ways that you can make extra money licensing music:
- YouTuber
- Wedding/Videographer
- Indie Film Soundtrack
- Indie Film Trailer
- Corporate video
- Advertisement
These are all passive ways to be an online creator, where your initial time investment pays off with royalties.
13. Build An App Or Product You Can Sell
Effort Level: 5
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰💰💰💰
If you have a skill or service that you can share with others, you can build an app or create a product to sell. For example, if you are passionate about fitness and have a background in creating workouts, you could create a workout app.
You could also create a physical or digital product, such as a course, ebook, or physical book if you would rather do that instead of an app.
Hiring someone to create an app for you can get expensive. If willing to learn, you could create an app on your own or barter services. Creating an app or product is a great source of passive income!
Selling products that you create can also be very profitable. Sites like Etsy allow you to sell your handmade, custom, and unique items – both physical and digital products. It’s simple to set up a storefront and get started!
There are also sites, like Kickstarter, that help bring your creative projects to life. You can join Kickstarter to launch a project or to help back others’ projects. This platform is a great way to get your ideas into the world, see if there is a demand for your product, and get funding assistance! Since Kickstarter’s launch in 2009, 18 million people have backed projects.
It’s never been easier to build a product and sell it online today. Hundreds of thousands of people have built products, books, or courses and are selling them online, making passive income. Tools like Shopify have everything you need to set up an online storefront, accept payments and build a community.
For example, my friend Mike built Quotebook with his kids over the Covid pandemic as a way to keep track of all the hilarious things his family says to each other.
Check out his cool story about the origins of Quotebook.
Mike stood up his online store within a matter of days with Shopify and primarily drives traffic through connected social ads and his email newsletter. Once the product was made and the website set up, sales became mostly passive in nature.
14. Become A Social Media Influencer
Effort Level: 3
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰💰
Did you know that you can get paid for posting on social media?
There are various ways to earn money as a social media influencer. You can work with companies to produce sponsored posts/content, which the company will pay you for. Typically rates for sponsored posts are calculated by how many followers you have and your engagement rates.
You can also earn income as a social media influencer by sharing affiliate marketing links, writing sponsored blog posts, or hosting events/attending events as an influencer.
To get started earning money as a social media influencer, it is a good idea to create a media kit highlighting your social media accounts, your niche, and samples of your work.
15. Deliver for Instacart
Effort Level: 2
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰
If you’re looking for a flexible way to make extra money, Instacart is a great choice. Instacart is an online grocery delivery service that works with local grocery stores to deliver groceries to your door. As an Instacart employee, you would shop for items at the grocery store and then deliver the groceries to the customer’s door. Currently, the demand for Instacart shoppers is higher than ever.
As a shopper, you will be paid weekly, have the flexibility to choose your own hours, potentially have the ability to earn tips, and be eligible for special earnings promotions.
Instacart also recently rolled out several new features, including contactless delivery and in-app incident reporting.
16. Deliver for UberEats
Effort Level: 2
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰
UberEats is a goods and food delivery service that allows customers to order almost anything they want, such as personal items, groceries, and restaurant meals.
It is 100 percent free to sign up to deliver for UberEats, and Postmates delivery drivers take home 100 percent of what they earn every time they complete a delivery.
UberEats delivery drivers love the flexibility and independence to work whenever they want. UberEats offers weekly pay and a super simple onboarding process.
17. Rent Your Car
Effort Level: 2
Upfront time commitment: ⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰
It used to seem weird to rent out a spare room to a stranger or to stay in a stranger’s home when you go on vacation. Thanks to the likes of Airbnb and others, these sharing economy services have shown us it’s not so scary!
So let me ask – how do you feel about renting out your car?
Think about it. Rental car agencies (Enterprise, Avis, Budget, etc.) are awful to deal with and too expensive.
A company called Turo has disrupted the industry, just like Airbnb disrupted the hotel industry. People across the country are earning money from lending their cars out to strangers.
If you aren’t using your car for a couple of days, or if you have a spare one, simply join Turo’s free platform, list the car, and charge whatever you want for the day.
18. Rent Out Your RV
Effort Level: 2
Upfront time commitment: ⏱
Upfront money commitment: 💵 💵 💵
Passive income probability: 💰💰💰
RV rental marketplaces like Outdoorsy put a unique spin on the ride-sharing concept. If you own a travel trailer or motorhome, you can earn passive income by renting it out to people in need of an RV for their summer road trip or family camping adventure.
The best part is you get to set the price and availability for your RV. And you can make good money. If you have a nice RV, you can charge $200 or more per day. You might earn enough passive income to cover your RV ownership costs!
19. Rental Income from Your Home
Effort Level: 2
Upfront time commitment: ⏱
Upfront money commitment: 💵💵💵💵
Passive income probability: 💰💰💰💰
If you’re interested in making money in real estate but want more of a hands-on approach, renting out your vacation home, house, apartment, or even a single room can be a stellar way to earn passively.
Airbnb
Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels. Their site breaks rentals into three categories: private room, shared room, and the entire home.
Airbnb charges you 3% on every booking for their services, but you can set the nightly rate at whatever you want. People around the world are making impressive passive incomes through Airbnb.
VRBO
With over 2 million rental properties, most of which are entire home rentals, VRBO has established itself as a legitimate service for renters and owners alike.
VRBO charges 5% per booking plus another 3% if the guest pays with a credit card. But again, you can set your own rate and easily make these fees worth their while.
Vacasa
Vacasa is a vacation home rental management company. In other words, you can’t rent out a spare room in your house on Vacasa like you can on Airbnb, but have an extra home in a vacation destination?
Then Vacasa is a great option to make passive income, they do all the work for you.
Pro Tip: The key to your rental success is reviews. The more four and 5-stars you get, the more people will rent your space (and the more money you’ll make).
20. Become a Rideshare Driver
Effort Level: 3
Upfront time commitment: ⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰
While it isn’t completely passive, rideshare driving makes the list due to its flexibility. You can make your own schedule with Uber and pick up extra income by driving others around when you are already out and about!
I assume you’re familiar with Lyft, the ridesharing competitor to Uber. I find Lyft to be cheaper and have better experiences with drivers.
How would you like to earn a guaranteed $1,000 to become a Lyft driver? Yup! That’s what the company is offering right now.
It’s part of a program called Earnings Guaranteed. According to the Lyft website, drivers will earn a guaranteed amount within a certain time frame. If the driver does not make the guaranteed amount within the time frame, Lyft will cover the difference!
And right now the guaranteed amount is $1,000! Easy money.
Don’t have a car? No problem! HyreCar is a marketplace for car rentals prequalified to drive with Uber and Lyft!
21. Advertise with Your Car
Effort Level: 2
Upfront time commitment: ⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰💰
Carvertise: With Carvertise, you could earn up to $1200 during an ad campaign and can usually expect around $100 a month just to use your car as ad space. Check out their site to see if they’re currently advertising in your area.
Wrapify: Wrapify operates a lot like Carvertise but differs in how you get paid. With Wrapify, you track your mileage and location. The more you drive, the more ads you qualify for and the more money you make, which can add up to $200 a month.
Vugo: Vugo is an awesome way to earn passively alongside rideshare driving. All you do is mount a phone or tablet to your dash and play ads, games, and videos. The app is compatible with Google Maps and Waze. Drivers can earn up to $200 more a month playing the ads, and there’s a driver tipping feature built in.
22. Give Your Opinion with Surveys
Effort Level: 3
Upfront time commitment: ⏱⏱⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰
Did you know you can get paid to take online surveys? Right from the comfort of your couch, you could earn money just by surfing the web. There are tons of great survey sites, some of which give you a bonus just for signing up.
23. Network Marketing
Effort Level: 4
Upfront time commitment: ⏱⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰
Network marketing is a business model where independent contractors buy into a company. They then earn a commission on the products that they sell. Many individuals are drawn to network marketing as this field allows them to be their own boss, set their own hours, and have flexibility.
There are many network marketing companies. Some popular companies are Mary Kay, DoTerra, Pampered Chef, and Rodan & Fields.
There are a few different ways to make money through network marketing. You can profit by sharing the company’s products with others, you can use products yourself, and you can recruit others.
24. Get Paid to Snooze With Sleep Studies
Effort Level: 1
Upfront time commitment: ⏱⏱
Upfront money commitment: 💵
Passive income probability: 💰
I’m not even kidding. If you’re in decent health, catch plenty of Zzz’s, and are in an area where a sleep study is being conducted, you could make the most passive income of all.
If you qualify, you could make thousands of dollars in one study. Once accepted, you’ll probably have to undergo a physical, alongside an exam from a psychologist to ensure you’re up to the task. Did I mention you get paid every step of the way?
Keep in mind, though, that these studies have their own challenges, like cutting you off from media sources and your social life and requiring you to be watched and studied for the duration of the experiment.
You might also be asked to sleep in potentially uncomfortable positions for an extended period of time. But the pay is impressive. For sleep and other medical and psychological studies, search ClinicalTrials.gov and filter results based on your location, age, and other factors.
25. Flip Goods on eBay
Effort Level: 3
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰
There is a simple equation to flipping goods on eBay and making money. That equation is: buy low, sell high and repeat.
To get started, you will need to set up an eBay store. Then you need to research items that you want to sell. As with everything, you don’t want to blindly purchase items to flip without any knowledge of that item. Some research that you need to do includes market price, profit margin, and shipping/packaging.
You can find items to flip on Craigslist’s “free” section, your local Goodwill, or eBay! Then follow the equation above and buy the item for a low price, list and sell it for a higher price and then repeat.
26. Dropship With Amazon
Effort Level: 4
Upfront time commitment: ⏱⏱⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰💰💰
According to the Merriam-Webster dictionary, dropshipping is defined as “to ship goods from a manufacturer or wholesaler directly to a customer instead of to the retailer who took the order.”
To make money dropshipping with Amazon, as a vendor, you purchase the items at a discount by working directly with a wholesaler. Your profit then comes from the difference between the initial item cost and whatever price you sell the item at.
You can get your Amazon store set up and be ready to accept orders within 24 hours! Just as we mentioned with eBay flipping, it is important to do research when it comes to choosing which items to dropship. It’s best to find and start with a product with high demand and low competition.
27. Refinance Your Home or Pay Down Debt
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰
The less obvious way to increase your net worth is to reduce debt!
Mortgage Debt
If you haven’t yet refinanced your mortgage, it is another option to consider. If you can save 0.50% or more on your loan, you’re potentially adding tens of thousands of dollars back into your pocket. Not many investments can beat that.
Student Loan Debt
Don’t have a mortgage? Chances are good you have student loans, so be sure and refinance if you qualify. It could save you thousands in the long run! The math when paying down debt is simple – if your loan is currently at 7% and you refinance at 3%, that’s equivalent to a 4% return on your money!
Credit Card Debt
Credit card debt is slowly creeping up in America as consumers feel stretched at the end of the month. If you have credit card debt, I highly recommend implementing a strategy to pay it off as soon as possible.
28. Get Online Rebates
Effort Level: 1
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰
With Rakuten, you can get a rebate when shopping at various online retailers. Here’s how it works:
- Start a Rakuten account.
- Follow the directions to activate the Rakuten browser extension.
- Shop like you normally would online.
Cashback percentages range from 1 to 22 percent (occasionally higher)! Each month you’ll get a check, PayPal payment, or gift card to the store of your choice.
If you buy a big-ticket item like a refrigerator or a smartphone or do your grocery shopping online, you can earn some noticeable income.
29. Rent Your Tools
Effort Level: 2
Upfront time commitment: ⏱
Upfront money commitment: 💵
Passive income probability: 💰
You can “share” just about anything these days. How about the tools in your garage that you don’t use all that often? Apps like Sparetoolz connect tool owners with people who need them. Seasonal items are always in high demand.
You can earn passive income by renting out your snowblower, lawnmower, or heavy-duty cleaning equipment like a Wet-Vac or an industrial vacuum cleaner. It’s a great passive income side hustle.
30. Buy & Sell Domain Names
Effort Level: 2
Upfront time commitment: ⏱⏱⏱
Upfront money commitment: 💵💵💵
Passive income probability: 💰💰💰💰
Did you know that you can trade website domain names like stocks on the stock market? As trends change, demand rises for different topics and their related keywords.
You can use domain registrar services like NameCheap or GoDaddy to search for and purchase domains in the hopes of selling them for a later profit.
Check out this story about a friend who turned DOWN a $45,000 offer for one of his domains! He estimates that he’s made more than $50,000 trading
31. Sell Lesson Plans (for Teachers)
Effort Level: 3
Upfront time commitment: ⏱⏱⏱⏱
Upfront money commitment: 💵💵
Passive income probability: 💰💰💰💰
Here’s a great passive income idea for teachers. You can create printable lesson plans and sell them to teachers across the globe on Teachers Pay Teachers, an online marketplace dedicated to educators needing pre-made lesson plans.
There’s some work involved in creating the material, but once it’s posted online, it becomes a truly passive income source.
5 Services to Help Outsource Your Business
If you currently own a business, outsourcing will free up your time so you can focus on other tasks that will result in more income. If you don’t want to hire employees, consider hiring freelancers who work as contract laborers. Look for freelancers with a strong work ethic who provide quality results.
As long as the main product or service isn’t something only you can do, you can transform your business into a passive moneymaker.
Here are the companies I recommend starting with:
- CloudPeeps: CloudPeeps does an excellent job matching businesses in need with skilled, vetted freelancers who can manage everything from PR and marketing to web development and administrative tasks.
- Fiverr: Fiverr has it all. Much like CloudPeeps, it supplies hand-picked freelancers for all of your business needs.
- Guru: Guru offers similar services to Fiverr and CloudPeeps but emphasizes their flexible payment options, like hourly pay, recurring payments, payment by milestones, and payment by the project.
- PeoplePerHour: With an advanced AI system that matches the project needs of the perfect freelancer and is featured on Forbes, CNBC, and BBC, PeoplePerHour offers a legitimate pool of talented artists to outsource to.
- Upwork: Like the other freelancing networks, Upwork pairs you with freelancers in several sectors and boasts hires by companies like Microsoft, with short-term, full-time, and recurring options.
How Can You Generate Passive Income?
Passive income can work for you, regardless of if you have millions of dollars to invest and no time to spare, or $0, ample free time, and a spark of ingenuity.
While they might take some funding and fortitude to get started, the moneymakers on this list will continue to earn you money long after you’ve put in the work.
So look at what you are working with: establish your financial goals and decide how much time, effort, and money you’re willing to put into your venture.
You can prosper from passive income if you choose to invest, buy a business, outsource your own, or get paid for your daily routine.
What are you waiting for? Plant the seeds today with one of the ideas on the list.
Frequently Asked Questions (FAQ’s) on Passive Income Ideas
Yes, most types of passive income are taxable. For example, dividends which is popular form of passive income and it is taxable, albeit at a discounted rate. Income from rental properties, another form of passive income, is also taxable but there may be creative ways to shelter some of the tax with a good CPA.
There are a several ways to make $1000 a month passively. One way is to invest in assets such as stocks (dividend stocks), bonds (corporate or I bonds), or real estate (rental properties) that will generate income for you month after month. Another way to make passive income is to create a business that doesn’t require much of your time or effort to maintain, such as a blog or online store (think Etsy or Shopify).
The easiest form of passive income is rental income. Rental income is passive because you do not have to actively work to earn it. You simply own the property and collect rent from your tenants.
It is possible for a beginner to make passive income; however, it will require and initial investment of money and effort. Passive income opportunities abound, but not all are created equal.
Some may require a greater investment of time or money up front, but can provide consistent returns over time. Others may be less labor-intensive but offer smaller returns.
There are many different ways to generate passive income, and what might be the most profitable for one person might not be the most profitable for another. Some of the most common ways to generate passive income include real estate investing, dividend investing, and owning a business.
The post 31 Passive Income Ideas to Build Real Wealth (Updated for 2023) appeared first on Good Financial Cents®.