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16 Passive Income Ideas that Will Change the Way You Make Money

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In today’s economy, relying on a salary is not enough for bills and to enjoy luxuries. This is why the idea of passive income is becoming popular. 

The definition of a passive income is money automatically acquired with little to no labor to maintain. It is often referred to as “side hustle”. It is typically combined with a main source of income such as salary to increase an individual’s stream of income. 

The question now is, how do you start earning passive income? Well, there are plenty of passive income options out there. What’s important is for you to choose one that fits your lifestyle and skills. 

Here are passive income ideas that might work for you:

 

1. Affiliate Marketing

Affiliate marketing is the best passive income idea for influencers, bloggers, or website owners. It is a strategy of referring products or services on websites, social media platforms, and blogs. 

An affiliate marketer earns money every time somebody purchases through their published affiliate link. Nowadays, use unique promo codes instead of links for when doing affiliate marketing. The money earned by affiliate marketers are called “commission” which ranges from 3% to 7% of the product’s price. 

Affiliate marketing does not require an upfront investment. It’s also not very demanding so you can just publish your affiliate link and wait for somebody to buy using it. However, it might not be that lucrative, especially when you are just starting out because you must first build a following and content to attract traffic. 

 

2. Rental Income

Renting properties is one of the best passive income ideas there is, especially when you already have a property that can be rented out. It’s a steady source of income and it does not require much maintenance once you have a long-term tenant. 

However, contrary to popular belief, earning rental income is not the easiest passive income idea. You need to do extensive research on how to make it profitable, especially because it requires a significant upfront investment. 

Even when you already acquired a property that you can flip into a rental income, there’s a lot of work involved to get a tenant to move it. It doesn’t end there, you’ll also have to deal with property maintenance and other tasks along the way. 

However, if you don’t mind paying for less hassle, you might want to consider hiring a rental property manager, especially when you have multiple rental properties. The main responsibility of the rental property manager is to ensure that the property is operated according to the law and your requirements. 

Property rental managers will:  

  • Ensure all property maintenance are in order
  • Resolve tenant complaints and concern
  • Advertise vacancy
  • Deal with contracts and payments associated with the rental property.

Hiring a rental property manager will significantly affect your total passive income. However, it’s a fair trade if you don’t want to deal with the hassle and inconvenience when running a property rental business. 

 

3. Create a Course

Nowadays, a lot of people are interested in improving their skills and knowledge. Luckily, the internet is making it possible for them to access the information that they need through online courses which is why it can potentially be a lucrative way to earn passive income. 

If you have specialized skills or knowledge, you can create a course through platforms such as Coursera, SkillShare, and Udemy. What makes creating a course a good passive income idea is that it only requires a lot of work at the beginning. Once your course is ready and published, there’s only little for you to do, like answer questions and marketing. 

Earn money every time a student buys your course. The more popular your online courses are, the more students there will be, so more passive income streams for you. 

 

4. Sell Stock Photos and Video Online

If you are an avid photographer or videographer, you can turn your passion into extra cash by selling stock photos and videos online. Stock photos and videos are generic media created with no particular project in mind. 

You can make your photos and videos into stock content by licensing them. Once you have them licensed, organizations and individuals who want to use your photo or video in their project will pay you a fee. 

The nice thing about selling stock photos and videos online is that it does not only allow you to earn extra cash but it gives your work more exposure. This is a big advantage, especially if you are considering making a career shift into a photographer or videographer. 

In addition, there are not many risks in selling stock photos and videos, especially if you have been long doing this for fun since there’s nothing to lose. However, if you are planning to invest in high-end cameras to create stock photos and videos, it might take time before you can get back your return of investment because these media do not really sell for high amounts. 

 

5. Buy and Flip Retail Products

Buying and flipping retail products require low minimum investment, so it’s feasible for those who do not have much extra cash. Besides that, online sales platforms such as Amazon and eBay allow you to sell products for little to no-fee, so you can take advantage of that. 

The key to buying and flipping retail products is to find cut-rate prices. There are tons of places you can look for these such as discount stores, vintage clothing stores, and even storage locker auctions. 

The items you get might not always be in the best condition but by doing some work such as cleaning and fixing some parts, you can sell it for extra cash. Some of the retail items that have high flipping potential are clothes and furniture. 

 

6. Buy and Flip Real Estate

Buying and flipping real estate is one of the favorite passive income ideas for DIYers and those who are in the construction industry. It’s a quick way to earn money. Some people actually enjoy taking on new real estate projects and transforming them from top to bottom. 

However, the initial investment for this passive income strategy is quite steep. It also involves a lot of work to flip a property and it has the potential to be a money pit if you don’t know what you are doing. 

Buying and flipping real estate can be a get rich quick scheme but it does come with a lot of risks. Make sure to take them into consideration before deciding on anything.  

 

7. Buy and Flip Websites

Yes, the buying and flipping strategy does not only work for real estate and retail products. It also works for websites, especially ecommerce websites. This is a good passive income idea for those who have excellent design skills. 

Since ecommerce is booming, a lot of people nowadays are looking to build online store websites. Unfortunately, not everybody has the skills for it which is why there’s a market for people looking to buy ready made websites. 

There are plenty of marketplaces that enable you to sell your website without hassle. A good example of this is the exchange market of Shopify. Newly built websites sell for as much as seven figures, making it as lucrative as buying and flipping real estate.

 

8. Dividend Stock

Another all-time favorite passive income idea is dividend stock. Dividend stocks refers to well-established companies that pay regular dividends. A dividend stock pays out per share so the more shares you have, the higher the dividend will be. 

What makes it a good passive income idea is that it does not really require much work and maintenance at all. You simply have to do thorough research on which dividend stock to invest in, buy the stocks, and wait and see. 

The biggest risk with this passive income idea is that you might lose money when you invest in the wrong stock. This is why it’s important to study the stock market first and take a look at the performance of the stock over the years. It might be a time-consuming process but doing due diligence will protect you against associated risks. 

 

9. REITs

REITs are another example of a more traditional passive income idea. It stands for real estate investment trust which is a term used to describe companies that manage and own real estate. The nice thing in investing in REITs as a passive income is that there’s little to no tax involved. It has a special legal structure that benefits the shareholders incomes. 

Publicly traded REITs are readily available through a broker, making it quite accessible. Compared to investing in rental property, the upfront investment for this passive income idea is significantly more affordable. 

REITs generate passive income, which are called dividends. These dividends can increase annually depending on how they grow. 

However, similar to stocks, REITs also come with their own fair share of risks. However, this risk can be mitigated by doing thorough research on the REITs before making an investment. Although this is a time-consuming process, it’s necessary to ensure that your investment is in good hands. 

 

10. Create a YouTube Channel 

Do you like creating video content and posting them online? In that case, you can turn these hobbies into passive income streams. 

Youtube is a platform that allows you to post video content for free. This means that you don’t really really need a big investment upfront as long as you have a camera, internet connection, and a computer which most people nowadays already have. 

You’ll earn money for every view that you get. You can attract more traffic by publishing interesting content consistently. 

However, the biggest challenge with vlogging is gaining enough traction. It requires a significant amount of time to get your blog or channel up and running but once you have already gained a steady following, it will be much easier to maintain. 

 

11. Monetize a Blog

Many people keep a blog for fun and as a way to share their ideas with the world. If you are one of those people, you can make this hobby into a passive income source through monetization. 

You can monetize your blog by hosting ads, doing affiliate marketing, selling products, and securing sponsorship. The possibilities are endless as long as you get creative. 

The biggest challenge with monetizing a blog is the work involved in building and maintaining it. It would take a while for you to get a solid following, so you need to consistently produce high-quality and eye-catching content. 

If you don’t have a lot of time in your hand, you can hire a writer and blog administrator to maintain your blog. However, doing so might affect the quality of your content, so you need to find reliable content writers and administrators. 

 

12. Sell Digital Products

Digital products refer to media assets that are intangible. Some examples of these are downloadable audiobooks, plug-ins, PDFs, and templates. 

This is a good passive idea if you have the ability to create digital products and you can get a high profit margin; you don’t have to pay for storage costs or inventory. Besides that, once the digital product is made, you can sell it repeatedly since there is no limit on how many times you can resell it. 

In addition, this passive income idea is very convenient because there are platforms that let you sell digital products without any hassle or fee. An example of a platform that you could take advantage of is Shopify.

Digital products require a lot of initial work at the beginning since you have to create them from scratch. However, once you have finished creating the products, they can be sold repeatedly so you can earn from them for an extended period. This is exactly the reason why it’s one of the favorite passive income ideas of tech-savvy individuals. 

 

13. Rent Out a Spare Room

If you live in a house or an apartment that has extra room, you can earn money by renting it out via property rental platforms such as Airbnb. Apps like this will connect you with travelers who are looking for a place to stay for an affordable price. 

The advantage of renting out a spare room is that it does not require much effort, except for making sure that it’s clean and ready for occupancy. The investment cost is also not high since you are already living in the property. 

You can earn a significant amount of money by renting out a spare room, especially if you offer added features such as breakfast or if your location is in a desirable area. 

However, this passive income idea is definitely not for everyone. The thought of having strangers stay with you can be worrying. It’s best to only consider this option if you can find ways that your security won’t be compromised. 

Another potential downside of renting out a spare bedroom is that the income can be inconsistent. In some months, the room can be booked for days while in others, there might not be anybody who wants to rent it out. 

 

14. Start a Dropshipping Store

A dropshipping store is a type of online store. It’s currently one of the best passive income ideas because it has tons of benefits compared to other types of online store. Some of its benefit include: 

  • Low Startup Cost: You don’t have to invest in initial inventory when you build a drop shipping online store. There’s also no need to rent a warehouse, showroom, and several employees to get the business up and running. This makes the cost for dropshipping business more affordable than other types of online stores. 
  • No Warehouse Expense: Product storage is one of the biggest expenses for many companies because real estate rent is not cheap. However, there’s no need to be worried about this with dropshipping stores because even if you have plenty of products, you don’t have to pay for warehouse or storage expenses.
  • Less Inventory Management: There’s also no need for you to hire a warehouseman and other employee to keep track of your inventory. Dropshipping stores have features that take care of these tasks. However, just like other passive income ideas, there are several challenges when starting and operating a dropshipping store. Some of these include the following: 
  • Tight Competition: Dropshipping is not a new passive idea, and since it has the potential to be lucrative, a lot of people are also showing interest in starting these kinds of online stores. As a result, there’s a high level of competition, especially in specific product niches. You might find it difficult to separate yourself from the competition if you choose a popular niche. This is why it’s highly recommended for you to research a niche that is less saturated. 
  • Quality Issue: Dropshipping stores are heavily reliant on third-party suppliers. Unfortunately, not all third-party suppliers are reliable, and there are some that might fail to execute orders as agreed upon, causing dissatisfaction on the side of the customers. 
  • Customer Support Quality: Since you have no control over the quality of the product and delivery, it can be a bit challenging to provide excellent customer support. If customers have concerns or claims, you’ll have to refer to a third-party supplier, which takes a lot of time and effort. 

 

15. Use Passive Income Apps

Nowadays, there are tons of passive income apps that will help you earn extra income. Most of these apps have specific tasks that you can do in exchange for money. The amount of money you earn depends on the complexity of the job. Nevertheless, it’s usually easy tasks that do not require much time and effort. 

Here examples of passive income apps that’s worth considering: 

  • Swagbucks: Swagbucks is one of the oldest passive income apps. It lets you earn money for answering surveys and playing games (read more about Swagbucks and how much you can earn with it here).
  • MobileXpression: You can earn money with this app by allowing it to track your mobile data usage. The information that it collects will be used to identify online behavior patterns.
  • Rewards By Foursquare: Similar to MobileXpression, this app collects data on your phone but is more focused on the location. You don’t have to do anything besides letting it track where you are. 
  • Monetha: Gives you cashback and lots above that. By using this app, you’ll earn points for every purchase that you make. The points can then be redeemed as crypto (for example, Ethereum (ETH) and Bitcoin (BTC)) or gift cards from Amazon, Airbnb, Apple, H&M, IKEA, PlayStation Store, and others. Basically, it’s like a cashback app. 

These passive income apps are not a get-rich-quick scheme. However, they’re worthwhile since they can add to your extra income without much effort, time, and investment. 

 

16. Sell Your Unwanted Items

Does your space look cluttered and tight? In that case, you can turn the clutter around you into passive income by selling them. Doing this is like hitting two birds with one stone; you earn money and you can make space for new things. 

There are plenty of online selling platforms that allow you to resell used items. For example, there’s eBay and Amazon. You can post your pre-loved items and advertise them. 

Some of the easiest to sell unwanted items are clothes and furniture. You might not get the same amount as you paid for these items but getting a fraction is definitely better than getting nothing at all.

Second hand electronic gadgets are also excellent items to sell. Just make sure that they are in pristine condition. If they are not, make sure to be transparent about its flaws when creating a listing. The same practice must be done with other items as well. 

 

How to Start Earning Passive Income

Here’s a step-by-step list of how to start building passive income:

 

1. Decide on the value you want to offer

You can only make this step work if you already know how the different types of passive income work and how you can deliver the value you intend to offer. Despite the term, you still need to invest some money or some time and effort before earning passive income. 

This is the first thing you have to decide – will you invest some of your money or some of your time? After choosing, you can work on the income strategy that will work with what you have. 

Let’s expound on one of the samples given above on how to earn passive income, which is through affiliate marketing. This kind of scheme can let you earn a lot or none at all. It will all depend on your strategy. 

However, the basic idea of affiliate marketing is that you are promoting or selling a product owned by someone else but allows you to earn a commission. It’s not going to work if you only spread spam links anywhere online. 

More people are getting careful with what they click on the internet, and they would mostly click on the links recommended and posted by those they trust. 

How do you gain the trust of an audience? This is where you will use your investment of time and effort to build your reputation. Only then would you gain people’s trust, enough to convince them to click on the links you have recommended. 

Some samples of the steps you can do to build your online reputation are to develop a website or blog or post relevant content on video-sharing platforms or social media sites. 

If you have money to invest in affiliate marketing, you can earn by running paid ads. You will run the ads in an already existing sales funnel that is already up and built by the company selling the product. How does this work? 

For example, Brand A creates and sells a product, meaning that they are already running a system that sells their product. The role of the affiliates is to tell people about the product and a promotional campaign that Brand A runs. Brand A will pay you a commission when people sign up for the campaign. In this sample, your role is to build a system that markets the products of other people or companies. 

 

2. Make a plan on how to deliver that value automatically

A plan is essential because you would not want to end up having a job that is more tedious than the one you have now. At this phase, you have to determine the machines, software, and systems you will utilize to automatically deliver the value set in the first step.

 

3. Create the product you will sell or purchase an investment

This is where things get real. This is where you’re going to make the investment of time in making the product you will sell or invest money to purchase the investment.

 

4. Find customers

This step is optional, depending on the type of passive income you’re trying to create. However, this step is necessary if you are selling a product. You will need customers that will purchase the product, which will give you earnings. In this case, you have to prepare yourself that this is going to be the longest and most difficult part of the process.

This step is optional if you have decided to purchase a financial investment. By investing money, you get to skip the hard work. 

If you have decided to invest time, you have to look into the three primary ways to find customers and choose which one you can pursue. 

 

5. Learn to work an algorithm

For example, if you have decided to sell a product on a certain platform, you need to learn how to work with the platform’s algorithm to ensure your products will rank well.

 

6. Pay for ads

This is often the most direct and quickest step to finding customers, but it involves money. You are required to make a financial investment in addition to the time you have already invested in the process.

 

7. Use content marketing and organic ranking

It doesn’t involve any financial investment, but you have to devote a lot of time to get this done. Among the three, this also involves the highest level of risk in investing your time. Among its risks include the possibility that you might never see a return on your investment.

 

8. Find out how you can automate maintenance

No matter what kind of passive income venture you end up pursuing, it will require some sort of maintenance. So it will highly depend on your passive income source. Some samples include managing your rental properties, continuing to market your products to keep on attracting new customers, managing your stock portfolio and more. 

Your goal is to make the venture more passive, and you can do this by learning how to delegate or automate the maintenance. You should begin the process manually. Don’t do this too soon. You can handle the maintenance for at least a few months to learn what the venture requires and what makes it click and what does not. 

This way, you can plan for more effective maintenance steps once you are ready to automate the process. You have to be aware of every possible problem the venture may encounter before you decide to outsource its maintenance. 

When you are ready to automate the process, you have to choose how depending on the source of your passive income. You have to decide if it’s something that needs to be delegated to humans or if it can be automated using the software.

 

Conclusion

Passive income pertains to the money you earn without putting in too much effort. It might make you think, is this possible? Before quitting your 9 to 5 job, you must first learn the tricks of the trade. The definition of passive income may be misleading. It still takes work to earn. Most people aspire to be rich, not solely for wealth but more for freedom. 

The idea of passive income encourages you to invest in your future. This way, once the investment starts paying off, you no longer have to be trapped in an office cubicle working a 9 to 5 job.  

You will obtain the freedom to pursue your passions through sufficient passive income. It allows you to do whatever you’ve always wanted to splurge on – more time at home, traveling the world, donating to charity; you become the boss.

To make it easier for you to succeed in any passive income you are pursuing, you should focus on one stream at a time. It’s understandable that you want to get rich fast, but creating multiple streams simultaneously might lead to all your efforts getting wasted. You don’t have to start everything at once to speed up the process of building up momentum.

The better way to do this is to plan how to turn the passive income method into a profitable success. By focusing on one venture at a time, you can give all your attention to that passive income method and give all your energy until you build its momentum and start earning money from it. 

To earn more from the venture, you have to excel in what you do. You have to give your best from the moment you put the product out there. Whatever you do in creating the product to ensure its quality will affect the earnings you will get from it in the future.

Another important aspect you have to accept to succeed in earning passive income is the fact that it involves balance and trade-offs between return, risk, and effort. Any venture you pursue requires a certain amount of effort, especially during the start, and it will continue into the future to sustain the income you are getting from it. 

It will also involve the risk of whatever you have invested in it, whether it’s your time, money, or both. The risk of return talks about how profitable it will be. 

This means that even if it is passive income, it is not easy money. You are still required to work hard, at least in the beginning, while you are setting things up. You can only begin to relax once you are already getting profitable gains from the process. 

But even at this phase, you will still need to employ either machines or humans to maintain the workflow and keep on earning from the venture years after you have established the product. 

Most of the ventures you might end up pursuing are going to have a trade-off. They can either require more effort with less financial risk and high return or low effort with a higher risk and lower profit.

PS: if you’ve enjoyed this post, we’re sure you’re going to like this one about how to shop smart. Let us know what you think!

 

FAQs

Passive income has long existed. You may have done it in the past but did not realize it is called that way. If you have lent people money with interest, you have earned passive income through the interests they continue to pay while they still couldn’t afford to wipe off their debt. 

While the concept is basically the same, it has only become more advanced with the inclusion of technology and machinery. This has opened more opportunities to earn passive income, even in ways where you don’t have to invest actual money but only your time, skills, and effort.

It is now possible to develop your own products and have them created and delivered without the need to lift a finger beyond the initial stage. While it may sound as if you’re trying to make something out of nothing or that it is too good to be true, it’s real. Many people have already attained wealth from pursuing profitable passive income measures. 

However, some people also get their passive income by selling scams or offering people something that has no value and won’t give them anything. What you must know about passive income is that it is not something you create out of nothing. You need to invest time, money, or both. 

To make a passive income work, you need to sell or offer some sort of value that can be automatically delivered. You will get paid for that value even years after making the product public.

 

Both active and passive income have one goal: to make you earn money. However, in active income, you will need to invest more time to earn more money. You are active with your time, meaning sacrificing your time to earn. 

For example, if you have a 9 to 5 job, you have to go to that job and spend time with it to do your work to get compensated every pay period. If you are an entrepreneur, you have to spend a lot of your time building the business, hiring people, and doing everything you can to succeed in the venture. 

Essentially, active income means getting paid for your time. You are exchanging your time for money. It can be any service that you provide and get paid for it. It’s active because you need to work to make money. You will get no compensation when you stop putting in the hours or time to provide the service. Active income is something that many people earn their living from. 

On the other hand, passive income will only require too much of your time initially. You have to set things up, develop a product and find people who will be interested in your product. You will feel that it is becoming a passive income when the venture experiences the success that you are no longer required to spend too much of your time on it, but you continue earning. 

You can keep earning from something you created several years ago as long as people are still finding the product relevant, or someone, such as bloggers or influencers, picked it up, which renewed people’s interest in the product. 

It can also be an investment you have put your money and time into learning about the process, giving you passive earnings in the future.



There are many ways to earn a passive income of at least $1000 per month, but all require more effort, especially in the beginning.

Many people nowadays are getting interested in becoming content creators on YouTube. You own your channel, so you can upload anything that you think people would want to watch without breaking any terms and rules set by the platform. 

After posting your content, you can allow the platform to run ads on your videos. The more people who watch your videos, the more chances to convince them to click on the ads, which leads to higher earnings.

Another venture you can try is to create a lead-generating website for someone else’s business. Your website will promote the business’ products without making it too obvious. Aside from hyping up their products, you can also run promotions on your site that will give your visitors a chance to earn a free booking or free samples of the products from the business.

There are many more ventures you can pursue that allow you to earn at least $1000 per month. They include renting out a room in your house, investing in real estate, creating an online course, promoting a niche affiliate, joining an Amazon affiliate program, writing a book, starting a membership website, and more

The ventures in which you have invested money into will give you higher passive income in the future. However, they also entail higher risks because there is always the tendency to lose your investment. This is why you need to learn everything about the process before putting your money into it or letting your money sleep in the venture that will give you profits in the coming years.

One good example is investing in dividend stocks. You will have more chances of getting a good residual income over time if you consistently invest money in this venture. You have to keep on updating your investment portfolio to earn more.

Aside from stocks, investing in rental properties is also considered one of the best ways to earn a good passive income. Once you have invested in it, you can outsource managing and running the company, so you can keep on making money from it over the years even without personally overseeing the business.



One of the ways to generate passive income with crypto is by buying and holding this type of currency. You can purchase a digital asset, store it in a secure wallet, and wait until the prices shoot before selling them. 

However, it will require active monitoring on your part. If you can’t afford to spend time in the process, you can choose an effective crypto finance solution. You will only need to sign up and verify your identity. Once done, you can begin depositing using the preferred method, buy crypto, and earn interest. 

Another excellent way of earning crypto is by shopping with Monetha. It has over 100 marketplaces where you can purchase and, in return, get reward points. You can exchange the points for cryptocurrencies, including Bitcoin, Ethereum, Tether, and Binance, without spending additional cash.



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