Want to know the best ways to earn passive income? Ever felt the need for more money but you feel you do not have the requisite time to dedicate to your quest?
There is no doubt that we all need multiple streams of income and the best ways we can get that is through passive income. Passive income makes multiple streams possible.
Therefore, in this article, we will put together some of the best options which you can use to get passive income. You may find something for you in this list, so read carefully.
A true understanding of the term “passive income” and how to get them will be very beneficial in raising them.
Passive income is money that you can earn without putting in a lot of time and effort. Once you’ve identified and established a passive income stream, you won’t have to work on it every day, but that doesn’t mean you won’t have to do some work now and then.
The last part of that definition is very crucial. They may not need the traditional daily efforts as jobs do, however, they need significant participation from you.
Most passive income ideas need an initial time investment, money investments, or investments of other resources. They will also require some sort of monitoring or regular maintenance to keep things running, but they will not require you to devote lots of hours per week on work.
A passive source of income with constant cash flow is what everybody wants. One could make a living off multiple streams of passive income.
What Passive Income Does Not Cover
The term “passive income” has its variance in meaning from “extra income”. Here are some few areas that the term “passive income” does not cover.
Your Daily Job
Passive income does not come from something which you have been involved in, such as wages from a job.
A Second Job
Getting a second job will not qualify as a passive income stream because you will still be required to show up and do the work in order to be paid. Passive income is about generating a consistent stream of income without putting in a lot of effort.
While some passive sources of income will require lots of efforts in the beginning and from time to time a little bit of dedicated efforts, what qualify them as passive is the fact that you can leverage on them to produce results with little interference from you as your daily job.
How to Earn Passive Income
Here, we are going to talk about some very profitable and important ways to earn passive income. Their profile of efforts required to make profits differ.
Some of the best passive income ideas are;
Invest in Rental Properties
Rental income is a splendid type of passive income. Long-term rentals can be a reliable source of cash if they are in a healthy rental market, but they also come with long-term stressors such as property maintenance, multiple mortgages, property tax bills, and other costs.
You could also concentrate on short-term rentals through a platform like Airbnb, which depends on a consistent flow of visitors to your area. You can start small and rent out a room in your house.
Peer to Peer Lending
Peer-to-peer lending is what it sounds like: you act as a lender to a third party, through a ready-made financial institution or platform like Prosper. You will then earn interest as they repay the initial loan amount.
Peer-to-peer lending carries a significant risk that the person or people to whom you lend will default on their loans. To reduce that risk, you could spread your funds across multiple loans.
You must meet the income or net worth requirements for your preferred peer-to-peer platform.
Dividends are payments made to shareholders from the profits of a company. A company’s board of directors decides on this.
Investing in dividend stocks, which distributes part of a company’s earnings to investors regularly, such as quarterly, is one means of creating an income stream. The best ones increase their payout over time, assisting in the growth of future income.
Advertise your Car
You can turn your car into a moving billboard to generate passive income. Free Car Media, Wrapify, Carvertise, and StickerRide are websites that connect car owners with advertisers.
You’ll earn a tidy passive source of income for putting a vinyl decal on your car for an agreement amount of time, all without disrupting your normal driving routine.
Just make sure you have the requisite driving habits. Some jobs require you to drive a certain amount of miles per day or to be a delivery driver.
Bonds and Bond Index Funds
Rather than purchasing stock in a company, bonds allow investors to lend money to companies, as well as federal, state, and local governments, and collect interest income. I consider bonds a safer investment than stocks, but they yield a lower rate of return.
Experts recommend investing a portion of your portfolio in bonds because of their lower volatility and relative safety compared to stocks, with a higher proportion of bonds in your portfolio as you get closer to your investing goal.
Get a High Yield Savings Account
A high-yield online savings account, which can be perfect for building your emergency fund, is another way to earn passive income. It adds the interest accrued by your savings account to your balance.
High-yield accounts are a type of insured savings account that pays much higher interest rates than the national average. The APY of these high-yield accounts may vary, and minor differences add up to real cash. So, it pays to shop around for where you put your savings.
Real Estate Investment Trusts (REITs)
If you want to generate passive income from real estate without the hassle and expense of buying and managing properties yourself, REITs may be the answer.
REITs, like mutual funds, own commercial real estate such as office buildings, retail spaces, apartments, and hotels. REITs pay high dividends, but their complexity and availability vary. Some are traded on stock exchanges, while others are not.
Crypto staking is a method of increasing your cryptocurrency holdings by using them to help confirm activity on an underlying blockchain network. They may reward you with more cryptocurrency if you stake an amount of cryptocurrency.
Most people think of staking as delegating their cryptocurrency to someone who keeps track of transactions on the network on which it runs.
Those verifiers must stake some tokens to protect against fraudulent transmissions. Giving the voting power of your tokens to a reputable verifier allows you to share in the rewards they receive for doing their job correctly.
Invest in Crowd-Funded Real Estate
If you want to invest in real estate but don’t want to do all the heavy lifting, such as management, repairs, dealing with tenants, etc., another option is to use a crowdfunding platform. An experienced investing team selects the real estate, and you decide whether to invest in it and how much you are comfortable with it.
You’ll pay an annual management fee to the real estate platform, with minimum investment amounts ranging from tens of thousands of dollars.
Create an Application
Developing an app may be a way to make that initial time investment while reaping long-term benefits. The app you created could be a game or one that assists mobile users with a hard task. Users will download your app once it is made public, and you will be able to earn money.
If you can design something that grasps your audience’s interest, an app has a lot of potential. You will have to think about the best ways to make money with your app. For example, you could run in-app ads or charge users a small fee to download the app.
Put Up Art for Sale
There are so many platforms on which you can put up your creative work for sale. This way, the only effort you will make will be to create the artwork. You can then go about your daily business until the artwork is sold.
Alternatively, if you have a good social media presence, you can use that to your own advantage. You can market these artworks with your social media.
Buy a Local Business
Someone else’s business can be your own passive source of income. If you have the requisite amount of money, you could buy an existing business, employ a manager, pay staff with the revenue of the company, and get paid from time to time for the company’s profits.
Rent Out Your Car
This is an excellent source of passive income. If you have a spare car, you can rent it out and have some income from it without any effort from you. In fact, the car produces money for maintenance and some extra cash for your pockets.
You can get your car registered with online transportation services. This way, you will be sure that your car will be in safe hands.
Rent Out Parking Space
Renting out a parking space can be a great way to earn passive income, as it requires little ongoing effort or maintenance once you have set it up. If you own a parking space, either as part of a rental property or as a separate asset, you can rent it out to someone else on a short-term or long-term basis, generating income without having to work actively for it.
To get started, you’ll need to determine what the going rate is for parking in your area and decide whether you want to rent out your space on a daily, weekly, or monthly basis. You can advertise your parking space for rent on websites like Craigslist, Airbnb, or JustPark, and set up a system for collecting payments and managing access to the space.
Once you have a renter in place, you can sit back and collect regular payments for as long as they continue to use your parking space. Of course, you’ll need to make sure that your parking space is safe and well-maintained and be prepared to handle any issues that may arise (such as a car blocking the space or a renter not paying on time). But overall, renting out a parking space can be a relatively easy and low-stress way to earn extra income.
Set up An Annuity
An annuity is a contract between an individual and an insurance company in which the individual makes a lump sum payment or a series of payments in exchange for regular payments over a specified period, usually for the rest of their life. Setting up an annuity can be an effective way to create passive income, as it provides a regular stream of payments without requiring ongoing work.
To set up an annuity, you’ll need to work with an insurance company or financial advisor to determine the amount of your initial investment and the terms of the annuity, including the length of time over which you will receive payments and the amount of each payment. Once you’ve set up your annuity, you can sit back and receive regular payments without any additional effort on your part.
Rent Out Useful Household Items
Another way to generate passive income is by renting out useful household items. This can include items like power tools, kitchen appliances, sporting equipment, or electronics. Renting out these items can be a good way to earn extra income without having to sell your belongings.
To get started, you’ll need to determine which items you’re willing to rent out and at what price. You can advertise your items for rent on websites like Fat Llama, Peerby, or RentNotBuy. Then, you can set up a system for collecting payments and managing access to the items.
You’ll need to make sure that your items are in good condition and are safe for renters to use, and be prepared to handle any issues that may arise (such as damage to the item or a renter not returning it on time).
Overall, renting out useful household items can be a relatively easy and low-stress way to earn extra income, as long as you’re willing to invest some time and effort upfront to set up your rental system.
Ways to Earn Passive Income Online
Here are several ways to earn passive income online;
Create and Sell Digital Products Online
Digital products are intangible media assets. They typically include downloadable files like audiobooks, PDFs, templates, or plug-ins.
Because there are no inventory or storage costs, digital products have high-profit margins. The asset only needs to be created once, and it can be sold multiple times. No limits can be placed on the number of copies that can be sold.
To sell your digital products online, you can set up a Shopify store. This entire process can be automated with instant downloads on Shopify.
Sell Photos Online
You can take photos and sell them to stock photo websites such as Shutterstock, Alamy, Getty Images, and IStock Photo. This can be a very good side hustle or passive income for you.
You take photos, check that they meet the site’s specifications, upload them, and add relevant keywords to help them appear in search results.
When a user licenses one of your photos, you receive a percentage of the sale. Alamy, for example, offers between 17% and 60% of the licensing price for each image sold.
If you are a master in any field, creating a written, audio or full visual course will be a wonderful way to make passive income.
You can use sites such as Udemy, Skillshare, and Coursera to distribute and sell courses.
You could also consider a “freemium model,” which involves building a following with free content and afterward charging for more detailed information or for those who want to know more.
The free content serves as a demonstration of your expertise and may attract those looking to advance or grow.
Affiliate sales are passive income generated when someone makes a purchase after clicking a link or entering a referral code that you have published on your website, video, or podcast. In most cases, you’ll be paid a flat rate commission or a percentage of your purchase.
You can find affiliate links for almost any product or service, which means you could earn money passively from anything from mattress reviews to software evaluations. However, keep in mind that this is a highly competitive market, and the most successful affiliate marketing requires high-quality ongoing content production.
Sell Sponsored Posts on Social Media
If you have many Instagram followers, you should consider creating sponsored content. Instagram-sponsored posts are pieces of content that promote a specific product or service usually owned by the sponsoring party. Sponsors pay publishers to create and distribute content that promotes their company.
The key to doing this is to increase your Instagram followers. You should also be extremely consistent with the type of content you post so that sponsors know what to expect. Also, stick to one niche. Brands prefer creators who can publish quality content on a specific topic.
Write an eBook
Writing an ebook can be an excellent way to generate passive income. You can sell an ebook online on platforms such as Amazon Kindle or Barnes & Noble Nook.
To write an ebook, you first need to choose a topic that you are knowledgeable about and passionate about. Then, research and organize your content, and write your book in a clear and concise manner. You can hire an editor to help you polish your work before publishing it.
Once your ebook is ready, you can upload it to online marketplaces for sale. You may want to consider marketing strategies such as social media, email lists, or advertising to reach potential readers and promote your ebook.
Writing an ebook requires upfront effort, but once published and marketed, it can generate a steady stream of passive income for years to come.
How to Earn Passive Income With No Money
Although money has to be involved in some way. However, there are plenty of ways to earn a passive income with very little money involved.
In fact, you can make some money using only necessary resources, such as data, time, and skills.
If you do not have enough money, you can try making your skills accessible to other people. Your skills may be in high demand in certain industries. Skills such as design, software engineering, and coding can be used to raise money for investments.
Furthermore, you can sell courses to help people become better at that skill. By creating courses, you can impact the lives of thousands of people and earn money in the process.
You can also leverage certain social media platforms, such as YouTube, by gaining a large following. Such platforms will enable you to make lots of money by just teaching your skills.
Passive Income Ideas for Young Adults
Apart from the ideas already listed on this page, here are some more passive income ideas for young adults;
Transcription is the process of converting audio or video recordings into written text. If you’re a fast and accurate typist, you can offer transcription services to clients who need to transcribe interviews, webinars, podcasts, or other content. You can do transcription from anywhere, and the demand for this service is skyrocketing. You can find transcription jobs on freelancing platforms like Upwork, Fiverr, and Rev.
Social Media Influencer
If you have a large following on social media, you can leverage your influence to earn money through sponsored posts, affiliate marketing, and product endorsements. As a social media influencer, you can work with brands that align with your values and interests and create content that resonates with your audience. Building a strong personal brand takes time and effort, but the rewards can be significant.
Airbnb Business Model
If you have a spare room, an empty apartment, or a vacation home, you can rent it out on Airbnb. Airbnb is an online platform that connects hosts with travelers who are looking for unique and affordable accommodations. As an Airbnb host, you can set your own prices, manage your availability, and communicate with guests directly. You can also hire a property manager to handle the day-to-day operations of your Airbnb business.
Social Media Manager
If you’re skilled in social media marketing, you can offer your services as a social media manager to businesses and individuals who need help to grow their online presence. As a social media manager, you can create and schedule posts, engage with followers, run ad campaigns, and analyze performance metrics. You can find social media management jobs on freelancing platforms or create your own agency.
If you have a passion for creating videos, you can start a YouTube channel and monetize it through ads, sponsorships, and merchandise sales. YouTube is the second-largest search engine in the world, and it offers immense opportunities for content creators who can capture the attention of their viewers. As a YouTuber, you can create tutorials, vlogs, product reviews, or any other type of content that resonates with your audience.
If you enjoy talking about a particular topic or interviewing interesting people, you can start a podcast and monetize it through sponsorships, affiliate marketing, and merchandise sales. Podcasting is a growing industry, and there are millions of people who listen to podcasts regularly. As a podcaster, you can share your knowledge, expertise, and opinions with your listeners and build a loyal following over time.
Vending Machine Business
If you’re interested in passive income that requires a bit more investment, you can start a vending machine business. You can place vending machines in high-traffic areas like malls, airports, or office buildings, and they can generate a steady stream of income without requiring much maintenance. You can sell snacks, drinks, or other products that people need on the go.
If you’re interested in e-commerce but don’t want to deal with inventory or shipping, you can start a drop shipping business. Drop shipping is a business model where you sell products online without keeping them in stock.
When a customer places an order, you purchase the product from a third-party supplier that ships it directly to the customer. Drop shipping allows you to focus on marketing and customer service, while the supplier takes care of the logistics. You can sell a wide range of products, from clothing and accessories to electronics and home goods. You can set up your own online store or sell through marketplaces like Amazon, eBay, or Etsy.
If you have strong writing skills, you can offer your services as a freelance writer to clients who need high-quality content for their websites, blogs, or marketing materials. You can do writing from anywhere, and there is a high demand for skilled writers in various niches. You can find writing jobs on freelancing platforms, job boards, or by reaching out to potential clients directly.
If you have a passion for a particular topic, you can start a blog and monetize it through ads, affiliate marketing, and sponsored content. Blogging allows you to share your knowledge and expertise with a global audience and build a loyal community of readers over time. You can write about anything that interests you, from fashion and beauty to personal finance and travel.
Silent Business Partnership
If you have some capital but don’t have the time or expertise to start and run a business, you can consider a silent business partnership. This involves investing in an existing business and sharing in its profits without actively participating in its operations. This can be a great way to generate passive income and diversify your investment portfolio.
Frequently Asked Questions
How Can I Make Passive Income?
You can make passive income with one of the following methods:
- Invest in rental properties.
- Peer-to-Peer Lending
- Dividend stocks
- Advertising your car
- Bonds and bond index funds
- Getting a High Yield Savings Account
- Real Estate Investment Trusts (REITs)
- Crypto Staking
- Investing in crowd-funded real estate
- Creating an application
- Putting Up Art for Sale
- Buying a local business
- Renting out parking spaces
- Setting up an Annuity
- Renting out useful household items
How Can I Make an Extra $1,000 Per Month?
Here are a few ways you can generate as much as $1000 per month with passive income:
- Buy and sell online courses.
- Real Estate
- Affiliate marketing
- Publish an ebook
- Buy U.S. Treasuries
- Rent out your yard.
- Rent your car out.
How Much Money Can I Earn from Passive Income?
The amount of money you can earn from passive income varies depending on the type of passive income stream you choose and how much time and effort you are willing to invest in it.
It also depends on various factors, such as the amount of money you invest, the return on your investment, and the length of time you hold your investments.
For example, if you invest in dividend-paying stocks that have a high yield, you can earn a substantial amount of money over time. If you invest $100,000 in a stock that pays a 5% dividend yield, you would earn $5,000 in passive income annually.
There are plenty of ways to earn both active and passive income. You can leverage the ideas given in this article to get yourself some extra income with less effort.