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If you’re tired of trading your time for money, working on different passive income streams can be a great way to make additional income without a lot of ongoing work, and it can also be a great way to diversify your income.
If you’re interested in creating passive income for yourself, this list includes 20+ different passive income ideas that you can use to build wealth.
What is passive income?
There are two types of basic income: passive income and active income.
Active Income is income that you receive after doing some type of work. This means things like working a 9-5 job, freelancing, or working on a project basis.
Passive Income is income that you receive from work you’ve doing previously. This means you don’t have to be actively working to get paid (you may need to do some maintenance to maintain your income though). This includes things like royalty income from things you’ve created, investment income, and income from renting out your property.
Now some people say that passive income needs to be income that you don’t need to do ANY ongoing work for, but I just don’t think that’s realistic. Really the only income that you never need to maintain is investment income. Other sources of passive income will need some setup and ongoing work, but it definitely doesn’t require the type of time commitment that a regular job requires.
Why Bother With Passive Income?
COVID-19 really made me take a look at how I was creating income
Passive income gives people freedom. You can use your passive income earnings to buy your time back by using the money to cover some (or all!) of your expenses. This means you can have financial freedom and time freedom.
Another great thing about passive income is unlike a regular job, there is no cap on how much you can earn with passive income.
Passive Income From Activities You Already Do
One of the easiest ways to start getting some passive income is earning income from activities you already do!
Cash Back Websites
If you do any shopping online you should be using a cashback site to get some extra money! Cash back sites will give you a percent of your purchase back in cash from using their link or extension when shopping. Some cash back websites will even help you find coupon codes so you can save even more!
Cash Back Credit Cards
Similar to cash back websites, cash back credit cards will give you cash or points when making purchases. Cash back credit cards will usually give you money back on every purchase (and maybe some extra money back when you buy things in certain “categories”), which means you can get money back on everything you buy!
The credit card we’ve been using is the Chase Sapphire Preferred card, which has helped us get over $1,000 in cash back!
They currently have a promotion where you can get 80,000 in bonus points and a $50 grocery store credit for signing up and using the card. Check out the Chase Sapphire Preferred card!
Advertise On Your Car
If you drive regularly, you can earn extra money by placing advertisements on your car! Carvertise is one of the largest car advertising companies, and here’s how car advertising works:
- First you will create an account and fill out your profile.
- Once you are matched with an advertising campaign you will set up a time to get your car wrapped.
- Then your call will be professionally wrapped with a paint-safe sticker the has the advertisement on it.
- You continue to drive like normal.
- Once the campaign is over, the wrap will be removed and you will receive payment.
According to Carvertise, you could earn $350 – $1500 for each campaign.
Use the Internet
HoneyGain is an app that you can install on your phone or computer that lets you make extra money from your internet connection.
The internet is connection is used as a part of a network that business and individuals can use for different activities. Your information is kept anonymous, and everything is encrypted.
Passive Income From Renting Your Property
If you have a car or extra space in your home, you can turn that into a passive income stream by renting it out.
Rent Your Car
If you have a car but aren’t interested in driving for Lyft or Uber or doing any type of food delivery you can still make some money by renting it out.
Turo is a service that connects people that need a car rental with cars. You can either meet the person to hand off the car (and keys) or do a contactless check-in using the Turo app (which makes this passive!).
Your earnings depends on how many days your vehicle is rented out, and the make, model, and year of the car, but there are people who make full-time incomes on Turo.
Check out this vide for more information about Turo and how much they earned:
Rent Out Your Home
You’ve probably heard of AirBnB, right? If you haven’t it’s a platform where people can find short-term and long-term rentals. People can also use the platform to list their rooms or homes for rent.
Depending on the amenities offered, the location, the length of the stay, and how often your space is booked, you could make anywhere from a few hundred dollars each month to thousands each month.
If you’re interested in becoming an AirBnB host (renting out your space), Adventure in You has a great article about how you can get started.
Rent Out Space In Your Home For Storage
If you have extra space in your home and don’t want actual people staying there, you can still make some money. You can use that space to store items for other people, kind of like a storage unit.
Neighbor lets you list your space for rent. You could rent out a closet, a basement, a driveway, and even your garage.
According to Neighbor, you could make anywhere from a few hundred dollars to up to $2,000 each month, depending on the space.
Passive Income From Investing
Investing is another way you can creative passive income. I love investing because you don’t need much money to get started, and it’s scalable!
One of the downsides of investing is that you need a large amount of money invested to make a good amount in gains/income, but you can build it up over time.
If you have any savings goals, you should put your money into a high-yield savings account!
A high-yield savings account is a bank account (usually online-only) that gives you a higher interest rate than a normal savings account or checking account.
CIT Bank has a great money market account that gives a 0.45% interest rate! There’s no monthly service fees, it’s FDIC insured, and you can access your money with Zelle and/or bill pay!
Invest in CDs
A certificate of deposit (or CD) is similar to a checking account, but there is a slight difference: with a CD money is held for a specific amount of time (from 6 months to 5+ years), and if you want to access it before the maturity date, you might have forfeit some of the interest earned.
With CDs you can get slightly better interest rates because you won’t be able to access the money (without a penalty) for a certain amount of time, so it can be a good place to earn some extra money.
A bond ladder is a type of investing/saving strategy where you purchase bonds that mature at regular intervals. This way you will have access to money at regular intervals and you can either put that money in a different bond or just use the money for whatever you want, all while getting interest.
If you’re interested in this type of strategy, Fidelity has a great article about bond ladders, and if you have an account with Fidelity, there is a free bond ladder tool that can help you create a bond ladder.
Peer-to-peer lending involves helping people obtain loans by giving them all (or a portion) of the money.
Website like Prosper and Lending Club help people searching for loans find other people willing to crowdfund the amount. With both of these websites you can “invest” as little as $25 into a loan and receive interest each month.
Dividends are payments that companies pay shareholders from the companies earnings. Dividends paying companies can be a great addition to any portfolio, and there are people who actually build entire portfolios from dividend stocks so that they can live on only the dividends that are received (instead of the gains from the stock price).
It may sound a little crazy, but many companies pay dividends, and there is a even a list called the Dividend Aristocrats, that has companies that are in the S&P 500 that have increased their dividend every year for the last 25 years!
If you’re interested in learning about dividend investing, Bruce Wang has some great videos for beginners, and Humphrey Yang also has some great videos about investing (including a video about creating a portfolio for beginners).
If you’re just getting started with investing and don’t feel comfortable picking specific stocks, you can invest into an ETF.
An exchange traded fund (or ETF) is something you can invest in that follows another asset, index, or sector. You can trade ETFs just like stocks, and they can be a great way to diversify your investments.
For example there are ETFs that track the S&P 500 like the VOO (Vanguard S&P 500 ETF) and SPY (SPDR S&P 500 ETF).
REIT stands for Real Estate Investment Trust, and it is a company that owns some type of real estate investment. There are a lot of REITs that are on the stock exchange and that can be traded like regular stocks.
There are different sectors of REITs like office REITs, industrial REITs, retail REITs, resort REITs, residential REITs, timberland REITs, health care REITs, self-storage REITs, infrastructure REITs, data cent REITs, and more.
If you’re interested in investing into a REIT, you can visit Nareit for more information.
Invest in a Business
If you’re interested in being part of a business but don’t want to be reponsible for the day-to-day operations, you can invest in a business and get a little bit of equity.
You don’t need thousands for dollars to invest in a business, you can get started with as little as $250 depending on the business and what platform you’re using for your investment.
Websites Where You Can Find Businesses to Invest In:
Passive Income By Creating Digital Assets
My favorite way to make passive income is through creating digital assets! Digital assets are digital things (of course), that you can use any way you want. These can be things like music, photos, even products.
Sell Stock Photos
If you’re an aspiring or professional photographer, there are many companies online that will pay you for your photos.
Companies like iStockPhoto and ShutterStock will list your photo on their website and people will be able to purchase the rights to the photo to use in their marketing or in their content.
What’s great about selling stock photos is that you can (usually) list the photos on multiple market places, which means more opportunities for your photos to be found and sold.
Where to Sell Your Stock Photos:
License Out Your Music
You can license out your music (also called sync licensing) to different companies for use in commercials, video games, movies and more.
Websites For Music Licensing:
Create Digital Products (eBooks, Printables, Online Course)
Digital products are another way that you can create a passive income stream (or two) for yourself.
If you have a special skill or some specialized knowledge or way of doing something, you could create a course to make money from that knowledge.
Where to Sell an Online Course:
Creating and selling ebooks is a newer income stream I started recently. I write short stories and sell them as ebooks on online stores like Amazon, B&N, Apple iBooks, and SmashWords.
Here are my Amazon sales and page read for the last 90 days:
You don’t have to create fiction books to make money, you could create a non-fiction book about something you’re knowledgeable about and make money with that.
What I’ve found, is when I upload my books and use the proper keywords and have a good book blurb, the book will be found organically and I’m able to make sales from just people stumbling upon one of my books!
Other Digital Assets You Could Create:
- Start a Blog
- Start a YouTube Channel
- Start a Podcast
Passive Income Through Business
Another way you can create passive income is by starting a business. This income stream does require a lot of up front effort, but if you’re looking to make a good amount of money, starting a business is a great way to accomplish that.
Passive Income Businesses You Can Start:
- Start a Dropshipping Business
- Car Wash
- Storage Rentals
Final Thoughts on Passive Income Ideas
Creating passive income is a MUST for anyone. Seriously, you need to diversify your income to have something to fall back on if something happens to your main source of income, and it to give you a little bit of wiggle room in your budget!
Creating passive income doesn’t have to be difficult, you can literally create a passive income stream today by opening a high-yield savings account for your earnings and switching to a rewards card for your purchases.
After you get comfortable with that you can start branching out to making money with things you own, and then you can begin creating digital assets, and then using all of that money that you earned to either invest and/or create a business.