Time is money, even if you do nothing with it!
An additional source of income never hurts, does it? Passive income is just that, but better. You’ve always exchanged some sort of resource to ‘earn’ money. A trader exchanges his purchases for money, a manufacturer exchanges his produce. Hell, even a beggar needs to leave his premises for a living.
Mostly though, people exchange their most valuable resource during a 9 – 5 job, i.e. their time. Unlike this unforgiving give-or-take, passive income sources ask nothing of you in return for money. Wait, really? 😯
It really is as good as it sounds, once the system gets going. For starters, let’s consider a simple example. Imagine Bob opens an online store as a side experiment, selling general merchandise items. He already has a supplier who takes care of production and shipping, all he did was set up an attractive e-store for customers to add things to their e-cart and place orders.
Bob doesn’t even keep a physical inventory for the things he sells. He lists them on his website with a profit margin ➡ people place orders ➡ the supplier ships directly to those addresses. Bob makes money without even producing, marketing, or shipping items. Bob is smart. Be like Bob.
Clarifying the Concept of Passive Income
Just like in Bob’s example above, earnings are generated in exchange for little to no involvement. In most passive income models, some investment, work, or time would need to be put in initially (e.g. setting up the e-store).
The amount of work, time, money, or involvement varies with different ways of passive income. In a way, rental income from the property is also an example of passive income. In this case, the initial investment required would be pretty significant, with absolutely no involvement needed to follow it up.
You wouldn’t only be earning the monthly rentals, but your own property would also probably appreciate in value with time. In this way, your stream of income sustains itself. 💰
Through passive income, you don’t have to work to live and live to work – if that makes sense.
How Can You Make Money Passively?
There are many paths that could lead to this particular destination. From creating ever-living online courses, writing eBooks, to investing in real estate and stocks.
Even renting out a property you own (or even a car) would enter you into the realm of passive income. Running a blog gets the blogger money through advertisement. A successful YouTuber keeps making money off his videos that date back a decade because as long as it gets views, ads will pay off.
However, in all of these examples, one factor is common. It all has to start from an input of ‘something’; which could be time, money and/or work.
In Bob’s example, he must have had to;
- Form the e-store.
- Find a supplier.
- Create visual models of the supplier’s products.
- Upload them to the e-store, with catchy product descriptions.
- Sync the supplier with customer addresses to form an automatic delivery system.
However, once it all got set up, Bob didn’t have to do much at all. His involvement was limited to answering a few queries of buyers, and occasionally checking the automated integration systems. Other passive sources of income may require even less work. So, if you feel like trying your luck with something else, this article has got 20 amazing ideas for you to consider. Keep reading!
Simple Ideas for Passive Income
Generally, people associate passive income only with making investments in the stock market. While that’s one of the examples, the stuff you already own could also turn into an investment. If you’re creative enough, even your personal belongings can start making your money passively. Any asset that has value can be converted into monetary gain, and that’s the concept we’ve based these ideas on.
1. Rent Your Car Out
In this day and age, almost anything you think about doing, an app is there to assist you. Gone are the days when you had to drive your car to multiple dealerships to rent it out at the best possible rate. Today, Lyft or Uber drivers who don’t own cars, rent them out through apps like HyreCar.
Put your car up for grabs on such apps and wait for the person with the highest price quote, and in just a few taps, you’ll have them at your doorstep. You don’t have to drive for deliveries or Pick ‘N Drop services to make money off of your car – that’s not really passive, is it?
Alternatively, you could use apps like Turo or Getaround to list your car as available for rental. Through the app, instead of having to rent cars from companies, they’ll be renting one directly from the owner i.e. you. From now on, instead of your car ever sitting idle in your garage, it’ll earn money back for you.
2. Rent out Unused Stuff
It may sound a bit sketchy to hand over your personal belongings to a stranger for money. It’s not though. It’s actually pretty rewarding. There’s an app for this too; called Fatllama. It allows you to rent your valuable things (such as electronics or devices) to people around you who may need them. Here are some examples of high grossing items;
- Video cameras
- Gaming consoles
- Lawn Mowers
- Drone Cameras
However, renting out isn’t the only viable option when it comes to generating passive income from valuable stuff.
Many people, even teenagers, have made thousands of bucks simply via flipping on-sale items with a profit margin on eBay. Just look for discounts on craigslist, eBay, Amazon, and upload these items for their regular price on the same platforms after a while. You’ll have made a few more hundred bucks on the side, just through a few efficient clicks.
3. Rent out Property (Or Extra Space)
Making money off of property is possible in many ways. If you own additional property that’s lying around empty; that’s a no-brainer. Apps like HomeAway and Airbnb should be knocking on your door by now. However, most people also have spare bedrooms and/or extra space in their home that could be monetized through a paying guest. However, if it distorts your privacy in any way, it’s understandable to let this option slide.
Many people even exclusively purchase property just to rent it out (this will be discussed in detail later on). Furthermore, people who rent it also at times list it on Airbnb with a profit cut to earn money passively. It’s surprising how many creative ways there are to make a few passive bucks here and there! However, with this particular idea, you should be prepared to do a little work when it comes to maintenance and cleaning.
Earn More Money Passively through Initial Investments
Bigger inputs generate better outputs. If you’ve got the money to invest in something that offers maximum rewards for minimum risks, would you go for it? Any rational investor would, and you should too. As a general rule of thumb, anything that has the potential to ‘probably’ turn into a self-sustaining long-term source of income, is worth a shot.
4. Stock Market Investments
Here’s the good old cliché way of generating passive income. Pro-tip, if you’ve got money to invest, you should start right away. You must have heard people saying that it’s always too risky, and hardly ever leads to profits – unless you’re an absolute pro at it. That’s false though, any beginner would tell you that. It’s actually one of the easiest sources of making money, even as you sleep.
Obviously, doing it blindly wouldn’t lead to any good, but play smart and you’d be surprised at the outcome. You should initially aim for index funds and dividend stocks, as they’re known to be the best investments for earning income passively.
Entering into the stock market, awareness would definitely help you. But every world champion was once a beginner, and some tips would surely help you climb up the ranks. Focused observation goes a long way in learning quickly in stock markets. Look at the successful professionals and watch how they do it, follow their footsteps in smaller scales and make your way towards a promising source of passive income.
5. Investment in Real Estate Investment Trusts
In short, they’re abbreviated to REITs. They basically trust that finance or own real estate properties that return revenues to them. Invest in these trusts to earn passive money through their dividends, without even purchasing or directly owning a property for rental.
You wouldn’t need to go through the hassle of getting the best deal, renting out the property, or taking care of its maintenance. That’s the true definition of ‘passive’, but the upfront investment amount could be pretty significant.
Apps like M1, ‘Fundrise’ and ‘DiversyFund’ are great options for making your REIT investments as effortless as possible. You could use their default pre-built portfolios, or add a few dividend stock, index funds, and REITs to your own portfolio according to your choice.
“I’ve invested about $25,000 and returns have been close to 12%. So far, I am very happy with it and think it’s a good way to get into the real estate market without needing a lot of capital.”
– Brandon Neth, Credit Card and Reward Travel Expert at FinanceBuzz
6. Buy a Property for Rental Income
As mentioned above, countless people are buying a property just to rent it out immediately. All they’re interested in is that reliable, fixed monthly amount to keep their finances ascending, all while the purchased property appreciates in value too. Which savings account could offer such a safe and lucrative return on investment?
You could buy a property according to your choice, and rent it out to single or multiple families. Listing the property on Airbnb and HomeAway is also always an option.
Apps like Roofstock are built to make this process simpler for you, allowing you to purchase rental properties through the app. One worry may instantly pop into your mind; who would take care of all the maintenance and property management issues? Well, property managers are easily available in the market who will work for far less than the rental earnings, making this venture easily worthwhile.
Hiring a good manager to reduce your required involvement to zero, but your income would still rack up. That’s about as passive as it gets when it comes to making money! 💸
7. Lending Peer to Peer
We’ve always been accustomed to turning towards the bank for loans. Financing needs are almost synonymous with banking needs, but not anymore. Peer-to-peer lending has been on the rise ever since supportive mobile applications have started to show up.
Instead of going to the bank, people can simply lend money directly to other persons who are looking for loans. This helps individuals dodge the rigid requirements, formalities, documentation, and never-ending confirmations of banks. With one-on-one dealing, the whole process gets a whole lot simpler.
The incentive for lenders would be the same i.e. interest. The income generated via interest turns into a passive stream of income while the principal amount remains secure with the borrower. It’s advisable to offer loans at an interest rate that’s slightly lower than that of banks, as that would attract more borrowers towards you. With a wider pool of applicants, you’d be able to pick and choose the most reliable individuals from the lot.
So, how could you get started on a system like this? Well, much like any other idea included in this article, there’s always an app to your rescue. You could use Upstart or Lending Club to kick start your first ever deal.
8. Website Investing
There’s real estate in the world of the internet too. Each website has a tag on it, and some are even worth millions of dollars. Investing in this ‘digital real estate’ could also lead to huge pumps of passive income. You could either build a website from scratch through your investment or buy and sell existing ones to turn a profit. People are making money off of each of these two ways in website investing.
Buying and selling websites are comparatively much simpler, especially if you’d like to limit your involvement. However, creating one from nothing and bringing it to a marketable worth could definitely be a challenge, but a rewarding one. Choosing to go in that direction, you’ll first have to buy a domain of your own.
Then, you’ll look for a great web developer who can start laying the building blocks for the website’s foundation. From their onwards, you could partner with a company like ‘Onfolio’ to start monetizing it. They’ll run day to day operational activities, and you’ll gain income for doing almost nothing.
Innovate Your Own Products for a Passive Income Stream
With these ideas, an investment may not be the key input required off of you upfront. You’ll initially have to put in some time and effort though. These innovations don’t necessarily have to be physical; they could even be online software, courses, books, or even entertaining content.
Producing any one of the above examples could be super time-consuming, but once they’re ready, the best part begins. You’ll list it on sale through any user-friendly (and popular) platform, and an income stream starts flowing into your bank account. Based on this concept, we’ve listed some ideas here.
9. Create an Online Course
Coaches have it way easier now as compared to a decade ago. Various platforms in the shape of websites and apps are there to cater to their lessons to a relevant market of users. If you want to give online courses a shot, the only thing you’d need to do is get the product ready.
After that initial input of work to design the course, your work should be over. Apps like ‘Teachable’ can take it from there; hosting your course and even managing payments for you automatically.
10. Write an eBook
The same goes for eBooks. The only thing you need to put work into is the actual eBook – writing it, proofreading it, finding people to review it for you, and getting it published through an efficient platform. All you need to do is to create the best possible eBook you can use all the effective procedures you can possibly perform. From that point on, after publishing it on a respectable platform (like Kindle), you can sit back and relax and the payments roll in.
11. Sell Videos to Media and News Outlets
In this day and age, everyone has a camera phone in their pockets. The next time you stumble across something interesting going on, pop your camera out and record a video. It could be a man proposing to his girlfriend, a funny pet video, or news footage such as the site of an incident.
Even crazy weather days could make for some amazing video footage. You could capture political protests, controversial instances, a heart-touching animal rescue, etc.
Chances are, you’ve already got interesting videos stored in your device. If you feel like you’ve got absolutely anything that could pique the world’s interest, it can probably make you money! You can sell these types of videos to media and news outlets which would make for a great side source of income.
12. Selling Stock Images
Smartphones these days have got some amazing quality cameras, and we hardly take advantage of that feature. Yes, the occasional selfie does make for a good chance of your profile picture, but have you ever thought of monetizing it? The next time you see an amazing flower, or a scenic sunset, think of it as a potential moneymaker for you (as materialistic as it sounds). 🤑
If you’re already a little into photography, start making cash for those photos by selling them as stock images. The obvious question arises though – how? Well, here’s how;
- Sell them on marketplaces for stock images such as Adobe Stock
- Use travel photo apps like ‘TourPhotos’ to market photos from your travel adventures.
- Make a website to sell your images exclusively (if you feel like you’re ‘that’ good).
- Gain contributor status on popular sites like Shutterstock to earn a 20% to 30% commission on your image sales.
- Point your lens towards Mother Nature – there’s a huge market for nature photography.
This is one of the best ways to earn passive income through innovation. You don’t have to spend hours over hours writing a book or creating a course. Instead, it’s actually a fun memory that also allows you to document your trips as you make money off of them. Just a touch of talent, a few right clicks on a few right moments, and you’ll have marketable content.
Once you put it up online for sale through any of the ways we’ve mentioned above, you’re set for timeless passive income.
13. Open up an Online Store
Here’s Bob’s example, but elaborated more clearly. In his example, he found his own way of making it as passive as possible. But, with e-commerce stores, the possibilities are literally endless. You could even combine most of the above suggestions (such as your photo/video sales) with an e-store.
You don’t necessarily have to set up your own website to take part in e-commerce. Numerous companies make million-dollar sales just through platforms like Amazon. Speaking of Amazon, the world’s richest person alive, Jeff Bezos, got there through an e-store – think about that for a moment.
Other ways to set up a digital shop include making use of platforms like Shopify which can host the store directly through your website. However, ongoing management needs must be considered. If your business gets to a point where you can hire a competent management team, that’s passive income right there. ✔️
Shopify will give you a 100% FREE trial and have an endless amount of resources to learn how to create a successful online store, even if you have nothing to sell!
14. Product Licensing – Make Money for Great Ideas
Ever thought of a great idea for a product or an app and wondered how no one has made it yet? If so, this is the time to shine. If you’ve got no idea how to pursue an amazing invention concept, it’s possible to make money off of just that thought. If you feel like it’s something valuable, don’t just waste it by saying it out loud. Through completing a series of (mildly complex) steps, you can actually get paid just for that idea.
The process is called ‘product licensing’, and it basically marks a certain invention idea as yours. It’d sure seem like a whole lot of work to put in upfront, but a good idea would make all the formalities worth your while. This article doesn’t focus on the procedures particularly, but you can find them out easily here (add the link here).
It highlights and clarifies steps that include;
- Think of everyday problems.
- Find out solutions and check if products/apps exist for them.
- Think of an applicable solution, which should result in a profitable product idea.
- File a provisional patent application.
- Figure out how the idea could be pursued.
- Generate an NDA, basically handing over your idea to the interested party (and only them).
- Create a sell sheet.
- Offer further information about the product if needed.
- Finally, seal the deal with the help of a good attorney.
- Cha-ching! Get paid. 💰
Following-based Passive Income Ideas Online
Yes, almost all the ideas we’ve discussed above have already got something to do with the internet. But these ideas are particularly digital, which require a major online presence to turn into an income source. You might need to build a significant audience’s following before you can expect monetary returns from these ideas. However, once you get there, it’ll not only bring you money passively but also earn you fame – if you’re into that sort of thing. 💁🏻
Ever thought you’d love to have a platform to just vent your thoughts out every once in a while? Or tell more people about the best life advice you ever had? Well, turns out you can even make money off of doing just that too. Bloggers have made a huge market for it, and people keep coming back to read more! If you also feel like you can write stuff that people would like reading, you can be a blogger.
Even a blog is essentially a website, so this idea is a subset of the website investing suggestion discussed above. When you’re keen on starting a blog, the requirements of time and financial investments are undeniable. The operational activities, such as day to day tasks can definitely be outsourced though.
Once you build decent traffic that comes back for your posts, ads will start monetizing your blog for you. Not just ads, even promoting products and services through affiliate links could earn you good money. Ads and affiliate links would keep generating passive money for you as long as the article is on the internet. However, writing and posting sponsored content (ever saw ‘#ad’ over blogposts?) is a great active income option for successful bloggers.
At any point, if you feel like moving on, even that’ll pay you a handsome golden shake-hand. Active and successful blogs could be sold for a good amount of money! Cashing out is always a great option for when you’re ready to move on to bigger things.
16. Start a YouTube Channel
Successful YouTubers earn stupidly huge amounts of money through Google AdSense. Every ad displayed on their videos pays off, but that’s not the only way they make money. They add affiliate links to their video descriptions, do brand deals, and create sponsored content to make money. Nowadays, almost every big YouTube personality runs a merchandise store that sometimes turns more profits than the channel itself.
The possibilities of making money are endless with a successful YouTube channel. There are so many directions you could take your channel into; almost every niche is pursuable on the platform. Even if you know a skill that most people don’t know, create courses to build a viewership. Whether you’re into exploration, travel, cars, computers – express and present what you’ve got to offer.
A famous YouTuber, Mike Boyd, has a channel that’s simply based on learning different random skills in every video; such as juggling or doing KeepyUps with a football. He picks up a random skill, practices it on camera, edits the footage into a time-lapse and uploads the video. As mentioned above, the possibilities are literally endless.
17. Monetize Your Internet Usage
It’s common for research studies and surveys to be used in order to improve the functionality of a product. Using the same concept, a company known as ‘Nielsen’ strives to improve products through your internet usage.
They pay you for doing absolutely nothing; as in, you’d use your internet just as you do usually, or don’t. And they’ll pay you on a monthly/yearly basis just for keeping their app or software installed in your device. Yes, that’s exactly what you read.
If you sign up and join Nielsen’s panel, it pays about $50 annually just to keep the app installed on your phone. The deal is a bit different from desktop/laptop computers. The company has got sweepstakes of $10,000, and just for keeping Nielsen’s software installed on your computer, you’ll receive entries into those stakes every month.
Other Honorable Mentions
18. Invest In Retirement
Many jobs offer to match a percentage of the contributions you deduct for your retirement from every pay. If you work at such a place, consider upping your retirement contributions. That money your company matches is ‘free money’, you just have to wait for it.
The company match usually has a percentage cap, such as they’d only match a maximum of 10% of your paycheck. Make sure you at least opt for that percentage of retirement deduction to max out on the opportunity.
19. Use Credit Cards and Cashback Apps
Prevention of expenditure is, in a way, you’re income. Not the kind of saving where you give up on a purchase itself, but saving through price cuts and cashback options while purchasing the same product. Numerous software, apps, and even browser extensions are available for doing so successfully.
You could use ‘Rakuten’ or ‘Honey’ for online shopping or even ordering food online. Their apps and browser extensions detect potential cash backs and savings for you automatically. On any purchase, they alert you on savings’ opportunities (through discount codes or deals) based on the webpage you’re browsing. Other cash-back cards, apps, websites and browser extensions include Dosh, Ibotta and Southwest Rapid Rewards Cards.
Through these apps, get your referral link and send them to your friends to earn some extra few in-app bucks. They’ll share the reward too when they sign up using your link!
20. Savings Account
There are many high-yield savings accounts that will offer a more lucrative return rate than your local credit union. You can switch a portion of your savings to platforms like ‘Haven Money’ to make up to a 4% annual percentage yield. To make it simple, let’s assume someone’s got $1,000 lying around collecting dust. Switching that over to Haven Money would bring them 4% on that amount annually – without doing a damn thing.
Through growing advancements in technology and the widespread of internet, bigger and crazier income possibilities are getting unlocked each day. Passive income, which is a concept that would baffle anybody about two decades ago, is now possible in countless ways. Right now, there are more ways to earn money passively than there were ever before. Any smart person would take advantage of that, and that’s exactly why this article was written.
The importance of achieving financial freedom early on in life is indescribable. You won’t truly experience living if you can’t get the worry of paying bills out of your head. You don’t have to bet worth millions to call yourself financially free. Even a sustainable passive income source could earn you that tag.
If it’s a setup that pays your bills, rent, and other living expenses, you’re already set. Hopefully, this article has inspired you with enough ideas to push you into taking that first step. Remember, starting itself is the hardest part. All the best!
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