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Do you want to build real wealth that lasts? Passive income is the best way to do it.
Get up, go to work, make money…and do it all again tomorrow. Americans have been earning money this way for generations. Unfortunately, there’s only so much time in a day. So, how can you possibly get ahead? Like, really get ahead?
That’s where passive income comes in. Making money in your sleep with passive income streams is totally possible.
Instead of trading time for money, recurring revenue is the name of the game. If you think passive income sounds too good to be true, you may want to reconsider.
Passive income opportunities help you build real wealth and set you up for long-term financial success. Whether you’re looking for a quick boost, long-term capital, or both, here are dozens of passive income ideas that could work for you.
1) Open a High-Yield Savings Account
One of the easiest ways to start generating passive income is with a high yield savings account. While you typically earn interest on every savings account, some pay more than others. For instance, the average savings account in the U.S. only earns about 0.05% interest.
With rates that low, it’s easy to cash in on a better deal. Some of the best high yield savings accounts let you earn about 10x the national average (or more).
Our current favorite is the CIT Bank Savings Builder account. Check out this account’s great rates below!
2) Invest in Crowdfunded Real Estate
Love real estate but hate the idea of being a landlord? No problem. That’s what crowdfunding is for. Just invest your money and earn a return without having to deal with managing the properties yourself.
For this type of passive income, we invest in Fundrise. With just $500, you can start investing in real estate without…and you don’t even need to save up to make a down payment!
3) Automate Your Investing
If you’re wondering how to earn passive income, letting a robo-advisor manage your investments is pretty hands-off. Using a program like Wealthfront or Betterment is a simple way to automate your money. It’s free to open an account, and they’ll build a portfolio around your preferences.
You’ll want to set up automatic deposits and portfolio rebalancing for the best return. It’ll take about ten minutes to start, and the robo-advisor handles the rest.
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4) Invest in Bonds
Bonds are a relatively low-risk way to earn passive income. To buy a corporate bond, you’re investing in a business. You’re essentially lending your money to the company.
The same is true for government bonds. In exchange for your cash now, they promise to pay back your initial investment plus interest.
If you’re interested in putting some money in bonds, we really like Worthy. They offer a 5% interest rate, the bonds are fully secured through the borrower’s assets, and they cost just $10 each.
5) Try Peer to Peer Lending
Peer to peer lending (P2P) gives you a chance to help out others and make money doing it. You lend your money to someone else with the goal that they’ll pay you back plus interest. The simplest way to begin a passive income stream with P2P lending is with Lending Club.
It requires an initial investment of $1,000, but you choose how to spread your cash across different loans. Screening your loans will help increase your success. If it doesn’t work out, Lending Club has a good collections process to tap into.
6) Use CD Ladders
Certificates of deposit are generally safe investments. Like a savings account, your money is insured by the FDIC or NCUA.
Earning passive income on a CD is a cinch. The trouble is that higher rates tend to require longer periods of investment. Not having free and unrestricted access to your cash can be annoying.
If you set up a CD ladder, your investments mature at various intervals. This way, different amounts can mature as each CD term is up. Accessing your funds on a rotating basis makes CD ladders an effortless passive income stream.
7) Buy Dividend Stocks
When it comes to passive income ideas, dividend stocks are a time-tested option. The hard part is finding good ones to invest in. You’ll also need to put in enough cash to get sizeable dividend checks.
Making money this way isn’t a guarantee since the market can fluctuate, but it can help you build up a significant passive income stream over time.
8) Become a Landlord
Buying a house as a rental property is an excellent option. It can make money a little tight in the beginning if you already have a mortgage payment, but the long-term return can be huge.
The amount of rent you charge is typically enough to cover the house payment, taxes, insurance, and minor repairs. That could mean very little cash comes out of your pocket. Once the mortgage is paid in full, that monthly payment can turn into a comfortable passive income for you.
9) Rent Your Space
Renting your house, apartment, or spare room could be just what you’re looking for. If you already have the space available, listing it on a site like Airbnb can fast-track your passive income stream (check with local zoning laws to ensure it’s allowed).
You may need to spruce it up a little to get going, and make sure it’s clean and tidy after guests leave. But other than that, you can sit back and relax.
10) RV Rentals
Just like renting out your house, you can turn your RV into passive income, too. I mean, how often do you really use it, anyway?
As we mentioned in our Outdoorsy review, there are thousands of people looking to rent RVs. Rather than letting your RV sit in your driveway or storage, rent it out and make some easy money.
11) REIT: Real Estate Investment Trust
Another option to start in real estate without the hassle of being a landlord is with real estate investment trusts (REIT). You don’t own any specific building (typically), but you do own part of the REIT and its portfolio, which often trade publicly like stocks.
12) Storage Rentals
Most everyone owns more stuff than they can fit in their house. That’s why storage units are so popular, which also makes them a great passive income opportunity.
It does require a little cash up front, but with self-storage rentals, you won’t be doing much work. Other than replacing a missing key now and then, it’s mostly self-regulating.
13) Start a Blog
The rumors are true: You actually can make money by starting a blog. In fact, It’s one of the best ways to earn passive income while working from home.
If you want to make money blogging, this guide can walk you through getting started. After your initial time investment, you can earn tons of cash.
14) Buy a Blog
If putting in the work to get a blog up and running isn’t your thing, consider buying one that already exists instead. Thousands of bloggers jump ship each year. Some of them have a reasonable amount of cash flow with decent web traffic. Diving into an already profitable blog can give you instant momentum on your passive income journey.
15) Write a Book
You don’t need a big publishing deal to write a book. Plenty of authors self-publish their work and make good money doing it.
One of the great things about this is that it’s truly passive income. You do the job once, list it for sale, and watch the money roll in.
Starting a blog to promote your book can help spread the word. Amazon also lets you sell self-published books for Kindle. You can even check out our book here!
16) Create an Online Course
Online courses are growing in popularity. Everything from culinary skills to freelance writing to learning foreign languages is taught online. Udemy, an online learning platform, reports they had 100,000 courses and 30 million students in 2018. Tapping into that by sharing your knowledge can deliver passive income to your door.
Personally, we like using Teachable to build our courses. It’s really easy to use, and they have tons of built-in functionality (like a built-in affiliate program) that helps you get up and running quickly.
17) Earn Credit Card Rewards
Spending money is a necessary part of life. Groceries, gas, utility bills, travel…why not earn a passive income from the cash you’ll spend anyway?
With credit card rewards, collecting points or cash back on purchases can help. Our favorite program is Chase Ultimate Rewards because of its flexibility. You can work toward free flights, hotels, or transfer your rewards to other loyalty programs and cash in with them, too.
Learn how to get started with credit card rewards here.
18) Build an App
If you’ve ever had a fantastic idea for an app, it could be one of your best passive income ideas.
Not having the know-how to program isn’t a problem. Consider hiring a programmer to help put it together.
Once it’s complete, listing it in the app store can lead to residual income. And offering in-app upgrades can help you earn even more.
19) Start a YouTube Channel
The growth of YouTube is on the rise. With a personality that shines on camera, starting your own channel might be a good idea for you.
Just like starting a blog, you’ll need to grow an audience. But if you pick a topic you enjoy, it should be easy for you to create fun and informative videos. Monetizing your channel with ads, sponsorships, and affiliate partners can lead to passive income for years to come.
20) Open an Online Store
Launching an online store is possible and can be done without quitting your day job. Shopify is a well-recognized avenue that has everything you need to open a profitable online store. You might try drop shipping, flipping your thrift-store finds, or selling your art.
21) Open an Etsy Store
Etsy is the perfect platform to sell your creative masterpiece. My uncle makes some amazing handcrafted bowls and does well with his Etsy “storefront.”
Another great way to earn passive income on Etsy is to sell digital files. Designing wall art, monthly planners, spreadsheets, and other digital files is a set-it-and-forget-it way to make money online.
22) Buy Annuities
With an annuity, you’re buying an insurance product that can provide you with regular monthly payments for life. If you’re thinking about how to earn passive income with an annuity, you have a couple of choices. Generally, you can set it up for a promised monthly amount now or pick a start date in the future. The terms vary considerably, and it’s best to talk with a financial advisor if you’re interested in them.
If you can find a laundromat for sale, it could be the perfect turnkey passive income idea. Think about it: Everyone needs to have clean clothes, right?
Taking the time to visit a few laundromats will show that the only people inside are the ones washing and drying their clothes. You don’t usually see any employees. Other than minor maintenance and bookkeeping, which you could easily hire out, a laundromat is passive income.
24) Advertise with Your Car
Earning an extra $100 per month to advertise with your car sounds pretty sweet. Companies like Carvertise look for drivers willing to rent ad space on their vehicles.
While getting paid for driving around with an ad on your car sounds pretty great, there are limits, such as needing to live in a large city and being able to drive enough miles. But if you qualify, it could be a piece of cake to earn passive income.
25) Rent Your Car
Similar to listing your place for rent, make money by renting out your car, too. Rather than renting your space or home, you’re being paid to let others borrow your car.
Turo connects you to others looking for a car in your area. If you’re not driving it, using it to make money could be a smart move.
26) Refinance Your Mortgage
A little different from the other ways to earn residual income, refinancing your mortgage can free up your cash. It can also save you thousands of dollars with the right interest rate.
Paying less each month puts money back into your pocket. Although it’s not technically income, it is a passive way to get more money. Think about it: You refinance once and reap the rewards over the life of your loan. What could you do with that extra money?
27) Sell Your Photos
Photos are in high demand. Every website, blog, and magazine has to get their pictures from somewhere. Why not you?
Knowing how to take a decent photo along with a few basic editing skills is all you need to get started. Selling stock photos with sites like 500px Prime, SmugMug Pro, or Shutterstock can put some cash in your pocket.
28) Design T-Shirts
Everyone can be an artist or make money designing clothing. Sites like CafePress give you the freedom to create your own t-shirts. Upload your one-of-a-kind design, and you could rake in the royalties on each purchase.
29) Online Arbitrage
It sounds fancy, but it’s a simple idea. Arbitrage is nothing more than selling something for more than you paid for it. Whether you shop garage sales, thrift shops, or go dumpster diving, sometimes you find a gem. Listing those items for sale at a higher price than you bought it for can turn a decent profit.
30) Vending Machines
Talk about a low maintenance business idea. Making the rounds to replenish stock in a vending machine is done about once every two weeks. In between visits, you’re free to focus on anything else – from traveling, building other business endeavors, or binge-watching Netflix.
31) Earn Cashback While Shopping
Getting cash back isn’t limited to credit card rewards. Whenever possible, opting to use a cashback site when shopping online can put passive income in your pocket. If you’re going to buy the stuff, you might as well earn some money doing it.
Rakuten is one of the most well-known sites out there. Plus, shopping online means you don’t have to deal with the crowds or wait in a long line to check out.
32) Buy and Sell Domain Names
There’s value in domain names. Think about it: if Nike couldn’t have Nike.com, where would they be? If you have a knack for hot keywords and a keen sense of business, you can buy domains and flip them for high resale value. Sites like Flippa specialize in business resales. But you can also list them for sale on eBay and GoDaddy Auctions.
33) Rent Your Stuff
Making money on stuff you already have is a jackpot when it comes to passive income. With no startup costs, profits come in right away.
Renting your stuff, like your kayaks, GoPro camera, bike, tools, tent, and lawn equipment can be a real money-making opportunity.
To start, hang fliers around town to advertise. Setting up a website listing your items is an option, too. Also, consider a site like FriendWithA to help you find your market.
34) Try Affiliate Marketing
If you love recommending products and services, affiliate marketing could pay off. After signing up to partner with a company, you become an affiliate seller. Every time someone buys something you recommend with your referral code, you can earn money.
This works best if you start a blog, YouTube channel, or podcast. But the opportunities are endless.
35) Solar Energy Funds
Similar to how you would invest in stocks, you can earn a return on solar energy. According to Wunder Capital, a leading company in solar projects and financing, the annual target return is 6%. It certainly isn’t the biggest payout, but it could earn about $800 in passive income over ten years without any work.
36) Lead Generation
Every salesperson knows it’s tough to turn a cold lead into a buyer. Think about the last time you got a call from a telemarketer. Did you greet them warmly? Or hang up because you were annoyed?
The process of lead generation helps to attract people who show interest in a particular product or service. If someone is already thinking about buying something, they’re much more receptive.
Setting up a website, direct mail campaign, or other outreach can get you a list of leads. Then you can partner with a local business or online company to make money on that list. It’s a win-win because the company makes more sales and you make some passive income.
37) Pay Off Debt
Debt is an income killer. Any money that’s collected for interest payments is wasted.
Again, it isn’t exactly income…but it sure feels like it. If you’re paying 10% interest on a credit card and you paid it off, that’s a 10% increase in your income each month! It’s almost entirely passive too because doesn’t require you to put in extra effort. When the debt is paid, the work is done. It’s like getting an automatic pay raise.
If you have a lot of time to invest or only a few minutes here and there, making money with passive income is a real possibility. Some of these ideas might take a little more work than others to get going, but a few can help you start earning money right away.
So, what are you waiting for? Get out there and start earning today!
Do you have a passive income idea? Tell us all about it in the comments below!