Running a business is hard work! You dedicate most of your waking life to it, and 80% of the time, it fails. Why do so many talented people fail? It’s because they don’t use the power of passive income to build wealth by working smarter instead of harder.
We’ve made your search for the perfect passive income stream easy by narrowing the list to the top 41 ideas. We’ve even got lesser-known passive income ideas (who knew you could create and sell Alexa skills?) and work-from-home options that’ll bring in $10K+ a month (just by creating digital files!).
We’ll also map out a plan for getting your business started so you can start earning passive income right away.
Let’s dive in!
What is Passive Income?
The Internal Revenue Service (IRS) defines passive income as income that meets two standards:
Remember to read IRS Publication 925 to learn about the tax treatment when you earn passive income.
How to Earn Passive Income
According to Graham Cochrane, whose blogs and courses are raking in more than $1M each year, the process for earning passive income is quite simple. Here are the steps to succeed:
- Explore passive income stream ideas
- Perform market research
- Create a customer avatar
- Build the system
- Create content or ads
- Gather emails
- Convert followers to customers
We’ll look at steps 2-7 a bit later. First, let’s check out 41 great passive income ideas!
Passive Income Stream Ideas
There are a lot of ways to generate passive income, but here’s Graham’s method:
He also explained that automation plays a huge role in generating passive income, so you’ll want to consider that in your decision-making process. In addition, you might want to consider whether you have the starting capital to create a passive income stream.
Don’t worry if you don’t have a lot of money left over from your active income. You can start generating passive income with an initial investment of $50 or less.
What do passive income ideas require?
As you consider each idea, you’ll want to weigh the following factors:
- Upfront time investment
- Upfront investment funds
- Potential for income
Keep reading for 41 passive income ideas.
WARNING: The passive income investments mentioned in this blog are meant to be ideas only. We are not financial advisors, nor are we providing financial advice. Always make sure to consult with a licensed financial advisor and do your own research before making any monetary investment.
#1: Single-Family Rental Properties
Real estate investing is a great source of cash flow and wealth building. It is the number one source of wealth building in the United States according to the Census Bureau. Find out how Mike Andes approaches rental properties in our interview below.
Emma Powell has turned real estate investing into a 100% passive income stream, and shared her advice on getting started in an UpFlip podcast interview.
You’ll need to hire a property management team if you want cash flow without managing the property. Make sure you aim for 10%+ annual returns on investment.
- Builds long-term wealth along with short-term rental income
- Very high-income potential if you invest in multiple properties
- Potential for a 100% passive income once your business is established
- Large initial investment if you’re buying properties
- You need employees from the start to make it truly passive
#2: Dividend Stocks
Many publicly held companies pay dividends on a quarterly, monthly, or annual basis. These dividend stocks can create passive income that increases the longer you hold them. If you use a brokerage account that offers a dividend reinvestment plan (DRIP), you can increase your:
- Passive Income: Through routine payouts
- Asset Value: If the stock price goes up, your net worth goes up. Historically, the stock market has increased by 10% per year. That means stocks tend to double in value every seven years.
- Number of Shares: Every time you get a dividend, a DRIP reinvests that income into the dividend stocks, which earns you more passive income.
You can set these on autopilot by scheduling recurring payments to help you grow wealth much faster. I use TD Ameritrade, but there are plenty of other brokerage services. More than 1,000 dividend stocks are paying more than 5% in annual returns. I’d stay away from the ones paying 50% or more because they are high risk.
- You don’t need tons of money to start
- 100% passive using a brokerage service
- Low risk compared to other investment options
- Long-term investment that won’t bring immediate returns
#3: Real Estate Investment Trusts (REITs)
You can buy real estate investment trusts to generate passive income. REITs invest in real estate and earn money from rental income. They then pass the gains on to the investors. You can buy REITs as stocks or use private equity. Publicly available stocks tend to pay investors less but have the advantage of being more liquid than private equity investments.
We filtered the available TD Ameritrade dividend stocks down to monthly dividends because this is the easiest way to identify REITs in their system. Here are the top monthly dividends on TD Ameritrade:
- More liquid than other real estate investments
- Completely passive income with a low up-front time commitment
- Affordable way to get into real estate investing
- Your investment could be affected by real estate market trends and interest rate changes
- Can take a long time to see significant returns
#4: Custom-Designed Products
You can start an e-commerce store with dropshipping or print-on-demand options to earn passive income. The initial investment is essentially free, but you need to have the money for advertising, the initial cost of the products, and the monthly software costs. Find out how to get started in ecommerce.
Custom apparel is a popular niche for print-on-demand passive income businesses, and one with a high revenue potential. 1-800-Tshirts, for example, brings in $500K every month. You can hear how founder Tom Rauen started and his advice for growing a t-shirt printing business in this interview.
Etsy is a popular store platform for custom designed products. That’s where Vlad Kuksenko sells his custom pet tags and collars. Hear advice on how to get started on Etsy in Vlad’s podcast and YouTube interviews.
Heather Johnson chose Etsy for her print-on-demand business, too, which she started as a side hustle in 2020 and has grown to revenue of $15,000+ a month (listen to our interview with Heather).
- High income potential
- Start earning income as soon as your store opens
- Excellent option for creative entrepreneurs and designers
- Building a customer base can require a high initial time commitment
#5: Bonds and Bond Index Funds
Bonds are a way to lend money. A company or government asks for an upfront investment and agrees to pay you back more than you lent them. The payment terms will vary based on the amount borrowed, the duration, and the borrower’s creditworthiness.
The gold standard of bonds are purchased from U.S. Treasury Direct.
- Very low risk investment
- Funds can be reinvested to increase earnings over time
- 100% passive
- You don’t see any earnings until the bond matures
- Interest rates are locked at the rate from when you bought the bond (even if they go up later)
#6: High-Yield Savings Accounts and Money Market Funds
These accounts are offered by legacy and online banks and give customers higher interest rates than you would normally receive. (None of the earning rates beat inflation, though. The best current high-yield savings account earns 3.5% APY, which means you’re still losing money after calculating inflation.)
Money market accounts are currently earning 4.45% annually. You can find them by unchecking the savings account box in the link above.
While these are highly liquid, they don’t generate enough passive income to satisfy my expectations of growing wealth.
- Minimal risk
- Easy to set up and manage
- Low minimum investment with few to no fees
- Wide variety of online banking options to choose from
- Lower return than other investment options
#7: Peer-To-Peer (P2P) Lending
If you just want to earn some passive income on your existing cash, peer-to-peer lending can give you great returns. The lending agreements you fund at Lending Club provide interest rates of up to 17.74%. Take note that higher earnings come with higher risks (borrowers with lower credit scores), so it might not be the best idea to go straight for the 17.74% interest rates because Lending Club takes 30% of the loan for themselves if they have to pursue collection.
- Easy to invest through a P2P platform
- Low ongoing time commitment
- Borrowers are vetted through the platform
- Higher interest rates carry more risk
- No collateral on loans
#8: Create an Online Course
An online course is one of the most profitable and popular passive income ideas. When Graham Cochrane lost his job, he expected to make money mixing music, but he quickly found that people were more interested in learning how to do it themselves and were willing to pay to learn those skills. Graham created a course that made over a million dollars—without ever updating it.
Jacques Hopkins of Piano in 21 Days saw similar success with his online course, starting off with a budget of around $150 a month and growing to a $40,000 a month revenue, about 50% of which is profit (listen to our interview with Jacques to hear more of his advice and story).
Today’s environment is more competitive, but it’s still one of the best ways to make passive income in 2023.
- Easy to publish and market your course through an online course platform
- 100% passive income once the course is published
- Income is scalable with high profit margins
- High initial time commitment if you’re writing the course yourself
- Course platforms charge fees that can cut into your profits
#9: Student Income-Share Agreements (ISAS)
If you are an accredited investor, you can invest in the future by helping promising students go to college. Loan them money, wait a year, then earn interest by getting a percentage of their future income. You can use sites like these to get started:
- 100% passive once you’ve invested
- Get monthly payouts after the first year
- Shorter duration than other investment options
- Can lose your investment if the borrower defaults
- Fees are relatively high (up to 4% on investment plus 5% of cash flows)
#10: Invest in Digital Assets (Crypto/NFTs)
This section is solely the opinion of the author and does not represent the beliefs of UpFlip, its owners, or any other members of the team.
Personally, I enjoy the crypto and NFT markets for high liquidity and income generation. They are highly volatile, which means you can trade them for quick 20% gains, but you can also hold them or provide the resources to operate the network. The safest of these investments to invest in are BTC and ETH, but both have been known to skyrocket or plummet more than 20% in a day.
If you invest in any crypto, understand that you do so at your own risk. These investments are unregulated, and you are effectively going into private equity without the regulatory environment that protects accredited investors. That said, my personal favorite projects are:
- Presearch: This privacy search engine is beta testing ChatGPT, has more than 75,000 independent node operators, and acts as a search engine aggregator (It’s my secret weapon for blogs). They also offer advertising opportunities that cost as little as $6 per month. The returns vary based on the pricing, but my assets have quadrupled since 2021.
- Vaporfi: The team at VaporFi has a loyalty rewards program called Stratosphere that partners with crypto projects and business owners to provide members rewards for interacting with their partners. They also run a decentralized exchange and a residual income project, and they have a lot of other cool projects in the pipeline. I currently hold 50 times the assets within their products compared to when I started and have gotten residual income greater than my initial investment.
- Avalanche: VaporFi operates on the Avalanche network which has deals with AWS and Alibaba to launch validators. The validators process the transactions on the Avalanche network. The staking rewards are currently 8.54% per year.
If you want to learn more about crypto, I suggest starting at Coin Market Cap’s Crypto Glossary.
- Can potentially see high returns very quickly
- High long-term growth potential
- Low time commitment to make and manage your investment
- High volatility means higher risk of losses
#11: Sell Stock Photos
If you love photography but want to avoid taking on clients, stock photos might be your answer. Stock photos are used by businesses for marketing purposes. You take pictures of in-demand products and post them on the site with keywords that describe them. Then companies pay to use them.
There are a variety of sites that you can use to earn a passive income stream, but Getty Images is the leader in this market. You can earn up to 45% on each image used, which converts to $.015 and up.
Other stock photo websites have different rates, but Getty sells approximately $1 billion of stock photos, graphics, and videos each year.
- Excellent way for creative entrepreneurs to make money with their passion
- 100% passive after images are taken and uploaded
- Easy to scale your income by adding more photos
- No need to find or communicate with clients directly
- Images need a lot of downloads to earn higher royalty rates
- Earnings are low if images don’t sell
#12: Write an E-Book
E-books are another great way you can make a passive income from your upfront time investment. Publishing has always been challenging, but now tools like AI copywriters and Audible make it where you can get in front of billions of potential customers without printing a single page.
Graham told us:
Download it on Audible for more advice on how to earn a passive income from e-books and online courses.
- Faster and easier than traditional book publishing
- Requires no financial investment
- Establishes you as a thought leader and helps to build a personal brand
- Significant upfront time commitment
- May need to invest lots of time in marketing if you don’t already have a following
#13: Create an Affiliate Marketing Business
Another way to create a passive income is to create an affiliate marketing business. You can easily get links for most software companies and start adding passive income streams by reviewing the software you use everyday.You’ll be adding value for the people following you while you gain passive income.
Many affiliate programs can make thousands or millions from a few hours of work. Check out some of the best affiliate programs of 2023 or listen to our interview with Matt Diggity to learn more about affiliate marketing.
- Completely passive once you’re set up
- Wide variety of affiliate programs to choose from
- Make money recommending products and services you use and enjoy
- Low to no initial financial investment required
- Need a website with high traffic to earn reliable income
#14: Music Licensing
If you’re a musician or want to help musicians earn a living, you can earn a passive income from licensing your music to movies, streaming services, and businesses. You get paid every time someone plays the song. You can find out how to make passive income online through different streaming platforms.
- Steady long-term source of passive income
- Build a following and gain exposure while earning royalties
- Variety of streaming platforms to choose from
- No financial investment required to get started
- Risk of your songs being pirated or copied
#15: Create a Blog or YouTube Channel
Blogging and YouTube channels are passive income ideas that require similar skill sets. You’ll need to provide useful information, optimize it for search results, and share it. Sure, the equipment is different, but either option can make you a ton of extra money. It’s quite easy to create a YouTube channel.
- Easy to monetize by integrating ads and affiliate links
- Fun way to profit from your areas of expertise
- Doesn’t take any money to get started
- Creating the content can be time-consuming
- It will likely take some time to grow your following before you see significant income
#16: Rent Out Useful Household Items
If you have tools or other useful household items, you can rent them out to other people using a variety of sites. Check out sidehusl’s blog for a list of sites to rent specific items.
- Make money from items you already own
- Easy to get started through one of the many online platforms
- Very low ongoing time commitment
- Some risk of your items being damaged or stolen
#17: Buy and Sell Websites
Did you know that buying a website and selling it could make you up to $90 million?
That’s how much Vegas.com paid to purchase LasVegas.com. If you find a website that you can imagine being a desired domain name, buy it and save it until a company is willing to pay way more for it.
You can monetize those websites while you own them, too. Rob Stefanski currently owns seven websites that generate about $30,000 every month in revenue. You can listen to his podcast interview to hear his insights on how to buy, grow, and scale revenue for a website.
- 100% passive
- Can earn short-term income while waiting to sell
- Potential returns are high if you buy the right websites
- No limit to the number of domains you can buy
- Return on investment isn’t guaranteed
- May need to sit on a site for a while before you find a buyer
#18: Invest in Vending Machines
Vending machines are another source of income. For those wondering how to create passive income from vending machines, check out our vending machine business course taught by Adam Hill, who turned an investment of $120K into $600K of annual revenue.
Insert sign up for the Vending Machine Boot camp.
- Fairly easy to earn enough to replace a full-time job
- Variable time commitment and startup costs
- No specialized skills, knowledge, or training required
- Ongoing time commitment unless you have employees (not completely passive)
- Potentially high initial investment if you want to purchase an entire vending route
#19: Advertise on Your Car
Your car can be a source of multiple streams of income. You can advertise your own businesses or earn easy passive income by advertising other brands. Some providers to check out include:
- Wrapify: Earn $180 to $500 per month to wrap your car in advertising.
- Carvertize: Earn up to $300 per month per campaign for car wrapping.
- FireFly: Earn up to $300 per month to have a lighted billboard on the top of your car. You must be a rideshare or taxi driver and drive over 40 hours per week.
- Play Octopus: Make an extra $100 per month plus $25 per referral by letting rideshare passengers play games on a tablet.
- Vugo: Earn Up to $300 per month from the oldest name in rideshare advertising.
- Excellent add-on revenue stream for delivery and rideshare drivers
- No ongoing time commitment once the advertising is in place
- You choose what types of ads you display and how much of your car they cover
- No permanent changes to your vehicle
- Relatively low stand-alone income source
- Won’t make much if you drive infrequently or in low-traffic areas
#20: Invest with Robo-Advisors
Robo-advisors are apps that automatically pick investments and manage your portfolio. All you do is answer a few questions about your risk tolerance and investment goals, and their algorithms take care of the rest. Credit Donkey’s list of the best robo advisors is a great place to start if you’re looking for more information.
- No investing skills or knowledge required
- Doesn’t take much time to set up or manage
- You can invest as much or as little as you want
- Little control or customization of what you invest in
- Need to invest a lot to see significant returns
#21: Flip Items with an Online Store
The old adage that one man’s trash is another man’s treasure is true and can be a great way to earn income if you have a sharp eye for products that will sell.
Mike Wilson’s story is a prime example. He started an eBay store to resell items after retiring from his career as a furniture store owner. After investing $1,000 into his initial inventory, he now makes around $30,000 every month with his eBay store. Hear more about how Mike built his online store in his podcast interview.
You can find items to resell for cheap at thrift stores, garage sales, or storage unit auctions. Sites like Craigslist and Facebook’s marketplace sometimes even have free items available, or you could sell unused items from around your home. While you will need to invest some time into acquiring your inventory, it’ll be on your schedule, and the income is still primarily passive.
- Don’t need much money to get started
- No specialized skills or knowledge required
- High potential income that’s easy to scale
- Some ongoing time commitment to stock and manage the store
- You’ll be stuck with items you don’t need if they don’t sell
#22: Certificates of Deposit (CD) Ladders
A Certificate of Deposit (CD) is a savings product sold by banks, credit unions, and other financial institutions. The main difference between CDs and savings accounts is that CDs have a fixed term and interest rate.
CD laddering is an approach to maintain your liquidity while investing in CDs. Basically, you invest in a few different CDs with varying terms. As each matures, you can choose whether to keep that money or reinvest it into a new CD. These investments are insured by the FDIC so your principal is protected, a key advantage over more volatile forms of investment.
- Full control over how much and where you invest
- Low risk with guaranteed returns
- A laddering approach maintains your liquidity
- Can’t access your money until the CD matures
- Interest rates are locked in until the CD matures, even if they go up after your purchase
#23: Crowdfund Small Business Inventory
KickFurther.com is a unique concept in crowdsourced small business financing. Business owners sign up for funding, and investors provide those funds by essentially buying their inventory and selling it through them on consignment. Your profit is earned once the products sell. Kickfurther sellers also get their own store on the site where you can help sell the inventory you purchased and get an extra 5% commission on any items sold through it.
- Help small businesses while you earn a profit
- Generate your own cash flow through the store
- Potential to be completely passive with no ongoing time commitment once you invest
- You won’t make money if the products don’t sell
- Limited support for buyers on the platform
#24: Rent Out Your Car
The website Turo uses a similar model to vacation rental sites like Airbnb, but with cars instead of homes. Hosts list their cars on the site and travelers who need a vehicle reserve them for a fee. You can host one car or several, making it a scalable passive income source for those who want something they can grow to replace a full-time job.
While there is some risk of your car being damaged while someone’s using it, Turo provides liability insurance coverage up to $750,000, so you won’t be on the hook for repairs if they do.
There are other places you can rent out your car, too:
- HyreCar: A site where you can rent your car to rideshare drivers.
- TravelCar: For people who travel often, this is a way to rent your car out while you’re gone, and all you have to do is park it at one of the qualifying airports.
- Earn extra revenue from vehicles you already own when they’re not in use
- Full insurance coverage for your car while others are driving it
- Complete control over who rents your car and when (no penalty for turning down a rental request)
- Risk that your vehicle will be damaged
- Can only list newer cars in good condition
#25: Rent Out Space in Your Home
There are a few different ways you can go about this. If you have an unused vacation home, extra rooms in your main home, or under-utilized spaces like a garage or pool house you can turn into a micro-apartment, you can rent it out to travelers on sites like Airbnb or Vrbo.
Travelers aren’t the only people who need to rent space, either. On Neighbor, you can rent out space storage space, whether that’s interior storage for people’s possessions or business inventory, or an outdoor lot where people can park cars, boats, RVs, and trailers.
This is a great option for homeowners who have extra space in an attic, garage, basement, or unused room but don’t want to worry about preparing that space for other people to inhabit.
- Complete control over who uses the space when
- Easy and free to get started
- No fees unless someone is using your space
- Fast way to monetize unused space
- Some ongoing time commitment to prepare a home or room for guests
- Sharing your personal space with strangers
#26: Rent Out a Parking Space
If you live in an urban area, especially close to a place where people congregate like a sports venue, fairground, or other event space, you can monetize your parking space for a bit of extra income. Apps like Pavemint and CurbFlip make this easy. All you have to do is list your space and drivers reserve and pay for it right through the app.
- Fast and free to set up
- High demand in busy and urban areas
- Complete control over when you rent your space and to whom
- Relatively low earning potential
- Earnings vary widely depending on your location
#27: Open a Coin-Operated Laundromat
Everyone needs to do their laundry, and not everyone has a machine to do it at home. Everything in a coin-op laundromat is automated, and it’s common for them to operate without employees on-site to supervise. If you hire someone to clean and maintain the machines it’s a completely passive business, and that won’t be much of a time commitment if you handle it yourself.
Like any brick-and-mortar business, a laundromat can be a big investment. Brian Riseland invested $1 million to open Laundry Genius (watch his YouTube interview).
Note that his space is larger than most, which means higher revenue potential. While you don’t necessarily need to make a 7-figure investment, it’s common for turnkey laundromat operations to cost between $200,000 and $500,000.
If you’re interested in opening a laundromat, the how-to guide on the UpFlip blog is a great place to get more info.
- Consistently high demand in well-populated areas
- High revenue potential
- Fully-automated processes give it a low ongoing time commitment
- Needs employees to be completely passive
- High initial investment
#28: Ecommerce Dropshipping
Dropshipping is basically like being a professional middleman. You take orders from customers, then send them along to a wholesaler, manufacturer, or other retailer who sends the ordered item to the customer.
The big advantage of dropshipping is that you never have to worry about inventory. All you have to do is list the items in your store and market to potential customers. There are software and tools you can use to automate many of these tasks.
Amazon and Shopify are the two largest platforms for dropshipping businesses. Multi-million dollar Amazon seller Ryan Hogue started his Ryan’s Method Passive Income School based on his success with a dropshipping eCommerce business, and you can hear his advice on how to start in our podcast interview.
- Highly scalable with the potential to earn a high income
- Relatively low ongoing time commitment
- Low start-up costs and overhead
- Lots of competition means you need strong marketing skills to earn a high income
#29: Create Alexa Skills
Devices that use Alexa voice control have “skills” that allow them to perform different tasks, like playing music or turning connected devices off and on. Anyone can create the skills and get paid for them. While you will need some software development skills to do so, Amazon has partnered with Codeacademy to create free courses that will teach you the basics.
Payment for skills is based on user engagement. The more popular the skill, the more you can earn from it. Skills can also be monetized by adding in-skill purchases.
- Easy way for developers to make passive income
- Completely free to get started
- You don’t need to do anything once the skill is developed
- It’s up to Amazon which skills get paid, and how much
- Large upfront time investment with no guarantee of a return
#30: Create Mobile Apps
Everyone who has a smartphone is a potential customer for mobile apps. If you can solve a problem or make an entertaining game it can quickly get thousands of downloads, even if it’s targeted to a very specific niche.
You don’t need to be a programmer to write an app, either, thanks to low-code and no-code platforms. NeoITO has a list of the best free platforms for non-coders to develop apps if this is something that interests you.
- Low time commitment once it’s approved by the app store
- Easily scalable with the potential for high income
- In-app purchases can create income sources beyond the initial purchase
- Large initial time investment with no guarantee of a return
#31: Build or Buy a Newsletter
Subscription-based newsletters can be very lucrative if they provide readers with consistent value. You can also monetize your newsletter by including affiliate links or selling advertising space once you have an established audience.
Like other content-based income streams, it can take a lot of time and hard work to create valuable newsletters and build a subscriber base. If you don’t want to start from scratch, you can buy a newsletter from a marketplace like Duuce.
- Recurring monthly income from your subscriber base
- Scalable with multiple ways to monetize the content
- Can use your newsletter to promote other passive income streams like a blog, YouTube channel, or online course
- Can take a lot of time to create valuable content
#32: Invest in Startups
Lack of capital is one of the biggest challenges many entrepreneurs face when starting a business. Equity crowdfunding is one way for them to access the funds they need, and you don’t need to be an accredited investor to get in on the action.
There are a variety of equity crowdfunding platforms where you can become an angel investor with just a few hundred dollars in capital:
- StartEngine: One of the largest venture crowdfunding platforms, you’ll find everything from coffee shops and clothing stores to wind turbine companies seeking funding on StartEngine. You can also invest in or trade rare collectibles on their site.
- WeFunder: A low minimum investment of $100 makes WeFunder one of the most accessible ways to become an angel investor.
- Republic: Another low-capital option, you can start with as little as $50 on Republic. Their curated list is focused on opportunities with high growth potential.
- MainVest: Focused specifically on small businesses, MainVest lets you support local entrepreneurs while you earn passive income.
- Support small businesses you believe in and earn income for doing it
- 100% passive once you’ve invested
- Potentially high long-term returns if the business takes off
- You lose your investment if the startup fails
- May take a long time to see a return on your investment
#33: Create Digital Files
You’ve likely seen the online marketplaces of fonts, website and store themes, and other graphics and illustrations. These are often made by independent artists and designers who can make extra income selling their digital files through a platform like Creative Market.
This isn’t just an option for artists. You can also sell spreadsheet templates, patterns for crafts, PDFs, or templates for business cards, invitations, or greeting cards. If it’s something people need and will search for online, you can sell it for extra income.
Some other sites to check out if this seems like something you want to do:
- Easy Digital Downloads: One of the most popular digital download marketplaces, boasting nearly 4 million downloads from their platform. They also have a wide range of third-party integrations and analytic tools helpful for creators.
- Gumroad: The easy sign-up process and knowledge resources on Gumroad make it ideal for new digital creators, and you can sell just about anything through their platform.
- SamCart: An all-purpose site for courses, membership subscriptions, or digital products, SamCart also has helpful resources and analytic tools. The downside is there is a membership fee to sell through their platform.
- Easy way to monetize your unique skills and knowledge
- Little to no up-front financial investment with a low overhead
- Income potential scales as you create more items to sell
- Need to sell a lot of files to make a significant income
- Risk of your content being copied or shared illegally
#34: Become a Social Media Influencer
If you’re already active with a large following on social media, you can leverage that following into passive income by becoming an influencer. Influencers are paid to promote products, services, and companies through their social media channels using reviews, promotional posts, or ads inserted into their posts, blogs, and videos.
Sites like Heepsy and Upfluence connect influencers with people who need their services and can help you build your reputation as an influencer. While the highest-paid influencers have 100,000 followers or more, you can become a micro-influencer with as few as 1,000 followers.
- Easy way to monetize a large social media following
- Try new products or services in your niche for free
- Works well in tandem with other passive income sources like courses, blogs, and YouTube channels
- Not completely passive since you’ll need to actively post engaging content
- Need a large social media following to attract advertisers and sponsors
#35: Generate Leads
A lead is a potential customer or sales contact. Companies get leads through their website, online ads, and ranking high on search results. Larger companies often have teams devoted to lead generation and management, but smaller businesses don’t have those resources, and instead pay third-party freelancers or agencies to do it for them.
If you have a strong understanding of digital marketing, SEO, and web development, you can use those to gather leads and sell them to businesses. The industries that pay the most for these are home services, insurance, and lending companies, so it can be beneficial to have expertise in those areas.
- Can use software and tools to automate lead sourcing and make it more passive
- No need to create and sell your own products or services
- High revenue potential once you’ve established your reputation
- Requires a specific skill set
- Can take a while to grow your reputation and increase earning potential
#36: Use Passive Income Apps
Do you want to get paid for doing things you already enjoy? There are a plethora of apps that let you do just that. While many of the apps you’ll find on passive income earning lists are investment platforms, there are other options. Some of the most popular include:
- Mistplay: A loyalty program for mobile gamers, Mistplay pays users to play promoted games. Earn points for playing and turn them in for gift cards to Amazon and other online sellers.
- Swagbucks: Earn gift cards for doing a variety of online activities, like watching videos, taking surveys, or playing games.
- InboxDollars: A way to get paid for things you already do online, like shopping, searching the web, or even watching TV.
- Get paid to shop or play online games
- Make passive income from things you already do
- Easy to set up with no specific skills or knowledge required
- Relatively low income potential
#37: Take Paid Surveys
Companies need feedback from users and customers to improve their products and services, and they’re willing to pay for that information. Taking online surveys doesn’t generate a ton of money, but if you enjoy doing them, it’s a way to make a bit of extra cash just by sharing your opinions.
- Easy and free
- Earn money in your spare time while doing other things
- Provide feedback to improve the products and services you use
- You’ll only get paid for surveys you qualify for
- Can take a while to earn a significant amount
#38: Use a Credit Card with Cashback Rewards
Getting money back for the things you buy is one of the easiest forms of passive income. The only caveat here is that you’ll need to make sure you only buy what you can pay off right away, before you’re hit with interest that wipes out those savings. Look for a card with no annual fees. Many also offer a sign-up bonus of $200-$300. Nerdwallet’s list of cashback credit cards is a great way to compare your options.
- No extra effort or investment required
- Many offer bonus savings on specific categories of goods and services
- Improves your credit score while earning cash back
- Can get hit with high interest if you don’t pay your balance in full
#39: Get Cashback for Shopping or Dining
Another way to get paid for the things you already buy is through discount and reward websites and apps. Like with cashback credit cards, you want to be careful you’re not overspending in your quest for rewards. For the things you already buy, though, you can access them through an app or website to get as much as 20% of your purchase back, which translates to more money in your pocket.
Some of the most popular sites for this:
- Rakuten: Shop through the app to get discounts, cash back, and rewards for buying things you already need and use.
- Earny: This site tracks prices and gives you a refund if it drops after your purchase. You can also win prizes and get other rewards for shopping, and adding the Chrome extension makes the whole process automatic.
- Seated: Book reservations at local restaurants and get up to 30% back in gift card rewards.
- Earn money back for the things you already buy
- Easy and free to get started
- Can earn additional bonuses and rewards
- Can take some time to accumulate enough rewards to cash out
#40: Buy a Parking Lot, RV Park, or Mobile Home Park
People with vehicles need a place to park them, and the larger the vehicle, the more limited their options. Undeveloped lots are cheaper than commercial property with structures, giving this a lower financial barrier to entry than other brick-and-mortar options on this list. Once you have the lot set up, you can automate the space booking process or hire a few employees to supervise and maintain the space to make it a fully-passive income stream.
- In-demand service with a consistent customer base
- Can make a profit from otherwise unusable and undeveloped space
- High long-term revenue potential
- Will need employees to make it fully passive
- Requires some initial capital investment
Let’s review Graham’s simple steps for developing your passive income idea into a thriving source of income:
Perform Market Research
Once you’ve chosen a couple of the best passive income ideas that you’d like to investigate, it’s time to do some market research. You’ll want to understand:
- Industry revenue and profit benchmarks
- The major players and how they make their money
- Trends in the industry
- Gaps in the current offerings
After you understand all this and have decided to enter the industry, it’s time to create a customer avatar.
Create a Customer Avatar
Create your own avatar profile with this template.
To earn passive income, you’ll want to have a customer avatar. There are two ways you can create the customer avatar depending on what kind of passive income streams you pursue:
- Avatar of your future self
- Avatar of your future client
Let’s look at each.
Avatar of Your Future Self
If you plan to earn passive income from dividend stocks, real estate investment trusts, exchange-traded funds, or other income-producing securities, you may want to create a customer avatar of what your life looks like in the future. You’ll want to include aspects like:
- The year
- Where you live
- Your monthly income
- Your family scenario
- Your work schedule
This is just defining what financial freedom looks like to you. With a picture of where you’re going, it’s easier to commit to the upfront time investment and monthly payments necessary to reach financial independence.
Avatar of Your Future Client
If your passive income streams involve selling a product or service to generate income, you’ll want to define your ideal client. You want to know everything you can about them, including:
- How they make money
- Where you can reach them online
- What is important to them
- Your pathway of interactions once you start interacting with them
- How they communicate
The more you know about your client, the better you can prepare a passive income strategy.
Build the System
This is where those who shine at running business ventures or creating passive income differentiate themselves from those who fail. You need a system in place. Otherwise you’ll burn out.
Graham started his first passive income stream with the following tech stack:
- Cheap WordPress site
He told us:
Kajabi offers a 30 day free trial.
Create Content or Ads
The next step is to create the content or ads to get your passive income ideas in front of your target market. If you’re creating content, you’ll want to share regularly with your audience. You can use your customer avatar to create ad accounts on the appropriate social media platforms.
Graham explained how he spends just five hours each week to earn passive income:
You can use programs like Canva to make content generation easy, but Kajabi also has design tools built in.
You’ll want to collect email addresses to communicate with your followers. Kajabi has built-in email collection and is really intuitive. You can even take the Kajabi Academy List Building Course to learn the best ways to build an email list using their platform.
If you prefer MailChimp, they also offer educational resources on using their platform. Here are the main things you need to know about any email list:
- You need real emails. If you have too high a spam rate, you’ll be flagged by email operators. If the email addresses don’t look real, they probably aren’t.
- Disclose how email addresses will be used before you collect them. People are hesitant to give out their emails to unknown companies.
- Comply with the strictest laws you fall under. In most cases, this is the GDPR, Europe’s privacy regulations.
Convert Followers to Customers
The final step in earning a passive income is converting followers into customers. This requires an automated email funnel. Kajabi has a free training that I linked to earlier.
There are a ton of places you can get free or low-cost email templates and edit them to suit your niche. If you wish, you can also use paid ads with retargeting as long as you have the proper tracking codes on your site.
Next, we’ll answer some commonly asked questions about the best passive income investments.
Passive Income Success: A Case Study
We mentioned him above, but it’d be a shame not to highlight him once more before we wrap this article. Graham Cochrane is a prime example of a wildly successful passive income plan.
He’s made $1.6 million dollars this year and only works 5 hours a week.
Yes, you read that right. Graham got laid off from his job four months after moving his family to Florida during the Great Recession. He told us:
He had some experience recording and mixing for bands, which he thought he’d start doing as a side gig. So he started marketing the business:
Want to know his secrets? Get all the info in our interview.
Passive Income FAQs
People ask a lot of questions about the best ways to invest passively. While I am not in wealth management, nor am I a certified financial planner, I have experience investing and am happy to share my opinions. Make sure to consult with a professional who actively handles wealth management before pursuing any types of income that require an investment.
Passive Income vs Unearned Income Streams
Passive income is from an investment of time or money, while an unearned income comes from sources like gambling, alimony, lotteries, or social security.
How to Generate Passive Income with No Initial Funds
Many of the top streams of passive income are online. In addition, most software offers a free trial. You just have to be willing to trade an upfront time investment for future income. If you are low on cash, consider getting into:
How to Make Your Money Work for You
To make your money work for you, invest it in passive income ideas that are strictly financial instruments. You can invest money in the following money making ideas:
- Dividend Stocks: Earn dividend income on a monthly, quarterly, or annual basis by playing the stock market.
- Mutual Funds: A fund that holds multiple types of stocks that requires a minimum investment. Mutual fund focused on income will pay out similarly to dividend stocks.
- Retirement Accounts: You’ll pay taxes on either the front end or the back end but not both. If you work with a company with a matching 401K, that is an automatic gain right from the start.
- Peer-to-Peer Lending: These financial instruments lend money to people and businesses in exchange for the repayment of principal and interest payments. You may be required to be an accredited investor on some platforms.
- Real Estate Investment Trust: Make money off real estate investing without buying a property and managing it.
A high-yield savings account or money market fund is another option, but I would recommend going for something that beats inflation. Savings accounts and money market funds normally have horrible interest rates.
How Can I Make Passive Income with Real Estate?
Passive income options in real estate include:
- Buying a rental property: Buying real estate to earn rental income is one of the ways many people earn passive income in 2023.
- Investing in real estate investment trusts: Make money on real estate without owning real estate or managing a rental property. These are some of the highest-yielding stocks.
Have You Figured Out How to Get Rich in 2023?
At this point, you’ve learned:
- The passive income definition
- How to earn passive income
- How to build passive income using Graham’s strategies
- Some of the best passive income ideas in 2023
Now you just have to put in the upfront time investment or money investment. As you bring in more money, make sure to keep reinvesting it in a mutual fund or other ways to create passive income dividends.
Just as a reminder, don’t consider this blog as investment advice. We’re just business owners who are passionate about helping others succeed. Any investment decisions should be made in consultation with a licensed financial advisor.
What passive income strategy has made you the most money?
- Real estate
- Online passive income