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Everybody who’s heard of the concept is on the lookout for passive income ideas.
Passive income is, essentially, money that you make for doing nothing, or relatively nothing. It can be money you make while you sleep or money that you make and continue to make from minimal work or overhead.
According to Investopedia, passive income is defined as:
“Money being earned regularly with little or no effort on the part of the person who’s receiving it.”
That sounds like money for nothing, right?
In this article, we’ll look at 53 passive income ideas you can get started on in 2020.
Do you want to learn how to make passive income?
Then let’s get into it:
Create a Blog or Website
You can start a free blog with WordPress. But you’ll be limited in what you can do with it and in how you can monetize it. It’s better to invest a few bucks for a domain name and hosting. For example, NameCheap can get you started for under $10 per month.
Bluehost usually has a special in which you can get hosting for just $3.95 per month plus a free domain when you sign-up for a year. You can use any of the free WordPress themes to build the blog.
I worked hard to build a collection of blogs and websites years ago. My website on how to remove carpet stains, built over a weekend, used to produce over $1,000 per month from Adsense revenue (the easiest way to monetize a site). Although my website empire has mostly failed now, I still make a few hundred dollars monthly, and I haven’t looked at most of my websites in over a year.
Warning: This passive income idea can be a great way to develop a large income, but getting traffic is the key, and that is more difficult than ever. There is no guarantee that your efforts will pay off.
Here are some key points you need to keep in mind when starting a blog.
Buy a Blog or Website
If you have some money and want to avoid the work and uncertainty of building a successful blog or website, just buy one… or two or three.
There are at least five ways to value a website, but if it’s passive income you want, avoid any speculative purchases. It isn’t potential that interests you, but current revenue.
Various earning multiples are suggested, but you probably shouldn’t pay more than 24 months’ earnings for a site. So, for example, if a website has been generating about $200 per month you might buy it for up to $4,800.
Theoretically, that’s a 50% annual return on your investment ($2,400/year). But since you want passive income you probably won’t work on the site, so the revenue will drop over time. It may even fail altogether due to a Google algorithm change, and then you lose everything.
You can afford to lose it all on one or two investments if you get a great return for years from the others. You can buy established websites on Flippa, and can even search the listings using income and price criteria.
I may yet try this more seriously. My experience so far is limited to buying a website for $100 that produced about $8 per month (I later sold the site for $700).
Buy Income-Producing Real Estate
My wife and I have owned rental real estate several times now. One thing I like about it is that, unlike business profits, you usually don’t pay self-employment tax on rental income. Not paying that extra 15.3% really helps.
Rent is not necessarily “passive income” in my book. After all, you don’t usually get to relax and forget about your properties. In fact, if I subtract a reasonable $15-per-hour for my labor on the duplex we owned last year, the remaining “investment” return was pretty lousy.
On the other hand, you can make it a more passive activity if you hire management. We did that when we rented out our condo in Florida a few years ago. We never even met the tenant, and we had one phone call to authorize a repair.
Become a Real Estate Lender
My wife and I used to loan money to an investor at 10% interest. He used it to flip homes for a profit (we always had a first mortgage on these for safety).
That was nice, but the money came back to us every five or six months and we had to do a deal all over. So we later loaned on a rental, collecting 9% for years.
It may be even easier to find the deals now, thanks to new peer-to-peer hard money platforms like GroundFloor. They do 6 to 12-month loans at 5% to 25% interest, and they allow you to invest as little as $10 in each loan.
If you like the idea of real estate income but don’t want to look for or buy houses, put your money in real estate investment trusts (REITs). These companies invest in real estate and pay out regular distributions to investors. They trade just like stocks.
Search a list of REITs to find ones that meet your criteria. For example, you can go with the highest yields, or focus on residential REIT’s, or those that invest in office buildings.
The concept is simple enough; link to a product on your blog and if someone clicks the link and buys something, you earn a commission. You can find relevant products for your blog on a list of the top affiliate programs.
When my websites did well I made hundreds of dollars monthly from affiliate links. For example, I made 7% when someone clicked a link on my backpacking site and bought a sleeping bag, and I received a $30 commission when a visitor to my brain power website clicked a link and bought a set of meditation CDs.
I still get occasional affiliate checks from sites I haven’t looked at in years.
If you don’t have a blog or website, you can post affiliate links on Facebook. Of course, that’s a more active way to make money, since you have to post again and again for the links to be seen for more than a few days.
Rent Out Your Backyard
This is an interesting one that might take many people by surprise but there are actually people out there who would like to rent out your backyard for a camping space. This can be cheaper for people than traditional Airbnb.
Where To Start: There are sites such as Gamping (yes that’s G-A-M-P-I-N-G), that will allow you to rent out your backyard to prospective campers and earn a little bit of extra money. Plus, you don’t have to have them in your house!
Create An Etsy Store
Etsy is a website that allows you to create your own internet storefront to sell arts and crafts. If you are someone who is interested in arts and crafts, maybe doing them as a hobby, taking an hour or so out of a single day to create an Etsy store will allow you to possibly reap some major rewards in the future.
You can put up whatever kind of products you want and set whatever price, and people can either choose to buy it or not. You can put up a piece of art for $1000 and it might sell in a year or two, then you’ve got $1000! It’s all up to you.
Where To Start: Follow this guide Etsy created on starting an online shop
Refinance Your Mortgage
Traditionally, the idea of refinancing your mortgage might seem counterintuitive to the idea of passive income but many people are actually paying a good deal more for their mortgage than they could be and refinancing their home with a better interest rate could propel your reverse passive income a great deal.
Where To Start: Do some research and maybe even pay a small fee for a financial adviser to help you figure out how to find the absolute lowest interest rate so that you can cut unnecessary expenses and save tons of money per month on your mortgage.
Rent Out Space On Your Vehicle To Advertisers
You may have seen this before while driving to and from work. A personal vehicle that has a huge advertisement painted on the side as if it were a bus or other form of public transportation.
Where To Start: There are many sites, such as Wrapify, that will allow you to make ties with companies looking for someone to do some personal vehicle advertisement.
Sell Merchandise On Amazon
Amazon has an awesome little thing where you can upload graphic designs and Amazon will print them on t-shirts to order should someone be interested.
This is a good option if you have an established brand that you would like to make merchandise for or just have a funny little idea or graphic for a t-shirt that you think people may be interested in. There is very little work involved, only a little bit of graphic design. Amazon will do the rest for you in return for a very small portion of the profits.
Where To Start: You can find this at merch.amazon.com.
Sell Unused Clothing Online
This might be cheating a little because you did pay for those clothes in the past so you aren’t necessarily getting money from nothing but while most people will take all their old clothes to donation sites, few realize that there are many second-hand stores and websites that will be willing to pay you a little extra cash for your old clothes, so long as there aren’t any exuberant mustard stains on them.
Where To Start: You can look on the internet to see if there are any second-hand clothing stores in your area and if there aren’t then you can try second-hand clothing websites like ThredUp.
Become An Ambassador For A Brand
If you’re a social animal, you can volunteer your services to either a local or popular brand and see if they’re interested in having you become a brand ambassador. This pretty much means that you pimp the brand and its products.
Brand ambassadors usually take some logo stickers, a little bit of product, maybe some pamphlets, and a good amount of brand positivity everywhere they go. They can go to social events, festivals, or just basic places and hand out products and swag that will spread the good word of the brand, let people try the product for free, and make people think positively about the brand going forward.
You will be paid upfront for your services but many brands will also let you give out a code that customers can use that will allow you to reap some commissions should say customers make a purchase of the product.
Where To Start: Here’s a helpful guide on becoming a brand ambassador
Take Advantage of Rewards Provided By Your Bank
So we all see that advertisements for financial rewards being offered by our bank or other financial institution but not everyone realize just how lucrative taking advantage of these awards can be.
While it won’t give you a fortune that you can retire on, taking full advantage of all the rewards posed by various financial institutions will definitely help you save money and increase your reverse passive income.
Buy A Food Truck
With the rise of popular microbreweries and music festivals, food trucks are becoming increasingly popular. Food trucks are trendy and people are always interested in trying a new food truck when it pulls up.
You can invest in a food truck and it will have far less overhead than investing in an actual restaurant or business. You can hire a small crew and make way more than you invested in a small amount of time.
Where To Start: Here’s a helpful guide on starting a food truck
Sell Stock Photos
If you like to take photos, and you’re good at it, you can offer them for use on one of the online platforms that pay you royalties. Here are three of them:
Most people don’t reveal their earnings from these websites, but at least one man says he made $1,255 in royalties the first 4 months of 2017. That’s an average of more than $300 monthly.
You need to upload hundreds of photos to numerous sites to start making a decent income. But once you have a good-sized portfolio you may collect royalties for years.
Some stock photo platforms are very selective, so send your best photos as samples. I was refused membership by two platforms after sending them what I thought were ten really good pictures (it must have been the camera).
Just like selling your stock photos, you can make passive income off your artistic passion. Every time somebody licenses your music for a YouTube video, commercial, video, or movie, you’ll earn a royalty.
Get Registered As A Notary
You’ve probably been in the position where you’ve had to get something notarized and you realized that anyone and their mother can be a notary so long as they have the proper paperwork and registration.
Why not become one yourself?
All they have to do is sit there for a second and watch you sign the paper and then sign it themselves.
This seems pretty passive if you ask me.
Where To Start: Taking the steps to become a notary is fairly easy, you just get registered and pay a small fee and then you open yourself up to pretty much unlimited passive income.
You can advertise your services on the internet or pretty much anywhere the message will be seen. I’ve seen small business owners put signs out on their storefronts saying “we notarize”.
Use a Few Good Cash-Back Credit Cards
I’ve previously written about ways to make money with credit cards, but many require ongoing efforts, so they don’t produce “passive” income. The exception is if you just use cash-back credit cards for all your normal purchases.
For example, use a Citi Double Cash card for normal purchases and you’ll get 2% back. Use an American Express Blue Cash Everyday card to get 3% back at grocery stores. Over the course of a year you might collect hundreds of dollars in cashback without extra effort (well, you may have to log in to your account and click those “redeem” buttons).
Become An Angel Investor
Of course, one of the first things that people think of when they think of passive income is investing in the next big business.
Use your intuition and your own business savvy to gamble on the odds of these small businesses and make an educated guess as to which one has the gumption and the drive to become the next big thing.
Where To Start: Using sites like Angel List will help you link up with small businesses trying to be the next big thing. You can invest a little or a lot and choose the business that you think is most likely to strike gold.
Flip Stuff On eBay
Selling stuff on eBay is such a great way to make money that many people have made it into a full-time job. A little bit of time spent each week looking for items on craigslist or at garage sales and then listing it on eBay can create a good deal of passive income from a very minimal amount of work. You can also sell those weird antiques you’ve accumulated from relatives and other stuff around the house.
Where To Start: Check out our Definitive Guide To Getting Started on eBay
Invest in Dividend Paying Stocks
A list of the highest-yielding dividend stocks is more exciting than bank accounts, with the top ten in the S&P 500 paying between 5% and 8.4%. If you’ve saved up 100K and get a 6% average return you’ll have $500 in passive income monthly.
The problem here is that companies paying that much may be the most likely to fail (will Kohls survive the general retailer wipeout?).
I want to invest in solid companies that rarely cut their dividends, like Walmart and Coca Cola. Sadly, their dividends are at 2.5% and 3.2% at the moment — too low for the risk.
But when the price drops, the dividend is the same per share, meaning you get a higher return for your investment. So you might want to do what I plan; wait for a market correction and buy a diversified portfolio of companies that will be around for decades or longer, and at prices where the dividends represent a 4% or better return.
It may be a while before stocks are cheap enough to implement this strategy.
Create Your Own Podcast
This is for the creatively inclined. It’s best to look at this one as a hobby that could possibly in the future lead to some passive income so if you need money now don’t go into this one looking to see those dollar signs right away.
Podcasts can be a fun pastime that has the potential to turn lucrative in the long run.
Maybe podcasts become incredibly successful and are able to make huge amounts by monetizing through corporate sponsorship and ad space during their runtime, as well as fan donations and possibly even selling their own merchandise.
If there is a topic that you are passionate about and would like to talk about what you think others could possibly be interested, all you have to do is find a microphone and possibly a few interesting guests and you’re well on your way to becoming your own podcast runner.
Where To Start: Check out this awesome How To Start A Podcast Guide from Podcast Insights.
Become A Social Media Influencer
These days, it seems like anybody can become a social media influencer.
If you like to share a lifestyle that other people may find interesting and/or similar to theirs, then becoming an Instagram model or influencer can actually pay off quite a bit just from doing something you’d already be doing anyway in your free time.
The most popular Instagram models and influencers make money from donation sites like Patreon, sponsorships, affiliate marketing, and selling their own products.
Where To Start: You likely already have an Instagram account. The next thing you need to do is figure out how to make your life…. What’s the word…. Interesting!
Rent Out Your Car
There are big bucks in the rental car business for any car owner. Especially since people prefer peer-to-peer business over large corporations like Enterprise or Avis.
If you’ve ever rented a car before, you may have been amazed at just how much you have to pay per day to drive a car you don’t own.
You could even buy a car specifically for the purposes of renting it out if you are concerned about people gumming up and wrecking your own personal car. If you live in a big city or a popular tourist destination, you could rent your car out almost every day out of the year.
Where To Start: Websites like Turo allow you to put your own car up for rent.
Bonds are essentially an investment into a corporation or agency that is like a loan you give that you will receive interest on in a pre-established amount of time. Bonds can be purchased on the cheap or for a higher amount of money, and they guarantee a return.
This is a fairly low-risk investment but that also means that the money you make won’t be too extravagant. As well, depending on how long the bond is for, inflation may eat up a good amount of your profits.
Many people recommend bonds for small amounts of passive income if you’re someone who has plenty of money and doesn’t want to take a huge gamble in things like stocks but many others think the potential benefits aren’t worth the effort.
Where To Start: If you are interested in bonds, you can find many online marketplaces like Stoever Glass that will show you some affordable bonds you can purchase, or you can go to a private investment firm.
Invest In A Private Equity Fund
If you have some capital sitting in your bank account and you don’t know what to do with it, pooling into a private equity fund is a great way to possibly earn some of those big passive income bucks down the line.
Private equity funds are essentially just putting in some money to a group fund that then gets invested into a long term project.
It’s like investing with friends.
This isn’t an option for everybody but, for those with the capital to do so, private equity funds can give you some good passive income further down the line.
You won’t get the money today, or likely even this year, but if you play your cards right and use your business savvy and intuition to find a good fund you will be able to add on some of the extra zeroes to your saving further down the road.
Where To Start: According to SEC guidelines, only qualified investors investing in private equity.
Basically, you must meet these two guidelines:
- An income of $200,00 for singles or $300,000 for couples in each of the last two years.
- A net worth of at least $1 million excluding the equity of your home.
Optional: Being an officer, director, or general partner of the company in which you’re investing.
Create A YouTube Channel
Making money on YouTube is as simple as clicking the “monetize” button when you upload your video. Of course, how much you make depends on the traffic you get.
Years ago I created a YouTube “show” on ultralight backpacking. It was a fun way for my wife and I to get out in the mountains of Colorado, where we lived at the time. At its best, it generated $80 per month, but the revenue kept trickling in for years without any additional effort.
That’s better than nothing, but much more is possible. For example, Rosanna Pansino makes $6 million annually from videos about baking. I suspect that if she stopped uploading videos she would still have a decent income from her YouTube channel for years.
This is a fun one and will allow you to both express yourself artistically and possibly make a little bit of money on the side.
Use Savings Apps
While this isn’t exactly “creating income from nothing”, there are many apps that allow you to passively by rounding up your transfers and purchases by a few pennies and put that money into savings for you.
You won’t even notice the small amount they take when it happens but in a few months or a few years, you will have a huge pool of money created from these apps that you might be extremely grateful for. This is an excellent way to create some reverse passive income and make sure that you always have some money set aside for hard times or future investments.
Publish An E-Book
Any book can be an ebook, but I like the fact that the format lends itself to short, easy-to-write books that can be sold inexpensively. For example, years ago I wrote a handful of short (under 20,000 words) books in about three days each, on topics ranging from ultralight backpacking to real estate investing (hobbies of mine), and loaded them up to the Kindle publishers platform.
I generally sold them for $2.99, of which I got a royalty of $2.09. They’re gone now (sales dropped and I didn’t want to update them), but for years I collected hundreds of dollars per month in royalties. That’s peanuts, by the way. Self-published author Amanda Hocking made millions with her ebooks.
The owner of this blog – Jason Wuerch – also created his own book called 101 Free Money Making Apps and gets anywhere between 10 – 20 sales per month.
If you have a website on which to promote them you can also sell your books as PDFs using ClickBank. I did that as well, making a few thousand dollars annually for years.
Success is more difficult now, and I no longer make anything from ebooks, but if you have the time, you don’t need much money to give it a try. A Kindle publisher account is free, and it costs just $49.95 to create a ClickBank vendor account.
Publish A Paperback Book
Royalties from a book are a great source of passive income. Do the work upfront and the money can keep coming for years. Fiction, while harder to sell, might provide royalties for a longer stretch, since non-fiction tends to be out-of-date quickly.
For example, my book 101 Weird Ways to Make Money is old information now (I wrote it in 2010). I received an advance and royalty checks for thousands of dollars, but now it’s just a couple hundred dollars every six months. On the other hand, I’ve invested no time on it since initially spending two months writing it, and doing a few interviews.
The odds of getting published by a traditional publisher are slim (I got lucky), but once you’ve written a book you might as well try. There are clear advantages to having a big publishing company promoting your book.
If that fails you can self-publish for less than $100 on platforms like CreateSpace. Again, the odds of success are slim, but you might combine a self-published paperback with the next strategy.
Create An Audiobook
Finally, turning your book into an audiobook, either by narrating it yourself or paying a small fee to have a professional do it, will be a great third-point on the triangle to maximize passive income from your writing ventures.
In fact, audiobooks can be one of the most lucrative forms of writing as there are so many people who may be interested in a topic and anxious to hear what you have to say but don’t want to take the time to sit down and read it for themselves.
Many people will put on an audiobook while they are driving to and from work or exercising.
Where To Start: Start of course by writing and publishing your own ebook or paperback book. If you publish a book, don’t skip this. Audiobook sales pushed past $1 billion in 2018!
Grow Marijuana (If It’s Legal Where You Live)
Seriously… On that last part.
Only do this if it’s legal where you live.
If you have any interest in gardening (or marijuana), then this could be an awesome little side-project for you. There may be a little bit of work and overhead cost involved but the amount of people who have struck gold in the marijuana industry is nothing to laugh about.
Where To Start: If you’ve got a green thumb and some extra space, there are sites such a Citizen Grown that will pay you to grow marijuana on your property.
Invest In Domain Names
This is an extremely clever one and one of my absolute favorite modes of passive income.
People who are not too internet savvy may not even be aware of this concept but every single website or domain address that you come across is essentially online real estate. What some people do is brainstorm ideas for what may in the future be a website or domain address that someone would like to create and buy it up before there is ever any interest in it.
For example, you could buy the domain “bobsveganrestaurant.com” and if in the future some guy named Bob wants to open up a vegan restaurant, he’ll see that you own the domain name and may wish to purchase it from you for an amount of money far greater than what you purchased it for.
This allows you to get really clever and use your intuition and business savvy to come up with domain names that might be lucrative in the future.
This passive income idea may be the most little known, but it can be extremely profitable.
Buy The Rights To Media Content For Royalties
Every time you hear a song in a commercial, television show, or movie, that is money in someone else’s pocket.
We mentioned licensing your own music if you’re an artist.
But did you know that you can own the rights to other people’s music?
The use of a song in another form of media entitles whoever owns the rights to that song to some royalties.
And these royalties can add up!
Use your business savvy and intuition to pick out some pieces that you think might end up being lucrative in the future. You can buy up a huge stock and even create your own marketplace where you advertise cheap royalties for low-budget media enterprises.
Where To Start: Online rights marketplaces such as Royalty Exchange will allow you to check out some pieces of media whose royalty rights are for sale.
Watching someone else’s house while they’re out of town is an easy way to make money while you sleep, eat dinner, sit on the couch watching TV, twiddle your thumbs… You get the point.
On average, pet sitters can make $30-$80 per day.
This step requires you to have a business and/or an in-demand skill on the independent market.
If you own a business, plan on starting one, or plan on buying one in the future, this is for you.
The next logical step as a business owner is finding people who can “do the work for you”.
You can outsource work to other individuals as employees or freelancers, or outsource the work to white-label companies.
If you’ve put in the work and managerial skills to develop an awesome team and they’ve hit it out of the park and finished up all the work that you can throw at them, why not make some money by having your team do work for other people?
People will pay you to complete a service, create a product, or finish a task for them. If you have someone else do the work for you, all you have to do is sit back and collect your little “sliver to deliver”.
Rent Your Personal Items
Ok, I get what you’re thinking…
“I understand renting out my home when I’m gone and maybe even my car, but my personal items?”
This is one that most people don’t think of but the fact is that most people have a lot of equipment, furniture, or other items that other parties would be interested in leasing or renting for a week or two, or even a day.
This can be stuff such as furniture, televisions, tools, or gardening equipment.
Buy A Laundromat
You’ve probably seen the TV shows like Breaking Bad where a “business owner” involved in questionable activities invests in a carwash or laundromat.
Did you know that… Well, anybody can own a laundromat.
If you’ve got the money, investing in a laundromat is an awesome way to start earning some big passive income dollars.
If you’ve ever been to a laundromat you may have noticed the fact that, well, barely anyone works there.
The place is its own little automated business. (Pre-internet era)
And who’s getting all the money that you pump into those laundry machines? Well, whoever owns the place.
Just be sure to invest in a camera security system as well!
Become A Video Game Streamer
If you’re someone who loves playing video games in your free time, this is actually something that you can monetize.
People like to watch others play video games they’re passionate about. It’s almost like the old guys at the park playing chess.
If you’re a social person who also happens to be a gamer, this may be up your alley. If people enjoy your commentary, think you’re funny, or just think you’re really good at games, they will tune in daily to your Twitch streams and donate their money.
Where To Start: With minimal investment in equipment, you can stream yourself playing video games on Twitch and start earning donations from people who enjoy watching you.
Create an App
The nice part is that if you create a popular app the money may keep coming in for years. You can get help selling your apps through websites like SellMyApp.com, and keep up to 90% of each sale.
Create An Online Course
This one requires that you have some pre-existing know-how in an industry or area that people would be looking to verse themselves in but, if you do, then creating your own online course could be the way for you to turn some stagnant capital (that being your own knowledge and brain) into passive income with minimal work on your part.
There is always an area that we are experienced and knowledgeable in that other people aren’t and finding that niche could be your ticket to some big passive income bucks down the line.
Where To Start: There are dozens of sites where you can sell an online course. The best part about these sites is you don’t have to be a marketing genius since they handle the marketing for you.
Here are a few examples:
Frugal For Less Resource: How To Make Passive Income From An Online Course
Use Your Property As Storage Space
Okay… so if you live in a large city then you have probably seen the huge amount of real estate being eaten up by storage unit companies and thought to yourself, “Wow, that must be some business”.
No services are being provided, it’s just space, space for people to put their overwhelming amounts of stuff, and the amounts of stuff people have is increasing exponentially by the hour.
You can use sites like Craigslist and other social media to advertise to people that they can use your extra garage or basement to store their stuff for a competitive fee to the professionals and you may be able to make some huge amounts of passive income from relatively nothing.
Investing In CDs And Certificates Of Deposit
This is one of the easiest options that anyone can do, even if they don’t have a lot of money.
CDs, or certificates of deposit, are pretty much like long term savings accounts that you won’t be able to get money out of for a while but will accumulate a good and pre-established amount of interest.
It’s better than a savings account so long as you won’t be needing the money anytime soon.
Also, unlike other forms of investment, you are guaranteed a pre-established amount of returns, even if those returns aren’t as great as investing in a more high-risk scenario.
If you are someone who has some money sitting on the table that you don’t know what to do with and doesn’t want to take a huge gamble, putting that money into CDs is a great way to guarantee some passive income in the future, however light.
Invest In Vending Machines
This is an old classic.
Vending machines are money machines for the right investor. You buy a vending machine, rent out a space to put your vending machine, maintain the stock (this is incredibly easy), and watch as the quarters come rolling in.
I remember as a kid, my uncle owned a dozen or so vending machines around our hometown. He was able to keep them stocked through his busy work schedule.
And the best part?
His house was full of candy every time I visited!
They might have a slightly increased overhead but, in my opinion, it’s worth it. Any vending machine will do, though, and you’ll be able to make a good profit no matter what with minimal investment.
Where To Start: One of the most popular recent options for investing in vending machines is the Redbox, the movie rental vending machine. Redbox is awesome because there is no cash or quarters involved and the product being given is both incredibly popular and slightly more expensive than a soda or candy bar.
Create Your Own Software Or Code
This one isn’t for everyone.
I certainly don’t have the know-how to write software but many people do, and if you have the technical expertise, savvy, and drive, spending a few hours after work coding and developing a software that you think people might have some interest in is an excellent way to make some passive income down the line.
The only caveat is that this one certainly requires some preemptive work and discipline before you start earning those passive income dollars. But if you’ve got the gumption and the ideas, the right software, should there be a market for it, can go on to make you a ton of money.
My own experience, investing no more than $20,000 at any given point in the last 9 years, is less successful. I made 6%+ for years, but lately, the return has been closer to 3.5% for some reason(s). It’s still better than the bank, but for a portfolio diversified into hundreds of loans at nominal rates of 10% to 24%, it’s not an inspiring result.
I hope you do better. One nice feature of these platforms is that you can invest as little as $25 in each loan. Also, to make this truly passive income you can use the automatic investing features to reinvest incoming payments.
Rent Out Your Spare Rooms
A common way of doing this is signing up on Airbnb. The process is quite simple. You first have to sign up, provide the necessary details and create a profile.
Afterward, prepare the space you plan on selling. If it’s dirty or needs a makeover, do that before moving to the next step.
Upon cleaning up, enhance its appeal by taking beautiful pictures, preferably of magazine quality. Take photos of different angles of the room to show potential guests what they stand to gain.
If you don’t have a quality camera or iPhone, or if you’re not a pro at taking pictures, ask a skilled friend to do it for you. Of course, you have to have a detailed description of the space under the photos.
Remember to include those features that make it unique. Whether it’s an exquisite view, a hot tub or a fully-stocked kitchen, share away!
The mode of payment of this online marketplace is PayPal. Cash is also directly deposited in your account a day after a guest checks into your space.
Another alternative is doing it the old-fashioned way, without any help from the internet. Be sure to check the state laws in your area to ensure that you’re complying with the necessary housing and fee requirements.
Here are some pointers on how to rent a room in your house successfully:
- Put the house in order.
- Choose a room to rent.
- Come up with a price for it.
- Be honest when advertising the room.
- Don’t rent out the room blindly. Use your intuition.
- Request for a background check and credit report from a potential tenant through Cozy.
- Have a written account of the agreement.
Put Your Money in the Bank
Worried about the risks inherent in some investments? FDIC-insured accounts are about the safest thing you can invest in. Of course, you won’t make much of a return.
You’ll do a bit better with online banks. For example, I have money with Ally. At the moment they offer a 1.50% 11-month CD. It has no early withdrawal penalty, which makes it essentially the same as a savings account.
If you park some of your money in banks, check for the best rates at least once or twice each year.
License Your Invention
Maybe you have an idea for making water-ski bicycles or some other invention, but you don’t have money for a prototype and a patent. Or perhaps you don’t want to spend thousands of hours figuring out how to manufacture and market your invention. You want passive income, after all.
The solution is to license your idea to an existing company. Nolo says you can expect royalties of between 2% and 10% of net revenue if you find a buyer. Once the deal is made they do the work and you collect your share for as long as the product sells.
But be ready to fail several times. One survey found that only 13% of inventors who tried to license an invention succeeded
There are people and companies who can help. For example, Harvey Reese, the guy who invented reindeer antlers for dogs (a Christmas novelty that’s been selling for decades), has licensed more than 100 ideas, and he offers his services in a fairly straightforward manner.
I once paid Reese to evaluate my idea for a poetry-creation card game called “Deal-a-Poem” (what was I thinking?). For a couple hundred dollars he told me exactly, and in detail, why it wouldn’t sell. It was money well spent. Well, moving on…
Let Corporations Mine Your Data
Okay, so you may have heard how desperate corporations are to get your personal data. They want to know what you’re looking at on the internet, what you’re buying, etc. If you are someone who isn’t turned off by this prospect then you can allow corporations to bypass the middleman and purchase your data directly from you.
Where To Start: Sites like Mobile Xpression will give you passive income in return for allowing corporations access to your data usage.
If you are someone who is open with nothing to hide and doesn’t mind a little bit of spying going on into your personal life, renting out your data to market research companies is a pretty good way to earn some passive income.
Rent Out Your Lockscreen To Advertisers
This might be mind-blowing for some people (certainly was for me) but you can actually rent out your smartphone lock screen to advertisers.
Where To Start: Using an app called Slidejoy will allow advertisers to take up your smartphone lock screen with ads. If you don’t mind it, this may be a great way to earn some passive income on the side with absolutely no work or overhead involved.
Buy An Established Business
If you’ve got the capital, buying up a business that is already making money can almost immediately put cash flow in your pocket.
There are several reasons that a lucrative business may be up for sale even though they’re making plenty of money. Using your intuition and business savvy to find a good pre-existing business can be your ticket to a couple of extra zeros in your bank account.
It’s best that you have a little bit of know-how about the industry you’re looking to get into but with a little bit of research and possibly some third-party consultation and advice, investing in an already lucrative business is one of the best ways to turn your existing capital into a self-generating money machine.
The goal here is to find a business that doesn’t need much intervention and is already doing a great job and making money. If you have to step in and change things up then every hour you spend working on the said business is an hour where you’re not making passive income.
If you read through every passive income idea, you probably noticed some ideas aren’t like the other. That’s because there are four different types of passive income.
Let’s check them out:
This is an avenue of making a passive income that consists of essentially creating a product that will go on to make you money in the future. It can be creating a website, writing a book, creating software, or coming up with a great idea for a t-shirt.
This is an avenue of making a passive income that consists of buying some kind of money-making asset that someone else has created that will go on to make you money. It can be buying an already established and lucrative business, purchasing a vending machine, or buying royalty rights to a song.
Reverse Passive Income
This is called “reverse passive income” because it doesn’t actually generate income but saves you some amount of the income that you’ve already generated. Simply put, reverse passive income is finding ways to save the money you already have. This can be taking advantage of credit card rewards benefits or using cash-saving apps to round up pennies on your purchases and put them into a savings account.
Selling And/Or Leasing Assets
This avenue of passive income is pretty self-explanatory. You take the assets you already have that aren’t generating income and sell them or lease them to other people. It can be renting out a room to someone in need, putting a room on Airbnb, renting out your car or other property, or selling useless stuff around your house that is just taking up space and collecting dust.
Passive Income Is Easy to Earn
You put enough effort into your day job and it’s time you took things easy and got some money in a simpler way.
There are more ways you can earn some passive income apart from the ones mentioned in this post. You only need to find out what you love doing and capitalize on it.
If what you’ve decided to try out takes time to reap rewards, hey, look on the bright side. You’re building upon great profit in the long run.
And if the first passive income idea you try doesn’t work out at first, keep trying, and you’ll make it.