What are the best passive income opportunities?
Passive income is a term tossed around by tons of people online.
And if you’ve ever read about the concept, you may think it’s too good to be true.
Earning money without working? How is that possible?
In fact, it is possible to earn passive income, but that doesn’t mean you don’t have to put in the work first.
These passive income opportunities and ideas are some of the best ways to start earning extra income, as long as you put in the legwork to make them a success.
What is Passive Income?
If you’ve never heard the term passive income before, you may be wondering how it works.
In general, there are three main categories of income:
- Active income
- Portfolio income
- Passive income
Active income is the income you earn from actively working at your job.
Portfolio income is the money your investment portfolio earns.
That leaves us with passive income, which is income earned without active involvement.
That sounds pretty great, doesn’t it?
While passive income may sound like a get rich quick scheme, there is a little more to earning a passive income than simply doing nothing for something.
In fact, many passive income ideas require work or a monetary investment upfront that will provide you with ongoing income in the future. And other passive income opportunities still require ongoing maintenance even after you put the idea into action.
Luckily, there are a variety of different ways you can earn passive income, which means there are multiple opportunities for you to start adding to your family’s income in a more passive way!
From using your existing knowledge and skills to create a new income stream to investing money you already have to start earning even more, finding the best passive income streams are a simple way to increase your family’s income year after year.
How to Start Earning Passive Income
Now that you understand what passive income actually is, you’re probably wondering how you can get started.
There are typically two avenues to take towards earning passive income:
- Investing your time upfront to create a product or business that will earn you income in the future
- Investing money you already have to earn more money through a passive avenue
Either method takes planning and preparation to get started, which means the first step towards earning a passive income is to come up with a plan.
Start by evaluating the time and money you have available to invest in your passive income idea. Then, decide which avenue would be the best option for you to take right now.
If you plan to invest your time to start earning more money, it’s a good idea to assess your skills to see what talents you can use to increase your income.
As you scan through the list of opportunities below, think about your current skills and talents and how you can apply them to your own passive income ideas.
And if you hope to use money you already have to create more passive income streams, you’ll need to take a good look at your finances to see how much you can invest.
The amount of money you have on hand will help you determine which investment opportunities will work for you so you can start earning passive income through investing right away.
21 Passive Income Ideas and Opportunities
Online Passive Income Ideas
Using the internet to earn extra money is one of the best ways to start making a passive income.
Each of these online income generating ideas allows you to use your time and skills to create a passive income stream to add to your family’s income.
But keep in mind that simply creating these passive income streams won’t generate money right away. Like most business ideas, the majority of these ideas require advertising and promotion to be successful.
1) Educational products
One of the most popular ways to earn passive income online is by offering educational products and services. If you have knowledge to share or a skill you can teach, creating and selling educational products is a great way to earn an ongoing income online.
There are a variety of different educational products you can sell to earn a passive income, including:
Setting up a self-paced online course is a great way to earn income by sharing your knowledge. In most cases, you can set up a course once and sell it over and over again, which means you can earn income on your efforts indefinitely.
If you prefer writing instead of video, selling ebooks may be a better option for you. Write your knowledge or share your skills in a book to help earn a passive income through education.
If you love to cook, you can gather up some of your favorite or most popular recipes and compile them into a cookbook to sell.
A common way to sell ebooks is through Amazon Kindle’s Self-Publishing.
Help homeschooling and remote learning parents teach their kids different subjects at home by creating printable worksheets for sale. Use your knowledge of different subjects or your design skills to create fun worksheets for kids to complete at home or in the classroom.
2) Digital product sales
While we discussed the sale of educational products as a great way to earn a passive income, not all online products need to provide educational value.
You can also sell digital products that provide some other use to customers online as a way to earn a passive income.
Here’s an interview with a mom who successfully makes passive income selling printables on Etsy. She sells bachelorette party printables.
There are a variety of digital products you can sell online to earn some extra money, including:
- Printable wedding and party supplies, like invitations and decorations
- Monthly planners
- Budgeting worksheets
- Printable wall art
- Social media templates
- Photo and video editing filters
- Vectors and clipart
- Computer wallpaper and digital scrapbook paper
- Printable coloring pages
- Printable journal pages
- Website themes
If you’re looking for ideas about what to sell on Etsy:
If you’re serious about making a good passive income selling printables or digital downloads on Etsy, this course is worth taking.
I had the pleasure of interviewing one of its students Jennifer Goncalves who sells wedding printables. In this review post, she shares an insider’s perspective on the printables course and tips for selling on Etsy.
3) Affiliate sales
Earning a passive income with the use of affiliate marketing is another easy way to make some extra money.
With affiliate marketing, websites and social media influencers advertise products using a specially coded link that attributes each click to their account. Every time a customer purchases a product using your affiliate link, you earn a small commission on the sale.
There are many companies that have structured affiliate programs from large household names like Amazon Associates to affiliate marketing networks like Shareasale that partner with over 4000 merchants including NBAStore.com.
You’ll notice on my website, this is something I’m doing. Here’s how I made my first affiliate sale from my blog.
4) Earn cash back
Making money while spending money is another simple way to earn a passive income.
Earning cash back on your purchase can help you save extra money while you shop without putting much effort into the activity.
Cash back credit cards can provide you with the opportunity to instantly earn money back on your purchases every time you shop.
And apps like Rakuten (formerly Ebates.com) can provide you with additional savings while shopping online at over 2500 affiliated companies (in the U.S.) and 750 companies (in Canada) including Amazon, eBay, Expedia, and Groupon.
Here’s an article on how Rakuten works.
5) Online advertising
Another simple way to earn money online is to create a blog or YouTube channel and sell advertising space.
After gaining traffic to your website, you can begin earning a passive income on the content you create through the ad sales generated on your site or channel.
Blogging is quite affordable to start. You can get Siteground web hosting for a WordPress site for as low as $3.95/month.
The online advertising network I’m with is called Monumetric. You need at least 10,000 pageviews/month to apply for Monumetric.
6) Stock photo sales
Are you a talented photographer?
Use your photography skills to make and sell stock photos online to earn a passive income. Submit your photos to stock photo sites or create your own stock photo membership site to sell your photos to others online.
Creative Market, iStock and Shutterstock are all websites that pay photographers to use their photos in their stock photography library.
If you’re serious about selling photos, it’s a good idea to have a good camera.
If you want to take your photography skills to the next level, you can join a photography class.
Skillshare has free photography classes online.
There are also premium courses available at a cost. However, you can sign up here and get the first 2 months of Skillshare premium for FREE.
7) Create an app
Technologically advanced entrepreneurs can use their skills to create and sell an app to earn passive income.
If you have a good idea for an app and the skills to create it, you could earn a great residual income on the sales of your program.
8) License music
Musicians can earn passive income online by writing and recording songs, then selling the license to use those songs in online videos.
You can sell licenses for the same songs over and over again, allowing you to earn a passive income for each song you write.
Passive Income Business Ideas
Starting a business that revolves around earning a passive income is another great way to earn some extra money without ongoing work.
These passive income business ideas are simple ways you can begin to earn a passive income.
9) Sell storage space
People will always need a place to store their stuff, which means selling storage space is a good way to earn some extra money.
Provide clients with a place to store their stuff and charge them a monthly rental fee.
The best part about this idea is that you can go as big or small as you want. You could invest in a storage facility or simply store the items in your home or garage.
The only requirement from you is that you keep your client’s stuff safe and secure as you store it, which means you can earn a monthly income without much effort from you.
10) Rent out items people need
Another great way to make a passive income is to start a rental business.
Think about different items people in your community may need, then rent those things out to earn some extra money.
There are so many great ways to use this idea to create a business that’s personal to you. You could rent out:
- Baby gear, like strollers and playpens
- Bouncy houses for birthday parties
- Lawn care equipment
- Camping and outdoor gear
- Entertaining equipment, like folding tables and chairs
- Catering equipment
- Video games and movies
- Your car (You could rent out your car through Turo.)
- Cleaning appliances, like carpet shampooers
11) Rent your home or a room in your home
Instead of renting out things, why not make use of an empty room in your home?
Set up an Airbnb page for your room and rent it out to out of town guests to earn a passive income on a space you already have available.
Another way to use sites like Airbnb to earn passive income is to rent your home when you’re away to earn some extra cash while you’re on vacation.
12) Subleasing an extra room
You can also earn income off an extra room in your home or apartment by subleasing the room to a roommate.
Invite someone to rent the room for an extended period of time, then charge a monthly rental fee to earn extra income on the extra space in your home.
13) Vending machines
Owning a vending machine is another unconventional way to earn a passive income.
Purchase a vending machine and find a good place to put it, then outsource the restocking to a vending company to keep the business operations passive.
Earning a Passive Income with Investments
Investing is another great way to start earning a passive income.
With this method, you typically use money you already have to earn more money down the road. There are several different ways you can invest your money to start earning a passive income.
14) High yield savings account
One of the easiest ways to earn a passive income is to put your money into a high yield savings account.
While traditional savings accounts don’t typically offer a high interest rate, it’s still passive income on your money. It will allow you to easily increase the amount of money you’re already saving.
If you’re in the U.S., you can attain up to $350 in bonuses when you open up accounts with Chase.
If you’re in Canada, you can open a Tangerine account. With a $250 deposit, you’ll earn a $50 bonus when you use this orange key: 35762624S1. Here’s my Tangerine Bank review and how to use the orange key to get the cash bonus.
15) Money market account
While investing in a mutual fund is slightly riskier than relying on savings account interest to increase your wealth, this type of investment is still a tried and true way of earning a passive income.
A money market account is similar to a high interest checking account, but these types of accounts usually offer a slightly higher rate of return. In return for that higher rate, this type of account has some restrictions, like minimum balance requirements and withdrawal limits.
16) Dividend stocks
Another investment strategy to consider when looking for passive income ideas is an investment in dividend stocks.
A dividend is a share of a company’s profits that is typically distributed to investors each quarter, similar to a bonus.
Most dividends are issued as cash payments made on a per-share basis. Stock dividends can also be issued, allowing you to increase the number of shares you own in the company. Either type of dividend provides you with passive income to add to your overall portfolio.
A Random Walk Down Wall Street is a book that was recommended by other personal finance experts in this list of the best personal finance books of all time. It provides a detailed overview on how to invest in the stock market and touches on a wide variety of investing strategies including investing in dividends. It’s on my to-do list to read!
The cheapest way to invest in dividend stocks is through a self-directed investment account.
If you don’t have a self-directed investment account and you’re in the U.S., look into Ally Invest with commissions as low as $3.95/trade.
If you’re in Canada, check out Questrade with commissions starting at $4.95/trade. Buying ETFs with Questrade is free. If you include my QPass key (596025774378536) when you open the account, you can unlock a welcome bonus of up to $250!
17) Bonds and CDs
Another low-risk investment option for earning a passive income are bonds and CDs.
Bonds can either be issued by the government (low risk) or corporations (moderate risk).
When purchasing bonds, you invest your money into the bond for a set period of time and earn interest on your investment during that timeframe.
On the other hand, certificates of deposit are issued by corporate banks. These accounts typically offer a higher rate of return on your investment in return for restricted access to your money during a set timeframe.
18) Robo-advisor investments
Typically, investing in the stock market isn’t a passive way to earn an income.
But with the help of a robotic financial advisor like Wealthsimple, you can invest in stocks without much work on your part.
All you have to do is set up an account and answer a few questions about your financial goals, and the robotic advisor will do the work of selecting and balancing your portfolio to allow you to earn a passive income in the stock market.
19) Peer to peer lending
When offering peer to peer loans, you provide a loan to someone who wouldn’t typically qualify for a traditional loan. In return, the borrower will pay you interest on the money you lend them, allowing you to earn a passive income on your money.
20) Rental properties
Investing your money in real estate is a popular avenue for passive income if you’re familiar with the real estate market.
Buying a piece of property and renting it out will allow you to earn a passive income each month.
But to make this type of investment truly passive, you’ll also need to hire a property management company to take care of all the day-to-day activities that go along with maintaining a rental property.
21) Become a silent partner
Starting your own business can be a lot of work.
But helping someone else start a business by becoming a silent partner could be a great way to earn a passive income.
If you know someone who has a great business idea, lending them money to start or build their business in return for a share of the profits is a good way to earn a passive income and help out an entrepreneur at the same time.
Final Thoughts on Passive Income Ideas
If you’re looking for more ideas on passive income opportunities, here’s a list of the best passive income books. They’re filled with stories from people who have been able to successfully generate huge passive income streams.
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