A successful passive income stream can help you retire before turning 30. Imagine all the things you could do after waving goodbye to 9 to 5! But there’s a catch.
If you want to make money while sipping martinis on the beach, you must work tirelessly first—find an idea that fits your skill set, create a strategy on how you will execute it, and, most importantly, follow through.
However, putting in a few extra work hours each day will eventually help you achieve financial freedom and live your life to the fullest. So it’s all worth it in the end!
To help you save time on research, we compiled a list of the ten best ways to earn passive income.
- Sell online courses
- Start a YouTube channel
- Create a blog
- Rent out your household items
- Invest in dividend stocks
- Open a high-yield savings account
- Stake crypto
- Create an app
- Invest in rental properties
- Go for real estate investing
Passive income is still widely misunderstood, so let’s quickly look at its definition before diving into the best passive income ideas.
What is passive income?
Passive income is described as revenue that doesn’t originate from traditional employment and takes little effort to earn and sustain. And yet, passive income is not some magic beans that will get you lambo without lifting a finger.
Investing in mutual funds or real estate, creating online courses, or renting out your flat are all examples of passive income streams.
What all these examples have in common is that they generate passive income almost automatically, but this is the result of hard work beforehand. Plus, you almost always need an upfront investment to get started.
Image source: makeameme.org
To become a successful investor, you must first go through numerous investing resources—podcasts, books, or courses. To build online courses that people will buy, you need to find a sought-after niche where you have the qualifications. Plus, you will need to learn how to create videos and promote your material on social media. And, if you want to buy property to rent, you will need to deal with the legal work and get the flat (or house) ready for your future tenants.
However, once you’re done with the prep work, you make investment decisions quickly, your courses are doing the job for you, and your tenants send you money monthly!
What doesn’t qualify as a passive income stream
While launching an online course is a passive income idea, tutoring is not. So is not freelance content writing when compared to releasing an ebook.
Here are a few more helpful comparisons to help you distinguish passive income streams from side hustles.
Now that the difference is clear let’s get to the good part—passive income ideas!
10 Passive income ideas to make money
The key to financial success, as well as feeling truly accomplished and aligned with your life goals, is to look for income streams where you can combine these three concepts:
- Skill – you must have the qualifications to pursue your passive income idea.
- Passion – you should love what you are going to do.
- Demand – enough people should need your product or service.
Once you’ve found an idea that hits all three things, you’re good to go with planning your passive income strategy!
1. Sell online courses
Are you highly knowledgeable in what you currently do for a living? Or maybe you’re really good at one of your hobbies? You could create an online course based on that! It’s a great way to generate passive income at a reasonably low cost.
For example, if you work as a digital marketing professional, you could release a course called “Facebook ads for beginners.” Or, if you’ve been practicing drawing to relax after work for the last five years, you could create a series of drawing videos for beginners.
Whichever direction you choose, you will need to create an outline for your course, film it, and edit it. It’s also a good idea to build downloadable assets such as templates or key takeaways for your students. Additional material will help them get the most from your training and ensure they spread the word to their peers.
Check out Udemy, Coursera, or Skillshare to get ideas for structuring your course.
2. Start a YouTube channel
If online courses look too intimidating, but you like the idea of sharing your knowledge, try YouTube! It’s a less passive way to earn money since you must upload videos regularly and communicate with brands. However, in the long term, your old videos will generate passive income if you get enough views, clicks, and comments.
Image source: youtube.com
Some popular ways to make money from a YouTube channel include branded integrations, ad income, affiliate marketing, and sponsorships.
3. Create a blog
If your Instagram captions are a bit more elaborate than a random string of emojis or an inspirational quote, you may give blogging a shot! Especially if you have a hobby that sparks your passion or you want to share your professional knowledge.
You can make passive income from blogging by selling affiliate products (or your own), creating sponsored posts, and using Google AdSense to sell ad space on your site.
And, even though establishing yourself as a blogger will take some time (think a couple of years), the good news is that you don’t need to be a web designer or have IT skills to launch your website.
Drag-and-drop website builders like Wix make it easy to build the blog of your dreams! But know that you may need help with SEO (search engine marketing) and creating a presence on social media with paid ads.
If maintaining a blog (created from scratch or bought) is not for you, you could also write an ebook! You have to do it once, and if it deems to be a great read, you’ll be generating passive income without lifting a finger.
4. Rent out your household items
Many of us have at least a few useful household items that collect dust in our garages and attics. It could be anything from food processors and window-cleaning robots to lawnmowers or tents.
Look for things generally considered high-value items but usually used for a short period of time, and consider renting them to other people. You can start small by lending your toolbox, but if you notice a significant demand for it, you could buy additional items in this niche and rent them out, too!
Image source: unsplash.com
The main risk is that your property may be damaged, but you can avoid the costs by signing rental agreements. It’s also a good idea to include liability issues in the paperwork if you’ll be renting something that people can accidentally hurt themselves with, e.g., a hammer.
5. Invest in dividend stocks
Investing in dividend stocks is the epitome of passive income. You only need to make the initial financial investment, and you'll be getting regular payments to your investment account. The more shares you own, the larger your dividend checks will be.
Image source: unsplash.com
Usually, companies pay dividends to their investors once every three months. But here’s the deal—you’ll need to research the right stocks to invest in so as not to risk your initial payment.
To be on the safer side, look for a company with a history of dividend growth. Also, analyze the company’s financial strategy, and see how it held up during times of uncertainty (think the 2009 global financial crisis or the recent pandemic).
6. Open a high-yield savings account
Okay, opening a savings account is not the most exciting way to generate passive income, but it’s one of the safest ways to make some extra cash. And why not start somewhere safe?
Here are the key things to consider before getting a high-yield savings account:
- Consider when you’ll be using the money.
- Compare APYs, minimum balance requirements, and monthly service fees across different banks.
- Bear in mind that inflation could hurt the purchasing power of your savings in the
future.
Even with some risks involved, if you have the money you’re not planning on spending any time soon, it’s better to keep it in a high-yield savings account than in your sock or a checking account with no interest.
7. Stake crypto
Staking crypto is a way to earn passive income by holding specific cryptocurrencies. You basically “lock up” a part of your crypto for some time and earn rewards (additional coins or tokens) in the meantime. Think of it as generating interest on your savings, except it’s more profitable!
You can make passive income by holding Wizardia's $WZRD cryptocurrency in a staking pool that Wizardia provides. It’s similar to an interest-bearing savings account.
Wizardia's staking program rewards token holders with generous token rewards and special NFT prizes. Staking rewards will be transferred to your wallet after the chosen staking period is over.
Learn more here.
8. Create an app
News flash! You don’t need to be an IT genius to build an app. You could learn some basic coding with online courses or partner up with someone with the required skills. The key is to have a great idea!
You could build something useful like an app that helps people to simplify annoying tasks or go for the gaming industry. It could also be something out of the blue, like the app called “Dog Language Translator - Woof” which “does” exactly what it says.
Image source: play.google.com
Whatever direction, try not to overload people with ads inside your app. While in-app ads are a great way to generate passive income, you’ll eventually lose all your users if ads pop on every screen.
9. Invest in rental properties
Rental income is one of the best passive income sources – it comes in monthly, and if it makes sense financially, you can hire someone else to run your rental property.
And you don’t need to limit yourself to renting just that one flat you may have inherited from your family. Many people in the real estate business buy multiple rental properties to maximize their profits.
You could start by saving up money for the first down payment, and later on, as you’ve gathered enough rental earnings, you could use them for your second down payment, and so on.
10. Go for real estate investing
Real estate investing may seem like a tough challenge, but with all the real estate investment apps available today, it’s easier than ever.
Here are a few useful tools to get started:
- Arrived Homes – for low minimum investment
- Conceit – great for beginners
- DiversyFund – best for long-term investors
If you don’t have the funds to buy a real estate property right now, you could use REIT (a real estate investment trust) as your passive income source. These trusts are created by businesses that own and manage real estate properties.
Real estate investors can buy REITs like any other dividend stocks on the stock market. Though REITs can be risky—like any other investment—they offer a great way to diversify your investment portfolio and have the potential to provide you with a growing passive income stream over time.
Final thoughts
Let's go back to the three key pillars we mentioned at the beginning: your skills, passion, and demand for what you can offer.
If you had to take away one thing from this article, it should be this: all of the ten passive income ideas have the potential to build wealth. But it can only happen if you are honest with yourself and choose the passive income strategy that best fits your life goals.
You can only do outstanding work if you love what you do. Take your time to figure out what brings you joy and purpose (be it in the form of active or passive income), and then do your best not to waste your time on things that don’t add up to who you want to become in the next 5, 10, or 40 years.
FAQs
Where to invest money to get passive income?
- Invest in dividend stocks
- Create a high-yield savings account
- Stake crypto
- Invest in REITs
- Go for real estate investing
What is the easiest way to make passive income?
Investing in dividend stocks and staking crypto are one of the easiest ways to generate passive income. You get paid just for buying and holding your investments.
How to make money from home?
- Sell online courses
- Start a YouTube channel
- Create a blog
- Rent out your household items
- Invest in dividend stocks
- Open a high-yield savings account
- Stake crypto
- Create an app
- Invest in rental properties
- Go for real estate investing
Julija Paškevičienė
Julija is a freelance content marketer. Specialized in content writing, social media, and finding the best dog memes, she helps businesses get their message across and create content that sells.
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