Collected from Pixabay
Do you imagine what a new side business (or even a new full-time business) could do for you? Since 2008, I’ve helped hundreds of thousands of people get started with their own online business — and here’s the common denominator: Everyone starts from zero. So, if you’re feeling behind — don’t worry. I’ll catch you up quickly with what you need to know. And as you’re just getting started, you might be wondering, what is passive income, exactly? Let’s start with what this thing called passive income really means, and is it even possible?
So… Exactly What Is Passive Income?
There are lots of definitions of passive income, and yes — I’m aware of traditional methods such as investing in real estate and in the market. I do both of those, but that’s not what this website is about.
In my experience, the best form of passive income — and what I focus on here is the following:
At Smart Passive Income, we teach you how to build online businesses that take advantage of systems of automation that allow transactions, cash flow, and growth to happen without requiring a real-time presence.
In other words, we don’t trade time for money.
Instead, we entrepreneurs invest our time upfront, creating valuable products and experiences that serve others, like online courses and communities because that’s really all a good business does — it helps other people solve their problems.
We work hard now to continually reap the benefits later.
And unlike real estate or getting involved in the market, the barrier to entry is much lower. There’s far less money needed to invest, the rewards can come in much faster, and what you create is something you can become recognized for.
My first online business, which served the architecture and design community, was created for only $6.95/month, and within 18 months it had generated over $200,000! That’s when I was hooked, and I hope to hook you too!
Passive Income Myths: What Passive Income is NOT
Let’s dispel some myths and set realistic expectations before we go any deeper.
- Generating passive income is NOT easy and it takes a lot of hard work. Nothing in life comes easy. Making money online is no different. Many conventional internet marketers and online entrepreneurs will try to persuade you to think otherwise. Why? Because they’re trying to make money from false hopes. I’m here to tell you the truth: Online business is hard. I’ll do my best to guide you and give you the information you need, but I can’t force you to take action; that’s up to you.
- Generating passive income does NOT happen overnight. I don’t live, teach, or believe in get-rich-quick schemes. My first online business took about a year of hard work before it was generating enough income to support my family. There was nothing easy about what I had to do to get that business going. But in relative terms, it was “quick” because I decided to opt-out of the work-till-sixty-five-deferred-life plan and make my own luck happen. You can do it too.
- Generating passive income is NOT impossible. Passive income was just a dream for me until 2008. That’s when I was let go from my job due to the crumbling economy. With no other options, I bet on myself by trying to make my dream a reality. And you know what? The dream came true, and it’s totally awesome! I get to stay at home with my family, work when I want, and make my own decisions. This lifestyle is possible, and I want you to experience it too.
How to Make Passive Income: Getting Started
Now that you know what’s up, you have three options:
Option #1: You could do nothing. The truth is, when you do the same ol’ things you’ve always been doing, you’re going to get the same ol’ results — but I know you don’t want that, or else you wouldn’t be here on this website and you wouldn’t have gotten this far down the page. This choice is obviously not yours.
Option #2: You could keep searching for more information on the web. There’s a TON of information, good and bad, all over the place. But why would you continue searching? All of the information you need to get started I’ve organized for you here on the blog, the podcast, and other resources I’ve created for you.
Option #3: You can take action now. I will be writing steps in my blog here on medium and you can take actions accordingly .
It’s all in a lesson-by-lesson, easy-to-follow (even if you’re scared of technology), on-demand course.
Imagine having a website up and running in less than a week. It will happen, but only if you get access to the course — and remember, it’s free. You have nothing to lose!
Collected from Pixabay
Passive Income Business Essential # 1 — A website with blog
A website is the first essential of any profitable passive income business done online.
There are a few free options like Blogger, Tumblr, or WordPress.com. Those are great options for some, but I don’t recommend that path for three important reasons:
- When you use a free service, your domain name will almost always be an “extra” extension to the service provider’s own domain. For example, if I created example on Tumblr, the web address would be example.tumblr.com instead of www.example.com.
- You have fewer customization options for design, functionality, and revenue. For example, I know that with free WordPress.com sites, you are limited to using only certain plugins, and you aren’t allowed to advertise.
- When you build your business on someone else’s platform, your business is vulnerable to any changes they might make. For example, if Tumblr closed tomorrow, you would lose your business entirely.
These three reasons alone are exactly why I recommend going with a self-hosted website. You have more control, it looks more professional, and you can truly call it your own. (For help setting up your website, check out my free Build Your Own Brand course, mentioned above.)
Passive Income Business Essential #2 — A Podcast
Launching a podcast for Smart Passive Income was one of the smartest business decisions I’ve ever made.
Why is podcasting so valuable to passive income online-based businesses? Because with a podcast, you are literally speaking into the brain of your fans — helping to educate and inspire them with your knowledge. You’ll forge a deeper connection with your audience than through blogging alone.
Also, the podcast marketplace is far less saturated than the blogosphere. That means you can stand out from the crowd easier if you produce a high-quality show — which makes podcasting both a great business launch strategy as well as a growth strategy.
Podcasts also become a route to building passive income. Down the road, if your podcast performs well, you may be able to attract sponsors to your show that you know, trust, and that add value to your listeners. Such high-quality sponsors are another fantastic source of passive income.
Only allow sponsors on my podcasts that youknow from firsthand experience and that share your values. You can also promote your own products, as well as affiliate marketing products that you trust.
Having these two assets — a website with a blog and a podcast — will be incredibly valuable for building your brand and setting it up for long-term success.
AND they’ll serve as your cornerstone for generating passive income.
This is because they’re the key to helping you build an audience — and once you have an audience who knows and trusts you, you’ll find that it’s significantly easier to build multiple income streams that provide residual income each month.
27 Best Passive Income Ideas for Earning Residual Income
Now that we’ve gone over your passive income basics and essentials, let’s walk through some methods you can use to generate multiple passive income streams.
Creating passive income is all about taking the right steps in the beginning stages to set yourself up for success in the long run — and that takes time… or money.
Yep, there are two key categories for generating passive income: you’ll either need to 1) invest time upfront or 2) invest money upfront.
I will focus on passive income methods that fall under the time-investment category for less risk, greater accessibility, and the potential for substantial brand recognition and growth.
But to give you a full picture of your options for building passive income, I’ll go over some of the best passive income ideas through monetary investing, too; they’re still useful to know and may be a perfect addition to your passive income streams.
With that said, here are the 27 best ways to make passive income.
Passive Income Ideas That Require a Time Investment
1. Affiliate Marketing
Affiliate marketing is one of the best ways to create passive income.
In fact, affiliate marketing has been my largest single source of revenue, bringing in over $3 million since 2009.
So, how does this work to make passive income, exactly?
Basically, with affiliate marketing, you recommend other people or company’s products and services to your audience, linked via content on your blog or social media channels. And when someone purchases from your recommendation, you’ll receive a commission from the sale.
It’s an awesome option because it’s easy to get started with, it’s low-risk, and there’s huge profit potential.
One of the most popular and accessible ways to get started is through the Amazon Affiliate Program. People already know and trust shopping from Amazon, and you’ll have a massive range of products to select from.
Just be sure only to choose products that you can stand behind and that will serve your audience well.
Ultimately, to be successful with this, you’ll need to put time into building an audience who trusts that you’ll always steer them in the right direction and then follow through on that.
To optimize your passive income efforts with affiliate marketing, make sure to take advantage of the best tools at your disposal. To help you out, I go over all the awesome affiliate marketing tools you need to know here.
2. Starting a YouTube Channel
Starting a YouTube channel is a great option for making passive income online; it’s easy and free to get started with, and if you play their algorithm right, you can get your videos in front of their massive audience of 2 billion people.
BUT appealing to YouTube’s algorithm is where the difficulty here lies. It takes time, strategic effort, and the delivery of consistent value to build your subscriber count.
You’ll need at least 4,000 hours of watch time and 1,000 subscribers before you can start earning revenue through the YouTube Partner Program.
However, once you get established with your YouTube channel, you’ll also be able to bring in passive income not just through ad revenue but also through affiliate links and selling digital products, like an eBook, art, or merchandise.
And, as a bonus, having a YouTube channel is a great way to help you promote and grow your blog, podcast, and brand audience overall.
3. Paid Membership Business
Like signing up for a gym membership, people join online memberships and pay recurring fees for the sense of community and/or value it brings them.
This could mean setting up a Patreon account and amassing paid members by providing helpful or interesting content.
Or, to avoid having to rely on an external platform (that could change or go away at any time), you could create a membership program on your own site to provide a community for your audience.
To pull this off well, you’ll need to stay consistent, always delivering valuable, curated content that meets your audience’s needs that they can’t otherwise access.
4. Print-on-Demand Designs
If you have a keen eye for design and current trends and know how to use design software, selling print-on-demand designs could be a great option to create passive income.
With print-on-demand, you don’t have to buy any inventory ahead of time, so it’s a low-risk business model.
You’ll work with a print provider, like Printful or Teespring, to sell merch (t-shirts, mugs, bags, etc.) customized with your designs and sold on a per-order basis.
When someone buys one of your designs, the print provider fulfills, prints, and ships the order on your behalf.
This passive income method is quick and easy to get set up, and it requires very little maintenance once you’ve created your designs.
The trickiest part here comes down to making unique, high-quality designs that inspire your people to purchase them.
5. Software as a Service (SaaS) Business
Another potentially lucrative option for passive income is to create an app or software that you can offer as a subscription service — also called software as a service (SaaS).
To do this, it does require coding knowledge or the funds to hire someone who knows how to code.
Keep in mind that this is one of the more time-consuming options; it will take a good chunk of time to plan and get things up and running.
Also, you’re going to have to create and offer a truly valuable solution — and market your solution effectively — to make passive income with this, which isn’t exactly easy.
So, there’s no sugarcoating it; this is a difficult route. But it could be incredibly rewarding for you.
6. Creating an Online Course
Everyone has a skill they can teach, so why not monetize yours AND help others in the process by creating an online course?
Making an online course isn’t too difficult either, but it will take quite a bit of time and effort to ensure it’s useful.
And once you’ve created the content and have everything set up, it can be an incredibly profitable source of passive income.
There are several platforms, like Udemy or Skillshare, that you can choose from to host your course and facilitate getting your course paid viewers.
However, I always recommend using your website to give you greater control and true ownership of your course.
7. No-Code Apps
Did you know you can reap the benefits of creating an app without knowing how to code? Apart from hiring an expensive developer, that is.
Yep, you can take control over the process and create your own app through development platforms like Zapier, Appy Pie, or Bubble.
There are a lot of apps out there, so to be successful with this, you’ll need to search and identify a need and fill that need with your app.
If you set your objectives ahead of time and know exactly which problem you’re trying to solve — and who you’re solving it for — you’ll already be a step ahead of the competition.
With this, you can earn high passive income through downloads, subscriptions, ads, etc. — depending on how you model it.
8. Publishing an eBook
Selling eBooks online is a very accessible method to making passive income.
The idea of creating a whole digital “book” might still sound intimidating to you, but I promise it’s actually simple to do.
Your book’s content can be informative or simply entertaining, and it can be as short and simple as a 5 page PDF.
Plus, you don’t have to be a pro writer or even an expert on your eBook’s topic. Just be sure to provide high-quality, well-designed content that will resonate with your audience.
You can even hire a freelance ghostwriter and graphic designer to help you out.
Then, all you have to do is self-publish it to Amazon or Apple Books and promote it to your audience.
Writing an eBook gives you a vehicle to benefit your existing audience with helpful information, further strengthening your relationship with them.
It’s also a great tool to augment your audience to new levels and boost traffic to your website, podcast, and other channels — growing your brand as a whole.
9. Writing a Book
Writing a physical book is among the most traditional passive income methods.
To self-publish, you don’t have to make and print the books yourself — which is costly and risky. Nope, there are now print-on-demand services, like KDP or Blurb, for selling paperback books too.
But if you want to go the traditional route (and bypass having to market the book yourself), you will have to find someone who’s willing to publish your book for you.
If you go this route, it’s definitely one of the more difficult options on here; it’s not exactly easy to find a literary agent or a publisher, let alone create a best-selling book that will have you raking in royalties for years to come.
BUT if you know yourself to be a great writer — or just someone with exceptional ideas, then this could be an enriching process for you.
Like with an eBook, writing a physical book is an awesome way to establish authority with your audience, provide a tangible source of value, and take your brand to new heights.
10. Printables
Printables are another digital product that’s really simple to get started and scale your passive income with.
A printable is a digital file that people can download and print themselves after purchase.
You can put together daily checklists, invitations, planners, and so on. But it’s a good idea to identify a need or trend before picking a printable idea to go with.
The beauty with this is that once you’ve created a file, there’s no limit to how many times you can sell it. AND you don’t have to put any money into making a physical product and shipping it yourself.
You can just sit back as orders come in and people print your product from home.
11. Renting out a Spare Room
If you own an apartment or house, consider renting out a spare room to earn passive income.
The cost of a room can be pretty expensive — especially depending on the city you live in — so this is a relatively easy way to make several hundred dollars (and beyond) each month without putting in a lot of time or effort.
You might decide to sublease it out on your own or use a service like Airbnb to rent the room out on a short to long-term basis.
And if the idea of having a roommate doesn’t appeal to you, you could also rent out your spare room as an office or storage space with a platform like Peerspace.
12. iOS App Icon Packs
If you have graphic design skills, making and selling custom iOS App Icon Parks could provide a solid source of passive income for you.
People love having the option to customize their phones; there’s a reason selling phone accessories has long been a popular option for eCommerce stores.
Selling iOS icon packs is a unique way to tap into that without having to purchase an inventory. An app icon pack allows people to customize their phone’s apps with a cohesive theme.
You’ll have to put a solid amount of work into designing the themes, including a design for each app, but these are pretty popular when done well.
13. Sell Spreadsheets
If you’re an Excel or Google Sheets wiz, you can put together and sell various spreadsheets for those who don’t want or know how to make them themselves.
For example, you can make sheets ranging from P&L, budgeting, time-tracking, invoicing, etc., and sell them on sites like Etsy or Sellfy.
If you can put together and market a sheet that answers people’s needs well, then this is an incredibly fast, easy, and risk-free way to start making passive income.
14. NFTs
You’ve probably heard the acronym “NFT” ringing around your ears a lot lately. But what are NFTs?
NFT stands for non-fungible tokens, and they’re unique digital assets that are backed by smart contracts on the Ethereum blockchain.
Basically, they’re a way to represent ownership of a one-of-a-kind digital item. It’s like digital art collecting — but you can also tokenize other things like Tweets or in-game video game collectibles.
But let’s talk about how to make passive income with NFTs.
You can make passive income with NFTs through methods like royalties, staking, renting them out, and more. There are a lot of opportunities here.
Currently, the most popular platform to make and sell NFTs is called OpenSea. The site does a good job of walking you through the process; but heads up, there are fees involved.
While the process of researching and getting set up with this will take time, this could be a good option for you to explore.
There’s a lot of passive money-making potential for social media influencers — but, of course, you’re going to have to amass a pretty big audience for this to work.
Social media is already a great tool to connect with your audience and build your presence online, so why not work toward achieving that and making passive income at the same time?
It will take a lot of time and effort before you can generate passive income as an influencer, but if you can get your audience large enough, you’ll be able to make a ton of money through sponsorships (active), affiliate links, merch, and other platform monetization (passive).
AND with social media, you can effectively drive traffic to your other passive income streams as well.
16. Sell Your Photography Online
If you have an eye for photography, selling your photos online could be a great source of passive income for you.
Etsy is one popular choice for selling photography, but keep in mind that unless you’re selling a printable — something your buyer can download and print at home — then you will have to take an active role in printing and shipping your orders. Unless, of course, it’s viable for you to hire someone else to fill that role.
Another option is to use sites like Shutterstock or Adobe Stock. With them, you can easily contribute your photography and make money passively through royalties.
But your best bet for earning a good chunk of passive income with photography is to use a print-on-demand service that will take care of fulfilling orders on your behalf.
Once you have your photos taken and edited, you can sell a single photo as many times as people will buy it with little to no ongoing effort from you.
17. Record an Audiobook
If you have an awesome idea or knowledge that you want to share but feel that writing isn’t your preferred modality, then consider recording an audiobook.
There are a couple of different ways you can earn passive income with this:
You can self-publish and link your audiobook on your own website.
Or, you can publish your audiobook through programs like ACX or Findaway Voices and earn royalties.
This will take a large time investment — and potentially a monetary investment for equipment, marketing, or hiring freelancers — but once your audiobook is established, it will require little to no upkeep.
Like with books, having an audiobook to your name can help paint you as a thought-leader in your industry and help build social proof for your brand.
Passive income ideas that require a monetary investment
18. Dividend Stocks
One of the easiest ways to earn passive income around is by investing in dividend stocks.
Investing in a dividend stock involves providing funding to fuel a business and receiving regular payments in return for your investment.
Basically, as the company profits, you’ll get a small piece of the pie — often on a quarterly basis.
The difficult part here is picking the stocks that will increase in value and continue to pay out dividends consistently.
So, it’s a good idea to research thoroughly before jumping into any particular dividend stock.
Another option that allows people to mitigate risk is to invest in a mutual or exchange-traded fund (ETF) that pays dividends. These are funds that consist of several different assets, allowing you to diversify (i.e., avoid putting all your eggs in one basket).
19. Peer to Peer Lending
Peer-to-peer lending is exactly what it sounds like. Rather than seeking capital from traditional lenders — like a bank — borrowers can receive funding from their peers — investors like you.
To earn passive income here, all you have to do is lend out money, and you’ll receive interest payments on the loan.
Keep in mind that there’s often higher risk involved in peer-to-peer lending because the borrowers are often people don’t qualify for a traditional loan or plan to use the capital to fund a high-risk project.
The offset here is that, usually, the interest rate on this type of loan is much higher, anywhere from 6–36%.
There are several different ways to structure a peer-to-peer loan.
Some opt to stick with a private agreement, which offers a lot of flexibility in terms of structuring the loan. (It might go without saying, but it’s ideal to involve a lawyer in this type of situation).
On the other hand, peer-to-peer lending platforms are less flexible but offer a layer of security; with these, both lenders and borrowers must pass certain criteria and background checks to qualify.
PeerStreet and Prosper are two popular options to look into to get started with a lending platform.
20. Investing in a Business
Being a silent partner or an angel investor is high-risk, but it’s highly profitable when successful.
Here’s how it works:
Usually, a silent partner or angel investor will provide a large amount of capital to a business in its early stages.
In return, the investor will receive shares (ownership) that are expected to provide dividends and increase in value as the company grows.
A less-risky option for this type of investment is to invest smaller amounts by pooling resources with other angel investors or investing small amounts in multiple start-ups through bonds.
Before getting involved, you’ll need to do a ton of research, and it’s a good idea to have a strong exit strategy.
21. Annuities
When you invest in an annuity, you’re essentially buying an insurance policy.
Except with a normal insurance policy, you pay a premium, and you receive a distribution of funds if a certain event triggers the payment — accident, illness, or death.
In the case of an annuity, you purchase a premium (either at once or through regular payments), and you’ll receive passive income through regular payments from that policy for a fixed period of time.
There are many different structures, terms, and conditions when it comes to annuities, and the downside is that they tend to come with high fees.
But with lower risk and average return rates on fixed annuities sitting around 3%, it could be a good option for you to earn passive income.
22. CD Ladders
CD stands for certificate of deposit. This is a low-risk, low-return investment for passive income that works kind of like a bond, except in this case, it’s bought through a bank or credit union.
CDs mature over time, earning a fixed interest rate. And at the end of the period, the bank will return your principal.
When it comes to CDs, the longer the term is, the higher the interest is — which is usually not much.
With CD ladders, instead of investing all of your principal in one long-term CD, you’ll divide the sum and invest it in a few different CDs at varying maturation dates. This strategy lowers interest rates and the risks involved.
You can consider CD ladders as an alternative to traditional savings accounts, giving you just a little bit more return on investment than a savings account would give you.
23. Rental properties
Rental properties are one of the best passive income investments; it’s a tried-and-true passive income method that’s potentially very profitable.
You’ll need to decide whether you want to buy and rent out a property that you own outright or a property that you’re financing.
Cash flow is usually higher on owned rental properties, but your ROI can be higher on financed properties.
Plus, financing is a good option for those who don’t already own a second property or have the funds to purchase one.
You’ll also need to decide how hands-on you want to be; are you willing and able to take care of cleaning, repairs, and maintenance?
If you want things to be fully passive, you’ll need to take on a management company to run things for you.
There’s a lot of thought and work that goes into investing in a rental property, but having one is a true asset that can bring you solid passive income each month.
24. Real Estate Investment Trust (REIT)
If you aren’t ready to invest in real estate yet, you can still take part by investing in a real estate investment trust (REIT).
A REIT is a company that owns and manages income-producing real estate. And thanks to their high dividends, investing in a REIT is one of the best ways to generate passive income.
Yes, REITs tend to provide a strong return on investment; they’re required to pay up 90% of their taxable income in the form of dividends to their shareholders.
Keep in mind that REITs will be affected in case of an economic downturn, which could cause a halt in dividend payouts.
But one benefit of a REIT is the option to invest through a stock exchange, allowing for more liquidity; you can sell it quickly when you decide you want to.
25. Invest in a vending machine
For a more unique investment option, you can actually buy vending machines to create passive income for yourself.
You will have to invest upfront into purchasing the machine. But, after that, buying snacks and sodas in bulk isn’t particularly expensive, so if you can find a good spot with a lot of foot traffic to place your machine, you can turn a healthy profit.
You will also have to make sure your machines stay stocked, but this task could easily be outsourced.
26. Domain Name Flipping
Almost anyone who is doing business anymore needs to have an online presence. And domain names can play a prominent role in branding and marketing.
So, not surprisingly, people and companies are willing to pay a lot to secure great domains — the record sitting at $872 million for Cars.com.
To flip domain names, you can buy attractive domains from registrars like GoDaddy and Bluehost — or you can buy a privately-held domain directly from the owner — and then list them for sale at a higher price.
From there, you can just sit back; this passive income source takes no maintenance.
When you’re hunting for domains, you’ll want to keep in mind the sellability of the names you purchase. For example, how short, simple, catchy, and easy-to-spell is it? Does it include a highly popular generic product or service?
In short, how in-demand will this name be in the near future?
Domain flipping is relatively cheap, but it takes know-how to set yourself up well, and it’s certainly not without risk either.
27. Staking Cryptocurrencies
Crypto staking refers to the process of passively letting the blockchain use your cryptocurrency to verify transactions.
It may sound complicated, but basically, when you opt-in to stake your crypto, you can earn interest or rewards.
So, similar to earning interest on a high yield savings account, you can earn around 5–20% per year passively with crypto staking.
To get started, you’ll need to take the time to learn which cryptos offer staking and conduct thorough research on a given crypto before buying into it.
Many exchanges don’t offer staking yet either, but some of the big ones, like Coinbase and Binance, do.
Keep in mind there is a risk factor here; the crypto market is incredibly volatile, after all, and your coin could drop in value quickly.
Reference :
- Smart Passive Income
Wanna say Hi to me ? Here is my linkedin . I’m here for you as both a guide and as a friend.
I want to hear your stories. I want to know how else I can help you.I truly want to make the Internet a better place.
