There are two ways to make money, option 1: is getting out of bed in the morning and going to work for it, and option 2, is using passive income ideas. Passive income can be a great way to help you generate extra cash flow, whether you’re running a side hustle or just trying to get a little extra dough each month.
Editorial Note: We earn a commission from partner links on Money Unscripted blog. Commissions do not affect our editors' opinions or evaluations.
What is passive income?
Passive income is money you can earn without too much ongoing effort. After you identify and establish a stream of passive income, you won’t need to tend to it every day—but that doesn’t mean you won’t have to do some work now and then.
Most passive income ideas require an initial investment of time, money or other resources. They also require a degree of monitoring or regular maintenance to keep things on track, but they won’t require you to commit tens of hours a week or make small talk at the water cooler.
Passive income is not…
- Your job – Passive income is not income that comes from something you’ve been materially involved in such as the wages you earn from a job.
- A second job – Getting a second job isn’t going to qualify as a passive income stream because you’ll still need to show up and do the work to get paid.
- Non-income producing assets – Investing can be a great way to generate passive income, but only if the assets you own pay dividends or interest.
Do you want to consolidate your debts? DebtSafe offers safe and secure Debt Consolidation.
Types of passive income
- Buy: Passive income investments include dividend stocks, bonds, annuities, and rental properties. You could also buy a small business.
- Create: You can develop a product or service that generates cash.
- Contribute: You can invest in an existing business or a limited partnership. You could also make an asset you already own available for sale or lease. Renting out a room in your house is one example.
Read: Why You Should Start a Side Hustle
Passive income ideas
Adding passive income streams to your life can give you more freedom, flexibility, and money. Here are 10 ways to generate passive income:
Dividend stocks
One way to build an income stream is to invest in dividend stocks, which distribute part of the company’s earnings to investors on a regular basis, such as quarterly. The best ones increase their payout over time, helping grow future income.
Dividend stocks typically are less volatile than growth stocks and help diversify your portfolio. Investors can also choose to reinvest dividends.
Read: What type of investor are you?
Rental properties
Investing in real estate isn’t an accessible option for most people, but if you have cash on hand, it’s a tried and true way to grow wealth and one of the best passive income investments.
Rent out your space
Having a roommate or the occasional Airbnb guest is a great way to sit back and add extra money to your budget—if you don’t mind sacrificing your privacy.
Real estate investment trusts (REITs)
You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.
Read: How To Invest In Stocks: Step By Step Guide
Affiliate marketing
Affiliate marketing is one of the best passive income opportunities available today. The upside to it is that almost every big brand has an affiliate program, so you can sell some pretty popular products and rake in the dough.
Advertise on your car
You may be able to earn some extra money by simply driving your car around town. Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many mileage.If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.
Read: 20 Side hustle ideas
Create a blog, podcast or YouTube channel
Blogging has helped countless entrepreneurs earn passively through affiliate links, courses, sponsored posts, products, book deals, etc.
If you start a podcast that resonates with people, then you can grow your audience and monetize your show by sponsoring with ad partners. If you get enough listeners, you may be able to sign up for podcast advertising networks.
YouTube is the passive income stream that just keeps on giving. From sponsored videos to ad revenue, you’ll find that you can make recurring income from your YouTube channel.
Sell online courses or e-books
If you’re an expert in some subject or field, selling online courses may be a great passive income idea for you. Whether you sell them through your own website or online learning platforms like Udemy, you’ll find plenty of individuals who are willing to pay to access your content.
Anyone with expert knowledge in a particular subject can write an ebook to share their thoughts with the world. You don’t have to go at it alone. Platforms like Upwork make it easy to find book writers and editors who can help with the process.
Sell digital products
If you enjoy creating digital organization systems in programs like Microsoft Excel or Notion, you might be able to sell your templates. Many people monetize their creations on Etsy or other online marketplaces.
License your photos and music
Do you love to write songs? Do you love taking photos? Then you could license your music and photos, and start to earn passive income. Upload your best photos to stock photo sites and earn passive income on them. To get your music licensed team up with a music licensing company.
Read: How Much Should I Save For Retirement
Learn more by enrolling for our free courses:
