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50 Passive Income Ideas To Build Wealth In 2024

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Making money while you sleep may sound like an impossible, far-fetched dream, but it is not as unattainable as it sounds.

Passive income is classified as any income that is earned without active effort and continued involvement. It is generated from passive sources rather than active sources like a 9 to 5 job or a gig economy side hustle like food delivery.

Passive income sources include things like income from a rental property, royalties, capital gains, and dividends from investments. This type of income offers an incredible way for people to create supplemental financial resources and work towards financial freedom.

In this article, I will highlight the best passive income ideas to build wealth. Discover new money-generating opportunities and find out what could work best for you.

12 PASSIVE INCOME IDEAS | Earn $1500/month While You Sleep

What is Passive Income?

Passive income is income that doesn’t require constant effort to earn it. On the other hand, active income requires consistent effort in order to earn it. If you have a job, even if you have a salary, you need to go in every day and perform the duties and responsibilities required of you to get paid. If you stop going in, you will (eventually) stop getting paid.

With passive income, however, your effort (time, money, or both) keeps bearing fruit long after your initial effort. For instance, an eBook you wrote required an initial effort on your part to get written, but once written (and effectively promoted), it can earn money as it sells. You can sell unlimited copies of your eBook even without you present. People can just download your eBook at any time on demand, even while you sleep.

Investing in companies that pay out dividends is another example of how you can earn passive income. As an investor of these types of stocks, you will earn a monthly or quarterly distribution on the capital you have invested in those companies.

One last thing to keep in mind is that passive income is still taxable, just like active income, however it is treated a bit differently by the IRS from a taxation point of view.


Types of Passive Income

Before we move on to the different ideas for generating passive income, it is important to understand that not all passive income is created equal. There are several ways to generate passive income. You can buy it, create it, repurpose it, or even engage in what we call “reverse passive income” (i.e., saving). For the purposes of this article, we have categorized passive income into four different categories.

Buying Cash Flow Assets

Purchasing assets that produce cash flow might be the most common way to generate passive income. There is another word for this: investing. You can invest in several different types of products or services, including:

It’s important to recognize that investing inevitably involves a certain amount of risk. You need to choose investments that involve an amount of risk that you’re comfortable with and that make sense for someone in your circumstances. For example, it doesn’t make sense for someone close to retirement to invest all their money in a single, risky stock. It may make more sense, however, for that person to invest in a diversified portfolio of dividend-paying stocks and bonds.

You also need to keep in mind that purchasing cash-flow-producing assets involves a trade-off between the money you have in-hand and future earnings. The time value of money indicates that money today is more valuable than money tomorrow. Therefore, you’ll need a larger amount of cash flow in the future to justify an expenditure of money today. Here is an example to illustrate the point.

Let’s say you’re buying a rental property for $300,000. The rental promises to bring in a net income of $3,000 per month, or $36,000 per year. You need to balance the worth those $300,000 have to you today with the value the potential rental income of $36,000 has to you one year, two years, and five years from now.

The math involved in determining what’s called the Net Present Value of a future cash flow stream is beyond the scope of this article — but for now, it is safe to say that if you’re paying money for future cash flow, you should get significantly more in return than what you paid to make the transaction worth it.

Building Cash Flow Assets

Instead of purchasing cash flow assets, you can build them yourself. There are all sorts of passive income streams you might be able to build or create, including:

  • Vending machines
  • Software and apps
  • Websites
  • eBooks
  • Online courses

You’ll notice that this list is heavily weighted in favor of digital products. These tend to be relatively simple to create and cheap to store and distribute.

You should keep in mind that you need to value the time it takes to create these products. For example, if you normally make $40 per hour through your next most lucrative work and expect it will take 100 hours to create an online course, your Cost of Goods Sold is effectively $4,000. You then need to value your future income stream against the immediate cost of creating the product and determine if it’s worth for you to create the product.

Share or Sell Assets

Sometimes you can convert property you already own into income-producing capital. Modern apps and websites will help you with this, allowing you to rent out your car, home, or boat to people online for a profit.

While this can be an excellent way to turn a piece of property into an income-producing one, it’s important to keep your costs in mind when you do this. Expenses like maintenance, upkeep, and cleaning must all be considered when you’re calculating your profit margins.

“Reverse” Passive Income

This might be one of my favorite ways to make money over time. Reverse passive income simply involves spending less money as you move forward. (In other words, saving.)

Since building wealth is all about striking the appropriate balance between money coming in and money going out, getting the latter part of that equation in check is incredibly important to building a healthy financial future.


Passive Income Criteria

Now that we’ve defined the different types of passive income, we’ve also included three characteristics: upfront time investment, upfront financial investment, and passive income potential to help you decide on which passive income idea is best for you.

  • Upfront time investment: Refers to the amount of time required to generate passive income. A high upfront time investment means you need a lot of time in order to generate passive income. On the other hand, a low upfront time investment means you don’t need a lot of time to start making passive income.
  • Upfront financial investment: Refers to the amount of money required to generate passive income. A low financial investment suggests that you don’t need a lot of capital to generate an income. On the other hand, a high financial investment suggests you need a lot of money to break into that passive income idea.
  • Passive income potential: Refers to the income potential of the idea. A low potential suggests you can make or save a small amount of money, while a high or unlimited potential suggests you can make a killing.

While we could have included different or other criteria, we thought these were the most crucial ones to help you decide which strategies to undertake and which to leave alone.


Cash Flow Passive Income Ideas

Cash flow passive income is generated through strategic investments — typically taking little to no effort to maintain. Here are some of the best ways to earn passive income by leveraging your capital.

1. Invest In Dividend Paying Stocks

Dividend payments from stock investments can be an excellent way for investors of any and all experience levels to start generating more passive income.

Dividend-paying stocks are publicly traded stocks that companies provide to their shareholders. These companies take a portion of their profits and distribute them to shareholders in the form of a scheduled dividend payment (typically quarterly).

When you purchase a stock of a company that pays dividends, you, in essence, become a partial owner of the company and are, as a result, entitled to a share of the profits it generates. The dividend payment amount that any particular shareholder receives will depend on the number of shares they own.

Not all companies offer dividend payments, as some companies may reinvest those funds into their business instead. Typically, well-established companies that are financially stable financially and mature and looking to attract long-term investors will offer dividends to their shareholders.

Here are some examples of companies that pay dividends to their investors:

One thing to note is that dividends are not always guaranteed, and companies reserve the right to reduce or terminate their dividend payouts at any time.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Mid-high

Dividend paying stocks for passive income
Source: Google Finance

2. Invest In Single Family Rental Properties

Investing in single-family rental properties provides substantial passive income potential when executed properly. This strategy sees investors purchasing single-family homes and renting them out to tenants monthly for an agreed-upon fee.

Not only are you creating that additional source of passive income from monthly tenant payments, but you are also building valuable equity in your rental property.

Some of the most important things to consider when looking for single-family rental properties include the following:

  • Your budget: this includes the initial investment to purchase the property, as well as property maintenance costs, mortgage payments, etc.
  • The real estate market in your area: take a look at the rental prices of comparable properties, market trends, demand for rentals, etc.
  • Your return on investment: the strategies you will implement to ensure you are turning a profit.

There are a variety of risks involved with investing in rental properties, from issues with tenants and payments to changes in the real estate market and unexpected property maintenance costs.

There are also great ways to invest in rental properties through online platforms like Roofstock. They specialize in single-family rental real estate and allow investors to browse for and purchase tenant-occupied homes.

Buyers will assume the active contract from the previous homeowner and will start collecting rent immediately. Their marketplace hosts hundreds of properties from all over the United States, ready for investors to purchase.

Roofstock also offers a “Lease Up Guarantee” for vacant home purchases. They promise to cover the rent payments on a vacant home purchase for up to a year if a lease is not signed on your rental home within 45 days of purchase.

Upfront time investment: Low-mid
Upfront money investment: High
Passive income potential: Mid-high

3. Invest In REITs

Real estate investment trusts, also known as REITs, are companies that own income-generating real estate properties and offer investors the chance to invest in a well-diversified portfolio of real estate assets.

This form of investing allows people to get involved in real estate investments without actually purchasing and owning the properties they are invested in.

By law, REITs are required to distribute at LEAST 90% of their taxable income to the shareholders in the form of a dividend payment. This creates another incredibly lucrative way for people to leverage their cash flow and generate passive income.

There are different types of REITs that implement different investment strategies. Three of the most common are:

  • Mortgage REITs: Mortgage REITs focus their investments on mortgages and other debt securities that are based on real estate. 
  • Equity REITs: Equity REITs own and operate real estate that is generating income consistently. This includes apartment buildings, shopping centers, and office buildings.
  • Hybrid REITs: Hybrid REITs combine investment strategy elements of both mortgage and equity REITs. They invest in real estate properties as well as real estate debt securities.

REITs are a great way to diversify your real estate investment portfolio and tend to provide better returns than other traditional fixed-income investments. However, it is essential to remember that they can still be affected by market volatility and interest rate spikes.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Mid-high

Dividend.com example of a hybrid REIT (WPC)
Source: Dividend.com — example of a hybrid REIT, W.P. Carey Inc. (NYSE: WPC)

4. Invest In Private Real Estate Developments

Investing in private real estate developments requires investors to provide funding for the development of real estate that is privatized. This includes construction projects for new buildings, renovations and/or expansions on existing buildings, and developing land for different future uses.

Investors will receive compensation in the form of a share in the ownership of the real estate or a fixed return on their investment. Depending on the terms of the agreement, investors may have voting rights or other say in the decision-making processes of the project.

Private real estate investments can be incredibly lucrative but do come with a relatively high level of risk involved. It is important to do your due diligence and look into things like the real estate market in your area, the developer’s track record and reliability, and any legal or regulatory restrictions.

Real estate crowdfunding platforms like Crowdstreet and Fundrise have been created to give investors an easy way to discover and access private real estate development investments. This allows ordinary people to invest in real estate opportunities that are traditionally only accessible to large institutions with huge amounts of capital.

Upfront time investment: Low
Upfront money investment: Mid
Passive income potential: Mid-high

5. Invest In Art

Investing in art is another good way to generate passive income while getting involved in the fine art industry. There are several ways that art can generate income for investors, including:

  • Artwork Rentals: Earn passive income by renting out your artwork to museums, galleries, and other institutional or privately owned art establishments. Insuring your artwork before renting it out is crucial to protecting your investment.
  • Royalties: When you invest in the artwork of living artists, sometimes there are opportunities to earn royalties on future sales.
  • Capital Gains: When you purchase a piece of artwork, and its value appreciates over a period of time, selling it for a profit will earn you passive income in the form of capital gains. It is important to be aware of market trends, artist popularity, and other factors that will affect the value of a piece.
  • Art Funds: Art funds are privately managed investment funds that are designed to generate passive income by acquiring and then reselling works of art. They allow investors to partially own a piece of art, and as a result, profit on the future sale of that piece.

Masterworks is a perfect example of a platform allowing individuals to buy and sell shares representing an investment in different well-known works of art.

Upfront time investment: Low
Upfront money investment: Mid
Passive income potential: Mid-high

Masterworks
Source: Masterworks

6. Invest In Farmland

Another great way to generate passive income using your cash flow is to invest in farmland. There are a few different ways that these investments can earn you money, including:

  • Ownership shares: Ownership shares in farmland provide investors with partial ownership of the farm and, therefore rights to a share of the profits generated by that property.
  • Capital gains: Farmland that is properly maintained and located in a good growing location can appreciate significantly in value over time. When you buy farmland for a given price and then sell it for a profit after a period of time, you are earning passive income through capital gains.
  • Farmland renting:  Renting out farmable property to farmers who want to grow produce, raise livestock, farm dairy, or any number of other income-generating activities, is a great way to bring in passive income.

Platforms like AcreTrader and FarmTogether are crowdfunded investment organizations that allow investors to buy shares in farmland real estate. Earn a portion of the income generated by the farmland you invest in, whether it is rental income, property value appreciation, or profits from farming.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Mid-high

7. Invest In Wine

Investing in wine can create a supplemental stream of passive income when done properly. There are a number of things to consider when purchasing wine for the sake of earning a return, these include:

  • Understanding the fine wine market, identifying trends, and learning how to manage risk and leverage volatility.
  • Store your product properly. Wine is perishable and can spoil if it isn’t kept in the right environment, which would leave it worthless.
  • Hold onto your wine for longer periods of time — Wine does not typically appreciate in value quickly.

For investors who want to avoid buying, selling, and storing their wine, there are websites like Vinovest and Vint. These online platforms have been built to help investors build a wine investment portfolio without actually having to handle the product.

Some platforms will even allow investors to have bottles shipped to their homes if they decide to enjoy their wine instead of selling it.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Mid

Vint.co invest in wine for passive income
Source: Vint

8. CD Ladders

CD ladders are a specific investment strategy in which a sum of money is invested equally into a number of certificates of deposit (CDs). These CDs have different maturity dates and are purchased at regular time intervals throughout the fiscal year.

When the first of your collection of CDs hits its maturity date, the money received can be reinvested in a new certificate of deposit with a later maturity date. The funds can also be withdrawn if investors so choose, but the strategy works best when money is reinvested, and the ladder is continued.

CD ladders allow investors to balance their need for liquid funds with their goal of generating yields from investments. Distributing their investment across multiple CDs with varying maturity dates allows them to generate long-term investment income while having access to funds at predictable intervals in case they are needed elsewhere.

Overall, CD ladders are a relatively safe way to earn passive income on your savings over a long period of time.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low-Mid

9. Money Market Funds

Money market funds are a specialized form of mutual fund that focuses its investments on short-term debt securities that are considered low-risk. These include things like certificates of deposit (CDs), treasury bills, repurchase agreements, and commercial paper.

Money market funds are typically made available through most brokerages and are purchased like any other mutual fund. Consider your financial goals and determine what level of risk you are prepared to take on before making an investment.

Some of the most reputable money market funds include:

  • Vanguard Federal Money Market Fund (VMFXX)
  • Schwab Value Advantage Money Fund (SWVXX)
  • Fidelity Government Money Market Fund (SPAXX)
  • TIAA-CREF Money Market Fund (TIRXX)

Remember that money market funds are not risk-free investments, however they offer a lower level of risk than many other investment strategies.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low-Mid

Vanguard Money Market Funds
Source: Vanguard

10. High-Yield Savings Accounts

High-yield savings accounts are a specific type of savings account that are characterized by their higher-than-normal interest rates. Traditional savings accounts typically offer interest rates of around 0.25%, while high-yield savings accounts offer average rates of 3.5% to 4.5%.

These savings accounts give investors a great way to generate passive income with their cash flow. Most high-yield savings accounts do not have fees or minimum balances, however some may require a minimum initial deposit or other actionable.

Some of the best high-yield savings accounts include:

  • Ally Bank offers a 3.60% APY  online savings account with no monthly fees and no minimum balance requirements.
  • Marcus by Goldman Sachs offers a 3.75% APY high-yield savings account with no monthly fees and no minimum balance requirements.
  • Capital One 360 offers a 3.40% APY savings account with no monthly fees or minimum balance requirements. 

High-yield savings accounts are some of the safest ways to earn passive income. However, it is important to understand that the returns are minimal compared to other riskier investment opportunities.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

11. Peer-to-Peer Lending

Peer-to-peer lending refers to an investment style that allows investors who have available cash to lend money to others in return for interest payments from borrowers. This lending practice does not require the involvement of traditional banks and provides a great way to generate passive income with your capital.

Peer-to-peer lending has been made incredibly accessible to the everyday person by platforms like Prosper. They provide a platform that allows people to borrow money directly from others without the need to consult a bank.

Prosper’s lending marketplace hosts loan listings from borrowers that highlight the specific details of their loan (e.g., amount, purpose, credit score, etc.). Investors acting as lenders can browse loan listings and choose a loan or multiple loans they would like to invest in (as little as $25).

When a loan has been funded, borrowers will make monthly payments with interest factored in until the loan has been paid in full (typically periods of 1+ years). Investors will receive their portion of the borrower’s monthly loan payments periodically — all handled by Prosper.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low-Mid

Prosper peer to peer lending for passive income
Source: Prosper

12. Buy Royalty Rights

Purchasing royalty rights is another good way to generate passive income by leveraging your available cash flow. Royalty rights are rights that entitle individuals to a percentage of revenues generated by the use of an asset or property.

There are a number of different types of royalties, each of which encompasses different forms of content:

  • Book royalties (author paid by a publisher for book sales)
  • Performance royalties (copyrighted music used in a movie, played on the radio, etc.)
  • Patent royalties (third parties paying patent owners)
  • Franchise royalties (franchisee pays royalties to the franchisor for rights to company name)

Platforms like Royalty Exchange have made it easy for people to buy royalty rights and start earning passive income on their investments. This website works by connecting investors with the owners of royalty assets in order to do business.

Here is a quick breakdown of the process:

  1. Individuals who own royalty assets list their assets on the Royalty Exchange marketplace, where investors can browse listings.
  2. Investors can bid on any asset they would like to purchase through an auction-style bidding system. The highest bidder will win the auction and purchase the royalty rights up for sale.
  3. The asset owner receives payment for the purchased royalty rights, and the investor will receive all royalties generated from that asset moving forward.

Royalty Exchange handles all payment collection duties and distributes royalties to investors regularly while handling ongoing asset management. They do also take a transaction fee as well as a percentage of the royalties paid to investors.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

13. Cryptocurrency Savings Account

For those who are interested in cryptocurrency and have the desire to invest in the future of crypto, creating a cryptocurrency savings account is a great way to generate some passive income at the same time.

Cryptocurrency savings accounts allow investors to deposit their crypto assets and earn interest on all deposits made. If you are holding your crypto for any period of time and not actively trading, create a crypto savings account instead of letting it sit in a wallet.

These savings accounts function like other traditional savings accounts in that assets can be withdrawn at any time, however withdrawal rules may vary between exchanges. Here are some of the best crypto savings accounts to consider:

  • KuCoin: Interest rates range between 0.67% APY on USDC and 0.22% on BTC.
  • Coinbase: Users can earn up to 6.00% APY on their crypto holdings.
  • Crypto.com: Interest rates on savings accounts range from 3% to over 14%, depending on the token and the total account balance.
  • Nexo: Interest rates on savings accounts range from 6% to 12%, depending on the token and the total account balance.

It is important to note that cryptocurrency savings accounts are not insured by the FDIC like regular bank accounts.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

Crypto.com savings accounts for passive income
Source: Crypto.com

14. Annuities

Annuities are contracts between individuals and insurance companies in which the investor agrees to make one or more premium payments to the insurance company in return for periodic payments in the future. There are three main types of annuities:

  1. Fixed annuities: Made up of bonds and other stable investments and guarantees a fixed rate of return.
  2. Variable annuities: Made up of stocks and bonds, and the return is based on the performance of investments.
  3. Indexed annuities: Direct investment in stock market indices (e.g., S&P 500, etc.). The return is based on the performance of indices invested in.

Investing in annuities can generate a solid source of passive income in the form of regular payments over a set period of time. Annuity payments can be structured in different ways, including:

  • Immediate annuities: Regular payments immediately after the annuity purchase.
  • Deferred annuities: Periodic investments for regular payments at a later date.
  • Systematic withdrawals: Systematic withdrawal schedule. Amount and frequency set by the individual.

Annuities present a guaranteed way to earn income, however the downside is that sometimes they come at a higher cost (i.e., commissions and fees).

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

15. Invest In A Small Business

Investing in a small business is another awesome way to generate passive income with your cash flow. Small businesses often seek investors to provide the capital necessary to grow operations, develop products, and ultimately grow out of small business status.

There is a significant degree of risk involved with investing in small businesses, as there are a number of factors involved in their success. It is often difficult for investors to discover legitimate small businesses that are looking for support and show real promise.

Platforms like Mainvest provide a place for small business owners to connect with investors who are looking to get involved in the small business space. They promote an investing community that targets 10 – 25% returns, and you can get started with as little as $100.

The investment opportunity marketplace offers everything from restaurant and retail to real estate projects and breweries. Invest in rigorously vetted businesses to build a portfolio — track your investments with quarterly reports from Mainvest — collect a share of the revenue the business generates.

Upfront time investment: Low
Upfront money investment: Mid-high
Passive income potential: Mid-high

Mainvest investment opportunities
Source: Mainvest

16. Crypto Staking

Cryptocurrency staking is one of the best ways for crypto investors to earn passive income with their asset holdings. This refers to the process by which an individual’s cryptocurrency is used to help validate transactions on a blockchain in return for rewards in the form of more crypto.

Note: Cryptocurrency that is staked is locked and unavailable to be traded or transferred for the duration of the staking period.

Investors will hold their cryptocurrency in a staking wallet, allowing it to participate in proof-of-stake (PoS) blockchain networks to validate transactions. Some people argue this method of validating transactions is a much more eco-friendly method, as opposed to proof-of-work (PoW) algorithms that are resource heavy.

Reward payouts for staking your crypto will differ between networks and their reward structures. The amount of cryptocurrency staked, as well as the length of the staking period (e.g., 3 months, 6 months, etc.).

It is important to remember that crypto staking and cryptocurrency investing, in general, come with a high level of risk as markets can be incredibly volatile. Always do your research before making any investments.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

17. Flip Domain Names

The process of flipping domain names involves purchasing active or inactive domain names for a certain price and then proceeding to sell the domain at a higher price to turn a profit. For example, business.com was purchased for $7.5 million in 1999 and sold eight years later for $350 million — not a bad deal.

This business model can be quite lucrative when done correctly. Some of the most important things to consider when flipping domain names include the following:

  • Market research: Study the market to identify what kinds of domain names are in demand and understand price fluctuations over time. Pay attention to world events and pop culture in order to catch onto trends and discover valuable investments.
  • Build value: Add content to empty websites or spruce up existing websites to add value to the domain name. Present your domain in a way that speaks to its potential and shows how it can be used.
  • Long-term holding: Be prepared to hold onto a domain for extended periods of time in order to allow its value to increase. Some flips may be most profitable when executed after a long hold.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low-mid

TechCrunch
Source: TechCrunch

18. Invest In Income Sharing Agreements

Income-sharing agreements (ISAs) are a specific type of agreement in which an individual pays a percentage of their future income for a certain period of time in exchange for funding or other services. These are often used to finance education or accreditation/training programs.

Investors can earn passive income by investing in an ISA program by providing funding for the program of choice. In return, investors receive a percentage of the individual’s future income when they finish school and start working.

ISAs offer a great way for investors to earn passive income while helping students get the education they need without taking out direct loans and incurring significant debt.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

19. Become A Landlord In The Metaverse

The metaverse and its virtual worlds are growing in popularity, and with that come opportunities to invest and start earning passive income by purchasing virtual property.

Start by choosing a metaverse environment through which you would like to purchase property. Platforms like The Sandbox, Decentraland, Axie Infinity, and Sorare are some of the most widely used platforms to interact in the metaverse.

Purchase a piece of land using the platform’s native cryptocurrency (for instance, property in Decentraland would be purchased using MANA tokens). Property owners can then assume the role of a landlord and proceed to rent out their property to players in that metaverse.

There are a number of important factors to consider when purchasing and renting out property in the metaverse. Here are some of the most notable.

  • Consider the location of the property and the demand for real estate in that area
  • Consider the current and future value of the native cryptocurrency of the environment you are purchasing
  • Offer competitive prices to renters based on comparable properties in order to increase the appeal and boost revenues

LandWorks is a community-owned organization that has been designed and launched to help connect metaverse landlords with tenants who are looking to rent virtual property. They allow period-based land rentals in a variety of Web3 metaverse games and deliver a marketplace that gives landlords the ability to build passive income.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

LandWorks
Source: LandWorks

22. Maximize Your Retirement Matching Contributions

Retirement matching contributions are a type of benefit offered by some employers to help their employees save for retirement. There are a few important things to remember in order to maximize retirement matching contributions. These include:

  • Understand your employer’s matching policy: Different employers will have different terms and conditions for contribution matching. It is important to familiarize yourself with all of this info in order to take full advantage of the policy.
  • Take advantage of the full percentage match: Employers match contributions from employees up to a certain percentage of their salary. Contribute the maximum available amount in order to maximize your match.
  • Contribute as much as you can: The more you are able to contribute to your retirement savings account, the better. Compound interest builds significantly over time, so maximize that potential as much as possible.
  • Take advantage of catch-up contributions: For those who are age 50 and older, you may be eligible to make catch-up contributions to your retirement account. These contributions allow people to make up for lost time and work to maximize their retirement savings.

Ensure you take full advantage of 401(k) accounts and Health Savings Accounts (HSA). Never say no to free money.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Mid-high

21. Become An Angel Investor

Angel investors are individuals who invest their own personal funds into small businesses or startups that are in need of capital to grow. Angel investors will typically be getting involved in the early stages of high-potential businesses that are not publicly traded, as this can be incredibly lucrative when success is found.

As an angel investor, you will receive a partial stake in the company’s ownership and/or a portion of any revenues generated, as decided in an official agreement. You will typically also have authority from a management perspective, but different investors will have different levels of involvement.

There are a number of platforms that have been developed to help connect angel investors with developing businesses that are in need of funding to continue their growth. 

StartEngine and AngelList are two popular platforms that have been designed to give angel investors a place to browse through vetted businesses and invest their money where they see fit. These platforms have tools for business owners, fund managers, and investors to kick-start their goals and find success.

Upfront time investment: Low
Upfront money investment: Mid-high
Passive income potential: Mid-high

StartEngine
Source: StartEngine

Asset Building Passive Income Ideas

Generating passive income through asset building involves investing time to create a portfolio of different assets that generate passive income over time. Creating a repertoire of assets that generate income is a good way to build wealth over time. Let’s talk about some of the best asset-building passive income ideas.

22. Create A Course

Creating an online course is one of my favorite ways to generate passive income through the creation of a digital asset. Online courses can be geared towards anything from web and graphics design, coding, and programming, to marketing, investing, and personal development.

Online courses are incredibly versatile in how they can be marketed and sold. Some of the main ways that creators typically monetize their courses include the following:

  • Subscriptions: Offer your course as a subscription-style service where customers pay a monthly, semi-annual, or annual subscription fee to access the content. You can position your course as a coaching program with unlimited support.
  • One-time purchases: Creators can choose to make their course available to customers by way of a one-time payment. Customers make an upfront purchase for an all-inclusive price and gain access to the course in perpetuity.
  • Affiliate marketing: Course creators can choose to promote other brands, products and/or services to their course customers to generate passive income. Affiliate marketing allows creators to earn a commission for every sale they convert by using an affiliate code or link specifically assigned to them.
  • Licensing: Online courses can also be licensed to a third party for a fee. Course creators are paid for the licensing rights to use their content elsewhere — whether it is a one-time payment or a portion of course sales generated thereafter.

Platforms like Podia and Teachable offer specialized marketplaces that give course creators a place to build, customize, list, and sell their courses. With a large pool of potential customers and easy-to-use systems that make connecting with them easier, these platforms are full of value.

Upfront time investment: Mid-high
Upfront money investment: Low
Passive income potential: Mid-high

23. Write An eBook

An eBook (electronic book) is a digital version of text that can be displayed and read on any number of electronic devices. eBooks can be a great way to start earning passive income and can do so in a number of ways, including:

  • Self-publishing your eBook through platforms like Barnes & Noble Nook Press, iBooks, or Amazon Kindle Direct Publishing.
  • Create a landing page dedicated to selling your eBook and set up your own payment method (e.g., PayPal, Stripe, etc.).
  • Launch an affiliate program that pays commissions to people who promote and sell your eBook.
  • Use your eBook and other free offers or incentives to build an email list by requesting customers and potential customers to provide their email. You can then use this list to send out promotional offers and increase sales.

Digital products, including eBooks, are relatively easy to make, and with the help of tools like Canva or Visme, you can make your eBooks stand out from the pack. The beauty of selling eBooks is that you can make money while you sleep, as people can download them anytime.

Upfront time investment: Mid-high
Upfront money investment: Low
Passive income potential: Low-mid

Barnes & Noble Press
Source: Barnes & Noble Press

24. Affiliate Marketing

Affiliate marketing is a marketing strategy that allows people to sell a product or service and receive commissions on any sales or leads they generate. Many companies use this strategy to incentivize people to promote their brand and ultimately increase sales.

Publishers (“content creators”) will typically track their affiliate performance through a unique affiliate code or link that is assigned to them. Affiliates will also typically be given some sort of dashboard where they can track their own performance.

In some cases, advertisers (“brands that need promotions”) will pay affiliates on a PPC (pay per click) or PPL (pay per lead) basis instead of or as well as the traditional PPS (pay per sale).

Here is an example of an affiliate marketing program and payment structure:

Imagine you have become an affiliate for a fitness retailer selling performance-tracking smartwatches to customers. Your affiliate agreement promises an 8% commission on all sales that are made through your personal affiliate link.

Let’s say that you make 100 sales through your affiliate link in the first month of selling smartwatches. If they are going for $75 per unit, you would be earning $600 for that month. ($7,500 in sales volume x 8% commission).

Some of the best affiliate networks and programs for beginners include Amazon Associates, FlexOffers, CJ, Rakuten Advertising, and Impact.

Upfront time investment: High
Upfront money investment: Low
Passive income potential: Mid-high

25. Sell Photos Online

Selling photos online is a great way for people who have a knack for photography to build some passive income. However, the industry is quite competitive, and there are a number of important steps that will lead to success.

  1. Build a portfolio of high-quality photos.
  2. Choose which platform(s) you would like to sell your photos through (e.g., Shutterstock, Getty Images, and Stocksy.)
  3. Upload your photos to your platform(s) of choice. Be sure to include relevant tags and accurate descriptions to make them more searchable and discoverable.
  4. Promote your photos through different social media channels (e.g., Instagram, Facebook, Twitter, Pinterest, etc.) and other online platforms.

Creators for photo-sharing platforms typically get paid in a few different ways:

  • Royalties: Every time a photo is downloaded or licensed, creators receive a royalty that is defined by the platform and agreement.
  • Subscriptions: Some photo-sharing platforms offer subscription plans to customers that give them access to a certain number of images per month. Depending on how frequently their images are downloaded, creators receive a portion of subscription revenue.
  • On-demand purchases: Sometimes, customers will be able to purchase images from a photo-sharing platform on an on-demand basis. This often results in a higher payout for the creator.
  • Print sales: There are some photo-sharing websites that offer customers the option to purchase prints of photos. A portion of print sales will be paid directly to the creator.

Upfront time investment: Low-mid
Upfront money investment: Low
Passive income potential: Low

Shutterstock
Source: Shutterstock

26. Create An App

Creating a successful app is another way to generate passive income that will continue to accrue over time. However, app development is quite a complicated process that can require extensive time and resources.

First, you will want to identify a problem you want to solve or a specific need you can satisfy with your app. Plan the concept of your app, including all of the features and functionalities, as well as the style and user experience aspects. 

I recommend consulting an experienced developer to discuss what the process of development will cost, as well as other important project details.

One of the great things about a successful app is that once it has been completed and launched on the app store, there is often very little maintenance that will need to be done going forward. As your app finds success and the user base grows, it can turn into a fantastic stream of passive income.

Apps can be monetized in a variety of ways, including:

  • App sales (for non-free apps)
  • Advertising
  • In-app purchases
  • Collecting and selling data
  • Subscriptions

Upfront time investment: High
Upfront money investment: Low-mid
Passive income potential: High

27. Advertise On Your Car

Another way to earn passive income is by putting advertisements on your vehicle. If your car and your driving habits meet the requirements, you may be eligible for a vehicle advertisement program.

Here are the steps to get started with this passive income idea:

  1. Choose a company that offers car advertising programs in your location. Check out all of the terms and conditions to see if you will be eligible to advertise.
  2. Apply for your program of choice by completing the application process and providing all the necessary information needed for your assessment.
  3. If your application is approved, the company will arrange to have your car customized with their advertisement (e.g., decals, wraps, etc.).
  4. Drive your car and show off your advertisement. Companies will typically have a mileage requirement or other conditions built into their program.
  5. Collect your earnings! Different companies will pay on a periodic basis (weekly/monthly), by the mile, or by other structure. Be sure to understand all of the terms and conditions.

Platforms like Carvertise and Wrapify have been designed to help people who are looking to earn some income by placing advertisements on their cars.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

Earn money with Wrapify
Source: Wrapify

28. Create A Digital Asset

Creating a digital asset for yourself is another good way to generate passive income. Digital assets can be anything from a YouTube channel or podcast to a blog or other website that can, in turn, create income.

There are a number of different ways to monetize your digital assets, including sponsored content, affiliate marketing, subscriptions/membership sales, and digital products.

Some of the best platforms for people to create digital assets include:

  • Graphic design assets: Photoshop, Illustrator, Canva, PicMonkey
  • Audio assets: Ableton Live, FL Studio, Logic Pro X
  • Web development assets: WordPress, Webflow, Squarespace, Wix
  • Video assets: Adobe Premiere Pro, DaVinci Resolve, Apple Final Cut Pro

Upfront time investment: Mid-high
Upfront money investment: Low
Passive income potential: Mid-high

29. Create And Sell Music

Creating and selling music has to be one of the most appealing methods of creating passive income for music creators. Thanks to the internet and all of the incredible tools that have been created to help artists share their music with the world, there are so many opportunities for them to earn.

Once you have created a song or collection of songs that you would like to share and sell, you can decide how and where you would like to do so. Some of the most common ways that artists monetize their music include:

  • Royalties: Artists can share their music on popular streaming service platforms like Apple Music, Spotify, and Amazon Music. These platforms pay royalties to artists based on the number of streams a specific song receives.
  • Digital Downloads: Artists can sell digital downloads of their music on platforms like iTunes and Bandcamp. Keep in mind that they will take a portion of sales revenue in exchange for hosting and handling payments.
  • Licensing: Artists can license their music to be used in movies, TV shows, commercials, and other media.
  • Fan-funding: Fan-funding platforms like Patreon give artists the ability to ask for support directly from their fanbase.

If you love making music, this passive income idea is for you.

Upfront time investment: Mid-high
Upfront money investment: Low-mid
Passive income potential: Low-mid

Sporify earn passive income with music
Source: Spotify

30. Run Vending Machines

Running a vending machine business can be a fantastic way to create a new stream of passive income. Vending machines can be found everywhere, from malls and grocery stores to apartment buildings, office buildings, and hotels.

When done right, running vending machines can be quite a lucrative endeavor. Here are some tips for vending machine entrepreneurs who are looking to get started:

  • Research the vending machine market in your area and consider what type of vending machine (e.g., food & drink, health food, bulk vending, etc.) and what locations would be best suited for a machine.
  • Find a vending machine provider that you like (e.g., online sellers, manufacturers, wholesalers) and purchase or lease your vending machine(s).
  • Source your products at a low price in order to boost profit margins on the products you sell. Find wholesale suppliers and negotiate for the best possible deals.
  • Monitor your revenue and make adjustments to products, locations, and other factors where necessary. Consider expanding successful operations to boost income.

A vending machine can be not only a lucrative passive income idea but also a good side hustle if you don’t have a lot of time.

Upfront time investment: Low-mid
Upfront money investment: Mid
Passive income potential: Mid

31. Run ATMs

Like vending machines can be leveraged to create passive income, people can run ATMs (automated teller machines) and make money.

ATMs can either be purchased outright or leased from a provider. ATMs can be incredibly expensive, running anywhere from $1000 to $10,000. Consider leasing your machine if you are just starting out in order to mitigate risk.

Some of the best ATM providers include:

When you have purchased or leased your ATM, find out where you would like to have it installed — ideally in a location that sees a lot of foot traffic. Some of the best places to situate an ATM are banks, nightclubs, gas stations, casinos, and hotels.

ATM owners will earn a portion of the transaction fees accumulated when people use their machine, depending on whether or not they own the machine. Transaction fees are typically a set amount or a percentage of the withdrawal amount. 

Some ATM machines have generated upwards of $1,000 per month on one unit alone. Building a fleet of successful machines will increase profits exponentially.

Upfront time investment: Low-mid
Upfront money investment: Mid
Passive income potential: Mid

ATM Experts
Source: ATM Experts

33. Buy An Outdoor Billboard

Billboards may be an old-school form of advertising, but they are still used quite frequently around the world. Buying an outdoor billboard and renting out space to advertisers can turn into a great stream of passive income.

Purchase or lease a billboard that is owned by another party and be sure to negotiate the price and/or other agreement terms before moving forward with a deal. This is crucial to being able to maximize revenue and start turning a profit quickly.

Choosing a good billboard location is one of the most important factors involved in finding success. Billboards that are placed in frequently trafficked areas like highways, city centers and 

Your next step will be finding advertisers looking to rent your billboard space. Reach out to local businesses, leverage your own network, or work with an advertising agency to connect with clients. Work out a deal that works for both you and the advertiser, and start renting out your billboard.

Track all of your expenses and the revenue generated through your billboard’s ad space sales. This will help you to ensure that you are on track to generate profits, as well as help you identify any areas that need improvement.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low

32. Run Arcade Game Machines

Another great way to build passive income is by running arcade game machines, which is again similar to running an ATM or vending machine business.

You will want to start out by researching the arcade game market and finding out what games are popular and what is going to attract players to your machine. Consider the purchase price and maintenance costs and factor that into your business plan.

Choose a high-traffic location that gets a lot of foot traffic — the success of arcade game machines depends largely on the quality of its location. Set a fair price and promote your machine through social media channels, fliers, and other methods.

Monitor the performance of your machine and make any pricing or location adjustments as you see fit. Be sure to maintain the machine regularly to ensure that it is functioning properly, so you don’t miss out on potential earnings.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

Arcade Machines for passive income
Source: M&P Amusement

34. Car Wash

The car wash business has proven itself to be very lucrative when business owners do things right. The U.S. alone hosts around 62,000 car wash businesses, and the passive income potential is quite substantial.

Car washes generate their income by offering a variety of car washing services and extras, these include:

  • Self-service car washes: Customers pay to wash their own cars with the tools and products provided by the car washing establishment. This includes a water supply, high-pressure hoses, rim brushes, and cleaning detergents.
  • Automatic car washes: These car washes use a variety of automated machines to wash cars efficiently and effectively. This service typically costs a lot more than a self-service or mobile car wash.
  • Full-service car washes: Customers are getting the full-service package that typically includes things like waxing and detailing 
  • Mobile car washes: These car washes act like a pop-up car wash, serving customers at their location or operating at a public spot. They offer convenience and help bring exposure to new businesses.

Bottom line, car washes, specially in-bay automatic car washes, are a good business and a great way to earn passive income.

Upfront time investment: Low-mid
Upfront money investment: Mid
Passive income potential: Mid

35. Laundromat

Laundromat businesses are another way to create a source of passive income that can be sustained. Laundromat businesses are self-serve facilities where customers can come to wash and dry their clothes using the washing and drying machines provided on-site.

Laundromat business owners will be earning their income mainly from the revenues generated through the use of their machines. Customers have typically used coins or tokens in the past to get a certain amount of time on washing or drying machines.

Laundromats sometimes offer other services or add-ons, including detergent packs, dryer sheets and fresheners, folding and dry cleaning services, and snacks/drinks. These can help increase your bottom line and add a few extra income streams to your laundromat business.

Here are a few more quick tips for succeeding as a laundromat business owner:

  • Choose a convenient location that is easily accessible and close to apartment buildings, subdivisions, housing complexes, and other densely populated areas.
  • Invest in high-quality machines and equipment to maximize efficiency and provide a unique and satisfying experience, so customers keep coming back.
  • Promote your laundromat business through different marketing strategies to increase sales.
  • Provide excellent customer service in the form of friendly staff, a clean environment, and extra perks like free Wi-fi access.

According to the Coin Laundry Association, coin laundries can range in market value from $50,000 to more than $1 million and can generate cash flow between $15,000 and $300,000 per year.

Upfront time investment: Low-mid
Upfront money investment: Mid-high
Passive income potential: Mid

BizBuySell
Source: BizBuySell

36. Sell Digital Products

Digital products are goods or services delivered over the internet and are entirely intangible. These include things like eBooks, online courses, printables, music downloads, software plug-ins, and web-based services.

Content creators can leverage their skills and expertise to create and share something they can monetize. Digital products provide a reliable way for people to build themselves a stream of passive income.

Once you have created your digital product, there are a number of ways to go about marketing and making sales.

  • Online marketplaces: Sell your digital product(s) on marketplaces like Amazon, Etsy, and eBay. These platforms provide large customer bases and streamlined payment processing.
  • Create a website: Build a simple website that outlines the benefits of your product or service to sell it directly to the consumer. This gives sellers more control over pricing and profit, but the marketing aspect will be up to them.
  • Affiliate marketing: Partner with affiliates to promote your product or service. Collaborate with influencers to increase brand awareness and increase sales.

Digital products are one of my favorite ways to generate passive income, as they are scalable and require minimal maintenance.

Upfront time investment: Mid-high
Upfront money investment: Low
Passive income potential: Mid-high

Asset Sharing Passive Income Ideas

Asset sharing is a strategy by which individuals leverage their shareable assets to generate passive income. People can share anything from cars, boats, homes, storage spaces, and even data. Here are a handful of asset-sharing passive income ideas to consider.

37. Rent Out Your Home

Create another stream of passive income by renting out your home or a portion of it to people who are looking for a place to stay. Home rentals can be incredibly lucrative, but it is important to consider a few things before getting started.

  • Evaluate the level of demand for rental homes in your area. Homes close to popular attractions and other desirable locations will be sought more and, in turn, will be more profitable to own and rent.
  • Consider the maintenance and upkeep costs of the property and factor those into your ROI calculations to ensure you are on track to meeting your profit expectations.
  • Price your rental home competitively. Check out what comparable properties in your area are being rented for and determine your pricing accordingly.

When your home is rental-ready, promoting it and finding renters looking to book a stay can be difficult. Luckily, platforms like Airbnb and VRBO have been developed to help connect renters with rental hosts. 

These are two of the world’s most popular home rental marketplaces, with millions of active users every month. List your vacant living space on their platform and host renters on your own schedule to build a very lucrative source of passive income.

Upfront time investment: Low-mid
Upfront money investment: Low-mid
Passive income potential: Mid

38. Rent Out Your Driveway

Renting out your driveway space is another genius way for people to easily make extra passive income. People who do not have the privilege of a driveway or parking space will often need a space for their car or vehicle. 

Take advantage of any available driveway space by allowing people to rent it out on a schedule that you create and make some extra cash.

Finding renters for your driveway has been made more accessible than ever, thanks to platforms like JustPark and Pavemint. These platforms have been specifically designed to connect drivers with people who are looking to rent out an available parking space.

These platforms provide marketplaces where renters can browse parking spaces based on their location and any particular requirements they have (e.g., size, stay duration, etc.). Drivers reserve their parking space through a convenient booking system, and renters are paid out (after a fee is taken by the platform being used).

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

JustPark
Source: JustPark

39. Rent Out Your Garage

Similar to renting out your parking space, people can also rent out their garages to create a new stream of passive income. People will rent garage space for storage, vehicle space, workshop space, and a variety of other reasons.

If you have a garage that is not being used, why not take advantage of an opportunity to earn some extra cash and build a passive income source?

Platforms like Neighbor make renting out your garage space a simple and straightforward process. Neighbor specializes in helping connect people with garage space with renters in their area. They allow renters to list their empty garages on their marketplace and provide an easy way to communicate and make payments.

Earn anywhere from an extra $50 to upwards of $500 extra per month by renting out a single garage space on Neighbor.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

40. Rent Out Your Car

Renting out your vehicle or a second vehicle that is not in use is another time-tested passive income idea to start building wealth. Leveraging your unused vehicle(s) to bring in some extra cash is easy to do and can be quite lucrative.

Demand for rental cars is steady and can be incredibly high in certain locations that are highly traveled by tourists. Many locals have also turned to renting a car when they need it instead of taking on the cost of owning a vehicle.

For new renters, finding people looking for a vehicle to rent can be difficult. This issue has been solved by platforms like Turo and Getaround. They provide dedicated marketplaces where owners can list their cars for rent, and renters can browse for a vehicle in their location that suits their needs.

These platforms are incredibly valuable and should be taken advantage of, especially for people looking to make some steady income renting out their car(s).

Upfront time investment: Low
Upfront money investment: Mid
Passive income potential: Low-mid

Turo rent a car for passive income
Source: Turo

41. Rent Out Your Land

Another unique passive income-generating idea that can help you build wealth is to rent out your available land to people. Common uses for rented land include things like farming and hunting or recreational activities like camping and hiking.

Depending on your location, your land will have different potential uses and will attract renters for different reasons. Consider what your land would be best used for, and if you think it could be useful to renters, you should definitely consider cashing in.

There are different websites that have been created to cater to the renting of land for different reasons. For example, HomeCamper is a peer-to-peer marketplace dedicated to connecting travelers with landowners who are looking to rent out their land for camping purposes. 

Campers can search the marketplace to find a piece of land that suits their needs and book it for a defined period of time through the website. Renters are paid out after HomeCamper takes their servicing fee — they also offer liability insurance coverage for landowners.

Upfront time investment: Low-mid
Upfront money investment: Mid-high
Passive income potential: Mid-high

42. Rent Out Your Boat

Just like you would rent out your unused vehicle, renting out your unused boat or other watercraft to generate passive income is another good option. People who are looking to go on a fishing trip, do some water sports, or enjoy a summer day on the water are willing to pay good money to renters.

For boat owners who want to get started renting, I recommend checking out platforms like Boatsetter and GetMyBoat. They have been created specifically to help boat owners list and promote their boats to thousands of interested renters.

Through a specialized marketplace, people who are looking to rent out a boat in a specific location can browse through available listings and find the boat that best meets their needs. 

Renters set ground rules, create their own availability schedule, and reserve the right to decline rental requests if they see fit. The marketplaces will typically take a portion of the revenue generated through boat rentals.

Boat owners can also choose to rent their boats out privately, eliminating middleman fees and giving them more control over their pricing. However, they will need to do their own marketing and promotion to find renters.

Upfront time investment: Low
Upfront money investment: Mid
Passive income potential: Mid

Boatsetter rent your boat for passive income
Source: Boatsetter

43. Rent Out Your RV

Just like you can rent out your car to earn passive income, you can also rent out your unused RV. Recreational vehicles provide temporary living spaces for campers and travelers in the form of reliable outdoor vehicles — they are also known as mobile homes.

For people looking to get started as an RV renter, I recommend taking advantage of online platforms like RVshare and Outdoorsy. These platforms connect RV owners and prospective renters and provide a great place for both sides to interact and do business.

With specialized marketplaces attracting thousands of potential renters, these platforms are the best way for RV owners to connect with people looking to rent an RV in their area. If you have a recreational vehicle that is in working condition, turn it into a source of passive income.

Upfront time investment: Low
Upfront money investment: Mid
Passive income potential: Mid

44. Rent Out Your Stuff

Another way to bring in some passive income by sharing your assets is to rent out your general miscellaneous items that others may not have of their own. This includes things like power tools, athletic equipment, cleaning equipment, and more.

The best places to list your items and connect with potential renters in your area are Nextdoor, Facebook Marketplace, and Craigslist. Facebook, for instance, has one of the biggest user bases in the world, these platforms provide access to tens of millions of potential renters.

Create a detailed listing, set a fair and competitive price, and start renting your stuff out to people in your area for cash. Why not leverage some of your assets to bring in some passive income — every dollar counts.

Upfront time investment: Low-mid
Upfront money investment: Low
Passive income potential: Low

Rent tools for passive income on Craigslist
Source: Craigslist

45. Share Your Data

Sharing your data is a bit of a less conventional way to earn passive income, but it is a viable option for those willing to give up certain information. Data is one of the most valuable digital commodities in the world, as it provides critical consumer insights that drive business decisions.

If this sounds like something you are interested in, but aren’t sure how or where to get started, consider platforms like Honeygain as a place to get started. 

Honeygain is a crowdsourced network company that lets users share their network connection in return for compensation. Their business model takes unused bandwidth from people’s internet connections and routes it through its own network to clients worldwide who need it for various reasons.

To get started with Honeygain, users download and install the application on their devices. They can then start sharing their internet connection and getting paid for it. They claim that the app uses encryption technology to secure users’ devices.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

Reverse Passive Income Ideas

Reverse passive income is not necessarily earning income passively. Instead, it is referred to as the practice of managing or spending money strategically in order to save money over time. Think about things like cutting bills, paying off debt, or using cashback apps.

46. Refinance Your Mortgage

Refinancing your mortgage can potentially turn into a source of passive income, reverse passive income, that is. The main goal of this process is to reduce your monthly payments and reduce the amount of interest you end up paying. Some of the most common reasons people choose to refinance their mortgage include the following:

  • Lowering interest rates to reduce the amount of money you end up spending on interest fees over the life of your loan.
  • Shorten the term of your loan to reduce the total interest you end up paying on your loan. You can then build equity in your home faster and take the proceeds to invest in passive income-generating assets.
  • Tap into your home equity for other passive-generating investments or home improvements to increase the value of your property.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low-mid

47. Get Cash Back While Shopping

One of my favorite and simplest ways to earn passive income is to get cash back while you shop. There are a number of different ways to leverage your spending to earn cash back, these include:

  • Credit card cashback: Most credit card providers offer a cash back rewards option for all purchases made with the card. Rewards typically range from 1% to 5% cash back and can be redeemed as cash or applied to credit card statement balances.
  • Cashback apps: A number of apps promise to provide cash back to users who shop using a linked credit card or by scanning receipts after purchases have been made. Three of my favorite ones are Rakuten, Ibotta, and Fetch Rewards.
  • Shopping rewards platforms: Rewards platforms offer users the ability to shop through their online marketplaces and earn cash back on eligible purchases. These can be in the form of an app or browser extension.

Why not get rewarded for purchases you will make no matter what. 

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

Ibotta
Source: Ibotta

48. Pay Off Or Reduce Your Debt

One of the least recognized ways to free up funds that can generate passive income when leveraged elsewhere is to pay off or reduce your debt. There are a few specific ways that this strategy can start working for your passive income goals:

  • High-interest debt, like unpaid credit card balances, accumulates a significant amount of interest fees over time. Pay it off completely, or reduce the total balance in order to lower your monthly interest payments. Take the money you save and invest it in passive income-generating assets.
  • Paying off or reducing your debt in a timely manner will help improve your credit score. This will, in turn, allow you to qualify for lower interest rates on future loans and/or credit cards, which will give you more capital to invest in passive income-generating assets.

Paying off debt is one of the best ways to free up cash to invest and build wealth. You can also use a side hustle to help you pay off your debt.

Upfront time investment: Low
Upfront money investment: Low-mid
Passive income potential: Low-mid

49. Use Cash Back Credit Cards

This passive income idea is essentially synonymous with the cash back shopping technique we discussed previously. The idea here is to use credit cards that offer cash back strategically to create a passive income source.

Credit card providers will often have a variety of cards and rewards programs you can choose from. Some offer air miles rewards on purchases to be used on flights, while others offer an option to receive cash back on eligible purchases.

Instead of using cash, a debit card, or another type of credit card, use a cash back credit card to make all of your typical payments (e.g., bills, groceries, home improvements, etc.). Making all of your typical purchases with a cash back credit card will build up a passive income cash back balance that can be withdrawn or used to pay off debt.

One important thing to note is to always pay off your credit card balances in full at the end of every month.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

50. Cut Back On Utilities And Subscriptions

This reverse passive income idea is a simple but effective strategy that everyone should consider. Cutting back on utility and subscription costs in your everyday life is a great way to start saving some money that can be put into a passive income-generating investment.

Some of the best ways for people to start saving on their everyday costs include:

  • Evaluate your subscriptions: Take a look at the subscription services you pay for and see which ones you could live without, share with someone, or find a free alternative. Sharing a Netflix account or using a free video editing app instead of the one you pay for are great examples.
  • Negotiate with your service providers: Negotiate with the service providers you are currently using. There are often new offers or ways to reduce your current payments that customers are not aware of. Call in and ask to speak with a customer representative, don’t be afraid to ask questions.
  • Shop around for better deals: You can also choose to shop around for other deals offered by different service providers. New providers will often come in and offer better prices and stronger deals in order to compete with more established companies. Take advantage of this.
  • Be conservative with utilities: Start monitoring your utilities and cutting down on unnecessary usage. Take shorter showers, turn down the heat a couple of degrees, wash dishes by hand, and make sure all of your lights are off when rooms aren’t in use.
  • Use energy-efficient products: Energy-efficient products like power-saving light bulbs and low-power usage appliances can have a significant part to play in reducing energy costs. Find products that are reasonably price and will help you save money.

If you are looking for some help to start cutting back on your monthly costs associated with utilities and subscriptions, there are a number of tools available to do just that. Platforms like Billshark, Trim, and Rocket Money have been created to help people identify where they can cut costs and start saving money on everyday expenses.

Upfront time investment: Low
Upfront money investment: Low
Passive income potential: Low

Rocket Money Save Money
Source: Rocket Money

FAQ On The Best Passive Income Ideas

We’ve found some of the most frequently asked questions about the best passive income ideas, and here are our answers.

Do I Have To Pay Taxes On Passive Income?

Yes, you will have to pay taxes on passive income earned, passive income is subject to federal income taxes. The amount will depend on factors like your tax bracket and your passive income source.

What Is The Best Way To Earn Passive Income As A Beginner?

There is no single best way to earn passive income as a beginner. Some of the best ways include investing in dividend-paying stocks, selling digital products, opening a high-yield savings account, and becoming an affiliate marketer.

Is Passive Income Better Than Active Income?

Passive and active income both have their own set of pros and cons. Determining which is better depends largely on your financial situation and goals. Passive income, in many cases, requires some form of initial investment but does not require much in terms of effort to maintain.

Passive income is better than active income for building long-term wealth and achieving financial freedom.

Can I Make Passive Income With Crypto?

Yes, there are a variety of ways you can make passive income with crypto. Some of the most reliable and commonly used strategies include staking, yield farming, and crypto mining.

How Do I Make Passive Income With NFTs?

NFTs (non-fungible tokens) have the potential to generate passive income in a number of different ways. This includes increases in asset value, yield farming, renting or leasing your NFTs, and more.


Final Thoughts

Finding ways to supplement your main source of income with passive income streams is one of the most important parts of building wealth and creating financial freedom for you and your loved ones.

With all of the incredible advancements in technology and the expansion of the digital world, finding ways to build passive income is easier and more accessible for regular people.

In this article, I highlighted the best passive income ideas and strategies to build wealth right now. From investments and dividends to building apps, creating online courses, and crypto staking, there is a wide range of potential opportunities to take advantage of.

I hope you have found the information you came looking for and learned something new along the way. Thanks for reading, and best of luck with all of your future endeavors.

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