Best Passive Income Ideas

Best Passive Income Ideas

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Although they get touted as “get rich quick” schemes, most successful passive income ideas are the result of hard work and repeat gains.

Adding passive income streams to your life can give you more freedom, flexibility, and money. Here are 30 ways to generate passive income, with examples and tips to start today.Click here to start selling online now with Shopify

What is passive income?

Passive income (or unearned income, as it’s classified by the Internal Revenue Service) is defined as income that requires minimal work to generate and maintain, coming from somewhere other than a traditional employer.

The opposite of active income, passive income streams can come from investing in mutual funds or real estate, selling products online, publishing online courses, or other side hustles in which the earner doesn’t have to actively participate.

30 easiest passive income ideas

  1. Start a dropshipping store
  2. Create a print-on-demand store
  3. Sell digital products
  4. Teach online courses
  5. Become a blogger
  6. Sell handmade goods
  7. Run an affiliate marketing business
  8. Sell stock photos online
  9. Become a social media influencer
  10. Buy a rental property
  11. Invest in the stock market
  12. Rent out your spare room
  13. Rent out your car
  14. Lend money to peers
  15. Earn while shopping online
  16. Buy and sell websites
  17. Start a YouTube channel
  18. Invest in REITs
  19. Sell designs online
  20. Invest in businesses

1. Start a dropshipping store

Dropshipping is one of the best passive income ideas to earn money from wherever you are, even if you don’t have a lot of cash flow to begin with. Some dropshippers report making upward of $100,000 per year. 

The dropshipping business model involves creating an ecommerce store where customers browse and buy products. What’s interesting about dropshipping is that you don’t have to see or physically manage the products you sell.

dropshipping as passive income

With dropshipping, your supplier handles everything from manufacturing to packaging to fulfillment. And since you don’t need to send money to your supplier until your customers pay, this passive income business has limited cash risk. You can use a platform like the DSers to find trending products in different niches to sell in your store.

2. Create a print-on-demand store

If you’re an artist, designer, or entrepreneur, print on demand can be a profitable passive income stream and monetize your creativity. It involves working with suppliers to customize white label products like t-shirts, posters, backpacks, or books and selling them on a per-order basis. 

Similar to dropshipping, you only pay for the product after you sell it. There’s no buying in bulk or inventory needed. Print-on-demand stores are a good passive income stream because:

  • You can create products quickly and put them up for sale in minutes
  • Shipping and fulfillment is taken care of by your supplier
  • Once your store is set up, you can automate many marketing and sales processes

With a print-on-demand company like Printful, you can quickly and easily create products to sell in your Shopify store. Overall, print on demand is a simple, low-risk passive income source you can get up and running fast.

3. Sell digital products

Digital products are assets or pieces of media consumers can’t touch physically. These include downloadable or streamable files such as Kindle books, templates, plug-ins, or PDFs. 

Digital products are great passive income sources because they have high profit margins. You only have to make the asset once, and you can sell it repeatedly via your online business. There’s no storage or inventory needed. 

You can sell as many digital products as you want. Many creators scale passive income from digital assets by selling kits, printables, files, and other materials professionals can use.

4. Teach online courses

It’s easier than ever for educators to sell courses online. Whether it’s marketing, illustration, or entrepreneurship, you can create pre-recorded courses and start selling with few limitations. You can sell online courses repeatedly without holding any inventory or stock, generating passive income.

Teaching online requires some upfront investment in time. You’ll need to outline your course, record it, and create downloadable assets like templates for students to walk away with. 

Whichever way you look at it, teaching an online course is a great way to generate passive income at a low startup cost, other than investment of time.

5. Become a blogger

Starting a blog can be a challenging venture, but the blogging business model is only becoming more successful as a passive income stream. 

It takes a little bit of time to build a blog. But if you create quality content and promote it through your platforms, you’ll build an audience big enough to generate a significant income stream. 

You could earn passive income from blogging by:

  • Selling affiliate products
  • Creating sponsored posts
  • Selling your own products 
  • Running ads through Google AdSense

The best part? You don’t need any design or coding skills to start a blog. With a content management system and hosting service like Shopify, you can get a blog up and running in no time. 

6. Sell handmade goods

There are hundreds of online sites you can sell on. Some have specific niches, like video games or handcrafted goods, while others let you sell whatever you want. 

Some popular online selling sites include:

  • Handshake
  • Amazon
  • eBay
  • Ruby Lane
  • AliExpress

The upfront investment is twofold. You’ll need to invest in materials and time to make and sell DIY goods like pottery or clothing. You’ll also want to create an online store to house your products.

Selling from your own store reduces the amount of fees you pay on each sale, plus, you can create a brand for yourself. The benefits of building a brand compound over time as you grow an audience and connect with more customers. It’ll help you sell more over time and make money online.

7. Run an affiliate marketing business

Affiliate marketing involves recommending a product or service to an audience. It’s a great source of passive income because you earn a commission whenever someone uses your referral link to buy the recommended product or service.

Online entrepreneurs become affiliate marketers for a few key reasons:

  • It’s easy to execute. You just handle the marketing side of things. The brand will develop products and fulfill orders.
  • It’s low risk. There’s no cost to join an affiliate program. You can sell established profits without any upfront financial investment. 
  • It’s scalable. Affiliate marketers typically don’t hire extra help. You can introduce new products to an audience and create campaigns while your past work makes money in the background. 

Earning money with affiliate marketing can be a rewarding way to add new revenue streams to your business. All it costs is your time. Once the hours are invested, you can reap the rewards continually.

8. Sell stock photos online

Unlike many of the other passive income ideas on this list, photography is a service-based business, which typically means you get paid for your time. You must be at an event or photoshoot to make money with photography, which, even if you’re making a killing, can be tiring after a while. 

However, if you’re a full-time photographer or own a good camera, you can generate passive income from photography by selling photos online. Stock photo sites like Pexels, Shutterstock, and other online media houses will pay for high-quality photos and videos.

shutterstock

If you run your photography business on Shopify, you can also easily tie in digital products like prints or print-on-demand products like shirts and hats, giving you even more passive income streams so you can work less and make more.

9. Become a social media influencer

To become a social media influencer—someone who can sway another person’s buying decisions—you’ll need to build a community of people who enjoy similar topics. 

Are you a comics fan? You can create an Instagram account and start posting consistently about the latest Marvel and DC shows. The same applies if your interest is in sports, scuba diving, home décor, or even general culture. 

If you have an engaged audience, you use that engagement to support a variety of passive income ideas. For instance, you can partner with large and small businesses to promote their products to your followers. Or you can make money through selling your own merch.

10. Buy a rental property

Real estate investing is one of the oldest ways to build long-term wealth in general, and passive income in particular. 

If you have enough money, you can buy apartment buildings or some other form of real estate and lease them out for rental income. But since the job of being a landlord is pretty active, you can hire property managers to manage tenants, maintain properties, and collect monthly payments or rent.

As a bonus, your properties will appreciate as the housing market rises, increasing your profits in the event of a future sale.

11. Invest in the stock market

Although the stock market might have a steep learning curve and can be confusing, it’s a great way to build lasting wealth. A common mistake most people make with investment funds is thinking short term instead of playing the long game to reach financial goals. 

The goal for investing in stocks is to diversify your portfolio and reduce risk. You can do this through investing in mutual funds, index funds, exchange-traded funds (ETFs), and high-dividend stocks that earn you capital gains over time. 

stock market image

To start investing in the stock market, you need to open up a brokerage account at a quality financial institution and fund it. It’s recommended that you also speak with a financial adviser to help plan and hit your passive income strategy goals. 

12. Rent out your spare room

Maybe you don’t have the startup capital to invest in rental properties. But do you have an extra room in your apartment? Or are you going on a three-week road trip and don’t want to leave your house empty? You can partner with a rental company like Airbnb or VRBO to put your free space up for rent.

Airbnb connects homeowners with people who are looking for their next getaway. People prefer Airbnbs because they’re sometimes cheaper and often more convenient than hotels, meaning a high demand for your free space as an Airbnb host. 

While renting out one spare room to earn passive income is great, renting out 10 is even better. If you want even more passive income from Airbnb, you can (depending on local laws) buy apartments for the sole purpose of renting them out. You should note, though, that renting your space out often requires work upfront. You might have to furnish or renovate your space before putting it up for rent.

13. Rent out your car

Your home is not the only thing you can rent out to earn passive income. You can also offer your car up for rent with a service like Turo. If you already use your car as an Uber, you can sign up with platforms like Carvertise or Wrapify to earn extra money as you take trips around town. 

Another way to turn your car into a passive income stream is to look for someone who needs a car for Uber or Lyft. So instead of actively driving around in your free time, you can pull up a Netflix show while your car works for you.

14. Lend money to peers

Have extra cash that’s not working for you? Try peer-to-peer lending as a side hustle. Peer-to-peer lending involves lending money to borrowers or small businesses. 

To make the process easy, you can sign up on a website like LendingClub, Prosper (for individuals), or Worthy (for businesses) that connects borrowers with lenders. 

These sites usually host loan requests along with interest rates based on the borrower’s history. The return on these loans is usually around 5% to 6%. The more you lend, the higher your cash flow will be.

15. Earn while shopping online

Cashback reward sites like Swagbucks, MyPoint, and Rakuten allow you to generate passive income when you shop online. After signing up, you don’t have to do anything extra, aside from shop, to make money from these sites. The more you shop online, the more points you gain. And the more money you can make.

A note of caution: don’t exceed your monthly spending budget or max out your credit card in a bid to earn some reward.

16. Buy and sell websites

Websites abound on just about any topic you can think of. The best part? A lot of them make a healthy income through the likes of affiliates, ads, memberships, or products—and they’re often put up for sale. 

Sites like BizBuySell make it easy to buy and sell online stores securely once you open and verify an account.

It’s a great way to own a business that already has some sales and traffic coming in. Once you complete your purchase, you also get access to seller support afterward to ensure you do well. 

17. Start a YouTube channel

It’s not too late to start a YouTube channel. A whopping 2.6 billion people around the world use YouTube every month. That’s a lot of eyeballs to capture for passive income. The catch? It’s a lot of upfront work for little to no return in the beginning. 

Yet, if you’re a long-term thinker and don’t mind frontloading your efforts, the passive income potential of a successful YouTube channel is high. Affiliate sales, sponsorships, branded integrations, and ad income can all add up passively as you accumulate content, clicks, and views and grow your audience. You can even easily spin off into starting a podcast and earn more money through sponsorships. 

18. Invest in REITs

What if you don’t have money to buy entire apartment buildings? Can you still earn rental income? Yes, you can. 

With a minimum investment of $500, you can use a real estate investment trust (REIT) platform like Fundrise to invest in a variety of real estate assets—and earn more passive income as the assets appreciate. A REIT is a company that owns and manages profitable real estate. It’s a great way for smaller investors to pool their money to afford investments they wouldn’t be able to afford by themselves. 

As a long-term investment, real estate investment trusts are one of the best passive income ideas to look into if you have startup capital. Besides upfront capital, getting started also takes some in-depth research. This isn’t an investment you want to walk into blindly. Thankfully, there are plenty of resources, like this guide, to help you get started.

19. Sell designs online 

Design websites like 99designs, ThemeForest, or Creative Market are great places to generate a passive income stream by selling digital designs online. Whether you use a website builder to build website themes, logos, branding resources, templates, illustrations, or even fonts, these platforms offer a built-in market that is already looking for design resources.

creative market homepage

For instance, if you wanted to start selling designs on Creative Market, you’d need to apply and wait for approval. From there, you get your own storefront, where you can start selling your branded designs.

20. Invest in businesses

Today, getting started investing in historically inaccessible business opportunities is absolutely possible. Platforms like Mainvest make it easy to invest passively with a $100 initial investment without any of the investor fees.

The returns? As with any investment, it depends. But Mainvest aims to earn you anywhere from 10% to 25%. You don’t even have to vet the businesses yourself. Mainvest takes care of the vetting process for you. You simply invest the capital to get started. 

As a passive income idea, this is a great, safe way to step into the business investment world and learn as you go.

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