I worked a traditional 9 to 5 job for many years and eventually I got burnt out. I knew that I wanted more freedom and the idea of passive income became very appealing. I had heard of many people quitting and replacing their full-time job with passive income, but I had no idea where to start. The pursuit led me to start this blog where I now make over $4000 per month (see my latest income report here), however, this is not the only way to make residual income.
What is passive income?
Passive income is where you get paid over and over again for work that you did once. I personally have multiple passive income streams, many of which I will mention below.
Passive Income Ideas
By choosing the right sources of passive income, you can invest your time the way that you want to instead of the way you have been spending it. Passive income is a way of buying back more time. There are so many opportunities out there to make residual income in network marketing, however, this is NOT one of those “things”. These are legit ways for you to make money while you sleep in something that fits your passion, experience, or skill-set.
1. Invest in Crowdfunded Real Estate
Real estate is a great way to make money while you sleep. Because it costs so much to purchase a home, using a crowdfunding platform to buy real estate can be a more affordable option. If you want an easy, low-cost way to invest in real estate, consider using a company like Fundrise. They had more than a 13% return in 2015 as well as a very low investment requirement to get started with $1,000.
2. Product Design
Another way you can make passive income is by designing t-shirts and other products even with no prior design skills. Companies like CafePress allow you to upload your witty design ideas to their site and create t-shirts, coffee mugs, laptop covers and a slew of other products. Shoppers then visit the site, check out your products, and when they purchase one of your designs, CafePress will pay you a portion of the profits.
3. Peer-to-Peer Lending
This is where you can loan other people money who don’t qualify for traditional financing. With investment returns often in the 6-10% range, investing money with a company like Lending Club can get you much higher income results than a typical savings or money market account.
4. Bond / CD Laddering
Bond and CD laddering involves owning several different bonds and/or Certificates of Deposit that mature at several different times during the year and taking the profits from those investments as cash income during the year. Although many CDs and bonds might not earn as much of a return as a Peer to Peer lending investment, bonds and CDs also generally come with little to no risk, ensuring a solid income source on a regular basis. If this is a route that interests you, check out BBVA Compass as they are paying 10x what traditional savings accounts offer.
5. Get Cash Back on Shopping You Already Do
You have to shop anyway, so why not get cash back on things you’d normally buy in the first place? There is a site called Ebates that will pay you $10 just for signing up and it is free. With their double cash back specials, you can double your passive income earnings if the right items go on sale. The key with shopping sites like this is to commit to buying only what you normally would purchase and not buy things just because they are on sale.
6. Writing/selling e-books or regular books
Once the initial work of creating the book is done, and you’ve spent some time developing an effective marketing plan, selling books can be a great way to produce some serious residual income. Once your book is available on a site like Amazon, you could receive a check each month for doing absolutely nothing. Obviously, the more time you spend marketing your books, the more money you’ll make. If you seriously want to make money writing, then you need to check out a course called, Earn More Writing where Holly Johnson shares how she makes over $100,000 per year from writing.
7. Get out of debt
The less money you’re paying in interest to creditors, the more money you have in your pocket each month. Talk about a simple form of passive income. Get out of debt quickly can increase your income even more because you’re no longer paying interest to creditors each month. So if you have high-interest debt that you want to get a lower interest rate on, go to SoFi to get a $100 cash back if you refinance your credit card debt.
8. Affiliate marketing & Ads
Here are two basic ways to make money with your website. If you have a site already then this is a no-brainer. There are people that are making over $50,000 per month like Michelle who created Making Sense of Affiliate Marketing. Affiliate marketing can be a great way to make passive income because when people click on the affiliate links on your site, you receive a commission at no additional cost to them when they purchase a product or service. A second way you can make money is from advertisements that appear on your website. The most well-known way is through Google Adsense, however, media.net tends to pay a lot more money for view views and clicks when compared to Adsense. If you don’t have a website yet, check out the offer below!
9. Dividend income
Dividend income is dividends paid to shareholders of stocks in the form of cash in your bank account. Dividend paying stocks are especially enticing for those wanting to make a living with passive income, as they will get payouts each quarter or so. Even Warren Buffet historically is a fan of dividend paying stocks. If you are going to go this route, make sure that you educate yourself and pick solid stocks so that you can depend on your dividend income for years to come.
If you don’t have an investment account, you can start one with TradeKing and I love them because trades are only $4.95.
10. Create a mobile app
If you are a bit techie and can come up with some unique ideas for mobile apps, or improve upon an existing app that will help people make their lives better, you may land yourself a great source of passive income. Every app on your phone is making money for somebody, somewhere. For instance, Joel Comm made over $1Million from his iFart app. We won’t even talk about the ridiculous money that Angry Birds brought in. While those are the exceptions, there are plenty of people making thousands of dollars per month with their mobile apps.
11. Create an online course
Online courses can be a great source of passive income. Here’s how they work: you create a value-packed online course that helps solve a problem or fills a need. This course can include videos, e-books, and emails with pertinent information. Customers sign up to purchase the course and your system automatically emails them everything they need to access the materials. You get money for the price of the course that you created and automation does all the heavy lifting for you. Ba-da-bing, ba-da-boom: money in your pocket. Need some inspiration? Take a look at my very own online course (shameless plug lol) called Debt Free in 18 Months where I help people get out of debt in a short period of time.
12. Create YouTube videos
Everyday regular people like you and me are making money on YouTube. Each time someone watches one of your videos, ads can appear and you can make money from those ads. The key to becoming successful with YouTube is building a large enough subscriber and viewer base. This can take a lot of time up front, but once your videos are live there is potential for you to make passive income from each video indefinitely. Granted you probably will not make a living off of just a few videos, so be prepared to make over 100 videos if you really want this to take off.
13. Rent out a room in your house
Do you have an extra room that you rarely use? Why not rent it out to someone looking for a short-term rental on Airbnb. There are millions of people using Airbnb to find a place to stay instead of staying at a hotel, sometimes even for months at a time. While this is not entirely passive income, it can take a little up front work but the returns can be amazing. If you end up giving this a shot, consider getting a maid service to minimize the amount of time you spend on transitioning from one guest to another.
14. Buy a vending machine business
A successful vending machine business can be a great way to make passive income. The key is to find the right places to install your vending machines. Check with smaller brick and mortar businesses that have over 100 workers in the building on a daily basis, and see if they have a need for vending machines. Another key to vending machine success? Ask those workers what items they prefer to have in the vending machine and then stock accordingly. Once again, is you want to reduce the amount of time that you are involved, consider hiring someone to stock the machines for you.
15. License your photos
Have you ever wondered how you can make money taking pictures? Do you have an eye when it comes to taking good photographs? If so, check out istockphoto.com where you can send them your pictures and if approved, each time one of their clients downloads one of your photos you get a paid a royalty.
16. Start a business and have someone else run it
Owning a business can be a good passive income source, provided you’ve got the right people running the business for you. Whether it be through the purchase of an existing business or opening a new business, your great business idea can be a viable source of passive income. For some creative small businesses that you can start for under 100 bucks, check out the $100 Startup by Chris Guillebeau. These are all verified businesses that grew to over six figures per year and started with very little money up front.
17. Rent your car for ad space
How would you like to make money just for driving your car and not have to pick up any passengers? By allowing companies to place advertisements on your car windows, you can earn a few hundred dollars each month simply by driving your car around town. Check out Free Car Media to see how you might be able to make passive income by wrapping your car with an advertisement.
18. Buy an existing online business
The beauty of an online business is that most will allow you to work from anywhere. Starting one from scratch can take a lot of time and resources, so why not consider buying an already established online business? Web sites such as Biz Buy Sell have hundreds of online business listings that are for sale in varying prices ranges. Check to see if there is an online business for sale that is in line with your passions or hobbies. Because if you are going to be working, why not do something you actually enjoy doing.
19. Buy a laundromat
Here’s another turnkey passive income business idea. Many cities have established laundromats that are available for sale. Here is how it would work: you buy the already existing business, make sure that you have someone to manage the day-to-day operations, and then “soak up” the profits.
20. Open a batting cage facility
I am shocked by the lack of batting cage facilities. Baseball is one of the most popular sports for kids in America, yet, batting cages are hard to come by depending on where you live. Something to be aware of though, is that these can require a lot of money up front. You will have to have a big facility, equipment, and someone to open and close. So make sure to do your due diligence before you invest too much money in this endeavor.
21. Open a high-yield account
Looking for a low-risk way to make passive income? Then look at opening a high-yield checking, savings or money market account with a bank like BBVA Compass. The yields are much higher than most local banks but still come with FDIC insurance. While this won’t make you filthy rich, it will be a safer way to make consistent income and not lose your money.
22. House or pet sitting
One of the easiest ways to literally make money while you sleep is by house and pet sitting. You have to live and sleep somewhere: so why not get paid to stay at someone else’s house and/or pet sit while they’re on vacation? Provided there are no unreasonable home maintenance expectations, house or pet sitting can be a great way to put some extra income in your pocket. While not totally passive, it beats having to get a job and is pretty dang easy. Check out Care.com where you can list your services for free.
23. Start a drop shipping business
With the explosion of eCommerce, Drop shipping has become very popular. Here’s how it works: you create an online store that offers products from certain manufacturers. A person visits your site, orders a product, and your system sends the order to the specific manufacturer. The manufacturer then completes the order by shipping it directly to the customer. One of the cool things about this type of business is that you do NOT need to order inventory. The customer pays for the product, you collect the profits, and the manufacturer stores and ships the products to the customer. It’s as simple as that. If you’re interested in starting a drop shipping business, consider using a platform like BigCommerce to build your online store. According to research by Ipsos, BigCommerce merchants grow 28% year over year, nearly 2x the industry average.
24. Rent your stuff
Thousands of people every day are looking to rent any variety of items. Craigslist can be a great place to advertise your items for rent. Here are some ideas of products that you could rent out: extension ladders, party tents, tables and chairs, utility trailers, log splitters, chainsaws, snowmobiles, and ATV’s. You can even rent out your car when you are not using it with a company like Turo. Just make sure that you have a proper rental agreement signed by both parties, get paid in cash beforehand, and get a current photo ID and secondary proof of address in order to protect the property you’re renting out. For extra peace of mind, consider requesting a security deposit as well.
As you can see there are a ton of ways that you can make passive income. Hopefully, this list has helped you narrow down which source of income is best for you. So if you’re tired of the traditional way of making money, implement a few of the passive income strategies above so you can start working less and making more money while you sleep today.
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