40 Passive Income Ideas That Actually Work

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Are you looking for passive income ideas to build wealth that actually work?

I tried many different ideas over the years and I have found options that now make me over $10,000 per month in passive income.

If you want to learn the best passive income ideas then keep reading.

What is Passive Income?

Passive income is income you earn from doing little to no work. You’ll have to do some upfront work, but then the money just comes in.

Some income is truly passive, which means it needs no attention from you. Other sources of income are passive but you need to delegate any work that needs to get done.

One way to earn passive income is to have multiple income streams coming in. In other words, don’t just choose one option, choose two or more.

Having multiple passive income streams is good for two reasons:

  1. You have more money coming in
  2. If one income source goes away, you’re not left without a paycheck

Keep that in mind as you read our ideas for building a passive income stream.

Checkout my video on some of the top passive income ideas here:

YouTube video

Types of Passive Income

There are two types of passive income, so it is important to know that before you get started.

The first type of passive income stream is where you need money to make money. The most common example of this would be investing in dividend stocks.

This is where you invest a certain amount of money, and in return, you get paid regularly in the form of dividends.

The second type of passive income requires your time, not necessarily money. The best example would be writing a book. It will take you a lot of time upfront, but it doesn’t require money to get started.

Want to hear from an actual person making over $100,000 per month in passive income?

Check out this podcast episode that I did with Pat Flynn from Smart Passive Income.

Top Passive Income Ideas

As you start researching, keep in mind the types of passive income that align with your skills and passions.

Read on to find your best passive income ideas to earn money while you sleep.

1. Dividend Income

Earning dividends is one of the most popular ways to make passive income using the stock market. Many investors, including Warren Buffett, earn money by owning shares in stocks that pay dividends.

Dividend income is money paid to shareholders of stocks in the form of cash.

Every quarter–or sometimes monthly–companies that have dividend-paying stocks issue dividend checks to stockholders.

You can reinvest those dividends to buy more shares of stock. Or you can take the money as a paycheck and live off of it if you don’t want to invest in the stock market further.

Whenever you invest money in the stock market, it’s important to do your research or talk to a financial advisor.

Investing in dividend stocks is one of the most popular ways to build wealth and has a long track record.

2. Invest in Real Estate

Another great passive income strategy is to invest in real estate and generate rental income.

The most common way to start investing in real estate is to buy a home and make it a rental property. This can be profitable, but unless you hire a property manager, having a rental property is not very passive.

It can be nice because you have a physical asset that you have more control over, and the cash flow is consistent with its monthly income.

I tried this traditional route, but it was too much of a headache trying to find new tenants and maintaining the property to generate rental income.

Looking for a better way to get passive income with real estate, I checked out real estate investment options.

One company that I came across is called Fundrise. It is a like REIT (Real Estate Investment Trusts) but better. Fundrise has low fees, and you can start investing in real estate with $10.

Note: We will get a commission if you sign up through this endorsement of Fundrise. However, we only promote brands we believe are a good fit for our readers. All opinions are our own.

3. Invest in Land

Did you know you can earn passive income by investing in land? Of course, you can buy land and rent it out, such as farmland.

However, you can also participate in crowdfunded land ownership and rental properties. This is a little simpler and might not require talking to a financial advisor for guidance.

Companies like Acretrader allow you to purchase shares of farmland. They handle all of the administration and property management work.

You earn the profits from the farmland being rented out. Rent for the farmland is paid upfront to reduce the risk of loss from crop failure.

AcreTrader boasts about their up to 11.5% annual return! That is worth checking out.

4. Create Software

Have you thought about using your skills to create software to sell? Spencer Haws created a software program called LongTailPro.

LongTailPro is a keyword research software that helps you find the right keywords to get high-converting traffic to your website or blog.

In fact, Spencer made over $10,000 a month by selling his LongTailPro software.

By partnering with other bloggers and advertising LongTailPro on his own blog, Spencer marketed his software in niches he knew would benefit from the software.

One interesting thing about Spencer’s story is that he hired someone via Upwork for all of the development of the software. So, he didn’t actually create the software he sells.

He had an idea of what he wanted the software to do, but he hired someone else to create the software.

So, even if you don’t necessarily have the skills to make a software program, you can still make this passive income business with digital products source work for you.

Related: 15 Ways to Make $50,000 a Year In Passive Income

5. Open a High-Yield Savings Account

This option won’t make you rich, but it is one of a few passive income ideas that requires little risk and minimal time investment.

When you open a high-yield savings account with an online bank, you often earn a higher interest rate than a traditional bank.

This is because online banks have much lower overheads than brick-and-mortar banks. That means they can pass higher profits on to you.

One popular online bank is CIT Bank, which pays a much more competitive rate than many traditional banks.

A high-yield checking or savings account can be a good way to start making passive income.

6. Music Rights

Did you know you can get royalties from music or movies you didn’t take any part in creating?

Royalties are the money actors, singers and other artists get when they create a song, TV show or movie.

Sometimes, those artists want to sell future royalties because they need a lot of money right now.

So, they sell a portion of their future royalties to investors. The investors make their money back with profits.

Companies such as Royalty Exchange work to connect artists with investors.

7. Be an Angel Investor

Angel investors provide funding for small startup businesses or entrepreneurs. This could be a great passive income stream if you have a lot of extra cash lying around.

When you invest with companies like AngelList, you can invest in specific startups, or you can invest in a basket of startups that is designed similarly to an index fund.

Although it does take an upfront investment, minimums for Angel investing products on AngelList can range from $1,000 to $500,000.

8. Peer to Peer Lending

Have you ever heard of peer-to-peer lending? This is kind of like crowdfunded real estate investing.

With P2P lending, a group of investors get together and invest money loaned to borrowers. As the loan is paid back with interest, you, as the investor, make money.

For instance, a borrower with excellent credit is less of a risk for you to lend money to than one with poor credit. You could choose to invest in lower-risk loans to minimize your chances of losing money.

Just know that investing in the lower-risk loans will result in a smaller profit.

If you want a lower-risk option with a decent return, check out Worthy Bonds. They offer $10 bonds and pay a 5.5% return.

9. Pay Off Your Debt

Many people don’t think of paying off your debt as a form of passive income. But it’s actually a legitimate financial investment.

The less money you’re paying in payments to creditors, the more money you have in your pocket each month.

On top of that, getting out of debt quickly can increase your passive income streams even more because you’re not wasting money on interest charges from creditors.

If you want to get out of debt faster, some companies can help you do that. For example, you could check out Credible, which offers low rates.

10. Rent Out Your Spare Room on Airbnb

Does your house or apartment have a spare room? If so, you could start generating passive income streams by renting it out on Airbnb. Airbnb is a popular alternative to regular hotels.

This is because it’s often cheaper than regular hotels and provides a more “homey” feel for guests.

Of course, some maintenance is involved. You’ll need to be sure the rooms are cleaned after a guest leaves.

However, you could hire a maid to do that. This would mean you’d have a minimal time investment in managing the property.

My friends Steve and Annette Economides make over $1,000 per month renting out their spare bedrooms.

This can be a great way to generate income with your own assets. You just want to ensure that the extra cash flow is worth it since it will take a little work each month.

11. Start Drop Shipping

Drop shipping has become one of the most popular ways to make passive income. 

Basically, it’s where you create a site that advertises other company’s products.

A buyer would order the product from your site, which is set up to send the order to the manufacturer automatically.

Then, the company that makes the product is responsible for shipping the item directly to the client.

With drop shipping, you don’t have to worry about carrying any inventory. You’re simply a go-between of a client and a company that makes a profit.

If you’re interested in selling products online, consider using a platform like Shopify to sell digital products and build wealth.

12. Write a Book

Have you considered writing a book and then selling it to produce a passive income stream? It’s truly one of the more creative financial investment options.

I did this with a book that I wrote called You Can Retire Early, which is about real ways to retire early. For each book that sells, I get a 10% royalty.

Of course, there is the initial work of writing the book. This requires a more substantial time investment. But after that, you can sell it on Amazon and collect passive income.

Also, you will want to do some marketing. The more marketing you do, the more chances you have of selling your book.

If you’ve got good content that could help or entertain many people, you might want to consider book writing as a way to make passive income.

13. Earn Income From Affiliate Marketing

Do you have a blog or website? Many blog owners make money by using affiliate links or sponsored blog posts. Affiliate marketing is one of those passive income ideas that makes me the most money these days.

Here’s how affiliate marketing works. You link to a product or service on your blog. Then, when someone purchases that product or service through your link, you get paid. 

Websites are easy to start, too, if you don’t already have one. In fact, I can show you how to start a blog in less than ten minutes.

You’ll need a hosting service for your blog to be seen on the internet, but that’s inexpensive when you get a deal. 

Blogging can be great way to make money from home. You just need a computer, internet service and engaging content on your blog.

Then sign up for affiliate programs and start promoting them within your content using things like sponsored posts. Affiliate marketing can be a great side hustle or even a way to get a full-time income.

It took me about six years before I started making a livable wage with my blog.

14. Start a Lead Generation Website

Another way to make passive income is to create a lead-generation website. The point of a lead generation website is to pass leads on to local businesses. You can also use your page to advertise.

For instance, let’s say you want to create leads for local realtors. You could start a blog that talks about owning a home or about real estate investing.

The site would contain links where people could contact you for more information. Then, you’d pass that lead on to local real estate agents.

This is what’s considered a “warm” lead. It’s not total cold calling. Instead, the person came to your site and is seeking out more information.

Professionals in any arena will typically be excited about warm leads. However, it’s important to know that making money this way requires your articles to be high-ranking in Google searches.

And that means you’d have to learn about search engine optimization.

15. Sell Products on Amazon

Many people are earning passive income by setting up a shop on Amazon.

You have the option to sell your own products on Amazon and ship them yourself. But that’s not true passive income.

Instead, you could have Amazon send the products for you. My friend has done really well with this.

He earns well above the six-figure mark selling his products online.

16. Make an Online Course

Do you have information you can share that would help others? Maybe you know how to kill it in investing or paying off debt. Or perhaps you can teach someone a skill.

You can pass that information on to others by creating an online course. Your course can include a variety of teaching techniques.

You can do it all via video, e-books, or emails. Once the course is created, any sale is passive income.

However, be prepared for a more substantial time investment upfront.

You can design the course so that the information is automatically sent to the customer after they pay.

The money you charge for this digital product goes into your pocket.

17. Create A YouTube Channel

I’m sure you’ve heard of people making big bucks by posting videos to your YouTube channel. They post a video, and the video contains ads.

As the video creator, you earn money from the ads within the videos you create. The key to earning money on YouTube is growing a large audience.

You’ll want to reach out to people who like similar content to what you publish on your YouTube channel.

Ask them to subscribe to your YouTube channel. Doing this will increase your YouTube following.

Once the initial work is done, you have a passive income source that will help increase your cash flow.

18. Start a Business

Owning a business is one of the best ideas to make passive income. You can start a new business or purchase an existing one.

Companies like Biz Buy Sell list hundreds of online businesses for sale. The businesses range in price and in the genre.

In order to truly be passive, make sure to hire the right people to run the operations so that you don’t have to.

19. Vending Machines

Organizations like gyms or dance studios love having vending machines available for clients or workers. You can visit these places to see if they’ll let you install vending machines their clients can use.

If you have the right types of snacks in your vending machine, you could make some big money with this unique financial investment.

Once you get approval to install the machines, ask workers or clients what types of snacks they want in the machines. This information could help you increase sales.

To make this really passive income, you can hire people to restock the machines for you.

20. Sell Your Photos

Are you good at taking pictures? Would you like to make money from your photos?

Companies and website owners purchase stock photos from sites like Shutterstock for online stores and blogs.

Open an account, and once your photos are approved, clients can begin downloading them for use.

You get paid each time someone purchases one of your photos for use. The more photos you have uploaded on the site, the more money you can earn.

Note: Look to sell stock photos that contain people doing everyday things, as they are the ones that earn the most money.

21. Create An App

Are you good at tech stuff? Do you have some unique ideas for mobile apps? Why not use those skills to earn some passive income?

Once the app is created and published, you earn money every time someone downloads your app.

Every app on your phone is making money for somebody, somewhere. For instance, Joel Comm made over $1Million from his iFart app.

And imagine the kind of money people are making from gaming apps such as Candy Crush.

You might not get to the million-dollar mark, but even if your app brings in a few hundred dollars a month, that’s still some decent money.

22. Put Ads on Your Car

Did you know some companies will pay you just for driving as you normally do every day?

If you live in a major metropolitan area and do a decent amount of driving, you could earn money by having advertisements on your car.

Companies such as CarVertise wrap your car with ads and then pay you for your daily driving.

Usually, the companies want vehicles that are in good shape with no dents or rust. These types of cars are easier to make advertising wraps adhere to.

23. Buy a Laundromat

While it’s an unusual financial investment, owning a laundromat is another popular passive income idea. Cities everywhere have laundromats for people who don’t have in-house laundry facilities.

Here is how you could make owning a laundromat into true passive income:

  1. Buy an existing laundromat from someone interested in selling
  2. Hire a reliable and trustworthy person to manage the store
  3. Take home a paycheck

Start-up costs for laundromats can be pretty high, as commercial washers and dryers aren’t cheap.

For that reason, you’ll probably be better off financially if you buy an existing laundromat.

24. Purchase or Open a Batting Cage

Baseball is one of the most popular sports for kids in America. However, there aren’t a ton of batting cage facilities in most areas.

Starting a batting cage from scratch can be very costly. You’ll need a building and the equipment to run the store.

Buying an existing batting cage might be a better bet if you can find one.

Again, you’d have to find a good manager to run the store. If you like sports, this might be a great passive income idea.

25. Use Your Graphic Design Skills

Are you good at graphic design? Print-on-demand sites such as Redbubble allow you to upload your witty design ideas and create t-shirts, coffee mugs, laptop covers, etc.

You might have ideas for great sayings that can go on shirts or mugs using a print-on-demand site. Or just great designs.

The cool thing about print-on-demand sites like Redbubble is that all you have to do is create your store and upload your designs.

They handle all shipping, payment and customer service. When your designs sell on any print-on-demand site, you get paid via a monthly check for your portion of the profit.

Alternatively, you could open your own online store on your own website to sell your designs.

26. CD Laddering

Bond and CD laddering is a type of financial investment where you own many bonds and/or Certificates of Deposit.

You spread out their maturity dates so they come due at different times of the year. Then, you’ll have cash coming in from them throughout the year.

Note that bonds and CDs typically don’t earn as high of a return as other passive income investments. However, they usually have a much lower risk, too.

Bond and CD laddering can provide you with a sure and steady passive income stream. While the time investment to get started may include research, once you set up your CD ladder, you are good to go.

27. Rent Your Stuff to Others

What about earning passive income by renting out your own stuff? Craigslist can be a great place to advertise your items for rent.

Products that you could rent out:

  • Tools and ladders
  • Party tents
  • Tables and chairs
  • Utility trailers
  • Log splitters
  • Cleaning equipment
  • Snowmobiles
  • ATV’s

You can even rent out your car when you are not using it with a company like Hyrecar.

If you’re going to choose this passive income idea, be sure to have all renters sign a contract.

That way, you protect yourself and your equipment in case something goes wrong.

I’d consider charging a refundable security deposit to protect yourself in case someone damages equipment, too.

28. Become a Social Media Influencer

While this does take a lot of upfront work, it can become a great revenue stream once the money starts rolling in.

To be fair, this is not for everyone. If you like being in front of the camera and speaking your mind, then this might be a path to consider.

Big brands pay a lot of money every day to social media influencers in order to get their brand in front of the influencer’s following.

29. Invest in Local Business

Mainvest is a crowdfunding company that helps you invest in local brick-and-mortar small businesses.

With Mainvest, you might have the opportunity to invest in coffee shops, breweries, restaurants, and more.

The minimum to invest with Mainvest is just $100, and you don’t have to be an accredited investor to join.

There are no investor fees with Mainvest.

30. Sell Digital Planners

Digital planners and other digital downloads present a financial investment opportunity. You can start selling blank planners to help people map out their day.

You can create a digital planner with the right software. Some options include Keynote App, Microsoft PowerPoint, or Adobe InDesign.

The software you choose will vary based on your comfort level and the design you are trying to create.

A few places to try selling digital products using an online store include Etsy and Shopify. Stand out from the crowd by creating amazing listing images!

31. Start a Podcast

A popular podcast can create a passive income stream. You can find podcasts on topics covering everything from gardening to personal finance and everything in between. Find a topic you love to get nerdy about!

When creating episodes, try to solve a problem for the reader. The problem could just be that they are bored and looking for fun entertainment.

Not only can you get sponsors to advertise on your show, but also consider creating digital products that your audience will love. If you build a strong audience, they’ll tell their friends and continue to grow your passive income streams.

32. Rent Storage Space

Many Americans don’t have enough space to store their items at home. So, the storage industry solves their problem by holding onto their extra stuff. You can hop into that space!

You can buy a storage unit to rent out. Or even rent out extra space in your basement to generate passive income for space you aren’t using.

When creating a storage unit business, consider making it as hands-off as possible. That might include keypad entry and security cameras to ensure everything stays secure.

33. Trade Domain Names

A domain name is the name of a website. In some ways, a domain name is like a digital property. Domain name owners stake a claim on their corner of the internet.

Since it’s possible to build income-generating websites, domain names can be in high demand. If you spot an available domain name that you think will be worth something one day, then you can buy it now and sell it later.

Depending on the name, you might be able to buy it cheap and make a nice profit. In most cases, domain names can be purchased for less than $100.

Although it’s a speculative financial investment, it could definitely pay off.

34. Rent a Billboard

As you drive along the interstate, you’ll likely see countless billboards. Not only do these billboards serve to keep you entertained on your drive, but they also act as a cash cow for the owner.

Each of those companies advertised is paying the sign’s owner rent for the privilege of being seen. You can buy a billboard of your own and rent out the ad space for passive income.

Of course, the location of the billboard matters. You can’t expect a business to pay for a billboard slot in your backyard unless your backyard is near a high volume of traffic.

Typically, billboard locations near interstates in areas with a high population earn more per ad.

35. Buy an ATM

An ATM in the right place can be a big money maker.

In fact, you might have seen an ATM earning passive income in action the last time you needed cash unexpectedly. The ATM didn’t necessarily go to your bank. Instead, it makes its way into the pocket of the ATM owner.

But the ATM charges around $3 per withdrawal. That can really add up! If you can find a high-traffic location, this could be a great passive income stream.

36. Own a Car Wash

Owning a car wash can be a great way to earn passive income. People pay money, drive in, drive out, and are on their way.

You can own car washes with automatic washers, self-service wash bays, or both. Of course, owning a car wash means maintaining equipment.

However, for the most part, car washes with pay stations run themselves. Search online to find car washes for sale.

Or consider building one if you can find the right location.

37. Sell Digital Files on Etsy

Selling on Etsy can earn you an unlimited amount of cash. All you have to do is open an Etsy shop and upload your design file on Etsy.

The most popular digital files for Etsy sellers are files that contain calendars, organizational documents and files with motivational quotes or sayings.

After you upload the file, the rest is up to Etsy. They deliver the sold files and give you the remaining profit after they’ve taken their cut.

Your main job will be to market your Etsy store on social media so that people are aware that the store exists.

38. Design T-Shirts

Designing t-shirts is another great way to earn passive income. With sites like Redbubble, you can upload your designs and they do the rest.

Companies like Redbubble handle printing, shipping and even customer service. Your job is to create great designs that potential customers will love.

Then you’ll have to market your designs and get them in front of the right audience.

39. Use Cashback Rewards Cards

Using cashback rewards cards is likely one of the easiest ways to earn passive income.

You can use your favorite cash back credit card and pay the balance in full each month to avoid paying interest.

Better yet, you can get one of these great cash back debit cards and earn cash back while avoiding debt altogether.

Use your cash back card for all of your grocery, gas and entertainment spending. Then watch the cash back roll in.

Search for cash back debit cards that have little to no fees so that all of the income you earn is money in your pocket.

40. Partner With a Network Marketing Company

Network marketing companies such as Young Living, DoTerra, and Pampered Chef earn hundreds of thousands of people passive income every day.

Of course, when you first start out with a network marketing company, the income you earn will be very active income and require a lot of legwork on your part.

However, when you start building a team that does the active work, your position becomes one of more training and coaching.

You’ll get a percentage of the sales of those on your team, similar to how Redbubble or Etsy take a percentage of your sales for products you list on their sites.

Be sure to choose a network marketing company that sells products you like and use yourself.

Frequently Asked Questions

Before you invest time to create passive income streams, check out these frequently asked questions.

Is passive income truly “passive”?

While most passive income opportunities do not take effort to maintain, it can take effort up front to get it going.

Some options, like buying dividend stocks, require minimal work, while others, like buying rental properties, can involve more work on a regular basis.

How do I generate passive income?

In order to generate passive income, you will need some capital to get started.

Once you have capital, you must research and choose the best passive income opportunity.

How much money do I need to start making passive income?

While some options like crowdfunded real estate start at $10, others like buying a single family property could require over hundreds of thousands to get started.

The most popular passive income sources include stocks, real estate investment opportunities, and bonds.

Recently, investing in businesses, as well as crowdfunded equity, have become popular passive income opportunities.

What is the difference between active income and passive income?

Active income is where you need to continue to work in order to make money. The best example of this is working a traditional corporate job.

You only get a paycheck if you work. Having a true source of passive income does not require work for continued income.


Passive income isn’t just for the wealthy. Everyone has to start somewhere, and there are many ideas you can start for less than $100 that will help you make money.

Don’t let a lack of knowledge or the initial time investment stop you from achieving your goal of having a source of passive income–even if you want a lot of it!

Decide on four or five that seem right for you. Then, get to work and earn some passive income!

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  1. Danny Larsen says:

    Debt can be used to your advantage as long as you use it correctly, it’s a way to utilize money you don’t have but can access. Just don’t blow it on luxuries, make sure you use it to invest in yourself for school or assets that while allow you to pay off the loan and also make a profite. It’s like getting a free opportunity to acquire an asset for life if used correctly. Also once it’s paid off and everyone is happy like the bank. They will lend you more the next time. Buy assets and let your assets pay of the loan to later buy your luxuries. Allows for perfect credit as well. Then you have everything you could want anytime you want it. No questions asked.

  2. Crystal C says:

    This was great to read! Haven’t heard of a lot of these! I will be researching the ones that suit my creativeness and passions the most! Thanks again! I needed this!

  3. Your list looks so do-able! Thank you.

    1. I’m glad it could help! You’re welcome.