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Have you ever thought you could make money without much effort on a daily basis?
Well, the good news is you can set up a source (or sources) of passive income and enjoy money pouring into your bank account while you sleep.
But what options do you have when it comes to setting up a passive income source?
Keep on reading to discover the 22 best ideas you can turn into an extra source of money or even a main one.
Before we move on to the best passive income ideas and opportunities, let’s define what passive income is.
What is Passive Income?
Passive income is a type of income that requires little to no effort to generate and maintain from your side.
Some of the most popular passive income examples are:
- Rental income
- Dividend income
- Business activities which don’t require your material participation
Active Income vs. Passive Income
As opposed to passive income, active income requires your intensive involvement on a daily basis. Active income includes salaries, wages, tips and commissions in return for your effort to provide a product or a service.
Should You Have a Passive Income Stream?
Speaking from personal experience, adding a passive income stream to your monthly earnings can significantly boost your earnings and push you farther towards your financial goals.
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What Does it Take to Earn Passive Income?
The biggest misconception about passive income is that some people think you have to do absolutely nothing to bring in the income. This just isn’t true. All passive income streams require at least one of the following:
- An Upfront Monetary Investment
- An Upfront Time Investment
Now that you have basic information about what passive income is, let’s review 22 best passive income ideas and opportunities.
22 Best Passive Income Ideas
1. Lend Money (Peer-to-Peer Lending)
(Average return potential: 5% – 10% annually)
Lending money is one of the ways you can literally put your money to work.
The concept behind lending money is that you’re getting an interest on the money you lend to someone. So it’s basically your money working for you, multiplying itself.
But how do you lend money to someone for profit?
LendingClub is a peer to peer lending platform that gives you an opportunity to invest your money into personal loans.
This is how investing with LendingClub works:
- A person takes a loan.
- The loan is automatically broken down into ‘Notes’ that are available on the platform.
- You invest in notes along with other investors, so the person takes out his loan. The notes start with as low as $25 and you can diversify your investments across multiple projects to increase your return potential.
- Borrower pays his loan back on a monthly basis until he covers it fully.
- Finally, in return for your investment, you’ll get the average interest rate corresponding to your ‘Notes’ portfolio.
2. Invest In Stock Market
(Average return potential: 9.8% annually)
Most of the worlds’ richest people – like Warren Buffet – build their wealth investing in the stock market.
But where do you even start when it all looks so complicated and hard to succeed?
Stash is a multi-purpose personal finance app aiming to improve your financial life. It lets you easily manage your cash and invest in the stock market with as little as $5.
This app is especially beneficial for beginner investors, because it provides advisory services so you get the most from your investments.
3. Invest in Crowdfunded Properties
(Average return potential: 8% – 12% annually)
Investing in real estate is one of the most lucrative ways to make passive income.
Many people invest in properties – residential or commercial – to resell them for profit or rent out.
While real estate is the most expensive investment, crowdfunded platforms may be the best option for when you want to start investing without breaking the bank.
Fundrise is a favorite crowdfunding platform for many property investors as it lets you start investing in real estate with as low as $500.
4. Rent Out Your House (or Extra Bedroom)
(Potential earnings: $40+ per day, depending on your location)
Real estate – big or small – is considered as the best asset you can own to turn to a lucrative source of passive income.
Whether you have a private villa, a small apartment or even an extra bedroom, you can rent out to travelers or longer-term renters.
AirBnb is the largest short-term rental platform and a favorite place for many travelers to search for their travel accommodation.
When you rent your property through AirBnB, the platform handles most things for you. First of all, they provide a built-in messaging and calendar apps so you can communicate with renters and manage your bookings flawlessly.
Moreover, AirBnb manages all payments, ensuring you’ll always get paid fairly. And even if renters damage anything in your property, AirBnb makes sure you’ll get your money to cover the damage.
5. Rent Out Your Car
(Potential earnings: On average $50/day)
A car is also a good asset that you can put to work and earn passive income on a daily basis.
Turo is one of the most popular car rental platforms many renters visit when they need a car for a certain period of time.
Whether you own a sedan, SUV or a truck, Turo lets you list your vehicle for rent on their platform.
But what about your car’s safety? Turo provides you with a liability insurance coverage of up to $750,000.
When it comes to pricing your rental car, you are free to set your daily prices. However, you can benefit from Turo suggestions and apply automatic pricing.
You can also use the Turo Calculator to check daily, weekly and monthly earning potential based on your car.
- How Does it Work When You Rent a Car?
- How Much Money Can You Make From Renting Your Car?
- 13 Best Sites & Apps to Make Money with Your Car
- Alternative Ways to Make Money from You Car
6. Rent Out Your Stuff
(Profit potential: Up to $1,200/day)
Whether it’s electronics that you’re not using anymore, clothing, tools, sports equipment or baby gear, you can put them to work and earn passive income.
Here’s the list of top 3 items you can rent out and where to list them:
|What to rent?||Where to list?||*Earning potential|
|Electronics||Kitsplit||Up to $300/day|
|Tools||ToolRent||Up to $1,200/day|
|Clothes||Style Lend||Up to $150/day|
* Note that these numbers are just the estimates and the real amount you can earn depends on the items you own.
7. Start a Vending Machine Business
(Average profit potential: $400+/month)
Vending machines dispense snacks and beverages to people on the go in public places.
And while the products in the vending machines aren’t usually high ticket, many people wonder whether it’s profitable or not.
Considering the fact that you’re purchasing products in bulk from the supplier, they offer you a lower price than its retail price, allowing you to profit.
In fact, a vending machine business can be highly profitable if they are well-placed. Based on location, you can earn $100/week or even more in busiest places.
Actually, placement is the key to success in this business. The best place for vending machines are usually public spaces where a lot of people walk through on a daily basis.
Vending machine prices usually differ by their capacities. However, you can expect to pay $1,200 to $3,000 for a used vending machine, while new ones would cost you somewhere between $3,000 and $10,000.
Check out Vending.com and request a quote for the vending machine you’re interested in buying.
8. Start an E-commerce Business
(Profit potential: unlimited)
Starting an e-commerce business is one of the most popular sources of passive income for many entrepreneurs nowadays.
While it requires a lot of upfront time and commitment from your side to build a really lucrative e-commerce brand, you can definitely automate all operations later on and enjoy money pouring into your bank account.
Your profits completely depend on your product and marketing efforts, however, many e-commerce business owners report to be making 6 figures annually.
The good news is, you can start an e-commerce business and build your own online store without any technical skills. And without breaking a bank too!
Shopify is the platform that allows you to easily set up your store without any design or technical skills with as little as $29/month.
(Profit potential: unlimited)
Dropshipping is a business model that allows you to start your e-commerce business without investing in inventory first.
In fact, when you own a dropshipping business, you advertise products exactly how you would if you owned an inventory. And when the customer buys from you, you’ll then purchase the item(s) in the order from the supplier and ship it directly to your customer.
This way, you can sell products without even touching the package yourself.
Moreover, you’ll keep the profit margin between the retail price you set and the price you paid to the supplier.
- Benefits of starting a dropshipping business
- How to find a winning product for dropshipping?
- How to find dropshipping suppliers?
- How to market your dropshipping business?
10. Create a Print on Demand Online Store
(Profit potential: unlimited)
Just like dropshipping, print on demand (POD) business model doesn’t require you to hold an inventory.
But what is print on demand anyway?
Print on demand is a process where you promote customized products on your website (or social media channels) but you actually order your supplier to provide you with the customized item only after buyers purchase it.
What products can you sell with a POD model?
- T-shirts, sweatshirts, hoodies
- Tote bags
- Phone cases
- Any other product that you can put a custom print on.
Here’s how you can make your POD business work:
- Step 1 – choose and design your product using Printify and download mockups
- Step 2 – set up your Etsy store to sell your products to a global audience
11. Buy an Existing Business
(Profit potential: unlimited)
Buying an existing business gives you the freedom to choose any business you’re passionate about.
Moreover, established businesses already have a customer base and you know exactly how much profit you can expect rather than setting up a new business, investing your time and money hoping it will work one day.
However, established businesses require much higher investing capital than starting up a new one. The amount an existing business could cost varies from business to business – starting from tens of thousands finishing with a few millions dollars.
- How Much You Can Expect to Pay for Businesses?
- Is It Worth Buying Businesses Instead of Building from Scratch?
- 15 Best Platforms to Find Business For Sales
- How Many Businesses Fail within the First 2 Years?
12. Affiliate Marketing
(Revenue share: 5% – 30%)
Affiliate marketing is a business model where you refer brands in exchange for a 5% to 30% revenue share for each new customer they get through your referral.
Alternatively, you can check a footer section of a particular business website that you want to promote and navigate to their ‘Affiliates’ section to see what they offer.
- How to Make Money with Affiliates?
- Why Recurring Commissions are the Best?
- Best Affiliate Programs with Recurring Commissions
- How to Promote Affiliates?
13. Start a YouTube Channel
Starting a YouTube channel is a great option to promote brands and get an affiliate commission.
As a YouTuber you can also get paid by allowing Google Adsense to place Google ads on your videos.
On average, you can earn $300 to $1,500 per 50,000 video views, but make sure to calculate your own earnings in advance.
Another way of monetizing your YouTube channel is to partner or collaborate with brands directly and create content for them or with them.
- How many subscribers & viewers you need to start making money from Youtube ads?
- How much money can you make as a youtuber?
- 5 ways to make money in the Youtube partner program
- 5 other ways to make money on Youtube
14. Start a Blog
(Earning potential: unlimited)
Starting a blog is a great option to get passive income while sharing your expertise to the global audience.
4 main ways to monetize your blog:
- Google Adsense – place a Google Adsense widget on your blog to get paid for showing ads within Google Ads network to your blog readers.
- Affiliate marketing – find affiliate opportunities through platforms like ClickBank and CJ.com and create content around the brands to get on average 5-30% commission for each customer you refer to them.
- Place sponsored posts – as blog content looks more authentic than ads, businesses pay influencers to get their information shared to large audiences.
- Sell your own products or services.
While setting up a blog and creating content takes quite a lot of time, you can automate the processes after your blog becomes popular.
- How to start a blog in 6 easy steps
- Most profitable niches today
- How to make your blog successful
- How to promote your blog
15. Create an Online Course
(Earning potential: up to $150 per purchase)
If you’re passionate about teaching, you could create video lessons and sell them online for unlimited times.
Udemy is an online platform that lets you upload your video courses which has over 35 million students around the world.
There are 13 different categories on Udemy you can create your courses around, including:
- Finance & accounting
- Marketing & sales
- IT & software
- Photography & video
- Health & Fitness
- Personal development
- Office productivity
- Teaching & academics
- How Much Money Can You Make Selling Online Courses?
- What Online Courses Sell Best?
- Steps to Sell An Online Course
- Platforms to Sell an Online Course
16. Advertise on Your Car
(Earning potential: $200 – $400 per month)
Do you have a car that you’re using for your daily commutes? Then placing advertisements on it is a great option when it comes to passive income sources.
The way car advertisements work is you contract with car advertising companies, such as Wrapify, who will transform your car into a moving advertising board. Wrapify will also provide you with campaign opportunities that are available in your area for free.
So all you need to do is continue using your car as usual while you earn extra money.
Here’s how it works:
- Download the Wrapify app on your iPhone or Android and apply for an available campaign in your area
- Wrapify will place an advertising banner on your car
- Activate the Wrapify app when you start your car to track your driving time
- You can earn extra cash just by your usual everyday commute.
- There are no signup or registration fees that you have to pay.
- Once the campaign is over, you can have the wrap taken off and get started with another campaign right away.
- Wrapify doesn’t damage your car. Once the wrap is taken off, your car is in its original condition.
17. Write an eBook/Book
(Earning potential: 50-70% of royalties)
Being a writer has never been easier. Whether you’re an established author or just feeling passionate about writing, you could self-publish your book or an eBook and sell it unlimited times.
Amazon offers Kindle Direct Publishing allowing you to publish your book yourself without even owning an inventory in advance. Rather can print your book on demand, only after the readers purchase it and ship them directly to them.
- Amazon Self-Publishing: What is Kindle Direct Publishing (KDP)?
- KDP Self-Publishing vs. Traditional Publishing
- How Much Does it Cost to Publish with KDP?
- A Step By Step Guide to Amazon Self-Publishing
18. Sell Your Photos
(Earning potential: on average $5 per photo download)
Are you a professional or an amateur photographer? Then you could turn your favorite job into a source of passive income.
19. Create a Software
(Earning potential: depends on the software)
Creating a software could take you time upfront, but as you can sell it unlimited times, your hard work has a potential to turn into a source of passive income.
All you need to create software is an idea. No matter whether you build software yourself or hire a professional software developer if your product brings value to your customers, it can be a lucrative source of income.
For example, you could create a plug-in for WordPress users that allows them to accept bookings and manage their calendars.
Building it would definitely take time, but once it’s published on the plug-in marketplace, there’s nothing much to do than enjoy the sales pouring in.
20. Create an App
(Potential earnings: depends on your app)
Whether you own a smartphone or a tablet, you probably have a bunch of apps downloaded.
But have you ever gotten an idea about a new app? Or maybe a game?
If you are an app developer you could easily create an app that you could upload on an app store and get residual income.
However, don’t worry if you don’t have any technical skills to build an app yourself. You can always hire an app developer, or partner with them to turn your app idea into reality.
A great example of an app that generates passive income is Preview – an app where Instagram creators can plan their content visually and see how their feed would look like.
As an app like this becomes popular and sales take off, it turns into a source of passive income.
21. Get Fit
(Win up to $10,000 for completing a challenge)
While getting fit in its root doesn’t sound passive at all, you can still call it a passive income if you’re living an active lifestyle anyways.
Or if you want to start getting in shape but lacking that tiny little motivation that’s holding you back.
There are apps like HealthyWage that reward you for setting and pursuing fitness goals.
22. Share Internet
(Earning potential: $10/hour)
Honeygain lets you share your internet data to businesses for research purposes that helps them improve their digital presence.
When you share your internet data to companies using Honeygain, they can access the web from your location to test how their content appears in different locations.
And because your internet data is valuable to them, they will pay you for just installing the app and continuing to use your devices as you do anyway.