23 Great Passive Income Ideas Made Easy
Warren Buffet: “If you don’t find a way to make money while you sleep, you are going to
work until you die.”
Passive income is by far my favourite way to make money. There are several ways to earn passive income and the internet has made it so much easier. But all passive income ideas are created different. All you have to do is choose one that works best for you.
Before we go anywhere, I want to let you in
on some passive income ideas that you might have heard of elsewhere that you
won’t find here. Like I said, not all passive income ideas are created equal. I
have come across some hustles people call passive income ideas that are not so
passive and so they either turn out to be a job (which defeats the whole idea),
or they bring poor returns.
An example of this is P2P lending. I
genuinely like P2P lending but only for investing purposes. That is why I
cringe every time I hear someone talk of P2P lending as a passive income idea. In
my humble but honest opinion, this is not true. Here is why. P2P lending is
built on a money growing model of investing and not for money making. So while
it can grow your money better than any bank savings account can ever do, it
won’t make you a monthly income to live by. The only way it might do so is by
investing thousands using high interest rates found in the platforms and these
high interest rates sometimes come with a higher level of risk.
That is why here I focus strictly on the
ideas that actually make you money relatively passively. I’ve chosen to give
you the actual, no BS passive income ideas that really work instead of wasting
time on ideas that don’t really work just to make this list bigger.
Now that that’s out of the way, let’s get
to business. You want to know what really works? Read on and find out. But first,
let’s define what passive income is.
So
what is Passive Income?
Passive
income can be defined as recurring income that is received with a little to no
effort on your part. We all know you can’t really make any money without at
least putting in work or investing money up front, otherwise that would sound a
lot like a scam. And I really hate scams by the way. So to create passive
income you either initially invest money or put in some work to create a
product or start a business up front. The return on your investments or the
profits that you get from your business or from selling your product, if the
money keeps rolling in, and with zero to a minimum effort from you, that money
becomes what is called passive income.
An example
of passive income, probably the most common there is, is owning a real estate property
and renting it out to get a monthly rental. It meets all the conditions needed
for passive income because you continue to receive money monthly without doing
much, if anything at all.
The idea
behind passive income is to make money while working significantly less than
the traditional 9 to 5 or while not working altogether. This means you will
have enough money and yet still more time to be with the people you love and to
do the things that matter the most to you. If the thing that matters most to you is work, then it’s a win-win
because you get paid from your passive income business or investment while you
do the work that you love.
There are three main ways to make passive
income and these are; investing, putting in work upfront and creative easy
passive income. Let me explain how each of these work and how they make you
money on autopilot.
Investing For Passive Income
But before you get too excited, you must
know that most investments are not so great for passive income. This is because
they use a money growing model which is not the goal here. With passive income
you’re trying to make money and not grow it. You should be careful about this
when you invest for passive income. You should know your returns well and try
not to create income with a money growing model. You end up increasing your
risk and the road often leads to regret.
But you can still grow your money and make
money at the same time through investing. The stock market is one such
investment that can grow your money while making you money from time to time in
the form of dividends.
These days you don’t really need a load of
money to start investing. Anyone can invest these days. But if you want to make
a pretty decent amount of money frequently from investing, you might require
some capital.
If you are new to investing I encourage you
to learn first. And the best way to do this is to do it yourself so start small
and grow in experience and confidence before you go big just to get your feet
wet. I say this because I know investing can be a risky and stressful business.
Once you get past the learning curve, you have yourself an invaluable skill
that might just change everything. Now let’s look at the different ways you can
make a passive income with investing.
1.
Annuities
For me annuities are just so great for
passive income. This is because they are specifically an investment made for
earning passive income. That’s why they are first on my list. They define what
passive income is all about.
With annuities all you have to do is pay a
sum of money to an insurance company and they pay you back a fixed amount of
money (fixed index annuity) monthly for as long as you live and sometimes well
after you die.
See what I mean! They are an investment
meant give you a steady flow of passive income. It sounds so simple
theoretically I know but unfortunately annuities can actually be more complex
than they appear. They are of different types and fixed index annuities are
just one of them. The idea, however, is still the same. I pay you so you pay me,
only smaller amounts and over a longer length of time.
2.
Real Estate
Not everyone can afford to have a home of
their own and yet we all need somewhere to stay, right. This is the need that
has to be fulfilled when it comes to real estate investing. Provide someone
with a place to stay and make yourself money monthly in rentals. The same
theory applies with commercial rental properties but with a few small
differences here and there. I’m sure you get the idea.
There are different ways to approach real
estate. You could buy and rent out a family home and use the monthly rent money
to pay for the mortgage and other expenses while you keep the rest of the rent
money as profit.
You could go big time and rent out
apartments or commercial property. The idea here is still the same but it just
requires more money and it makes you even more. Buy a bigger property, rent out
the property, use the rent to pay the mortgage and keep the rest. It’s really that
simple.
We all know every investment comes with its
risks. Besides, sometimes you encounter tenants who don’t pay on time. Other
times you have to deal with damages and maintenance to your property from time
to time. So it’s not all sunshine and rainbows in real estate investing, but
it’s worth the trouble because there are simple solutions around these
problems.
3. Real
Estate Investment Trusts
If you are interested in real estate, but
you dislike managing real estate properties, then this is probably the right
investment for you.
In Real Estate Investment Trusts (REIT’s), you
invest with a company that owns and rents out rental properties and you get a
percentage from the rentals the company collects every month from these
properties. Here, all you have to do is invest just enough money to get a good
monthly return while the firm manages all the properties for you and come month
end, it’s pay time.
I personally like the REIT model because
it’s simple and completely automated. It’s
really my idea of what passive income should be like.
4. Dividend
Paying Stocks
With stocks you buy the shares of a company
through a stock brokerage firm. Because you own shares in that company, it
means you are a shareholder of that company. This also means if the value of
the company increases so does your money. But that’s just how you grow your
money not how you get paid.
The passive income part comes from dividends.
These are the quarterly earnings that you get from the company. Not all
companies pay dividends so you need to lookout for this when investing in the
stock market if your goal is passive income.
It’s not always easy when you invest in the
stock market. There is a risk of losing money. A stock only grows your money
and pays you well if the stock price is going up. The opposite is true with
loses if the value of the stocks goes down. Also, you might need to invest a
lot of money to see any real returns.
However when you take all the necessary
precautions and you invest with a good strategy in a good company, you can make
quite a sum of money in passive income with stocks. Just remember to start
small and learn first before going all in.
5.
Investing in an Online Business
Since coming up with ideas is hard and
growing a business from the ground up is harder, not to mention riskier, buying
a business that’s already making profits (proof that the model already works) seems
like a better and safer investment.
Most online businesses are great for
passive income because they don’t run like brick and mortar businesses that
have big operational costs and staff that needs to be supervised and paid. Most
online businesses are completely automated and only require your attention for
a few minutes or hours daily or even monthly.
Buying an online business is easier than
most people might think. There are several websites where you can find online
businesses for sale at fair pricing. All you have to do is find a business model
that works for you, buy the website and you are already a business person of
the year contender.
Just be sure that your business is one that
is has a model that doesn’t require a lot of work and time from you in the long
run. Remember, it’s not just income you’re after here; you also want it to be
as passive as it can be.
6.
Crowdfunded Real Estate
Crowdfunding for real estate is an
investment whereby investors (that’s you) pool their money together to buy a
property, which is usually commercial real estate. There are three parties
involved in this type of investing. There is the sponsor, the platform and the
investor (you again).
The sponsor (an individual or company) is
an experienced investor who wants to buy a property but they are short on money
and that’s where you the investor comes in. You provide the remaining capital
needed through a Crowdfunding platform like CrowdStreet. When the money is
successfully raised and the purchase is made, you get your return when the
property is sold at a profit or when it’s rented out and you get a share of the
monthly rent money.
Statistics in this industry have been really
interesting and 82% of investors report to have exceeded their target returns
according to CrowdStreet.
7.
Saving For Retirement
The thing that makes saving for retirement
worth it is usually that it is a very low to no risk investment and the savings
use compounded interest so when you finally retire, the returns are potentially
huge. It’s possible to actually have as much as a million dollars in your
account depending of course with how much you contributed monthly and for how
long.
The most popular of these accounts are your
401k or IRA if you’re a US citizen (they have other names in different
countries across the world).
The downside of saving for retirement, for
me is that, with most retirement accounts, you cannot pull or use the money
until you are well in your 50’s or until you retire. It’s the ultimate
definition of work now and enjoy later.
Because, like I said, they are a work now
and enjoy later kind of investment, I don’t really recommend saving for
retirement as a great passive income idea. I think it’s best to try other
passive income ideas that produce results in the near future while you still
save for retirement. That way it’s a win-win for both the now and the later.
Passive Income by Working Upfront
Most of the ideas here are low budget and
they don’t require much cash up front but a lot more work and time to start
making any real money from them. The ideas in this category will take hours of
your time to make them happen. If you want to make any money from these ideas
you have to be willing to put in the work and to provide enough value that
people can actually pay for.
The good news is that you only put in most
of that work for a few months and the money comes rolling in on autopilot after
that. Sometimes you have to keep working but usually it’s only for a few hours a
week (usually less than 10 hours weekly) to maintain the business.
Either way you still make passive income at
the end of the day, which is what we’re after here. There are several ways to
make money in this way and here are some ideas that you can imitate.
8.
Start a Blog
For years I was curious on why people start
blogging websites. I understood that they give a lot of valuable information to
their visitors but what I didn’t understand was why bloggers went through so
much trouble just to help people. I did my research and now I understand why
they go through all that trouble. Blogs make you money and a lot of money too
if done right. There are quite a number of blogs that make five and six figures
a month. That is really great but it’s not the best part. The best part is that
blogs, like most online businesses are automated. What that means is that most
of that money is all passive income.
Blogs make money mainly through selling
products, advertising, affiliate marketing, membership subscriptions and selling
online courses. With the help of hosting companies like Bluehost and Wordpress,
creating a blogging website these days is very easy. So easy in fact that it can
be done in a matter of minutes and you don’t even need any tech knowledge to do
it and operate it.
If you have valuable information on a topic
that you’re passionate about or that you know really well, then starting a blog
and monetizing it with any or all of the ways mentioned above could be the
right path for you to passive income. If you focus on giving people the value
that they are looking for when they visit your site through your content or
products, with a little patience, you could make a lot of passive income
through blogging.
9.
Write an eBook
Are you an expert in a specific field? Do
you feel like you have valuable information that people would pay for in that
specific field? Writing an eBook could be your way to making a good, solid
passive income for yourself.
Writing an eBook is easier and way cheaper
than writing physical books so don’t brush this idea off yet. You don’t have to
worry about publishing costs, inventory or distribution. You write one book and
it can be sold and distributed easily online. Thank technology for this.
If you have worked in a field that most
people only dream of or find difficult to enter and if you happen to know just
enough about that field to help people and you are sure that people would pay
to know what you know. Then all you have to do is write a 50 or more page eBook
in that field and sell it online on websites like Amazon’s kindle and Clickbank.
You can also start a blog of your own
writing similar information while advertising and promoting your eBook. A lot
of internet marketers write eBooks too in their area of expertise.
10.
Do Affiliate Marketing
Affiliate marketing is selling other
people’s products for a commission. Affiliate marketers sell other people’s
products through writing and making videos or podcasts among other ways to
promote these products with a goal to make people buy the products through
their unique affiliate links.
When a customer buys the product, the
affiliate marketer gets a commission from the seller which can be anything from
3% to 75%.
Affiliate marketing works best when it’s on
a website, preferably a blog. That way you don’t have to spam people with
affiliate links to make a sale. Using a Blog to write or YouTube for videos, you
can convince a potential customer to buy a product explaining how and why you
think it’s a useful product.
Also, this way it becomes passive income
because you can write a post promoting a product today, and still make money
years later if people visit your post or video and make a purchase through your
affiliate link.
11.
Create an Online Course
If you think you have valuable
instruct-able lessons to offer the world and the world is willing to pay for it,
then you could create an eCourse. This is similar to the eBook idea because you
need to be an expert in that area and you need to provide purely valuable
information that people are willing to pull their wallet and pay for. But here,
you do it a little differently.
An eCourse is more instructional than an
eBook, and unlike an eBook which usually serves to inform, an eCourse is more
like a how to guide that teaches how to do something. It’s more action
oriented.
An eCourse can make you thousands monthly depending
on how experienced you are in that area and how good your course is. Internet
marketers charge anything from a few hundred to thousands of dollars for their
eCourses like how to do affiliate marketing and how to do email marketing.
eCourses can be used on a Blog like I
mentioned earlier, or they can be sold on eCourse websites like Udemy or
ClickBank.
An eCourse is better than a traditional
face to face course because you have to create the content only once and yet
teach millions of people with no additions or adjustments to the course whatsoever.
You don’t have to keep meeting people and addressing them, which is laborious.
That’s how an eCourse gives you passive income.
You just make and promote your product once
and the money rolls in automatically after that.
12.
Make an App
Nearly everyone has a Smartphone now, from
the young to adults and even older people are getting in the game too.
Applications are so popular these days there are apps for nearly anything that
we do on a daily basis from social Apps, to sports, productivity, games etc. There
are literally millions of Apps in the world right now, some more popular than
others, flooded on market places like Google play store or the Microsoft
Windows store. This shows how big the App market has grown over the years and
that’s an opportunity for you to make passive income.
If you are interested and good in
programming, you can make yourself several hundreds of dollars monthly from
creating a useful App that people can pay for to download or to use. Games are
part of Apps as well, so that’s another way to make money through an App.
13.
Make a How to DVD
This idea is closely related to creating an
eCourse because it is instructional and it teaches people to do something that
you know how to do very well. This idea comes from the understanding that
people are different in how they like to learn and get information. Some people
prefer to read which is perfect for an eBook and an eCourse while others like
to watch video tutorials and these people should be your target audience.
A how to video course works best on fitness
products and other more practical products that are better demonstrated than
explained.
DVD’s are great for 2 main reasons: First,
they work out great for most people because people don’t like or have the
patience to sit and read these days and they prefer to watch and listen
instead. Secondly, the market is not too crowded since most people are shy to
make videos so it makes you stand out a little.
These work out better when you market them
on a website or blog dedicated to the product being sold.
14.
Incorporate Email Marketing To Your Business
Remember that time you went on a website
and it asked you if you wanted to get their newsletter or when they asked you
for your email in exchange for something you wanted to download? If you did
give them your email, you became a member of that website’s email marketing
list. That means you were now on the list of people who receive emails of
information on products that the website is selling.
Email marketing is basically what it sounds
like, get people’s email addresses and send them emails marketing your products
or promoting other people’s products. Does that sound similar to the emails you
received from those websites?
Email marketing works best with a website
and it’s almost impossible to implement without one. This is because before you
start the marketing you need a legit way to capture your target audience’s
emails. This is best done using a website and an email capture plug-in.
Email marketing is a powerful way to make
money because unlike with a website where you have to wait for people to visit,
if you have an email list there is no need to wait for visitors. You already
have your loyal subscribers’ email addresses so you get to tell them what you
want to tell them without having to wait for them to visit you.
Email service providers like Convert kit make
it possible to automatically send emails daily weekly or monthly automatically
and in the order in which you set them to every new subscriber you get in your
mailing list. That way you only write emails once and the rest happens all by itself.
Get the idea? It’s just one of the many other set and leave money making models
you find on the internet. As long as your emails are converting, your income is
completely passive.
15. Sell Physical Items on Amazon Using FBA
This is not one of those buying and reselling
other people’s products at a higher price on Amazon. This is actually selling
your own branded products on Amazon, products like bathroom gadgets, health and
fitness products etc.
To get started on Amazon, you need to
choose a product, create a brand and logo, find a manufacturer, ship in your
product and then set up shop on Amazon. But this is all just a summary; it’s
not as easy as it sounds here. There is a lot of work required up front and it
could take you up to as much as 3 months of hard work just to set up.
The important thing is that once you’re set
up it gets more passive after that. Amazon will literally do all the heavy
lifting for you, thanks to the FBA program. They handle your inventory, take
payment for you and they even handle all the packaging and shipping. All you
have to do is advertise and watch your sales climb, which is actually the easy
part.
This idea is arguably more lucrative and
more hands off than most information products. If you’re into eCommerce, this
might be the perfect idea for you. FBA is your friend.
16.
Start a Drop Shipping Business
Drop shipping is one if the coolest passive
income ideas there are out there. You’ve probably already heard about it and
how it works.
With drop shipping, you resell a product
that is made very cheaply by a company at a higher profitable price and when
someone places an order with you, you get the product shipped to the customer
directly without handling the product.
Starting a drop shipping business is easy
and it does not involve too much work like some of the ideas on this list, the
real work is on handling the orders so the customer get their product delivered
to them which can be easily outsourced to make the business completely passive.
17. Automate Your Business
If you own and run a small business, you
could automate it by outsourcing your business systems for a small fee. This
leaves you free and it makes your business earn you passive income.
You could do this through a process
abbreviated as DEAL.
D – Definition
E – Elimination
A – Automation
L – Liberation
The book 4 hour work week explains in
detail how each stage of this process works. The key of this whole process is
on automation. Outsourcing and automating a business leaves you free to do more
and earn you passive income. If you are an employee, it will show you how to
work fewer hours than you’re working now while being more productive than
before.
18.
Make Music and License It
Are you a talented musician? Then good,
this might just be the passive income idea you’ve been waiting for.
Let me explain how it works. I want to give
you a small listening exercise. The next time you see or hear an advertisement
on TV or on air, I want you to block out whatever is being said and listen closely
to the background sound. It’s usually not a Rihanna or Justin Timberlake or any
other popular song you hear in those ads. So, where do they get that music
from?
This is where you come in. The music in
those ads is made by regular people you meet every day and not the famous
musicians on TV. People who are talented just enough to make good songs and
beats that cooperates need for their advertisements and are willing to spend
money on.
If you a good in producing similar music
you can make yourself some money in passive income by making music and
licensing your music over and over again to anyone who wants to use your songs.
It’s like buying software, only here its music. They buy a licence to use your
song but you retain all the rights to your music and can continue to license it
out. The process is all passive, all you have to do is promote your music and
with a little luck you can become a regular composer for one or more cooperates
who need your music.
You can sell your music on any of the many
sites that sell that type of music, which if you’re a beginner I’d recommend
Audio Jungle or Pond S.
19. Take
Photos and License Them
If you have ever wondered how and where
bloggers and the websites you come across daily get their images, here’s where
they get them.
There are several stock photo websites like
Getty images and Shutterstock where photographers sell licenses to their
images. Website owners go there from time to time to buy these images to make
their content appealing to readers.
If you own a camera and you’re a good
photographer then you could make money off this. The great thing about this
idea is that you don’t have to be a professional photographer to make any money
at this; all you have to do is to just take good enough photographs that you
think are relevant to your target customers and put them up for sale on any of
the websites I’ve just mentioned and others and you’re set.
This idea is just like the one on licensing
music and both are completely passive once you have enough music or pictures on
the stock music and photo websites. You only put in the work when you make the
music and take the photos and the rest of the process is handled by these sites
and all you do is cash in.
20.
License Ideas for Royalties
Are you always coming up with smart ideas
and you feel like they are pretty smart enough to make some money? Then this
one is for you.
Coming up with ideas is hard, but sometimes
it’s not the hardest part especially if you are an idea machine. In fact,
coming up with an idea is just the beginning. You need to act on your idea to
make it a business and make money off of it; otherwise it remains an idea,
right.
Sometimes this implementation process can
be the difficult part because most people don’t have the capital or the
expertise to implement a business idea from scratch. In some cases you simply
don’t want to go through all that trouble or to be a business person at all.
But you still have a great business idea
here, should you just let it slide? No, you don’t have to just let go of your
idea. You can make yourself some sweet passive income by licensing your idea
for royalties with a company that’s already in business in the same market as
your business idea.
For example, if you have an idea for a
product that you think could be revolutionary in the bathroom or toilet space,
you could contact a company that manufactures and distributes bathroom products
like Bathroom Bizarre and pitch your product to them. If they like your idea,
you partner with the company and they will manufacture and distribute your
product idea to the marketplace.
They handle the business part of things and
you get a royalty deal. An example of a royalty deal is like this; you get $3
for every unit sold or you get 5% of the profits made.
This is completely passive and it’s all off
of an idea. How cool is that!
Easy and Creative Passive Income Ideas
When it comes to making money, sometimes you
have to challenge the conventional and get creative. You simply need to think
outside the box. You might be surprised by some of the things that could make you
money these days.
Maybe it’s a lot more popular now but when
it first came out would you have believed there is an App that actually pays
you for not using your phone while driving? Did you know that you can “Uber”
your house (kind of) to tourists?
You want to know how? Read on, I have
compiled a few, easy and creative ways for you to make a passive income.
21.
List Your House on Airbnb
Airbnb is like Uber but for your house.
It’s a company that will make you money using your extra house space, by linking
you to tourists who are looking for a place to stay through their website.
All you have to do is redesign your rooms
to look cozier. You can do this by hiring a professional designer or by simply
buying a home design magazine and imitating some designs. You don’t really have
to be an expert at it. Then you have to register your house on Airbnb and list
it on their website. Here tourists seeking accommodation will find you.
If you live in an area that’s high on
tourist activity this could be a lucrative source of income for you. Some
people living in high tourist activity cities make several thousands monthly
through Airbnb.
22.
Get Paid for Not Using Your Phone While Driving
The App OnMyWay will pay you for every mile
you drive without using your phone. Once you have the App up and running, all
you have to do is lock your phone screen and drive at over 10 miles per hour
for it to start working in the background.
The money you get from using this App will
only be sensible if you drive long distances. For example if you’re an
international truck driver kind of long distances. At $0.05 per mile the pay is
not so great, you’ll need to drive 20 miles just to get a dollar. This is why
you want to be a long distance driver to make a significant amount here, but
either way it’s still passive income if you already drive long distances so it
counts.
23. Passive
Uber Driving
Yes I know there is nothing passive about
driving an Uber, but there is a way to make it work. Consider this; let’s say
you drive several Kilometres (Maybe 50km or more) to and from work daily. If
you leverage this to your advantage and use Uber to drive someone to your
destination every time you leave home for work and back, then it becomes
passive income.
If you were going to drive to a place
anyway you might as well make yourself a buck or two in the process. This way
it becomes passive income (more or less).
Dream Passive Income does not give financial, tax or investment services and advice. All the information you see here is produced and presented with no consideration of the readers risk tolerance, financial circumstances and objectives. The information might not be suitable for all readers and or investors. Past performance is not indicative of future results. Investing involves risk and possible losses.
Dream Passive Income does not give financial, tax or investment services and advice. All the information you see here is produced and presented with no consideration of the readers risk tolerance, financial circumstances and objectives. The information might not be suitable for all readers and or investors. Past performance is not indicative of future results. Investing involves risk and possible losses.
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