Best Passive Income Ideas: 23 Ways To Build Wealth In 2023
Before you look into the best passive income ideas, make sure you understand what passive income is.
A passive income stream is a cash flow of unearned income that entails little to no effort to sustain. However, to start generating passive income, you must invest money or time (or both in most cases).
Passive income doesn’t come from the salary your nine-to-five job provides – it’s not a result of your side hustle or money-making hobby either.
In most cases, passive income grows from investment or the development of business. As you can guess, it takes considerable time for such an income stream to become passive.
Having multiple streams of passive income can help you achieve financial freedom, flexibility, and balance in your day-to-day life.
Today, I’ll break down 23 ideas for generating passive income you can use without leaving your high-paying full-time job.
This post contains affiliate links – check my disclosure for more info.
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What Is Passive Income?
Unfortunately, many people still believe that passive income is receiving free money in exchange for nothing. If you’re one of these people, now is the time to burst your babble:
While passive income is money that doesn’t require you to keep actively working for it, you’ll still have to put upfront effort and work to develop it.
Let’s use an example to clarify the subject of passive income further:
The money you get from your salary can’t be a passive income become you work actively each day to receive that paycheck at the end of the month. But the money you’ll receive from investments will be passive income since you don’t have to keep working to continue to get it.
Again, you’ll have to work to develop a stream of income until it becomes passive. Also, you’ll need to put in additional effort to maintain it.
At a certain point, your passive income stream will start bringing in money repeatedly and allow you to earn cash while you sleep.
Best Beginner Passive Income Ideas
1) Dividend Stocks
A dividend stock is an investment that offers shareholders a regular stream of income through periodic payments. When a company earns profits, it can distribute a portion of those earnings to its shareholders as dividends.
Investing in dividend stocks is one of the oldest ways to build a passive income stream. There are a couple of things you must know before getting into it:
Firstly, take plenty of time to do your research. Once you begin asking for advice, you’ll hear plenty of opinions. Don’t start investing until you feel confident you know what you’re doing.
Secondly, the larger amount of money you invest, the larger your dividend checks will be.
Lastly, you have to open an account on the best online brokerage you can find.
It’s important to note that dividend payments are not guaranteed and can be influenced by a company’s financial performance and management decisions.
Investors should carefully research the companies they choose to invest in and consider their individual financial goals and risk tolerance before including dividend stocks in their portfolios.
2) Rental Income
Next on my list of best passive income ideas is rental income.
By all means, rental income is one of the most reliable sources of passive income. However, earning cash passively by investing in rental properties requires work and money.
Here are a couple of essential factors to consider before you start investing in rental properties:
- What is the total cost and expenses of the property?
- Do you know the exact return on your investment?
- How huge are the risks?
While rental income can become a passive income stream, it does require careful planning, property management, and adherence to local laws and regulations.
Additionally, there might be occasional challenges, such as tenant turnovers, maintenance issues, or market fluctuations.
You’ll have to carefully calculate your investment in rental properties if you don’t want to risk losing that entire investment.
3) Fix A Property And Rent It Out
Similarly to the previous idea, fixing and renting properties comes with its own challenges. Let’s discuss what you’re facing here, shall we?
Basically, fixing property and renting it is a house flipping without the selling part.
As you already know, house flipping is when you buy a house, fix it, and sell it for a profit. That is a smart approach to building a passive income.
Due to the economic situation around the world currently, putting a property for sale might not be the most profitable move you can make. However, renting it most definitely is.
Most people will probably think twice before buying a house now, but renting one is a different game, so why not take advantage of that? Find a property that could use some repair, fix it, and rent it for a decent price.
Making money this way will build you a substantial stream of passive income.
Plus, you can always sell that property when the market recovers if that’s your end goal.
4) Rent Out Your Home Short-Term
How do you feel about renting your home short-term?
If you plan to be out of town for a few months or go on a long vacation, renting your home out is an excellent way to make money passively.
After all, you won’t be using your home for a while. Is there a reason not to monetize it and earn money while you’re gone?
Nowadays, numerous websites will assist you with renting out your home for a short time. You’re in a position to set the rental terms yourself since it’s your home.
On the bright side, renting out your home short-term will bring you money without putting in any effort or extra work.
However, not everyone enjoys the idea of strangers living in their house – tenants might destroy or damage your home or its furniture.
Rent Out Your Spare Room
Do you have a spare room you’re not actively using?
Whether you have a spare bedroom or a separate living space, turning it into a rental can provide a steady stream of money. After all, renting out a room in your home is a lucrative way to earn extra income fast.
Airbnb will connect you with individuals who need room to stay in for a short time. More often than not, Airbnbs are cheaper than hotels, and most people prefer them.
Make sure the room you plan to rent out is in excellent condition. Don’t skip renovating or furnishing it further if necessary before you list it on the marketplace.
5) Peer-To-Peer Lending
Peer-to-peer lending (also known as P2P) is a revolutionary financial model that facilitates direct borrowing and lending between individuals without the traditional intermediation of financial institutions.
Borrowers can request loans for various purposes through online forms. Meanwhile, individual investors can fund these loans in small increments, diversifying their investments across multiple borrowers.
Lending money to others via P2P will earn you an income in the form of interest.
Using peer-to-peer lending sites will connect you with people willing to pay you the interest rate you’ll agree upon.
With that said, P2P works in a simple way – you lend cash to a person in need, and the site will collect the payment.
This way, you’ll lower the risk of losing your money to people who are late or even trying to escape to pay you back altogether. Still, the risk factor exists, and you should consider it carefully.
Usually, participating in peer-to-peer lending will bring up to a 10% return on your investment.
6) Earn Passive Income As A Silent Business Partner
Even though it’s not hugely popular, becoming a silent partner in a business is one of the best passive income ideas, and here is why:
Being a silent business part can be a lucrative venture and an excellent way to generate wealth.
As a silent partner, you invest capital in a business without actively participating in its day-to-day operations. Instead, you provide financial support and share the profits based on your agreed-upon ownership percentage.
Such an arrangement allows you to benefit from the success of the business without the time and effort required of active management. In other words, you don’t have to do any work that goes into creating a business from zero.
It’s crucial to carefully select the businesses you partner with and have an in-depth partnership agreement that outlines each party’s rights and responsibilities.
A piece of advice – check the numbers well before getting into this passive income idea.
Everything that will lower the risk and your financial exposure is worth the effort.
Buy A Local Business
Speaking of being a silent partner in a business, maybe you should think about buying a local business too:
Buying a local business as a source of passive income can provide financial security and freedom, but you’ll have to approach it as a long-term investment.
When acquiring a local business, you are essentially investing in an established operation with existing customer bases, products, and processes. The key to making it a passive income source lies in finding a business that already runs smoothly and requires minimal day-to-day involvement.
Firstly, research and choose a business that aligns with your interests, expertise, and financial goals. Then analyze its financial performance, market position, and growth potential. Next, hire a professional business broker or consultant to assist with valuations and negotiations.
Once you acquire the business, consider implementing systems and delegating responsibilities to competent managers or employees to handle the daily operations.
By hiring and training a reliable team, you can reduce your direct involvement and ensure the business runs efficiently.
7) Start A Blog And Monetize It
I highly doubt that starting a blog doesn’t exist in every article about the best passive income ideas:
Blogging as a way to build passive income works, no matter how hard the naysayers try to convince you otherwise.
Sure, it takes time and work to develop a successful blog that will earn you money for years. Once you manage to do that, though, your website will bring you passive income in many ways.
Some of these ways are:
- Promoting products via affiliate marketing
- Publishing sponsored content
- Selling your products/services
- Running ads
Reaching blogging success faster depends on how much time you can commit to your site and how hard you work on it.
Blogging is the perfect online career for anyone dreaming of a flexible schedule on their own terms.
You don’t need coding or graphic design skills to create a blog. Concentrate on choosing a web hosting company that will ensure fast load time – I recommend BigScoots ( affordable plans, outstanding customer support).
Buy And Sell Websites
What if you want to get into the blogging business without creating a site yourself?
Well, then you can buy an already-established blog that brings sales, keep it, or resell it for a profit.
Earning passive income through buying and selling websites can become a lucrative online business. Such a business is known as website flipping.
As a website flipper, you identify undervalued or underperforming websites, purchase them at a reasonable price, and then improve their content, design, and search engine optimization (SEO) to enhance their value.
Once you increase the website’s value, you can list it on various website marketplaces or auction platforms for a higher price than originally paid.
8) Affiliate Marketing
Affiliate marketing is how I was able to quit my job and earn a full-time income online so that business model is one of the best passive income ideas in my eyes.
In short, affiliate marketing is making money by promoting other people’s products and services. Affiliates earn commissions when readers buy something through their affiliate links.
But how can affiliate marketing be a source of passive income if you have to create and promote content in order to make money?
You can build a passive income stream through affiliate marketing, and that’s possible thanks to affiliate programs that pay recurring commissions.
A recurring affiliate program will keep paying you after you make the initial sale. In other words, you can make an affiliate sale once and keep earning money for as long as the buyer keeps using the product or service.
Bloggers with steady organic traffic to pages with affiliate links will earn money without actively working for it.
Once your traffic is stable and you don’t have to work actively on it, you’ll see how affiliate marketing is earning you money passively.
Do you want to get into affiliate marketing? Consider joining this teaching platform that will start training you as an affiliate marketer for free.
9) Sell Digital Products
Selling digital products is a fantastic way to generate passive income and create a scalable online business.
To clarify, digital products are assets clients can’t get in a physical form. For example, a digital product can be a template, software, graphic, PDF, or even music.
Listing digital products for sale is a business with incredible income potential and high-profit margins. After all, you’ll create your digital product once and keep selling it repeatedly without physical inventory or shipping.
Once you develop your digital products and set up a user-friendly online platform, the sales process can run on autopilot, reaching a global audience 24/7.
More importantly, creating a digital product doesn’t have to be a daunting task to complete. Platforms like Canva will allow you to create digital products for free.
Implement effective marketing strategies, like content marketing, social media, and email campaigns, to drive traffic to your digital products and boost sales.
Additionally, offering affiliate programs can incentivize others to promote your products for a commission, further expanding your revenue streams.
10) Create And Sell An Online Course
Quite frankly, online courses are digital products at their core – as such, they belong to the previous category of best passive income ideas. However, creating and selling an online course deserves special attention:
Anyone can create an audio or video online course and sell it to a wide audience through platforms like Udemy or SkillShare.
With the increasing popularity of e-learning and the accessibility of online platforms, creating and selling courses is easier than ever nowadays.
I have to say that creating a successful online course takes time and effort, especially in the initial stages.
But once you set your online course up and it starts to gain traction, it can become an excellent source of passive income, enabling you to earn money while reaching and helping students worldwide.
Creating an online course is a process that goes through several stages. These stages are identifying your expertise, defying your target audience, choosing a platform, and outlining and creating your content.
11) Create An App
Betting on app development as a potentially passive income stream will work but only for people with tech skills on a professional level.
Are you one of these people? If you’re, creating your app should be on the top of your to-do list and your number one priority:
An app can generate a massive amount of passive income if that app meets the needs of your target audience and provides value.
One of the best things about building an app is that the market for apps is enormous. There is plenty of space to conquer it if your app attracts a large crowd.
On the downside, creating a successful app requires time, effort, and ongoing maintenance. Additionally, the app market is highly competitive, so your app’s success will depend on its value and your ability to market it.
Plus, there are many details you must consider while developing your app.
For example, if your app collects user data, make sure the app is compliant with privacy laws. And these laws are not the same everywhere.
How about alternative ways to make money with apps? Check the ones below:
12) Write an eBook
By all means, not everyone is a best-selling author material or can become one through persistence and effort.
Be that as it may, everyone with specific skills to teach and expertise on a topic can create and sell an eBook to earn passive income.
These days, self-publishing is one of the hottest fields you can get into:
You’ll be taking advantage of the global distribution platforms like Amazon provide and the low cost of publishing.
Contrary to popular belief, publishing a book is not as difficult as you may think.
First thing first, you need to write and edit your eBook. Giving it a professional cover and overall look is a must if you want the eBook to sell well.
I suggest getting a professional tool to help you through the process of creating your eBook. Sqribble is such a tool – using it will allow you to create stunning eBooks in minutes.
Once your book is ready to roll, you can upload it to platforms like Amazon Kindle Direct Publishing.
Pro Tip: You might want to invest in K Money Mastery (read the full review here). That course is affordable and will teach you everything about making money with Kindle Publishing.
13) Sell Photography Online
Say what you will, but selling photography online is one of the best passive income ideas for anyone who is more than good with the camera:
While selling stock photos won’t be a passive business at first, it can become one if you start selling the same photos repeatedly. Achieving that will be possible if you join forces with platforms like Shutterstock or Getty Images.
Assuming you decide to work with any of these platforms, you’ll have to wait until they approve you and license your images for usage by people that will download them.
When that happens, the platform you work with will pay you each time someone downloads an image of yours to use.
Bloggers, business owners, and online magazines need high-quality images for their content. In other words, don’t worry about not having a large enough pool of potential clients.
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14) Rent Out Your Car
Renting out your car can be a smart way to earn extra money while making the most of an asset you don’t actively use.
Feel free to list your vehicle on peer-to-peer car-sharing platforms and connect with potential renters who need temporary transportation. This arrangement allows you to set your rental rates, schedule availability, and choose suitable renters.
It’s crucial to ensure that your insurance coverage and local regulations are to protect yourself and your vehicle before renting it out.
As long as you manage the rental process responsibly and provide a well-maintained car, you can easily turn your vehicle into a passive income source.
Platforms like Turo will allow you to list your car for rent. What I like the most about Turo is that it will protect your vehicle from possible damage, and the company provides customer support and road assistance.
You’ll earn over 70% of every trip and get the money directly into your PayPal account.
Rent Out Your Parking Space
Until we’re still on the subject of renting vehicles, let’s discuss renting out parking spaces as well:
People who own parking spaces they don’t use can make money passively by renting these spaces out.
Listing your parking space for rent is one of the best passive income ideas to generate cash flow without any effort.
An Important Info:
Those of you who own a larger parking space area can double and even triple the rental income since that space can fit a couple of cars.
Advertise On Your Car
Car wrap advertising is a marketing strategy hundreds of companies rely on to enhance their advertising campaigns.
Do you want to earn money by transforming your vehicle into a moving billboard? Why wouldn’t you, since that’s one of the easiest ways to generate passive income?
Wrapping your car with ads brings around $200 a month on average. However, many people manage to earn up to $1,000.
Check the best companies that will pay you to use your car for advertising.
15) Start A Dropshipping Store
No one can argue that dropshipping is one of the best passive income ideas – many owners of dropshipping stores earn over $100,000 annually.
Dropshipping is a business that involves selling products online without the need to maintain inventory or handle shipping logistics directly. With minimal upfront investment and lower operational costs, it offers a low-risk entry into the e-commerce landscape.
Doing dropshipping for a living has many advantages. For instance, dropshipping is the type of business where your supplier will handle most of the work activities (manufacturing, packaging, etc.).
Another perk of doing dropshipping is that you choose the prices of the products you’ll sell in your online store. Subsequently, dropshipping gives you full control of your profit margins.
Most importantly, dropshipping is one of the businesses you can start with zero investment:
Shopify is the number one platform for building online shops in the world. If you decide to join Shopify, you can launch your store without paying anything – the platform offers a free trial to all its users.
16) Create A Print-On-Demand Store
Creating a print-on-demand store offers a fantastic opportunity for creative entrepreneurs and artists to turn their designs into tangible products without the burden of upfront inventory costs.
Print-On-Demand (POD) is a business model that will allow you to curate a unique collection of custom-designed merchandise, including apparel, accessories, home decor, and more.
POD involves collaborating with print-on-demand providers who handle the production and fulfillment of orders, allowing store owners to focus on design and marketing efforts.
Getting into the POD business will help you build a passive income stream because you’ll create a design once and sell it repeatedly on different products.
Some of the best-selling items are T-shirts, coffee mugs, and magnets. Actually, there is a market for almost any item you want to sell.
Owning a Print-On-Demand store will let you reach a global audience of potential customers.
17) Sell Designs Online
Platforms like Creative Market and 99designs will allow anyone to earn passive income by selling their designs.
Logos, templates, illustrations, and fonts are designs that sell very well online these days.
Success in selling designs online requires building a brand, engaging with the target audience, and consistently producing high-quality, appealing designs.
Marketing, networking, and leveraging social media platforms are essential for reaching a broader customer base.
I should say that some places you can join to sell your designs will have to approve you before you can join them. Do your own research and decide which platform is the best fit.
18) Sell Handmade Goods
By all means, selling handmade goods offers a fulfilling and unique entrepreneurial journey for crafters and artisans. Whether it’s handcrafted jewelry, ceramics, textiles, or other creations, the process allows individuals to showcase their creativity and passion for their craft.
Crafters can set up their own online stores or list their products on platforms like Etsy, ArtFire, or Shopify. I suggest using Shopify since selling handmade goods in your store will reduce the fees for each sale.
Personalization and attention to detail are key factors that attract customers seeking one-of-a-kind items.
Social media, blogging, and word-of-mouth play crucial roles in building a loyal customer base.
There is a downside to starting a business that deals with selling handmade crafts, such as the upfront investment. But if you work hard to build up your brand, you’ll reach more people and sell more goods with time – that’s why I see offering handmade items for sale as one of the best passive income ideas!
Related Read: 50 Things You Can Sell To Make Money Easily
19) Start A YouTube Channel
As most of you probably already know, YouTube is the second biggest search engine in the world – the platform attracts millions of users daily.
It doesn’t take a genius to realize that YouTube provides excellent money-making opportunities – YouTubers earn thousands of dollars monthly through ad placement, affiliate marketing, and sponsored content.
Here are a few pointers to keep in mind before you start your YouTube channel:
Building a successful YouTube channel requires finding a popular topic and becoming an expert. Once you do that, you’ll have to upload content consistently on the platform.
Are you uncomfortable showing your face or using your voice when creating videos? I have a solution for you, and that is Speechelo.
Speechelo is a text-to-speech tool that will create naturally sounding voiceovers for your YouTube content – the tool comes at an affordable price and is quite easy to use.
20) Earn Money Passively While Shopping Online
Earning money passively while shopping online is possible through cashback and rewards programs. Several websites and apps offer cashback on purchases made through their platforms, such as Swagbucks, Rakuten, and My Points.
Once you sign up and shop through these platforms, you’ll earn a percentage of your back as cash rewards, gift cards, or points.
It’s worth mentioning that some credit cards offer cashback or rewards on specific categories of purchases, such as groceries, gas, or travel. By using these credit cards for everyday expenses and paying off the balance monthly, shoppers can accumulate rewards without incurring interest charges.
Of course, you should spend more than you normally do on shopping only to earn cashback rewards!
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Alternative Best Passive Income Ideas To Consider
21) Make Money Passively On Pinterest Without A Blog
Pinterest is a popular visual search engine millions of people use daily. Uploading pins is how users will discover your content.
There is no need to start a blog to make money on Pinterest. Instead, you can create click-worthy pins that will bring you affiliate sales.
An affiliate pin is a graphic that leads to an affiliate offer you promote. Choose valuable products, design pins that will get you the click, and you’ll start earning affiliate commissions.
I have to say that making money on Pinterest is a semi-passive income idea – you’ll have to put in the effort to create and promote your affiliate pins.
22) Publish Sponsored Posts On Social Media
Do you have a large following on Social Media Networks like Tik Tok or Instagram? Assuming some of you do consider reaching out to brands that will pay you to post content about their products or services.
Sponsored content involves partnering with businesses to promote their products, services, or brand messages in exchange for compensation or other benefits. For influencers, it presents an opportunity to monetize their social media presence and engage with their audience in a more authentic manner. Brands benefit from increased visibility and exposure to a targeted audience.
However, to maintain credibility and trust with their followers, transparency is a must when posting sponsored content. Disclosing that a post is sponsored ensures that the audience understands the commercial nature of the content and allows them to make informed decisions.
Related Read:
23) Invest In Vending Machines
Investing in vending machines can be a lucrative and passive income opportunity for enterprising individuals. Strategically placing vending machines in high-traffic locations (offices, schools, malls, and airports) will allow investors to capitalize on convenience-driven consumer behavior.
The initial investment cost includes purchasing the vending machines and stocking them with products, but once operational, the machines can generate revenue 24/7 without constant oversight.
Regularly restocking and maintaining the machines to ensure a smooth customer experience is crucial. Don’t forget to fill your vending machines with popular and in-demand products that appeal to the specific demographics of each location.
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Best Passive Income Ideas FAQs
How Can I Make Passive Income With No Money?
Making passive income with no money can be challenging, but it is not impossible. Here are some strategies you can consider:
- Online content creation
- Creating and selling eBooks and other digital products
- Affiliate marketing
- Teach online courses
- Rent out your space
- Receive royalties from creative work
What Is The Easiest Way To Make Money Passively?
The easiest ways to make money passively are:
- Launch a blog and monetize it
- Build an online store
- Start a YouTube channel and monetize it
- List your designs for sale online
- Sell photography online
- Peer-to-peer lending
- Rent out a room
Do People Live Off Passive Income?
Yes, some people do live off passive income. Passive income refers to money earned with minimal effort or direct involvement, often generated from investments, businesses, or assets.
Many passive income sources provide financial freedom and cash flow that doesn’t require active work or a full-time work-at-home job. Such passive income sources are:
- Dividend Stocks: Owning shares in dividend-paying stocks allows investors to earn regular dividends without actively managing their investments.
- Real Estate: Rental properties can generate rental income, and real estate investments will appreciate the value over time.
- Online Businesses: E-commerce stores, affiliate marketing, and online courses can create passive income streams for entrepreneurs.
- Royalties: Authors, musicians, and artists can earn passive income through royalties from their creative works.
- Intellectual Property: Licensing patents, trademarks, or other intellectual property can generate royalties.
My Closing
That is it for today – my list of best passive income ideas is at its natural end.
There are plenty of other ways to make money without actively working – I’ll add more entries in the future.
Do you want to share which passive income sources are your favorite ones?
I’ll keep an eye on the comments section below if you decide to drop a comment.
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