As a writer I am partial to being direct and to the point, the same can be said of what I like reading. So you may ask, what are some examples of passive income options- here’s a list of ideas I’ve gathered.
26 Ways to make passive income
- Real estate investing
I put this one first because it is used by nearly everyone that is wealthy. There are many ways you can go about generating passive income through it: single-family homes, multi-family homes, apartment complexes, shopping malls, storage units, RV parks, and raw land just to name some of the ways.
These are the obvious ideas though. You can also get involved with real estate in unconventional ways through real estate investment trusts, real estate notes, and others. An example of this is through fundrise.com where you can invest as little as $10 to start generating passive income.
Real estate investment trusts (REICS) take being a landlord out of being a real estate investor. Essentially these companies do much of the work with the real estate running the numbers, possibly even remodeling or even having tenants already. What they are looking for is someone to invest in the property giving you the rental income, while it is managed by a management company.
Some resources you can look at include(check for yourself and use the company that suits your goals):
Reination
biggerpockets
roofstock
noradarealestate
martelturnkey
Real estate investing types
Single-family homes
Single-family homes are a common method of starting out in real estate investing. I’ve known several real estate investors that got into it almost by accident because they wanted to move and couldn’t sell the old house fast enough so they just rent it out until it sells.
Multi-family dwellings
Whether it’s duplexes or apartment buildings multifamily dwellings are much better at creating a passive income for those short on time. You can work on one deal at a time and if it fits your criteria then you’ll gain a large boost in income compared to working on single-family home deals (though single-family options are still great).
Commercial developments
Do you like to build and create things? If so working at commercial real estate developments may be very fulfilling for you, though they are much more involved and require a lot more capital to do.
I read somewhere about how developers not only create a plan for commercial buildings but also include in their plan residential areas surrounding it. This is a great way to help ensure the success of a new section of town to attract residents and give them places to work.
Farmland
Everyone has to eat and there are always farmers that want the use of land to grow and sell crops. It’s not cool looking but it sure can be a good way to create passive income if you know what you are doing.
Storage units
It amazes me just how long people use storage units. They are a great option and really helpful for those moving around. I recall when I was a kid a neighbor of ours built one and he said the biggest problem was just in building them, after that he said they almost ran themselves.
RV park
Find a piece of property with some great views around it and you’ll almost certainly be able to attract people traveling the country to stop in for a while. Here in Idaho we have one right near the snake river with trees and brush surrounding it making it feel like you are out in the wilderness while you are smack in the center of town.
Trailer park
For some people, the only thing they can afford is a mobile home or manufactured home. Creating a community of these types of housing options is a great starter option for some and can bring in tremendous passive income if built and managed properly.
- Build a website or blog
While building a blog or website can be a great source of income, it requires a large amount of effort. Setting up hosting, choosing a topic, picking a domain name, and learning how to write a helpful article, are just some of the things needed to figure out.
The reason I’ve created this blog is to help create value for others to learn about passive income at their own pace. If you create your own blog and create a lot of value for other people then you can create a great level of passive income.
While building a blog is a time-intensive endeavor it is very low on one’s budget. The sooner you start, the sooner you can earn an income.
Many sites exist that you can use to get started buying a domain and hosting. Bluehost is a great option, but others include goddady, greengeeks, and others.
- Dividend-paying stocks
Buying stocks (or anything) in the “hope” that it will increase in price is speculation or perhaps educated gambling. Warren Buffet has said that he doesn’t sell stocks, and if he is specifically talking about dividend stocks then I can agree. While they require capital to start with, they may be the course for you to go with if you want something right away that doesn’t take much education to figure out.
You can work your day job, buy stocks that pay a dividend, and be given enough time and purchases that can build up to a significant income.
The downside I see with stocks is that you have no control over what happens. In my own opinion, I would only own stocks for a company I personally owned, but we all have our own tastes.
- Create an online course
Online courses are getting more and more popular. Sites like Udemy where you can learn just about anything. Most sites have a select number of topics that creators have made courses on.
There is an opportunity to create almost anything you want to. Bottling, attraction, shaving, just to name some ideas.
I’ve purchased half a dozen or so courses and each of them was superbly done. Each course includes an outline, a description of what will be learned (sometimes an intro video), and then sub videos to explain the topics discussed.
Depending on the platform that you use prices can vary. On some course sites, you can offer an all-included price and then have lower price points for less content. I haven’t used any others but I’ve considered buying courses on others. Pick the one that you like most based on your own learning interests.
- Peer to peer lending
Peer-to-peer lending, also called P2P lending, simply put is you being the bank lending money to an individual or business. You determine the interest rate that will be paid and they pay you back.
For some people, this is a real win-win scenario because they may want to consolidate debt or say pay off a credit card to lower their interest rates and get back on track yet they can’t qualify for conventional loans or don’t want one for whatever reasons.
This is where you come in. You can set up the deal directly with them, though this is a riskier scenario than using a service. You the investor go to these services and buy the debts, while those wanting the loans get their rates and terms determined.
4 Peer to Peer lending sites
Prosper
marcus
upstart
yieldstreet
- Build products or apps
Mobile devices are a huge industry that is only getting larger as time goes on. With over a billion devices worldwide, apps are an awesome way to earn passive income. If you have the skills to program or manage programmers you can come up with some really useful applications for people or businesses to use.
Using sites like Etsy you can sell items that you have created which can turn into a good income. If you have a passion for remote-controlled cars you can 3d print parts possibly and sell those.
Creating products requires skill however and it gets rather expensive to say build an app depending on its complexity of it. If you have the desire to learn and are willing to do it on your own then you possibly build something that makes you the next Zuckerberg, or bill gates.
- Buy a website
Like any entrepreneurial endeavor, building a website generally takes a significant amount of time invested before any revenue is seen. Many website articles, courses, ebooks, etc all have to be created for a functioning site to generate traffic which you can then monetize.
Unfortunately, many people start a website and then quit long before that happens. There are sites you can go to where you can buy other people’s existing websites. Finding amazing deals may not be as easy to do as before but if you do enough research, or know a specific industry really well, then you can find sites that are good and build them up even better.
Getting a site that has a decent amount of traffic already, is well-positioned in its industry and most importantly has valuable content for visitors, you can earn a really good passive income from it.
The most common form of monetizing blogs is through Google AdSense, though it’s not the most profitable. That being said it may be one of the only ways a blogger can think of to monetize their niche website. When someone builds a website and then sells it, usually most sites like Flippa have a common formula of 24 times its monthly income as a sales price.
With this method, it will essentially take you 2 years to recoup the investment cost, without making any changes to the website. That’s not always possible though so it’s better to buy a website and have someone manage it by adding more content to it with the hope of increasing its income.
- Purchase a business
One of the wealthiest individuals on the planet focuses only on buying businesses. It’s no secret that if you build a business you can sell it, and many do but if you buy a business with the purpose of keeping it forever and live on a portion of its profits it will last longer.
Warren buffet was been doing this for decades and decades. Buying a business does not have to mean that you then manage or run its day-to-day operations of it. It’s probably better in fact that you don’t, especially if you are buying an already successful business. Now if the business is struggling then it may be good to step in and restructure it or whatnot so long as you are fairly certain it can be turned around to justify the investment.
Businesses are great as passive income streams because they have the most important aspect needed to create regular consistent exchanges that you can profit from and that is: people!
There are many sites where you can actually list your business and be connected with investors looking to buy. Some of those sites include:
If starting out these can be a good starting place but so can speaking with local businesses. You may find that some businesses are low on capital and have a good marketing plan in mind but not the capital for it, or a business expansion idea but not the capital for a new product or some other part.
- Become A Social Media Influencer
If you build a large enough following on social media websites there are many ways to earn money from it. Many companies are willing to pay an influencer to produce sponsored posts. Rates for doing sponsored content differ from one gig to the next. Sometimes they ask you to share affiliate links or create a story, or maybe just do an ad-like video.
- Write an e-book
In days gone by publishing a book was only done by large companies. Today self-publishing is super easy. With a few clicks, you can upload a PDF to amazon and have it ready for sale.
While it’s very easy to upload and make the book available it’s not going to become an instant bestseller. Part of publishing by those large companies in the past included a considerable amount of marketing for each new book, and especially a new author.
It’s pretty popular with self-publishing to write 50-100 page books, though you can write longer if desired. I bring this up because some people may think they can’t write a book, but have good expertise on a topic. Depending on the topic, it may not require a standard 250-page novel to explain it to other interested parties.
- Create a Course on Udemy
Udemy is an online platform that lets its user take video courses on a wide array of subjects. Instead of being a consumer on Udemy, you can instead be a producer, create your own video course, and allow users to purchase it. This is a fantastic option if you are highly knowledgeable in a specific subject matter. This can also be a great way to turn traditional tutoring into a passive income stream!
- Stock photos or videos
Pexels is a great website where you can post photos and videos for use by others, thousands of people do so. The exchange that they get is the opportunity to be exposed to a large audience of people looking for work.
In exchange, they can ask for a reference or comment about who made the work or they can ask for a donation. None of these are required but if you are skilled enough and post enough work it’s almost certain you’ll start earning some money creating a passive income stream.
- Rent Your Car
It still seems really odd to me that you can rent out a room in your home or your car using a simple phone app or website.
If you have multiple vehicles and are looking for some extra income then you could use sites like hyrecar or getaround.
- License your own music
Have a passion for writing music but don’t want to perform? Or don’t have the time to go on tour due to other responsibilities or interests? One way that many deals with this are to license others to use the music they create.
In doing so you can create passive income, more precisely this would be called royalties. I’m not all that familiar with how most people go about this but I have come across many people that have youtube channels where they post their music royalty-free or have websites where they have a subscription to use their music.
- Monetize your car
You have seen cars drive by with logos for companies on them. Depending on the type of vehicle you have you may be able to have a vehicle wrap placed on yours. There are usually driving requirements in the number of miles per month that will affect how much you can earn.
A part of being able to get accepted is the population of the city you are in. The following companies are just some that I was able to find.
- Cryptocurrency passive income
There are several ways to earn regular passive income with crypto. Not every coin can be used to earn passive crypto so do your research to figure out which ones.
Staking- Staking is sort of like putting money in a cd, in that you place the coins within a pool or collection of stakers and then you earn a percentage every so often.
Mining- This option requires quite a bit of equipment investment but after getting it set up it’s very simple to run some software that adds computing power to the pool of miners.
- High yield savings and CDs
I don’t really consider a savings account to be investing, however, many investors mention that the place to start is by creating a savings account. While the most boring method of earning passive income, putting money in a savings account will generate some, though it’s so minuscule you may not notice it. That being said, an often overlooked strategy for investing is to keep 12-24 months of income for basic expenses.
Cds on the other hand are rather straightforward and easy to use. While they don’t generate large income and become tied-up funds, they do create a guaranteed increase over the indicated term chosen.
- Annuities
While most insurance products require an ongoing premium and provide benefits during that period, annuities provide an income stream after you have finished paying into it. Generally, they are purchased with single premium payments.
The terms on annuities vary quite a bit and require a large upfront payment but they are great at creating passive income with virtually no maintenance. Though with the capital required to receive one you may find it more efficient or profitable to put your money into other options, particularly when starting out.
- Rent Your Home
For those looking to be more hands-on with their real estate it may be a good option to rent your home, beachfront property, apartment, or other single-family real estate.
My grandparents have a cabin they are not able to use as much as they would like because they are getting too old to make it there. One of their sons offered to take care of the property and rent it out for half the year using Airbnb.
Airbnb helps them find tenants, without which they wouldn’t be able to rent it out. Even so, it still requires that they clean the place between tenants. This has led them to hire someone to help with this on occasion.
There are other sites that do a similar job to what Airbnb does, all have slightly different conditions usually how much they charge per guest that books your property. Something like 3-5% is the norm.
- Free up cash flow
This may sound odd but one of the fastest ways to create income is by restructuring your current finances. If you pay off your mortgage or refinance it, then the money you were putting towards that can be redirected to other areas to build more passive income.
By working with a good accountant and other financial professionals you can find areas in your finances where you can find additional resources you may be throwing away unnecessarily. Something I’ve done for many years is to try getting the smallest tax return possible because I would prefer to get as much from my paychecks as I can.
A tax return is not extra money, it is a return of overpaid taxes, so why give it to the government when you could use that income for projects now.
Freeing up cash flow like this can be done both on a personal as well as a business level.
If you’d like a free cash flow analysis to see where you are leaking income contact us today.
- Build a car wash
Have you ever seen anyone working at those coin-operated car washes(the basic type that is mostly just a pressure washer inside a car bay)? I know there is some maintenance that needs to be done at them like adding soap or wax for the car wash process but for the most part they seem like a great way to create a passive income stream.
Now there are those drive-through style car washes with many employees so that would be more of a business than a passive income.
- Network Marketing
I hesitated to put this into the list as I’ve gotten a bit of a bad taste for some of these companies. A few years ago however I found one company that provides a real service of more natural products that I’ve been using ever since.
Also called multi-level marketing you can create a passive income if you enroll enough people that you create a large team of individuals.
- T-shirt design
This idea really took me by surprise, though at this point I suppose making money from odd things shouldn’t anymore. There are sites that allow you to design shirts and earn royalties as they become popular enough.
There are becoming a lot more companies that offer print on-demand options, here are but a few:
Cafepress
Printify
4imprint
Bonfire
- Student income share agreements
Have you seen those ads where you can go to school for either a discount or fully paid for as long as you agree to give a portion of your income for a period of time after graduating?
This is what income share agreements are: your school’s tuition is paid for and in exchange, you give up future earnings.
I’ve seen them the most with computer programming schools, but a few others as well. The downside to these agreements is that requires you to be an accredited investor and they also have minimum investment amounts ($10,000 or so).
Edly was the only ISA investment option I was able to locate with a handful of google searches, but if you find others let me know too and I’ll update this.
- Own a laundromat
Like the car wash above I rarely see people at laundromats other than people using them. However with as many washers and dryers as there are I imagine that maintenance would be required quite a bit. If you had several then you could probably hire someone with mechanical skills to keep things working, otherwise, it may be less passive and more active an option.
- Vending machines still exist
I don’t know about you but I haven’t used a candy vending machine in ages. That being said I have used the larger ones for a soda or bag of chips a couple of times over the last year. If you have a lot of them it could take a considerable amount of time to restock, empty the coins, and the like but after getting them set up that sounds like easy work to be compared with many other work options.
- Cashback
I really don’t like putting ideas on here that are misleading so I highly debated this one. Many of us have the mistaken idea that saving money on a purchase is making money, it’s not- it’s a discount.
That being said if you are looking for ways to reduce costs on things you are going to purchase anyway then using a cashback credit card could be a great way to do so.
You may not like the idea of using credit cards but if you use them specifically for the purpose of building your credit and pay them off every month or nearly pay them off every month then they can be a useful tool.
Thoughts about passive income to keep in mind
The idea that passive income requires no work is a lie, though it sells very well because most people are overwhelmed, stressed, and seeking an easy way to just fix their finances. That’s not how money or passive income work.
Passive income requires either money or time to create. If you write a book then you can benefit from the sales of it over and over again for many years.
Something to note however is that usually where you put your focus that thing expands, and others shrink. Meaning that as you focus on building up one area of passive income you will see it grow but if you take your focus off of it then it will stagnate or slowly diminish.
You can mitigate that problem by having managers and a network of individuals continually grow. If you think about it this is why companies grow, each employee focuses on his individual tasks so the owner is able to do other tasks.
If you’d like to be part of building your own passive income contact us to create your own custom game plan.
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