25 Best Passive Income Ideas & Income Streams

Passive income means that you continuously receive money without doing additional work after the initial labor investment. There are numerous approaches to this. It’s not unusual to want to get rewarded without working from 9 to 5 by generating a passive income stream.

There is a difference between passive vs nonpassive income. The traditional approach of passive investing is to create a lot of value upfront by using your knowledge and establishing a revenue stream to sell it.

Every passive income strategy requires a significant amount of upfront labor and money and this fact is a widely misinterpreted concept in personal finance.

First, you have to put in a significant amount of work to generate passive income while simultaneously hiring people or putting up automated systems to continue to earn money for you. Evaluating how much free time is in your hands and how to use it is strategically crucial. Some of these passive income streams take years to bear fruit.

Second, choose something you already have an interest in; otherwise, you will have a long and rocky road ahead of you, and you will quickly lose motivation. Don’t follow trends or other people’s ideas religiously; instead, bore your own ideas by doing something interesting to you. Use your own set of skills and personality to your advantage for an extra income.

1. Stocks & Bonds

Another excellent way of generating passive income is to invest money in the stock market. Stocks, bonds, and index funds can potentially generate a lot of passive income, even though they require a certain level of expertise and knowledge.

It is best to invest with the assistance of a professional advisor, such as a fiduciary. They offer financial services with one important distinction: unlike a simple financial planner, they are legally required to provide you with beneficial financial advice. Inform them that you want to maximize profit while paying as little tax as possible. Learning about tax brackets can also be helpful.

2. Dividend Portfolio

Dividend-growth investing is one of the most popular long-term passive income investments, especially for a bear market. A dividend is the redistribution of a company’s earnings to its shareholders as a reward for their investment of money and trust in the company. A good yield, years of growth, solid corporate numbers are crucial to choosing a healthy dividend portfolio.

Set up DRIPs, or Direct Re-Investment Portfolios, so that all of your dividends are automatically used to purchase more stock in the company.

There’s also the DRIP strategy where you start with a lower amount, and every time companies pay cash dividends, it reinvests automatically for compounding returns. So you have your dividends reinvested into the same stock, and it buys more which compounds the growth.

3. Real Estate

This is only truly passive if it is properly set up; sometimes, it is nothing more than collecting rent each month, which can also be outsourced to a property manager. Real estate is often considered as one of the best ways of building long-term wealth. You can easily make far more than your annual mortgage and tax cost.

There are additional ways to turn these income ideas into a source of passive income. Triple net lease properties are one of these approaches. It means you buy an investment property, but the tenant is responsible for everything, and all you have to do is collect a check. Another proper way to have a passive rental income is to invest in a real estate investment trust.

Many property management companies will only contact you for the checks. It all depends on how much work you want them to do and how much you pay them. They provide full service with professionals who have years of experience and know what to do at every step of the way.

4. Real Estate Funds

There are several ways to generate a sizable annual passive income, but one of the most popular is through real estate funds. Crowdfunded real estate investing as a business model can easily lead to an ROI of 5% – 15%, or even higher.

Real estate investment trusts for passive income do not imply outright ownership of property but rather crowdfunded real estate ventures. You would put in X amount of dollars, which would entitle you to a certain percentage of the property’s value. Your investment would grow in proportion to your ownership percentage as the property’s value increased and the loan used to purchase it was paid off, resulting in equity. Investing in passive funds can help you retire sooner and can be sustained indefinitely.

5. Monetized Youtube Channel

Not passive, but a passively growing income, a side venture that will ultimately earn passive income is ideal. Once a video has been generated and is online, you are no longer working on it. Any uploaded video provides passive revenue.

However, you must plan ahead of time. The films take a long time to make initially (and there is a steep learning curve), but they may be getting views for years if they are evergreen!

Uploading a video and then letting it accumulate views and revenue from those is unquestionably a passive income source. I believe it’s one of those things where you can generate an ongoing residual income and then outsource activities like video editing and thumbnail creation.

You will need a good monthly income to achieve this, but YouTube is similar to blogging in that you can outsource the parts you don’t enjoy over time. So, while it is not fully passive, it is certainly possible to significantly minimize the amount of labor.

6. Game Streaming

If you are already a gamer and spend a considerable amount of time doing it anyway, why not make some money off of it? Either by live-streaming, building a monetized Youtube channel around it, or becoming a part-time game tester. Livestreaming is one of the most extensive opportunities for earning a high income for a gamer. Sites like Twitch pay you for content if you have the skills and build a following base.

7. Sell Your Graphics Designs

If you have graphic design skills, you might be sitting on a golden egg of a passive income stream. Digital products, like graphic designs, are a great way to reach your financial independence faster because you can sell them infinite times without putting in more work once they are done. It’s an income stream for years to come with only initial effort.

As a graphic designer, you can sell a variety of products online, including graphic sets, templates, print-on-demand, NFTs, journal templates, greeting cards, resumes, ebooks, and many more. You can also license your artwork through Adobe Stock, Shutterstock, Mintable, Graphic River.

It’s also lucrative to design book covers on Kindle Direct Publishing for Amazon, and you get a percentage of the sales. Some bookstores can even use your designs and purchase them in bulk, while Kindle Direct Publishing would do both the shipping and printing. That is a perfect passive setup for long-term portfolio building.

8. Blogging

Blogging is not a source of income in and of itself. It can, however, easily become one with the right strategy. They will become a passive source of income after an initial investment of time and effort.

To drive traffic, you must create high-quality, SEO-optimized content and articles, and the ads and affiliate links will do the rest. After you’ve established your blog and started receiving traffic from your articles, you can outsource the writing and SEO optimization. The sites will pretty much continue to grow and earn income after they are created.

9. Owning Copyrights

Intellectual property refers to mental creations that have legal rights. Many items, including articles, books, music, movies, artwork, pictures, comic books, software, and logos, can be copied, trademarked, or patented.

Using intellectual property to your advantage could be a great side business that allows you to earn money passively. All intellectual property can be copyrighted, and allowing access to it can generate income.

Assert your rights by including copyright notice, obtaining trade or service marks, or acquiring patents to protect your works. You must intensively protect the fruits of your labor by making it difficult for others to sell or use it for profit.

Copyrighting something is actually much easier than you might think. If a client uses your copyrighted material to generate sales, you can also negotiate a royalty. This is a legal fee for a profit-making enterprise to continue using your intellectual property.

10. Owning Patents

Having a patent or a privilege, the exclusive right to market or license something valuable, is a tried and true path to wealth and a steady passive income opportunity. For a limited time, patents also protect inventors from having their work stolen or copied. When they expire, the invention becomes public domain.

Obtaining a patent is not an easy task. You must submit drawings to the US Patent and Trademark Office, demonstrate that your invention is unique and useful, and hope that it does not infringe on another patent. And in many cases, the competition is fierce.

If you’ve created something unique and useful, such as a novel, a course, a video, or other media content, you have rights to it and the ability to monetize it if there’s a market for it. If you have something good, it’s worth the effort, so don’t be shy.

11. Angel Investing

Traditional angel investing requires accreditation but can create passive income like no other method if you happen to be lucky and smart. Some new crowdsourcing sites, such as miventure.com, allow you to invest in smaller amounts without requiring accreditation.

Angel investors help significantly grow the economy and improve the lives of others by investing in young companies on the cutting edge of technology. Angel investing does not provide immediate cash flow or liquidity, but the payoff can be enormous if you hit a home run and the company succeeds.

When it comes to angel investing, you must be willing to risk losing your entire investment, and it may take five to seven years, if at all, to realize a profit.

12. Affiliate Programs and Marketing

Affiliate marketing is a prevalent form of passive income. Most affiliate programs and websites promote a third-party product or service to earn a commission or be compensated for advertising space.

Affiliate sites are simple to set up, and you only need to decide how much content to include and whether to use other channels to drive traffic. Local lead generation is also simple if you select the appropriate niche and location.

In most cases, little content is required, but getting SEO optimized and ranking is a top priority. It can rank in a few weeks with a low competition niche and proper setup, making money while you sleep.

13. Local Lead Generation

Local lead generation is considered one of the most underrated passive income ideas. The core concept is that you can get paid to bring customers to local service businesses organically (rather than through paid advertising, though paid ads can generate leads as well).

This entails creating a dedicated local website and ranking it locally upfront, then selling the leads that come through it, much like digital real estate. There isn’t much to maintain once it has a high ranking. Any customer who calls or writes in looking for that service is directed to a local business that can assist them.

‘Rank and rent’ is also how some people call this passive income source. . You are a digital landlord with ‘tenants’ who are local businesses that want your leads. There is slight upkeep in the medium to long term, but if you set up a large enough number of sites, you can quickly scale to very attractive monthly payments.

14. Online Courses and Workshops

Learn any skill and get good at it, then teach an online course on it. Teaching courses based on your skill is one of the best passive income ideas. A digital workshop or virtual courses can be easily set up. Can you think of any skills you might be able to teach? Set up an account on Udemy or Linkedin courses. While creating all of the material and courses will take some time, they can be additional income streams for you.

If you believe you lack teachable skills, don’t give up just yet. Here’s the plan. Simply go to a platform with a high volume of course traffic, such as Udemy. Take a free or low-cost course in an area where you have some knowledge or expertise.

Examine the course’s structure and delivery method. Consider what changes you would make to the course and read some additional books on the subject. Make a plan based on your newly acquired knowledge and experience for how a similar course should be delivered differently. Create class video sessions and upload them to your course platform account.

Set a lower fee as it is your first attempt to get some feedback. Rinse and repeat if you want to get better and bigger and to create a decent passive income.

15. Ebooks & Audiobooks

Writing books and collecting royalties from them is a steady way of earning passive income. Produce an ebook, such as through Kindle, and then hire a voice actor to narrate it, or narrate it yourself if you have a natural talent, into an audible book.

Technically, it is now considered passive income, with a minimum investment. Sales can begin as soon as a few weeks or months. You can combine it with a wise blog strategy and even self-publish on Amazon to save money, but it is still up to you to drive traffic.

16. Selling Your Photos

We all have great photos on our phones or computers, whether we are professional photographers or not. So why not monetize them to generate extra cash flow while they’re taking up hard drive space? Selling or lending your photos is a great way to start building passive income steadily.

Upload your photos to multiple sites, most of which do not require them to be exclusive, and use tags to increase your visibility. Before expecting any money, you’ll also want your portfolio on each site to have at least 100+ approved photos; the more photos you have uploaded, the more frequently you’ll get downloads/purchases. Shutterstock will license your images and pay you a commission for each sale of your image, or you can also sell stock photos at dreamstime.com.

17. Credit Card & Bank Account Bonuses and Cashbacks Apps

Use the right credit cards for your fixed expenses like groceries and gas to get decent cashback every month to cushion a few thousand dollars in play money each year in passive income. It’s essentially free money to spend on things you were going to buy anyway.

Just make sure to pay off the cards in full, or don’t bother. It’s far too easy to overspend on credit, so you must take caution to save money. Budgeting is essential if you do not want to spend more than you planned.

Free cash enables users to earn money online and instantly receive payments in PayPal, Bitcoin, Litecoin, and Gift Cards (or several other withdrawal methods like Amazon, Steam, DOGE, etc.…). Explore your options to make more money.

18. Honeygain App

Data and bandwidth-sharing apps can be a great source of passive income opportunities to boost your savings account further while doing the things you do anyway. However, it’s not as lucrative as a rental property but requires no additional investment or extra time on your hands.

Honeygain helps you make money online by allowing you to share your internet connection with businesses. You can use all of your unused data plans from now on. You can make money by converting your device into a gateway and sharing your internet connection with data analysts.

There are a few other options, such as Swagbucks or NiceHash, or Earnapp. Apps like Honeygain and their clients use your data to conduct market researches, SEO monitoring, ad verification, and price intelligence. This way, they make money, and you do so too.

19. Earn While Walking Apps

Walking is a great way to get your muscles moving, but did you know you can make passive income from it? These applications use the GPS chipset in your phone to track your walking, speed, and distance.

Sweat Coin is an interesting app that rewards you with money and points for walking. Their mission is to make people healthier by encouraging them to be more active while also not selling their data to third parties. You earn “sweatcoins”, which you can exchange for cash.

Be realistic; these apps will not break the bank for you, but they can easily earn you $1,000 per year simply by walking. You can easily make money with activities such as walking with your phone, which you can then redeem for cash or other types of rewards such as gift vouchers, movie tickets, and free Starbucks drinks.

20. Rent Out Assets

You can also buy assets to rent out for passive income. They can be costly to purchase, but once you have them, you can reap the benefits on a monthly basis for years. If you don’t want to be hands-on, you can pay someone to manage the assets for you, making it a 95% passive income idea.

3D printers, industrial machines, food trucks, wedding or festive decorations, garages, storage spaces, cars, high-end handbags, funeral and wedding cars, gym equipment, bouncy castles, ice cream vans, cleaning equipment, gardening tools, bikes, coffee carts, Pilates machines, and hand sanitizer machines are just a few examples.

21. Sell Digitals

Sell digital files, print-on-demand, ebooks, audiobooks, sophisticated spreadsheets, website templates, and anything else that is prepared in advance on Etsy (pdf, music, private pre-recorded video sounds, learning course, tips, and tricks). It’s a terrific passive income stream, even if you have to send the file and perhaps answer some questions.

22. Get Paid for Traveling or Being a Delivery Person

You could try the miles app, which pays you to travel (driving, biking, walking, etc.) to earn passive income; exchange “miles” for gift cards, lottery tickets, and other prizes. It’s a bit slow to earn, but they give you a number of free miles on top of the ones you earn by flying frequently. It all adds up to earn some extra cash.

You can also explore HiveMapper, which an Uber driver informed me he uses to boost his income. In a nutshell, it uses video footage to create new maps of our environment. They have individuals mapping for them all over the world. So, suppose you currently drive for Uber, Lyft, DoorDash, or any other related platforms (i.e., delivery, car service, etc.). In that case, this might be an additional source of revenue for you while doing what you already do for a living.

23. Online Directories

Similar to blogging, owning an online directory can be a side hustle. A well-built website requires significant upfront effort but is well worth the hassle in the long run. You must choose a good niche, rank your page, and search for businesses and service providers in that field. Businesses and ads will provide a steady income with minimal maintenance that can be easily outsourced once your page is backed up with traffic, SEO, and ranking.

24. Dropshipping

Dropshipping is simply a fulfillment method applicable to any online store, as products are shipped directly from the source to the consumer. As in most passive income ideas, you will need to put in a lot of work to make it profitable.

Marketing, CPC, SEO, Web Design, Writing – your proficiency with these skills will determine how successful you are. These all seem like active income, but it will gradually become passive by hiring virtual assistance. Then, all you will have to do is count the money, outsource taxes, and occasionally check the Google Sheet where they work.

Facebook Marketplace and Commerce Manager stores can make this more lucrative. A well-ranking website with free organic traffic is even better since you don’t have to pay for ads and just need to list consistently. However, dropshipping is less profitable these days in certain regions on the planet since tax and regulation directives made it harder to make a profit sending low-priced items around the world.

25. Buying a Company

Purchasing a business as an investment requires extensive knowledge and expertise. Please don’t take this lightly; do your homework or hire a professional to do it for you. Buying an established and promising company, whether digital or analog, can be profitable but costly.

You must consider the long-term benefits. For example, you could purchase an already successful blog that has a following and generates revenue from advertising. You simply need to outsource the necessary maintenance.

You can buy any company, not just digital ones, or invest a certain amount in them and become a sleeping partner, receiving only a percentage of the profit and not having to provide any additional value or labor.

Conclusion

With just a quick Google search, you can find numerous amount of passive income ideas. From the comfort of a high yield savings account to owning expensive rental properties, to new frontiers of peer-to-peer lending, slightly overdone affiliate marketing, renting out a spare room you have, mutual funds.

Often it starts with simply opening savings accounts and finding the motivation to do something with your spare time instead of scrolling through Facebook aimlessly. Of course, some passive income strategies are not meant for everyone, but you can find what suits you the best.

It might be simply to lend money for interest payments or simply turn to a financial institution for professional advice to take this chip off your shoulders. Whichever suits you best, all passive income ideas require putting in the effort, money, or time in advance before you can plan to pay off your student loan debt from your passive income streams.

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About the author: Alexander is the founder of daytradingz.com and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody and has been quoted on Benzinga, Business Insider, Investors Business Daily, Newsweek, GOBankingRates, capital.com, investing.com and other top financial publications.