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Passive Income Ideas Simply Explain

Passive income side hustles

  • You do not need to invest upfront capital to make passive income.
  • Many sources of passive income can be fairly lucrative in the long term, such as dividends and selling of shares that have appreciated or earning passive income through display ads, affiliate marketing revenue, course sales, digital products, etc.

Start micro-investing

  • Invest in fractional shares of thousands of stocks and ETFs with $5 or less
  • Generate passive income when you earn dividends or sell shares that have increased in value
  • Create and sell digital printables on Etsy
  • Blogging for less than $3/month
  • Earn passive income with Neighbor

Churn bank bonuses

  • Move your savings around every few months to take advantage of different cash bonuses that banks offer to new customers
  • Sofi is currently offering new customers up to a $300 cash bonus
  • Start banking with SoFi
  • Get started with M1 Finance
  • Rent out your car to work with HyreCar
  • Teaching online courses is different than in-person teaching because you’re recording video-based lessons, writing texts, and creating worksheets
  • Robinhood gives new customers their first stock free with Robinhood

Sell stock photos

  • Many of the photos you see on your favorite websites are stock photos, which means someone took that photo and made money licensing it to a stock photo site. Photographers can make money when the site buys a photo from you or receives a commission every time someone purchases one of your photos.
  • Podcasts are one of the fastest-growing types of media. Back in 2006, only 20% of the U.S. population had a clue what they were, and now 80% of Americans have caught on.
  • This isn't a 100% passive side hustle because it takes time to build an audience and market your podcast, but your episodes can generate revenue through affiliate marketing and advertisements well after you release the episode.

Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work, these income streams build and maintain themselves, bringing you consistent revenue without much effort on your part. If you want to get started earning passive income here's what you should know first.

What It Takes To Earn Passive Income

  • All passive income streams require at least one of the following two elements: upfront monetary investment or upfront time investment
  • You can’t earn residual income without being willing to provide either of these items
  • A list of passive income ideas

How to invest in dividend stocks

  • Dividend Stocks
  • Open an account at the best online brokerage
  • M1 Finance
  • Build a portfolio and invest in it for free
  • Your investments will be auto-allocated to your entire portfolio every deposit - for FREE

Rental Properties

  • The internet has made investing in rental properties more accessible than ever before.
  • You can be a limited partner in large residential or commercial properties, or you can buy homes and be a landlord - all online
  • Invest in single-family homes
  • Roofstock
  • Larger developments
  • Farmland
  • AcreTrader

High Yield Savings Accounts and Money Market Funds

  • Typically, high-yield savings accounts are located at banks and are FDIC-insured.
  • Money market funds can be located at both banks and investment companies and are only sometimes FDI-insured.
  • Interest rates have been rising, so putting more money into a savings account can generate a safe passive income stream.

CD Ladders

  • These require buying CDs (certificates of deposits) from banks in certain increments so that you can earn a higher return on your money.
  • They are offered by banks and since they are a low-risk investment they also yield a low return, making them a good option for the risk-averse.


  • An insurance product that you pay for but can then provide you passive income for life in the form of monthly payments

Invest Automatically In The Stock Market

  • Set up a Robo-advisor to automatically invest in and they will handle the rest for you.
  • Betterment is a popular option because it charges

    one of the lowest fees and automatically makes it easy to invest.

Invest In A REIT (Real Estate Investment Trust)

  • These are investment vehicles that hold property within them - and you as the owner get to benefit from the gains, refinances, sale, and income (or loss) on the property.
  • Fundraise is a great platform for this.

Refinance Your Mortgage

  • This can be a great way to free up a lot of income and save you $100,000s over the life of your loan.
  • Interest rates are still near historic lows, and if you haven't checked out your mortgage lately, now's a great time to shop around and compare rates.

Pay Off or Reduce Debt

  • If you can pay off or reduce your debt, you're making huge progress in building income.
  • The great thing about paying off debt is that it's a straight return. Paying it off gives you a 10% return on your money.

Invest In A Business

  • This is very risky, but with risk comes the potential for high returns.
  • You can invest small amounts in many companies by lending them money in small bonds
  • There are now tools available where you can loan money to a business and get paid a solid return for doing it

Peer-to-Peer Lending

  • P2P lending is the practice of loaning money to borrowers who typically don't qualify for traditional loans.
  • As the lender, you can choose the borrowers and can spread your investment amount out to mitigate your risk.

Passive Income Ideas Requiring an Upfront Time Investment

  • Instead of using money, you need to put in sweat equity to make these happen
  • Almost all of these ideas require starting a personal blog or website
  • It's incredibly cheap to do and can be done with a free domain name
  • Bluehost is a great option for this

Sell an eBook Online

  • Self Publishing is mainstream today.

Create a Course on Udemy

  • You can be a producer, create your own video course, and allow users to purchase it.
  • This can also be a great way to turn traditional tutoring into a passive income stream!
  • Use Udemy if you are highly knowledgeable in a specific subject matter.

Selling stock photos

  • Submit photos to stock photo sites and receive a commission

Licensing Music

  • Much like stock photos, you can license and earn a royalty off of your music when someone chooses to use it.

Create an App

  • Hire a programmer to create an app for you.

Affiliate Marketing

  • Partners with a company (becoming their affiliate) to receive a commission on a product

Network Marketing

  • Can be done by building a team underneath you (often referred to as a down line)

Design T-Shirts

  • Custom design items like T-shirts and earn royalties if they sell.
  • Amazon has a new service called Amazon Merch, where you simply upload your designs and Amazon takes care of the rest (making it, packing it, and shipping).

Sell Digital Files on Etsy

  • This could be an amazing passive income idea for graphic design.

Semi-Passive Small Business Ideas

  • These are more like a business and require a small combination of time and money investment.
  • Once you invest, you can earn more income and typically do so passively. However, they require an ongoing time investment, so they aren't 100% passive like a savings account.

List Your Place On Airbnb

  • Airbnb is a great way to earn money on a space you already own.

Car Wash

  • This is a great way to earn semi-passive income.

Rent Out Your Car

  • This can be truly passive because once you list your car, it can earn you income when you're not using it.
  • The best partner to rent your car is Turo
  • Turo allows you to put your car out for rent, and when people rent it, Turo handles the rest

Storage Rentals

  • My cousin owns a set of storage rentals and receives monthly checks for letting customers rent these out

Cashback Rewards Cards

  • If you pay your bills with a credit card, make sure it offers cash back rewards.

Get Paid To Have An App On Your Phone

  • Neilson Digital
  • This app tracks what you’re doing and it sells your data, but it doesn’t track your data.
  • You simply download the app and do what you normally do, enter to win rewards, and voila! You get paid!

Save Up To 30% On Your Electric Bill

  • Truebill is an app that helps you save money by identifying recurring subscriptions and other bills and helping you cut costs by negotiating better rates and fees
  • One of their partnerships is with Acradia Power which has the potential to save you up to 30% on your electric bill

How to Get Started

  • Pick a few passive income ideas to start with

Frequently Asked Questions

  • How do I generate passive income?
  • Passive income is the idea that you deploy time and/or money and receive income with no further work.
  • When you don't have money, you can leverage your time and effort to create income streams that will grow into the future by investing in dividend stocks and mutual funds.