12 Passive Income Ideas

  • Building passive income requires upfront work but you can expect to reap eventual rewards with little effort.
  • Common forms of passive income are selling digital products, being an influencer, and owning real estate.
  • The amount of passive income you make depends on many of factors.

Imagine this: You’re lounging on the beach on a Tuesday afternoon, reading your favorite book. You check your bank account and realize that you’ve been earning money the entire day while doing absolutely nothing. You think, “Thank you, passive income!” and dive back into your book while enjoying the sunshine.

Ok, passive income might not look EXACTLY like this, but it truly is the key to building long-term wealth, leading to the opportunity to quit working someday. To quote renowned investor Warren Buffet, “If you don't find a way to make money while you sleep, you will work until you die.”

But what exactly is passive income, and how can you start earning it today so that you can enjoy more freedom in your life?

While there are thousands of possibilities for earning passive income, we found the absolute best passive income ideas that can earn you some real income. And some of them don’t require any money to get started!

What is Passive Income?

Passive income is money that you earn without any daily effort on your part. That’s not to say there’s no effort required at all, though, at least in the beginning.

Setting up passive income streams does require some upfront work. This might mean building a business on the side that eventually runs automatically. Or it might mean researching assets to invest in that will pay you dividends on a regular basis.

Either way, passive income always requires money or time (likely both) to get started. But once you’ve put in the work, you can enjoy long-term benefits with relatively little effort.

Top 12 Passive Income Ideas For 2024

1. Create an online course

The online course market is booming, valued at nearly $400 billion in 2022 alone. There’s so much demand for e-learning products that this is one of the best ways to build passive income.

To create an online course, pick a specific audience who has a specific problem they need solved. Research or interview your target audience to learn more about their needs and pain points, and even take on a few beta clients to help them achieve a desired transformation. Perhaps you’ll create a quick, convenient fitness course for busy moms or a step-by-step guide to build epic Lego creations.

Platforms like Teachable and Thinkific make publishing your course a breeze. In addition to marketing through the platform, you can use a website or social media to help attract your target audience. 

2. Become an affiliate marketer

Have you ever recommended a product to a friend because you love it so much? How would you like to get paid to recommend it instead? Affiliate marketing is essentially recommending a product or service to an audience and getting a commission for anyone who signs up or purchases it. Some examples include an Amazon product you love (they have an affiliate program), or a favorite service or app.

The best way to build passive income as an affiliate marketer is to find products or services you genuinely love and find out if they offer an affiliate program. Some affiliate platforms include Impact and Commission Junction. Then create a traffic source (think: a website, social media presence, or YouTube channel) and share your unique affiliate link. You can also share affiliate links to an email list or Facebook group that you manage.

Once you have enough regular audience traffic seeing your offer, you can sit back and keep earning a commission each time someone purchases.

Woman with phone looking at affiliate marketing. Guide to different passive income ideas.

3. Start a blog

Blogs have grown into trusted places for people to find information, and creating a website focused on a specific niche can turn into a great passive income stream.

Say you love paddleboarding. The best way to make your paddleboard blog a source of passive income is to answer questions people are searching for on Google. So you could create content about “how to choose the best stand-up paddleboards,” find the “best places to paddleboard,” or explain the “best paddling techniques.” 

If your blog posts provide the best answers, Google will show your website to more people and you’ll get more website traffic. You can monetize traffic through display ads, affiliate marketing, sponsorships, and selling your own products. 

You can set up a website for less than $100 — buy a website domain name from GoDaddy for around $10, and host it for around $5 per month using Bluehost. It may take a while to gain momentum, but eventually, your website can make you money 24/7. And with enough growth, you can hire a team to manage the site, create content, and increase your earnings.

Related: 15 Side Hustles From Home You'll Actually Want to Do

4. Purchase rental properties

Rental real estate is what many people think of when it comes to passive income. You can buy a single or multi-family home, fix it up, find renters, and start collecting passive income on a monthly basis. Search through sites like Zillow or Realtor.com to find properties, or work with a local agent that helps investors.

But any real estate investor will tell you it’s anything but passive if you do it on your own. For truly passive income, you’ll want to put together a team to help with repairs and maintenance, taxes, and property management. This allows you to delegate the day-to-day responsibilities of being a landlord and simply manage the team and collect checks.

5. Rent out your vehicle

With Airbnb becoming a massively popular way to rent your home directly to other people, there are new websites that allow you to rent out other assets as well. Sites like Turo allow you to rent out your car directly to people and earn money while you’re not using it.

While there is some risk to renting your car to strangers, Turo offers insurance and legal contracts that protect your vehicle in the case of damage or an accident. There are fees to use the service, and you’ll need to be there for pick up/drop off, but you earn money for the entirety of the time your car is rented. This is a great option if you have a second vehicle you don’t use very much.

6. Store people’s stuff

While you can rent out your home or even a room in your house through sites like Airbnb, did you know that you can also rent storage space? Websites like Neighbor.com allow you to rent out parking spots on your land or garage space to store people’s stuff.

Whether someone needs to park an RV or a boat on your property or simply wants a different option than using a storage unit for their extra stuff, you can earn money renting out any spare space you have. If you have a way to allow access remotely (such as a gate code or lock), this can be a very passive activity.

7. Sell a digital product

Selling digital products online is a great way to earn money. Create templates, print-on-demand products, or even digital designs that you can sell in an online shop. For example, you could spend some time designing coloring book pages in an app like Canva, then package them into a PDF to sell.

Using an online store such as Shopify or Etsy allows you to sell to anyone by just sharing a link to the product, and the item is delivered via a download link or email. You can also set up automatic delivery of digital products after payment, avoiding the shipping costs and logistics associated with selling physical products.

Once your virtual storefront is set up and you have a way to bring in traffic, this is truly passive income.

Related: How To Sell on Shopify

8. Create an email newsletter

Email marketing is the process of getting customers to sign up for an email newsletter and then sharing links to products or services that make you money. This works best if you already have a website or social media presence. You can offer a freebie to your audience in exchange for their email address.

For example, if you love training dogs, you could create a newsletter all about dog training tips and offer a free guide in exchange for their email. Using an email service like Mailchimp or Convertkit allows you to collect email addresses and send emails to everyone on your list at once.

Once your list has grown, you can share affiliate offers or your own digital products to make money. You can even get a sponsor for your newsletter if your list is big enough. Most email platforms allow you to automate sending emails, allowing you to share your offers without needing to write emails every day.

9. Invest in dividend stocks

Dividend-paying stocks are shares of companies that make regular payments to investors from company profit. Most dividend-paying stocks are larger companies that have a proven track record of making a profit, making them a (somewhat) stable investment.

Some popular dividend stocks include Verizon (VZ), Comcast (CMCSA), and Wells Fargo (WFC). Each of these are steady, established companies and their stocks are paying 2.5% up to 7% dividend yield per year. 

Dividends are usually paid out on a quarterly basis and can increase or decrease based on business performance or objectives. Dividend stocks can go down in value, though, so you need to do your own research before choosing to invest.

10. Create a YouTube channel

YouTube is far from passive at first, but it can lead to massive passive income over time. As your audience grows, you can monetize your videos and earn ad revenue from Google’s Adsense program. You can also share affiliate offers with your audience, sell your own products, or even earn money from sponsors.

To grow a YouTube channel (like Erika!), you must choose a topic your audience cares about, share answers to their questions, and ultimately, be yourself. You can also focus on highly-searched topics to show up in search results and drive more traffic. Over time, YouTube will share your videos with more people, even years after you’ve made them. 

Learn more about growing your YouTube channel from Erika’s Master YouTube course.

11. Invest in REITs

Real Estate Investment Trusts (REITs) are companies that buy and sell real estate and allow you to own a portion of their real estate portfolio. REITs can pay out regular income from rents collected and even earn passive income through property appreciation.

REITs are long-term investments that typically require locking up money for several years, but it’s a passive way to invest in real estate without the headaches. You can invest in REITs through platforms like Fundrise and Arrived that offer access to residential and commercial real estate investments. 

You can also invest in REIT stocks, which may be an easier way to access real estate dividends without locking up your funds. Some popular REIT stocks include Blackstone Mortgage (BXMT), Iron Mountain (IRM), and Crown Castle (CCI). Each of these REITs has a market cap in the billions and pays a dividend yield of 4% or more per year. 

12. Sell your photos

Do you love taking photos? Whether you love nature photos, sports photography, or even selfies, you can make money with your pictures. You can sell those photos online through websites like Shutterstock and Alamy. Some apps like Stockimo even allow you to sell your mobile device photos right in the app, letting you make extra cash from your phone. 

While taking photos isn’t a passive activity, if you’re already doing it as a hobby, you can quickly set up an online profile and list your photos for sale. The websites do take a commission from your photos, but you can typically control the licensing and pricing to get the most from your images.

FAQs

How much can I make with passive income?

Passive income has no limits on the amount of money you can make. While many passive income investments and business ideas only make a few dollars each month, if you’re consistent and strategic, you can grow your passive income to thousands of dollars per month.

How can I make $1,000 in passive income?

There are several ways to earn $1,000 in passive income, including selling online courses, investing in various stocks, selling automatically to an email list, or having a successful YouTube channel. You can also earn $1,000 per month through investing in real estate or dividend stocks, though it takes a lot more money upfront.

How can I generate passive income with no money?

Some strategies to make passive income with no money upfront include starting a YouTube channel (use your phone to start), building a social media following and sharing affiliate links, renting out your vehicle, or selling a digital product through websites like Etsy.

Do I pay taxes on passive income?

Passive income is taxable, but various types of passive income are taxed in different ways. Income from an online business, for example, may be taxed as self-employment income with business deductions allowed, while rental real estate income is taxed as ordinary income, but can be offset by rental expenses and depreciation. Once you start generating passive income, it’s a good idea to work with a licensed tax professional to organize and optimize your tax strategy.

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I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

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Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.