I worked a traditional 9 to 5 job for many years and eventually I got burnt out. I knew that I wanted more freedom and the idea of passive income became very appealing. I had heard of many people quitting and replacing their full-time job with passive income, but I had no idea where to start.
What exactly is passive income?
Passive income is where you get paid over and over again for work that you did once. I have multiple income streams that are passive, many of which I will mention below.
Passive Income Ideas
By choosing the right sources of passive income, you can invest your time the way that you want to instead of the way you have been spending it. Passive income is a way of buying back more time.
There are so many opportunities out there to make residual income in network marketing. However, this is NOT one of those “things.” These are legit ways for
you to make money while you sleep with something that fits your passion, experience, or skill-set.
- Invest in Crowdfunded Real Estate
Real estate can be a great way to make money while you sleep. However, because it costs so much to purchase a home, using a crowdfunding platform to invest in real estate debt can be a more affordable option.
If you want an easy, low-cost way to invest in real estate, consider using a company like Fundrise. You only need $500 to get started, and they have three main eREITs to choose from.
- Dividend Income
Dividend income is dividends paid to shareholders of stocks in the form of cash in your bank account. Dividend-paying stocks are especially enticing for those wanting to make a living with passive income, as they will get payouts each quarter or so. Even Warren Buffet historically is a fan of dividend-paying stocks.
If you are going to go this route, make sure that you educate yourself and pick solid stocks so that you can depend on your dividend income for years to come.
If you don’t have an investment account, check out Ally Invest because trades are as low as $3.95.
This low fee is awesome because most brokers charge around $10 per stock trade.
- Peer-to-Peer Lending
Peer-to-peer lending is when you loan other people money who don’t qualify for traditional financing. With investment returns often in the 6-10% range, investing money with a company like Lending Club can get you much higher income results than a typical savings or money market account.
- Get Out of Debt
The less money you’re paying in interest to creditors, the more money you have in your pocket each month. Talk about a simple form of passive income. Getting out of debt quickly can increase your income even more because you’re no longer paying interest to creditors each month
- Open a High-Yield Account
Are you looking for a low-risk way to make passive income? Then look at opening a high-yield savings account with an online bank like CIT Bank that pays 22x more than traditional banks. The currently are paying 1.55% which is unreal.
The yields are much higher than most local banks but still come with FDIC insurance. While this won’t make you filthy rich, it will be a safer way to make consistent income and not lose your money since they are FDIC insured.
- Write a book
Once the initial work of creating the book is done, and you’ve spent some time developing an effective marketing plan, selling books can be a great way to produce some serious residual income.
I wrote a book called You Can Retire Early and I get a 10% royalty for every book that gets sold.
- Rent out a Room in Your House
Do you have an extra room that you rarely use? Why not rent it out to someone looking for a short-term rental on Airbnb. There are millions of people using Airbnb to find a place to stay instead of staying at a hotel, sometimes even for months at a time.
- Affiliate Marketing
If you have a website already then this is a no-brainer. Some people are making over $50,000 per month like Michelle who teaches others how to make money online with her course Making Sense of Affiliate Marketing.
If you don’t have a website, you can start one for less than $3/month. Click hereto get special pricing of $2.95/month with Bluehost.
- Get Cash Back on Shopping You Already Do
You have to shop anyway, so why not get cash back on things you’d normally buy in the first place? I use a site called Ebates that will pay you $10 just for signing up and, it is free.
- Create an Online Store with Drop Shipping
With the explosion of eCommerce, drop shipping has become very popular. Here’s how it works: you create an online store that offers products from certain manufacturers. A person visits your site, orders a product, and your system sends the order to the specific manufacturer. The manufacturer then completes the order by shipping it directly to the customer.
- Create an Online Course
Online courses can be a great source of passive income. Here’s how they work: you create a value-packed online course that helps solve a problem or fills a need.
The course can include videos, e-books, and emails with pertinent information. Customers sign up to purchase the course, and your system automatically emails them everything they need to access the materials.
You get money for the price of the course that you created and automation from a site like Teachable does all the heavy lifting for you.
- Create YouTube Videos
Everyday regular people like you and me are making money on YouTube. Each time someone watches one of your videos, ads can appear, and you can make money from those ads. The key to becoming successful with YouTube is building a large enough subscriber and viewer base.
- Start a Business and Have Someone Else Run it
Owning a business can be a good passive income source, provided you’ve got the right people running the business for you. Whether it be through the purchase of an existing business or opening a new business, your great business idea can be a viable source of passive income.
For some creative small businesses that you can start for under 100 bucks, check out the $100 Startup by Chris Guillebeau. These are all verified businesses that grew to over six figures per year and started with very little money up front.
- Buy a Vending Machine Business
A successful vending machine business can be a great way to make passive income. The key is to find the right places to install your vending machines. Check with smaller brick and mortar businesses that have over 100 workers in the building on a daily basis, and see if they need vending machines.
Another key to vending machine success? Ask those workers what items they prefer to have in the vending machine and then stock accordingly. Once again, if you want to reduce the amount of time that you are involved, consider hiring someone to stock the machines for you.
Related Video: How to Invest $1000 (many are passive income)
- License Your Photos
Have you ever wondered how you could make money taking pictures? Do you have an eye when it comes to taking good photographs?
If so, check out a site like Shutterstock where you can send them your pictures and if approved, each time one of their clients downloads one of your photos you get a paid a royalty.
- Create a Mobile App
If you are a bit techie and can come up with some unique ideas for mobile apps, or improve upon an existing app that will help people make their lives better, you may land yourself a great source of passive income.
Every app on your phone is making money for somebody, somewhere. For instance, Joel Comm made over $1Million from his iFart app.
We won’t even talk about the ridiculous money that Angry Birds brought in.
While these are the exceptions, there are plenty of people making thousands of dollars per month with their mobile apps.
- Rent Your Car for Ad Space
How would you like to make money just for driving your car and not have to pick up any passengers? By allowing companies to place advertisements on your car windows, you can earn a few hundred dollars each month simply by driving your car around town.
Check out Carvertise to see how you might be able to make passive income by wrapping your car with an advertisement.
- Buy an Existing Online Business
The beauty of an online business is that most will allow you to work from anywhere. Starting one from scratch can take a lot of time and resources, so why not consider buying an already established online business? Websites such as Biz Buy Sell have hundreds of online business listings that are for sale in varying price ranges.
Check to see if there is an online business for sale that is in line with your passions or hobbies. Because if you are going to be working, why not do something you actually enjoy doing.
- Buy a Laundromat
Here’s another turnkey passive income business idea. Many cities have established laundromats that are available for sale.
Here is how it would work:
Buy the already existing business
Make sure that you have someone to manage the day-to-day operations,
and then “soak up” the profits.
The reason why you would want to buy an existing one and not start one from scratch is that the startup costs are pretty high. Commercial washers and dryers are not cheap, so it makes a lot more financial sense to buy an already established laundromat than starting from ground zero.
- Open a Batting Cage
I am shocked by the lack of batting cage facilities. Baseball is one of the most popular sports for kids in America, yet, batting cages are hard to come by depending on where you live.
Something to be aware of though, is that these can require a lot of money up front. You will have to have a big facility, equipment, and someone to open and close.
So make sure to do your due diligence before you invest too much money in this endeavor.
- Product Design
Another way you can make passive income is by designing t-shirts and other products even with no prior design skills. Some sites allow you to upload your witty design ideas and then create t-shirts, coffee mugs, laptop covers and a slew of other products.
Shoppers then visit the site, check out your products, and when they purchase one of your designs, Red Bubble will pay you a portion of the profits.
- House or Pet Sitting
One of the easiest ways to literally make money while you sleep is by house and pet sitting. You have to live and sleep somewhere, so why not get paid to stay at someone else’s house and/or pet sit while they’re on vacation?
Provided there are no unreasonable home maintenance expectations, house or pet sitting can be a great way to put some extra income in your pocket. While not totally passive, it beats having to get a job and is pretty dang easy.
- Bond / CD Laddering
Bond and CD laddering involves owning several different bonds and/or Certificates of Deposit that mature at several different times during the year and taking the profits from those investments as cash income during the year.
Although many CDs and bonds might not earn as much of a return as a Peer-to-Peer lending investment, bonds and CDs also generally come with little to no risk, ensuring a solid income source on a regular basis.
- Rent Your Stuff
Thousands of people every day are looking to rent any variety of items. Craigslist can be a great place to advertise your items for rent. Here are some ideas of products that you could rent out: extension ladders, party tents, tables and chairs, utility trailers, log splitters, chainsaws, snowmobiles, and ATV’s.
You can even rent out your car when you are not using it with a company like Turo.
Just make sure that you have a proper rental agreement signed by both parties, get paid in cash beforehand, and get a current photo ID and secondary proof of address to protect the property you’re renting out. For extra peace of mind, consider requesting a security deposit as well.
As you can see there are a ton of ways that you can make passive income. Hopefully, this list has helped you narrow down which source of income is best for you. So if you’re tired of the traditional way of making money, implement a few of the passive income strategies above so you can start working less and making more money while you sleep today.
