When you earn from a source even if you are not actively involved in it, then that income is considered as passive income. That means it is an inactive income. Everyone tries to make passive income for their financial independence.
Passive income will help you acquire additional assets. Because what you earn from your day job goes behind your family’s expenses. That’s why you cannot save much more money. If you have very little savings, you may fall in various problems in the future. Suppose there is an accident or a disease that will cost you a lot of money. Then you will be in great danger if you do not have enough deposit in your bank account. So I would advise everyone to create passive income even if it is little amount.
What is Passive Income?
Passive Income is the money that can be earned from doing something even if you are not very active in that work. That means you can make money with little or no effort.
Suppose you open a savings account in a financial institution. If you deposit some money there then you will get interest every month. You do not have to give effort for this. You can earn some extra income in addition to your business or day job income.
Active Income vs. Passive Income
Active income is money that you are currently earning from your day job. You get paid if you work and you don’t get paid if you don’t.
And passive income is income without any hard work. Even if you don’t work, your income stream will be continued.
Active Income will not give you financial freedom but passive income will help you to achieve financial freedom.
You cannot acquire too much wealth by active income. When we create a personal budget, we see that a large part of the active income goes behind the necessary expenses. Therefore passive income will help you to acquire additional assets.
How Much Passive Income Can I Earn?
How much you can earn depends on your skills, hard work and how much time you are spending for this work.
Suppose you invested $500 in stocks. How much you earn by investing this $500 depends on your skills and investment strategy. If you have a good idea about Bull market and Bear Market, then you can earn a good amount from the stock market.
If you are a good photographer and want to earn money by selling photos then you need to take professional photo and edit it to make it interesting. You need both skills and time to do these things. So it can be said that the amount of money you will earn as passive income depends on your skill and effort.
20 Passive Income Ideas
Start a blog
Since I am a blogger I want to put it at number 1. Blogging can be your one of the major sources of passive income. Do you know there are over 600 million blogs in the world? Why so many blogs? Because blog is a perfect source of income. You can make unlimited money by blogging. There are some bloggers (Moz, Neilpatel) who earn millions of dollars a year.
Starting blogging is very easy. There are two popular platforms for creating blogs. One is Blogger.com and the other is WordPress.
Blogger is a free service from Google. Google provides default Blogspot domain and free hosting. But Blogger has a lot of limitations so I would recommend WordPress. WordPress is a content management system (CMS) platform where you can create a professional blog.
There are several ways to earn money from a blog. The easiest way for beginners to earn money from AdSense. In addition to AdSense, you can earn money by affiliate marketing, direct advertising and selling your own products.
You do not have to work outside the home to earn money from the blog, you can make money from your home. You just need a computer and net connection. So I say blogging is the best and easiest ways among 40 ways to make money from home.
Sell online Course
It is another great passive income idea. Are you an expert on any subject? Then you can create a course on that subject. Then you can sell that course online. But you need to remember that there’s no room for trash out there. If you make a great course and build a strong platform to market your course then you will be successful.
You can use different mediums to sell courses online. There are some platform like Udemy, SkillShare and Coursera are ready to buy your course. Or you can create your own website then start selling the course to your readers through this website. In addition to the website you can sell your course through social media. In this case, Facebook will be the best medium. Facebook page and group will help you reach your content to your target readers.
Start a YouTube Channel
YouTube is the most popular video streaming website. More than 1 billion people are entering this site every day to watch videos. This huge amount of users is a huge asset for marketers because they are making a lot of money by creating videos targeting these users. There are many YouTubers who are earning millions of dollars a year. Ryan Kaji is one of them who earned $29.5 million in 2020.
Making money from YouTube is not very difficult. There are many ways to earn money from YouTube. If you have proper idea about these ways then you can earn a very good amount from YouTube. From this guide you can learn about all the ways of earning from YouTube.
Many people think that they can earn money by uploading videos on YouTube, but this idea is completely wrong. YouTube does not pay you for uploading videos. If you want to make money from YouTube channel you have to monetize your channel.
Currently, almost all writers are earning money by writing ebooks. It is a passive income for them.
Writers work hard when they write ebook. From then on, they just keep earning.
You have to promote your ebook to increase sales. If you have a blog and there is a lot of traffic then selling will be easier for you. If you do not have your own blog, you can write a guest post on another famous blog. You can mention your ebook in the post. If readers are satisfied reading your guest post, they will be encouraged to buy your ebook.
Affiliate marketing is about getting commissions by selling other company’s products through your blog. Earnings from affiliate marketing are passive income because you don’t have to put much effort into affiliate marketing.
Write a review post about the products that you want to sell. Then add link of that product in the review post. If customers read that post and think they will be benefited if they buy the product then they may buy.
In addition to the review post, you can promote affiliate products in other posts, but it must be relevant. For example, if you promote electronics products in a health related post, it will not be relevant.
You can also use social media to promote affiliate products. When promoting affiliate products through social media, be careful not to annoy your followers. You can follow different strategy to promote your affiliate product.
Rent out your spare room
Hope you heard the name Airbnb. If you have spare rooms in your home, you can list those rooms on their website. They have specific guidelines that you have to follow.
Renting out spare room is a good option for passive income. With this you can earn $500-$1000 per month. But how much you can earn will depend on the condition and area of your home. If your home is in a big city and close to a commercial area then you can make a very good income. And if it is in the small town, then your income will be less.
Rent Out Your Garage
Is your home garage unused? Then you can earn some extra cash by renting out that unused space.
How much you can earn by renting out a garage will depend on which area you live in. If you live in a large city, you can rent out a garage space for $150 per month or more. And if you are in a small town, you can rent out for $50-$100 per month.
Become a Social Media Influencer
Did you know that most companies now give great importance on social media influencers? This is because consumers avoid most of the time when companies advertise their products. People do not like commercial advertising.
To get rid of this problem, companies want to promote their products through social media influencers. What is a social media influencer?
A person who has a lot of followers on social media and has established credibility in a specific industry. Social Media Influencer can easily reach a large audience and persuade them.
Social Media Influencers can earn in different ways. Company pays them for sponsored content posted on social media. Those who have more followers and higher engagement rates earn more money. They can also earn money by selling affiliate products by sharing affiliate links. They also make money by organizing events for different companies.
Investing in stock
Investing in stock, bonds and mutual funds can be your passive income source. You will find many people around you who are making extra money by investing in stock.
Many people think that it takes a lot of money to start investing. But now you can start investing with a little money if you want.
Companies raise their funds in exchange for shares from investors to meet their financial needs. They invest this fund in business expansion, new product development, equipment replacement etc. Investors receive a portion of the company’s profits as dividends.
Small investors don’t have ability to buy shares of the company directly. They invest in the stock market.
You can invest in the stock market in two ways. 1. Purchases IPO from the primary market. An IPO (Initial Public Offering) is a process in which a company issues shares for the first time for the purpose of raising funds.
- Buying and selling shares in the secondary market. The secondary market is a market where previously issued stocks are bought and sold among investors.
Investing in the stock market is as profitable as it is risky. Before investing in stocks, you must consider the current state of the stock market. This guide can help you a lot in this regard.
Sell your photos online
This is a great source of passive income for photographers. Photographers can make a decent amount by selling their stock photos on various websites. There are many websites like Shutterstock that buy stock photos. They buy all kinds of pictures. It can be a landscape photo, travel, food or sports photography.
In order to sell photos on the website, you must take professional photos. Your photo should be transparent and of high quality. You need to edit your photos nicely. Pixels and dimensions must be in accordance with the guidelines of the websites.
You can get an average of 24-45 cents per image per month. If you upload a very attractive picture, you can earn some extra income.
The more photos you can upload, the more your income will continue to grow.
Some popular websites for selling stock photos
- 500px Prime
- SmugMug Pro
- Getty Images
Passive income through cash back apps
You may ask how it is passive income. I say, it is one kind of passive income. Because you can earn money through cash back apps without any effort.
You will just go to the market to shop and earn money. But to make money you have to follow some process.
The first thing you need to do is sign up for the app or website. Then when you go shopping, you will shop from the vendors listed in the app. In return you will get a percentage of the total cost on your qualifying purchases.
Flip retail products on eBay or Amazon
We all know Amazon and eBay are two world famous online ecommerce platforms. We can sell our products using these two platforms. There are some products that have lower price in your area than in other areas. If you want you can take this opportunity to make some extra cash as passive income.
You can sell all kinds of items, such as – Clearance items, Furniture, Baby and kid gear, Appliances, Food.
If you can build strong business relationship with some loyal customers then you can gradually grow your business. If your sell is increased then try to collect products from multiple sources to meet your customer’s demand.
Peer to Peer Lending
Peer to Peer Lending is a good option for passive income. If you idle money, you can lend it to another person or organization. In return you will get interest with the principal.
Lending Club is a peer to peer lending platform where borrower can get debt from a lender. Both must have a account with Lending Club to progress their deal. Depending on credit history, income, etc. interest rate is determined. If a person has a good credit score then he can get a debt with lower interest rate. But a bad credit score holder has less chance to get loan with lower interest rate.
When the borrower makes monthly installments, the principal and interest are deposited in lender’s investment account.
Sell unwanted Stuff
Do you want to start decluttering your home? You might have piles of boxes filled with unused stuff Which are bothering you.
Now is the time to sell them. Don’t waste your home space with these unwanted things. Sell them on eBAY or etsy. This will give you some extra income.
Invest in High-Yield Savings
Savings account is one of the ways of saving your hard earned money. You are saving means you are investing. I think it is a risk less boring investment.
Savings account offers a very low interest rate. So those who are scared to make risky investments, savings account are good for them. Since the rate of interest in savings account is very low, so if you want to see any real action then you need to exceed the FDIC-insured $250,000 account limit.
Sell Digital Products
Are you a young entrepreneur? Want to start a business but don’t have the capital? Then selling digital products online would be best for you. You don’t need capital to create digital products; you need skills and hard work.
Digital products include
- Audio and Video
- Video Games
- Website Themes
You can create a website to sell these. You can also sell these products using social media. If you want you can create a Shopify store and sell through it.
Invest in real estate Crowdfunding
As passive income real estate Crowdfunding is a good option. You can invest in real estate crowdfunding as an alternative to investing in the stock market. This is an opportunity for small investors. Because small investors do not have much capital in their hands. So they cannot invest in any asset alone. Crowdfunding connects many investors and pool their fund to invest in property.
Nowadays many people are making money as rideshare driver. The advantage of ridesharing is that you can earn money by driving in your spare time. There is no obligation here. You can drive when you get leisure time after your office hours.
Hope you are familiar with Uber and Lyft. You can easily get passengers using Uber and Lyft apps. This way you can earn $500-$1000 per month.
Work as Translator
The demand for translators is increasing day by day. If you are proficient in multiple languages then you can start working as a translator to make some passive income.
Freelance writing service
You can start freelance writing services for passive income. If you are a good writer, you can earn up to a few thousand dollars per month as a freelance writer.
In the freelancing markets you will find lots of article writing jobs. In order to satisfy the clients, you need to complete the project on time and submit it.
There are some strategies to write great article. Articles should be SEO-friendly. Use lots of data when writing articles. Articles must be unique.
Let’s take another look at passive income ideas.
- Start a blog
- Sell online Course
- Start a YouTube Channel
- Sell E-book
- Affiliate marketing
- Rent out your spare room
- Rent Out Your Garage
- Become A Social Media Influencer
- Investing in stock
- Sell your photos online
- Passive income through cash back apps
- Flip retail products on eBay or Amazon
- Peer to Peer Lending
- Sell unwanted Stuff
- Invest in High-Yield Savings
- Sell Digital Products
- Invest in real estate Crowdfunding
- Rideshare Driving
- Work as Translator
- Freelance writing service