“Making money while you sleep” has a nice ring to it, doesn’t it?
Let’s be honest, if you want passive income for life, you have to get to the point where your assets are earning for you (even while you’re sleeping). But first, you’ll have to put in one of three things: time, money, work, or all three.
If you’re willing to commit your resources to the ideas below, like earning interest with High Yield Savings Accounts via CIT Bank or Peer-to-Peer lending with Lending Club, you could be earning effortlessly for years to come.
You just need to know where to start and decide what resources you’re willing to expend for your passive income ideas to take flight.
Sneak Peak At Our Top 5 Passive Income Ideas
|Robo-Investing||Betterment: $0 Minimum||Learn More|
|Passive Real Estate||Fundrise: REITs||Learn More|
|High Dividend Stocks||TD Ameritrade: up to $600 Bonus||Learn More|
|High-Yield Savings Account||Discover: 1.70%||Learn More|
|CDs||CIT Bank 11mo No-Penalty CD – 1.80%||Learn More|
What is Passive Income?
Passive income is money earned with minimal activity through a variety of ventures which require little daily effort or upkeep on the individual’s part.
The initial downtime you put into passive income can be as involved as starting a blog or as simple as logging into a robo-advisor platform and investing $100. You can earn passive income whether you’re an entrepreneur with a brilliant business plan, a talented artist, or just happen to have extra cash to invest.
There’s no magic trick that turns your time directly into money. Instead, you plant seeds so your money will grow, even when you’re sleeping or at the park walking your dog.
23 Passive Income Streams
- Passive Real Estate
- High Dividend Stocks
- High-Yield Savings Account
- Rent Your Car
- Invest in a Business
- Pay Down Debt
- Invest in Index Funds
- Alternative Investments
- Rent Your Space
- Rideshare Driving
- Peer to Peer Lending
- Shop, Search & Play Online
- Online Course or Guide
- Outsource Your Business
- Cashback Credit Cards
- Advertise with Your Car
- Sleep Studies
- Online Rebates
- Start a Blog
- Buy a Blog
- Affiliatize a Blog
23 Ways to Make Passive Income
1. Invest With a Robo-Advisor
Letting an algorithm manage your investments is about as passive as you can get. Robo-advisors like Betterment allow you to set your willingness for risk, then sit back and let the income flow. And the fees are much lower than what you’d pay a human account manager. Below is a rundown of a few of the leading robo-advisor platforms.
I have been a long-time supporter of Betterment and even did an interview with their CEO in my Betterment investing review. Betterment is great at reducing any taxes you have to pay on your investments, and they work with you to give you the best financial advice through their algorithms.
Unlike other robo-advisors, with Betterment, you can actually talk to a human being if you want to. Betterment charges the same fees as Wealthfront but does not waive the fee on the first $10,000 you invest.
I don’t think you can go wrong with any of these services, but if I am investing a large sum to create a passive income investment, then I would go with Betterment, as their overall fees are lower.
|Betterment||Best for retirement accounts||1 yr. managed free||Open Account|
|Acorns||Best for beginner investors||$5 cash bonus||Open Account|
|E*Trade||Great for taxable & retirement accounts||up to $2.5k cash bonus||Open Account|
|Blooom||Helps employer-sponsored accounts||n/a||Open Account|
|M1 Finance||Borrow against your account with low fees||no fees||Open Account|
2. Passive Real Estate
Real estate is a classic and favorite source of passive income for many. As the investor, once you purchase the property and subtract all the costs for owning it (mortgage, HOAs, rehab costs, etc.), what’s left of the rent is 100% passive income.
Below are resources I recommend checking out if you’re interested:
REITs own and manage income-producing properties and distribute the profits to investors. Investing in REITs used to be expensive and require accreditation, but Fundrise has changed all this.
The minimum investment on Fundrise is only $500.
Roofstock is a marketplace of turnkey single family homes for sale. The term “turnkey” means the numbers have been crunched, the home may have been rehabbed, and may already include tenants!
All you as the investor have to do is put up the cash. Once you purchase the home it is 100% yours and the rental income goes straight to you.
For something in between Fundrise’s REITs and Roofstock’s single family homes, I recommend checking out Realty Mogul.
Realty Mogul is a crowdfunding platform that pools together investors’ money to purchase large ticket properties (office buildings, retail space, etc.). The minimum investment is $1,000.
3. Invest in High Dividend Stocks
By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.
Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation. In that way, you can earn passive income from two sources – dividends and capital gains.
You can make this process very easy and affordable by opening an account with any one of the brokerages listed below. Most brokerages these days no longer charge trading commissions which is a huge savings for us!
|TD Ameritrade||No trade fees + up to $600 bonus||Open Account|
|E*TRADE||No trade fees||Open Account|
|M1 Finance||No trade fees||Open Account|
4. Invest in High-Yield Savings
Savings accounts might be the most boring investment ever invented, but they are also the safest.
At 0.15 percent interest or lower, you’d need to exceed the FDIC-insured $250,000 account limit to see any real action.
Online savings accounts offer competitive rates as good as a CD without locking in your money for several years.
Rates change regularly so be sure and check back here for the best rates and recommended places to open an account.
|CIT Bank||up to 1.85%||$0||Open Account|
|UFB Direct||2.25%||$10k||Open Account|
|nbkc bank||1.66%||$5||Open Account|
5. Invest in CDs
CDs are simple, straightforward, and if I’m being honest, far from the most exciting investment strategy out there. But if your goal is to make money while you sleep, there isn’t anything more passive than CDs. Investing in a certificate of deposit is a great-low risk strategy to accrue interest risk-free.
CDs are like savings accounts with a catch. You can’t touch your funds before they reach maturity, which is based on the time frame you set when you open the account. That time period can range from months to years.
Be sure and buy your CD with an FDIC insured financial institution (up to $250k is insured). The longer the duration of the CD, the more interest the financial institution will pay.
Below are places we recommend to open and invest in a CD:
|Synchrony||2.45%||5 yr.||$2k||Open Account|
|CIT||1.80%||11 mo||$1k||Open Account|
|BBVA||2%||12 mo||$500||Open Account|
|Nationwide||2.20%||12 mo||$500||Open Account|
|Discover Bank||2.00%||12 mo||$2.5k||Open Account|
|Capital One||2.20%||12 mo||$1||Open Account|
6. Rent Your Car
It used to seem weird to rent out a spare room to a stranger, or to stay in stranger’s home when you go on vacation. Thanks to the likes of Airbnb and others, these sharing economy services have shown us it’s not so scary!
So let me ask – how do you feel about renting out your car?
Think about it. Rental car agencies (Enterprise, Avis, Budget, etc.) are awful to deal with and too expensive.
A company called Turo has disrupted the industry, just like Airbnb disrupted the hotel industry. People across the country are earning money from lending their cars out to strangers.
If you aren’t using your car for a couple of days, or if you have a spare one, simply join Turo’s free platform, list the car, and charge whatever you want for the day.
7. Invest in a Business
nvesting is an excellent source of passive income. What’s even better is when you invest in tangible assets that you can see, understand and watch grow over time.
My favorite way to do this is to invest in small businesses. Entrepreneurs are a special breed and when you come across the right one with the right idea… there’s no doubt that money is in their future!
So how to jump on the bandwagon? It’s simple: Provide them the funds they need in order to grow.
Below are platforms and websites that connect entrepreneurs and businesses with investors seeking a return.
|Worthy Bonds||Fixed 5% return by way of bonds||Learn More|
|StreetShares||Loans focused on Veteran-run business||Learn More|
8. Refinance or Pay Down Debt
The less obvious way to increase your net worth is to reduce your debt!
Interest rates are near historic lows, so if you haven’t yet refinanced your mortgage, now is a great time to do so. If you can save 0.50% or more on your loan, you’re potentially adding tens of thousands of dollars back into your pocket. Not many investments can beat that.
Student Loan Debt
Don’t have a mortgage? Chances are good you have student loans, so be sure and refinance if you qualify, it could save you thousands over the long run! The math when paying down debt is simple – if your loan is currently at 7% and you refinance at 3%, that’s equivalent to a 4% return on your money!
Credit Card Debt
Credit card debt is slowly creeping up in America as consumers feel stretched at the end of the month. If you have credit card debt, I highly recommend putting in place a strategy to pay it off as soon as possible.
9. Invest in Index Funds
Index funds give you a passive way to invest in the stock market. For example, if you invest money in an index fund based on the S&P 500 Index, you will be invested in the general market.
This means you won’t have to worry about details like choosing specific investments, rebalancing your portfolio, or knowing when to sell or buy individual companies.
Index Funds can be purchased through almost any brokerage or investment platform. Below are my top picks for investing in index funds:
|Betterment||Best for retirement accounts||1 yr. managed free||Open Account|
|Acorns||Best for beginner investors||$5 cash bonus||Open Account|
|E*Trade||Great for taxable & retirement accounts||up to $2.5k cash bonus||Open Account|
10. Alternative Investments
Investing is the ultimate passive income. Kevin O’Leary from Shark Tank referred to each dollar as a soldier. He said, “…I send them out to war every day. I want them to come home with prisoners so there are more of them.”
Investments beyond stocks and bonds are called “alternative investments.” Kevin O’Leary investing in entrepreneurs on a TV show is an alternative investment, for example.
Other alternative assets could include real estate, precious metals, agriculture, art, hedge funds, commodities, antiques, etc. How to invest in alternative assets used to be a mystery. The internet has changed all this; we now have many places to put our dollar soldiers to work beyond the stock market.
|Blue Print Income||Annuities||Learn More|
|Rocket Dollar||Misc.||Learn More|
11. Rent Your Space
If you’re interested in making money in real estate but want more of a hands-on approach, renting out your vacation home, house, apartment, or even a single room can be a stellar way to earn passively.
Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels. Their site breaks rentals into three categories: private room, shared room, and entire home.
Airbnb charges you 3% on every booking for their services, but you can set the nightly rate at whatever you want. People around the world are making impressive passive incomes through Airbnb.
With over 2 million rental properties, most of which are entire home rentals, VRBO has established itself as a legitimate service for renters and owners alike.
VRBO charges 5% per booking, plus another 3% if the guest pays with a credit card. But again, you can set your own rate and easily make these fees worth their while.
Vacasa is a vacation home rental management company. In other words, you can’t rent out a spare room in your house on Vacasa like you can on Airbnb, but have an extra home in a vacation destination?
Then Vacasa is a great option to make passive income, they do all the work for you.
Pro Tip: The key to your rental success is reviews. The more 4 and 5-stars you get, the more people will rent your space (and the more money you’ll make).
12. Become a Rideshare Driver
While it isn’t completely passive, rideshare driving makes the list due to its flexibility. You can make your own schedule with Uber and pick up extra income by driving others around when you are already out and about anyway!
I assume you’re familiar with Lyft, the ridesharing competitor to Uber. I actually find Lyft to be cheaper and have better experiences with the drivers.
Speaking of, how would you like to earn a guaranteed $1,000 to become a Lyft driver? Yup! That’s what the company is offering right now.
It’s part of a program called Earnings Guaranteed. According to the Lyft website, drivers will earn a guaranteed amount within a certain time frame. If the driver does not make the guaranteed amount within the time frame, Lyft will cover the difference!
And right now the guaranteed amount is $1,000! Easy money.
Don’t have a car? No problem! HyreCar is a marketplace for car rentals prequalified to drive with Uber and Lyft!
13. Peer to Peer Lending
Peer-to-peer lending, or P2P Lending, is a favorite of mine. The idea is to lend money to individuals or a business. They then pay you back, plus interest.
Let’s say someone needs to borrow $10k to consolidate their debt. They create an account with Lending Club (for example) and depending on their credit history, income, etc. are given an interest rate on the loan. The investor (you) also creates an account with Lending Club and buys the debt. When the borrower makes monthly payments, the principal and interest are paid to you in your Lending Club investment account.
There are several companies that underwrite P2P lending, some like Lending Club facilitates personal loans, while others, like Worthy, facilitate business loans (the process is the exact same).
Check these guys out to learn more:
|Lending Club||$25||4 – 7% avg||Open Account|
|Worthy||$10||5% fixed||Open Account|
|StreetShares||$25||5% fixed||Open Account|
14. Shop, Search, and Play Online
Did you know you can get paid to take online surveys? Right from the comfort of your couch, you could be earning money just by surfing the web. Check this out:
|Top Survey Sites:|
|Swagbucks||Watch videos, answer surveys, shop, and more. $5 Sign-up Bonus||Sign Up|
|Survey Junkie||Highly reputable for online surveys||Sign Up|
|Inbox Dollars||Watch videos, answer surveys, play games, and more. $5 Sign-up Bonus||Sign Up|
|MyPoints||Earn points for surveys, redeem for amazon or retail gift cards||Sign Up|
15. Create an Online Course or Guide
Why not create an online course based on your passion? My buddy Ramit Sethi at IWillTeachYoutobeRich.com is an expert at creating online courses. He has made an insane amount of money selling his lessons.
One very simple way is to produce and share your course is Teachable.com. Teachable has over three million students and is a great way to get your content in front of others.
What do you put in your online course? Good question. You can add:
- video lessons
- checklists for completing steps you recommend in your video lessons
- small ebooks to supplement the lessons
- audio files for people listening while traveling
- informative interviews with like-minded experts
- and a whole bunch more!
Pro Tip: Create several packages at different price points. Some people want everything, so you can include ‘the works’ for the highest price point and have two lower price points so you can receive the largest possible volume of orders.
If writing articles or creating videos isn’t your thing and you want to make money online, try creating an online guide. A good example of this income source comes from Pat Flynn’s website, SecurityGuardTrainingHQ.com. On the website, his map allows someone to click on any state to see the security guard requirements for that state.
By providing specific information in a guide-like format, you can make money through some of the means already addressed: Google AdSense, affiliates, and even memberships to your online guide.
It’s a fantastic idea!
16. Outsource Your Business
Outsourcing will free up your time so you can focus on other tasks that will result in more income. If you don’t want to hire employees, consider hiring freelancers who work as contract laborers. Look for freelancers with a strong work ethic who provide quality results.
As long as the main product or service isn’t something only you can do, you can transform your business into a passive moneymaker.
Here are the companies I recommend starting with:
- CloudPeeps: CloudPeeps does an excellent job matching business in need with skilled, vetted freelancers who can manage everything from PR and marketing to web development and administrative tasks.
- Fiverr: Fiverr has it all. Much like CloudPeeps, it supplies hand-picked freelancers for all of your business needs.
- Guru: Guru offers similar services to Fiverr and CloudPeeps but emphasizes their flexible payment options, like hourly pay, recurring payments, payment by milestones, and payment by the project.
- PeoplePerHour: With an advanced AI system that matches your project needs to the perfect freelancer and features on Forbes, CNBC, and BBC, PeoplePerHour offers a legitimate pool of talented artists to outsource to.
- Upwork: Like the other freelancing networks, Upwork pairs you with freelancers in several sectors and boasts hires by companies like Microsoft, with short-term, full time, and recurring options.
17. Use Cashback Credit Cards
If you’re already using credit for some of your purchases, pursuing credit card rewards is an absolute no-brainer. Most top rewards cards let you earn anywhere from 1 to 5 percent back with almost no effort on your part!
The Chase Sapphire Preferred®card offers one of the best opportunities out there. Spend $4,000 on the card in 90 days to earn 50,000 points, worth $500. Add your spouse as an approved user, and you score an extra 5,000 points. That’s 59,000 points for just $4,000 of spending you were going to do anyway.
Our post on the top six cash back credit cards for 2020 offers an array of additional options. With the right card, you could earn 1 to 5 percent back with almost no effort. If travel is your thing, you can get bonus offers on travel rewards credit cards to save thousands of dollars on travel each year.
|Capital One Quicksilver||$150||Spend $500 in first 3 mos||$0||Learn More|
|Wells Fargo Cash Wise||$150||Spend $500 in first 3 mos||$0|
|Chase Freedom||$150||Spend $500 in first 3 mos||$0|
|Bank of America Cash Rewards||$200||Spend $1,000 in first 3 mos||$0|
18. Advertise with Your Car
Carvertise: With Carvertise you could earn up to $1200 during an ad campaign and can usually expect around $100 a month, just to use your car as ad space. Check out their site to see if they’re currently advertising in your area.
Wrapify: Wrapify operates a lot like Carvertise, but differs in how you get paid. With Wrapify, you track your mileage and location. The more you drive, the more ads you qualify for, and the more money you make, which can add up to $200 a month.
Vugo: Vugo is an awesome way to earn passively alongside rideshare driving. All you do is mount a phone or tablet to your dash and play ads, games, and videos. The app is compatible with Google Maps and Waze. Drivers can earn up to $200 more a month playing the ads, and there’s a driver tipping feature built in.
19. Get Paid to Snooze With Sleep Studies
I’m not even kidding. If you’re in decent health, catch plenty of Zzz’s, and are in an area where a sleep study is being conducted, you could make the most passive income of all.
If you qualify, you could make thousands of dollars in one study. Once accepted, you’ll probably have to undergo a physical, alongside an exam from a psychologist to ensure you’re up to the task. Did I mention you get paid every step of the way?
Keep in mind, though, that these studies have their own challenges, like cutting you off from media sources and your social life and requiring you to be watched and studied for the duration of the experiment.
You might also be asked to sleep in potentially uncomfortable positions for an extended period of time. But the pay is impressive. For sleep studies and other medical and psychological studies, search ClinicalTrials.gov and filter results based on your location, age, and other factors.
20. Ebates – Get Online Rebates
With Ebates, you can get a rebate when you shop at a surprisingly wide variety of online retailers. Here’s how it works:
- Start an Ebates account.
- Follow the directions to activate the Ebates browser extension.
- Shop like you normally would online.
Cashback percentages range from 1 to 22 percent (occasionally higher)! Each month you’ll get a check, PayPal payment, or gift card to the store of your choice.
If you buy a big-ticket item like a refrigerator or a smartphone or do your grocery shopping online, you can earn some noticeable income.
21. Start a Blog
Take it from someone who’s reaping the benefits as we speak — blogs are an unbelievable source of passive income. But there’s more to making bank with a blog than just posting good content.
If you’re looking for an extremely cheap, yet highly scalable way to create a passive income for yourself, you might want to take a moment and consider starting a blog.
Did you know: you can start a blog for as little as a penny for your first month, and just a couple dollars per month thereafter?
Here’s the idea: If you can consistently use your blog and create a lot of value for a lot of people, you can generate an extraordinary amount of passive income. As you post to your blog, more and more, your site will start bringing in traffic whether you put in any additional time or not.
A blog is the most cost-effective method to creating a truly passive income stream I know of. Hour after hour, day after day, your blog is out there doing work for you;
What’s the catch? It takes time to get it rolling. That’s it. The sooner you start, the sooner an income stream can begin to grow.
You’ll also want to access our Make 1k Challenge, which is a free email course that walks through the steps to start your first blog and make your first $1,000.
The first step is to register a domain and select a hosting plan for your blog. I recommend any one of these domain hosting companies below:
|Bluehost||Hosting for as little as $2.95/mo||Learn More|
|Siteground||Hosting for as little as $3.95/mo||Learn More|
|HostGator||Domain, hosting + email for $3/mo||Learn More|
|GoDaddy||60% off plus FREE domain||Learn More|
22. Buy a Blog
Thousands of blogs are abandoned by their owners every year. If you can buy blogs with a reasonable amount of web traffic and demonstrated cash flow, it could be a perfect passive income source.
Most blogs employ Google AdSense, which provides a monthly revenue stream based on ads that Google places on the site. There may also be affiliate programs generating additional revenue.
From a financial perspective, blogs usually sell for 24 times their monthly income. So if the site generates $250 a month in income, you can likely buy it for no more than $6,000. Translation: a $6,000 investment will buy you $3,000 per year in cash flow.
Some sites have good “evergreen content that will continue generating revenue even years after the site has gone silent, so a simple $5,000 investment can net you ongoing passive income.
Bonus tip: If you buy such a site then reinvigorate it with fresh content, you may be able to increase the monthly revenue and sell the site at a later date for substantially more than what you paid for it.
I recommend buying a blog on Flippa. Here are some quick facts on this awesome marketplace:
- Includes everything from small sites to ones that garner millions
- Currently has more than 2,000 web-based businesses for sale
- Based on a bidding system and fulfilled by Flippa Escrow program to ensure your money and business are safely secured.
23. Affiliatize your Blog
Whether you start your own blog or buy a pre-existing one, choosing to affiliatize it is a passive income technique that will serve you well. You can sign up to promote certain products or services on your site, for which you will be paid a flat fee or a percentage of the amount of the sale.
If you think affiliate marketing is too complicated for you, you’re selling yourself short. This strategy isn’t as hard to do as you might think.
You can find affiliate offers by contacting vendors directly or on dedicated websites such as ShopHerMedia.com. It’s always best if the product or service is one that you are either very interested in or one which is highly relevant to your website.
How Can I Generate Passive Income?
Passive income can work for you, regardless of if you have millions of dollars to invest and no time to spare, or $0, ample free time, and a spark of ingenuity.
While they might take some funding and fortitude to get started, the moneymakers on this list will continue to earn you money long after you’ve put in the work.
So look at what you are working with: establish your financial goals and decide how much time, effort, and money you’re willing to put into your venture.
Whether you choose to invest, buy a business, outsource your own, or get paid for your daily routine, you can prosper from passive income.
What are you waiting for? Plant the seeds today with one of the ideas on the list.