25+ Passive Income Ideas to Help You Make Money

If you’re trying to make money on the side without having to think about it constantly, opting for a passive income strategy might be for you.

It seems like everything is more expensive, and the daily grind of making money doesn’t seem to be cutting it. Sound familiar? If this is the case, it might be time to look into passive income ideas to help you make money.

If you’re struggling with rising costs, you’re not alone. A 2019 Pew survey found that 35% of middle-income families frequently worry about paying their bills. 

A Passive income source can be a great tool to help increase your cash flow and provide financial security. Passive income can be accomplished through a variety of different opportunities. Depending on what works for your lifestyle, you might consider running a side hustle, investing, or renting out goods that you don’t use regularly. A passive income strategy won’t require an immense amount of time or effort that will take you away from your full-time job or other obligations.

What is Passive Income?

The Internal Revenue Service (IRS) defines passive income as trade or business activity that you don’t materially participate in. This means that you aren’t involved in its operations on a continual and significant basis.

While passive income allows you to earn money without continual involvement, keep in mind that most streams of passive income do require initial financial and physical (i.e. time) effort to get them started. Additionally, many streams of passive income to require you to monitor them and maintain them on a semi-regular basis.

With this said, unlike active income, passive income usually won’t require you to invest tens of hours per week, so it’s still a fairly easy way to earn additional income.

How to Earn Passive Income

People typically generate a passive income stream in one of three main ways:

• Investing. When you invest, you use money you already have to make more money.
• Asset building. This means acquiring an asset that earns money passively over time.
• Asset sharing. Sharing in this sense means selling or renting out assets that you already own.

Easy Passive Income Ideas

Here are some ideas to earn passive income that are considered fairly easy to take on. 

1. A Bond Ladder

How To Do It: A bond ladder is a series of bonds that mature at different times over a period of years. The staggered maturities allow you to decrease reinvestment risk (the risk of reinvesting your money when bonds offer too-low interest payments).

With a bond ladder, you can collect your interest payments when the bond matures, or you can “extend the ladder,” and role that money you’ve made into a new set of bonds.

Difficulty Level: Easy

Income Potential: The average return for a bond is about 1.6%.

2. Set Up an Annuity

How To Do It: An annuity is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future. You buy an annuity by making either a single payment or a series of payments. 

Annuities are most typically used for people seeking for stable, guaranteed retirement income. Keep in mind that the money you invest will not be liquid, and if you need to access it, you will face penalty fees.

With a typical annuity, you give money to a financial company, usually an insurance company, that will provide you with a stream of income in the future. Annuities pay out monthly, and they can be set up in a variety of ways, for example to start paying immediately or much later.

While the payouts are simple once set up, annuities are tremendously complex. When you set one up, you’re often locked in long-term, though you may be able to get out by paying a significant penalty. Read the fine print on the contract carefully so that you understand the pros and cons of the specific contract.

Difficulty Level: Once it’s set up, it’s pretty simple. 

Income Potential: A $100,000 annuity would pay between $448 and $1,524 monthly for life if you use a lifetime income rider.

3. Vending Machines 

How To Do It: Owning and operating vending machines can provide a (mostly) passive income stream. 

You’ll need to find a location and shell out at least a few thousand dollars to get started. Vending machines are particularly easy to gain income from when you own or operate a business with high trafficked areas (i.e. a car wash, etc.)

From there, upkeep just requires you spend a little time each week restocking and servicing your machines, though you can outsource these tasks if you’re willing to sacrifice some profits.

Difficulty Level: Easy

Income Potential: The average vending machine earns $35 a week, but vending machines that are well-stocked and placed in safe, high-traffic locations can generate over $400 a month.

4. Domain Name Investing

How To Do It: To get started with domain name investing, you’ll purchase inexpensive domain names. From there, the goal is to be able to resell them for a profit. You’ll generally want to target common terms or specific proper nouns, and keep in mind that .com domains run at a premium over almost all others in the U.S. 

Keep in mind that if you don’t sell the domains off, you’ll be responsible for paying the annual fees associated with each domain name.

Difficulty Level: Medium. It’s not hard to get started, but you’ll have to evaluate the market to make smart decisions on which domains to buy. 

Income Potential: Assuming that you’re able to actually sell the domain names you purchase, a beginner can earn between $100 to $10,000 by flipping domains. However, seasoned domain flippers can flip undervalued domains for millions of dollars,

Passive Incomes Ideas With Little Money 

Some passive income opportunities require a good amount of financial investment. These passive income ideas can be taken on with little money, and can have solid returns!

5. Affiliate Marketing

How To Do It: Affiliate marketing is most commonly used for website owners, bloggers, and social media influencers. With affiliate marketing, you’ll promote a third party’s product by including a link to the product on your site or social media account. 

The link is coded with the owner’s specific tag so the website can assess how much traffic and/or sales their unique link is generating. The more traffic/sales the link generates, the more money the owner makes. 

Companies from Amazon to Nordstrom and Target offer affiliate links for their vetted partners.

Difficulty Level: Easy, as long as you’ve built up an audience for your platform. 

Income Potential: On the low end, you’ll earn about 5% of the sale, but with some arrangements, you can earn as much as 50%, usually when promoting a class or event. There are also affiliate marketing programs that provide a flat rate per sale instead of a percentage.

6. Invest in a High-Yield CD

How To Do It: A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years. In exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest.

In order to make passive income with a high-yield CD, you’ll need to have money to invest. To make the most of your CD, you’ll want to do a quick search of the nation’s top CD rates.

Difficulty Level: Easy

Income Potential: According to Investopedia, some of the highest yielding CDs are currently yielding rates of around 5%.

7. Advertise on Your Car

How To Do It: Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.

Consider reaching out to companies including carvertise.com, nickelytics.com, or wrapify.com

Difficulty Level: Easy

Income Potential: Carvertise notes that you can earn $450 – $1,000 by wrapping your car.

8. Transportation Rental

How To Do It: If you’re not going to be using your car, consider renting it out as a transportation rental. Companies like Turo allow you to rent out your car when you’re not actively using it. 

Turo is an American peer-to-peer carsharing company. For more details on how to build your Turo business strategy, check out this article. 

Difficulty Level: Medium

Income Potential: Turo estimates that the average annual income of one car with at least seven trip days per month is around $10,516 annually.

Passive Incomes Ideas for People Who Like Numbers 

If you like numbers and analyzing data, these passive income ideas might be up your alley. Investing offers the biggest opportunities for generating passive income, but it might require big sums of money to generate meaningful returns.

9. Dividend Stocks

How To Do It: First you’ll need to purchase stocks that pay dividends.

Dividend stocks reward investors with regular payouts of company profits. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.

This means that you do have to invest a significant amount of money to make money.

Difficulty Level: Easy, as long as you have the funds to invest.

Income Potential: The average dividend yield on S&P 500 index companies that pay a dividend historically fluctuates somewhere between 2% and 5%, depending on market conditions. In general, it pays to do your homework on stocks yielding more than 8% to find out what is truly going on with the company.

10. Exchange-Traded Funds (EFTs)

How To Do It: ETFs are investment funds that hold assets such as stocks, commodities and bonds, but they trade like stocks. 

ETFs also diversify your holdings, so if one company cuts its payout, it doesn’t affect the ETF’s price or dividend too much. Here are some of the best ETFs to choose from. 

Top U.S. market-cap index ETFs give investors broad exposure to publicly traded companies listed on American exchanges using a passive investment approach that tracks a major index such as the S&P 500 or Nasdaq 100.

Difficulty Level: Easy

Income Potential: 2023 YTD performance for top U.S. market-cap index ETFs is at 4% but the historical performance over five years is about 9.6%.

11. Bonds and Bond Index Funds

How To Do It: Bonds are a way for investors to lend money to companies, federal governments, as well as state and local governments in order to collect interest income. 

Bonds are considered a safer investment than stocks, but also generally earn a lower return on your investment. 

You can purchase bonds like you would stocks, but they are considered a safer investment because of their lower volatility and relative safety compared to stocks.

Difficulty Level: Easy

Income Potential: The current 10 year treasury bond yield as of March 23, 2023 is 3.38%.

12. Crypto Staking

How To Do It: Crypto staking is a way of growing your holdings in certain cryptocurrencies by using them to help verify activity on an underlying blockchain network. 

When you stake a cryptocurrency, you can be rewarded with more cryptocurrency.

To do this, most people choose to delegate their cryptocurrency to someone who is compiling records of transactions on the network on which it runs. Those verifiers need to put some tokens at stake to guard against fraudulent transmissions. By giving the voting power of your tokens to a reputable verifier, you can get a share of the rewards they receive for carrying out their job accurately.

Difficulty Level: Difficult

Income Potential: Crypto staking is estimated to have an average interest rate of 7.7%.

Passive Incomes Ideas for Risk Takers

These passive income ideas are riskier than others, but usually have higher rewards!

13. Peer-to-Peer Lending

How To Do It: A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary. Platforms that offer peer-to-peer lending include Prosper and Funding Circle. Funding Circle targets businesses and has higher borrowing limits and payoff, which targets better credit risks.

Difficulty Level: Easy

Income Potential: Prosper’s peer-to-peer lending platform reports that it has provided average historical returns of 3.5% to 7.5%.

14. Private Equity

How To Do It: Private equity funds are typically only available to accredited investors who meet certain net worth or income requirements.

If you don’t meet the net worth requirements, you can back a family member, friend, or other trusted individual to help fund their business with an agreement to earn returns from any future profits.

Difficulty Level: Medium 

Income Potential: Private equity produced average annual returns of 10.48% over the 20-year period ending on June 30, 2020.

15. Buy Crowdfunded Real Estate

How To Do It: Using a crowdfunding platform to invest in property is a great way to get into real estate if you don’t want to be responsible for management, repairs, and dealing with tenants. 

With crowdfunded real estate, an experienced investing team picks out the real estate, and then you can decide to invest in it and how much you’re comfortable with.

You’ll pay an annual management fee to the real estate platform and have minimum investment amounts that could range from ten dollars to tens of thousands of dollars.

Difficulty Level: Medium

Income Potential: Equity crowdfunding investments on reputable platforms, with terms of 5 or more years, have an average internal rate of return (IRR) of over 17%. Shorter-term real estate crowdfunding investments have average returns in 10% to 12% range.

16. Real Estate

How To Do It: Investing in rental properties is an effective way to earn passive income. But it often requires more work than people expect.

In order to actually earn money through rental income, you’ll need to go into the venture prepared and well researched. 

You’ll want to be sure and assess the following information:

• The property’s total costs and expenses
• The financial risks of owning the property
• How much return you want on the investment

Difficulty Level: Difficult

Income Potential: According to the S&P 500 Index, the average annual return on investment for residential real estate in the United States is 10.6%. Commercial real estate averages a slightly lower ROI of 9.5%.

Online Passive Income Ideas

Don’t want to worry about a physical rental property or being available in a physical location? Many money making skills can be used to generate income online. These online passive income ideas are for you!

17. High-Yield Savings Accounts

How To Do It: A high-yield savings account is a no-brainer way to make extra cash. Online banks such as Ally don’t have brick-and-mortar locations. This allows them to give higher benefits/incentives to customers. A high-yield savings account will make significantly more money in interest than a regular savings account, making it a great option for virtually anyone.

Difficulty Level: Easy

Income Potential: High-yield savings accounts can earn around 3% APY. By comparison, the national savings average is 0.37% APY.

18. Invest in a CD

How To Do It: Certificates of deposits, most commonly known as CDs are a great way to generate some passive income. They are considered low risk, but it’s important to keep in mind that your money will be tied up more than it would be in a high-yield savings account.

Difficulty Level: Easy

Income Potential: Top National CD Rates:

• 3 month CD rates are around 0.67% to 5%
• 6 month CD rates are around 0.97% to 5.25%
• 1 year CD rates are around 1.49% to 5.2%
• 2 year CD rates are around 1.41% to 5.5%
• 3 year CD rates are around 1.31% to 5.5%

19. Write an E-Book

How To Do It: You can write an e-book on practically anything, but you’ll want to ensure that you have an expertise on the topic, or conduct enough research to provide value to the reader.

When writing an e-book you, you can provide readers with an electronic download of your book, or you can take advantage of the low cost of publishing available with Amazon. It might even be worth leveraging the distribution power of Amazon to get your book seen by potential buyers. 

E-books can be relatively short, and are usually very inexpensive to develop since they rely on your own expertise. You can use free platforms like Canva to create e-books that look professional. With a variety of different templates, you can build your book pretty quickly.

Difficulty Level: Easy

Income Potential: Depends on what you sell your book for. The most commonly purchased e-books range from $2.99 to $3.99, with $3.99 being most popular.

Passive Income Ideas for Students 

When you’re a student, every dollar makes a difference. Here are some passive income strategies that can be easily implemented when you’re in school.

20. Content Licensing

How To Do It: Selling content such as photos online can become a great source of passive income, especially if you can sell the same photos over and over again. To do that, you might work with an organization such as Getty Images, Shutterstock, or Alamy.

To get started, you’ll have to be approved by your chosen platform. From there, you’ll license your photos to be used by whoever downloads them. The platform you choose will pay you every time someone uses your photo.

Difficulty Level: Easy

Income Potential: On average, stock photographers make $0.02 per image per month with stock photos, while professionals make $0.05–$0.25 per image per month. Royalty-free sales earn between $0.10 and $99.50, while extended licenses bring up to $500. Stock photo agencies pay an average of $0.32 per sale of a royalty-free license.

21. Create a Course

How To Do It: A popular strategy for passive income is creating an audio or video course. Once the course is created and marketed, you’re left with a hands-off approach to income as people purchase the course that you’ve built. 

Courses can be created and distributed through platforms including Teachable, Udemy, SkillShare and Coursera.

Difficulty Level: Medium to difficult. Taking a course takes time. Once the course is built, you’ll need to market the course in order to drive traffic to it and generate income.

Income Potential: Depends on what you charge for your online course.

22. Rent out Your Home Short-Term (i.e. over breaks)

How To Do It: If you’re going away for the summer or have to be out of town for a while, or maybe even just want to travel, consider renting out your current space while you’re gone.

You can rent out your home or room on platforms like Airbnb, VRBO, or a variety of other online options. 

Difficulty Level: Medium. While the act of renting out your home isn’t difficult, your offering must be vetted and up to a certain standard to qualify on platforms like Airbnb.

Income Potential: On average, hosts in the United States make more than $9,000 per year, according to Airbnb, but those numbers vary. Some hosts buy or lease a number of apartments or homes and rent them out full time.

23. Custom Designed Products

How To Do It: If you have a flair for crafting, you can sell your custom designed products on platforms like Etsy, CafePress, or Zazzle. 

Printing partners allow you to have the items printed and shipped without directly having to do the work or investing in the merchandise, packing, shipping, or physical space yourself.

Difficulty Level: Medium. You’ll have to put in some initial legwork to develop the designs, find printing/shipping partners, and build out your online shop.

Income Potential: The average successful seller on Etsy earns between $43,000 and $46,000 per year.

Passive Income Ideas for Mothers and Caretakers

As a mother or a caretaker, it can be challenging to make extra time to take on a full-time job. These passive income ideas can help increase your cash flow without taking you away from your caretaking obligations.

24. Real Estate Investment Trusts (REITs)

How To Do It: A REIT is a real estate investment trust that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.

You can purchase REITs on the stock market just like any other company or dividend stock.

Difficulty Level: Medium. While buying the stock is not difficult, you’ll need the money to invest. You’ll also need to analyze the data and returns to make a good business decision about the REITs that you purchase.

Income Potential: REITs average an 11.8% ROI.

25. Rent Out a Parking Space

How To Do It: Renting out a parking space is a great opportunity to make money if you have a spot or garage that isn’t being used. This is particularly true in a city or highly trafficked area. 

You can also rent out a large open area to be used as a parking area for an event for venue. In particularly high-demand areas or during high-demand times, your parking spot could be worth a lot of money. For example, you might rent a spot during a concert, sporting event, or during commuting hours

Companies like Spacer make it simple to rent out your parking spot.

Difficulty Level: Easy

Income Potential: Spacer notes that you can make up to $450 per month renting your parking spot.

26. Land Rental

How To Do It: If you have extra room on your property such as space in your yard, garage, driveway, or literally extra acreage that you’re not using, consider renting it out.

Sites like Vanly let you lease land to travelers looking to pitch a tent (or park a recreational vehicle) in your area.

Difficulty Level: Easy

Income Potential: Vanly notes that you can earn more than $1,000 per month by sharing your property with campervan and RV travelers.

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This article was written by The Salary Project writer, Michele Lando.