Passive income is the dream for most people. Find out how to generate passive income with these 10 passive income ideas that you can get started with today!
It’s the dream isn’t it? Lazing on the beach, sipping on a cocktail (or a mocktail in my case) counting your benjamins.
Wikipedia defines passive income as “income received on a regular basis, with little effort to maintain it”. Before I get into ways to create a passive income, I want to focus on a specific part of that definition. “…little effort to MAINTAIN it”.
The key word here is “maintain” – while passive income does not require much effort to maintain, it almost always requires a substantial initial investment of either time, money (or both).
But in the long run, that initial time investment is absolutely worth it, especially when you’re sitting back watching your bank balance grow. Investing your money in income producing assets really is the difference between rich vs. wealthy people.
Here are my 10 favorite ways to generate passive income streams – these will help you escape the rat race and live a life of freedom!
How To Generate Passive Income
1. Self Publish an eBook
eBooks are incredibly popular these days, with the vast majority of eBooks being self-published. And while there is certainly an initial time investment involved with writing an eBook, there is the potential to generate a nice passive income through eBook sales.
I can attest to this, having written my own eBook (Cracking the Code-How to Generate Income with Amazon Affiliates.) The process of writing my eBook was surprisingly simple. I wrote the eBook in Microsoft Word, exported it to PDF format, created a cover using Canva, and then uploaded it to SendOwl and linked my PayPal account.
Canva is a great tool to use for creating your eBook cover and graphics to promote your eBook but if you’d rather hire it out, you can find graphic designers on Fiverr or Upwork.
2. Purchase a Rental Property
This is my favorite way to generate passive income. There is an upfront investment, and it does take some work to get it set up.
But once you have your property rented (for more than your mortgage and other expenses) and a property manager in place, it can be a goldmine.
I own 11 rental properties right now and absolutely love it as a “mostly” passive income stream. I find properties for under market value, rehab them, then rent them out. I have a project manager and property manager that handle the work. Once it’s rented, I sit back and collect the money.
And as time goes on, rents go up and you get appreciation on your property. You could even buy enough rental properties to sustain your retirement!
However, like I stated, it does require a lot of upfront investment, and there can be some risk involved. A good alternative to buying your own rental property is to invest with a company like RealtyShares. RealtyShares is a crowdfunding platform that allows you invest in real estate for as little as $5000.
3. Start a Blog
Blogging is another one of my favorite ways to generate a “passive” income. The beauty of a blog is that it’s always “on,” regardless of whether you are or not.
I run 4 blogs now, with 3 of them bringing in regular income (one is still in the works). While running a blog is not necessarily passive as you do have to do the work on it, once you get it set up, it allows you the opportunity to take substantial amounts of time off and still make money.
I’ve worked ahead on my food blog (Went Here 8 This) and scheduled out content until the end of December. That means I can technically take off from now until then, spending my holidays with friends and family instead of working, while still bringing in income.
Also, last Christmas, the boyfriend and I went to visit my parents for a week and I didn’t work on my blog at all. However, thanks to the hard work I’d put in prior to our vacation (and investing in some excellent scheduling tools like Tailwind to schedule out Pinterest PINs) I was able to keep things running smoothly and continue to make money.
If you’re interested in starting a blog, I’ve written a step-by-step tutorial on how to start a blog (and you can also get a free copy of my blogging resource guide where I list everything I have done to create a full time income in less than a year.)
4. Multi Level Marketing/Network Marketing
MLM certainly isn’t for everyone but there are people who generate an amazing income through network marketing. I personally know of a couple who makes six figures a month through their networking marketing business, so the potential is there.
It appears that one of the main keys to success is choosing a network marketing company that sells a product you’re genuinely passionate about. If you love the product, it’s probably something you’re already sharing with your friends anyway, so why not make some money doing so?
But, like any opportunity, network marketing isn’t a get-rich-quick scheme, and there is almost always an initial cash investment required. However, most companies will provide you with a start-up kit as part of your initial investment.
The jewelry company Stella & Dot is an example of this – their start-up cost is $199 but you get to choose $350 worth of jewelry. (I’m not a Stella & Dot consultant, but I think that’s a pretty good deal if you truly like the jewelry!) You can read more about Stella & Dot here.
Investopedia describes a robo-advisor as “an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners.”
If that sounds like gobbledygook, basically robo-investing means that you’re using an online service to invest your money for you, with very minimal requirements on your part.
Robo-investing is a great option for someone who doesn’t have the time or inclination to learn the ins and outs of investing (or the time to manage a portfolio) but wants to invest in stocks and bonds.
I’ve been using a robo-advisor called Betterment for a couple of years now and I’ve had a great experience with them. The initial set-up was very straightforward and I’ve basically done nothing since then – I let them handle everything.
6. Sell Stock Photos
If you’re good at photography, you can generate a passive income by selling your stock photography online. There are countless website owners looking for great stock photos to use on their site (I subscribe to two stock photo services for this blog.)
Once you’ve taken and edited your photos, you simply upload them to a stock photography site like Shutterstock. From there on out, every time someone purchases your photo, you’ll earn money.
7. Create an Online Course
If you’re an expert on a certain topic then creating an online course and sharing your knowledge with the world can be a great way to generate a passive income.
And don’t think that you’re limited to teaching things like accounting, freelance writing, knitting, etc. A quick search on Udemy and you’ll see that people are creating and selling online courses on every topic under the sun.
Just think, if it’s a topic or skill that you’ve mastered, it’s highly unlikely that you’re the only person in the world interested in it.
You can check out Udemy here for more inspiration (and you can also use them to host and sell your own online course.)
8. Affiliate Marketing
Affiliate marketing basically means that you’re partnering with a company to promote their product for a small commission, and it’s one of the most popular ways that bloggers and website owners make money.
Affiliate marketing is a long term game but once you’ve gotten the ball rolling, it’s basically the definition of passive income.
However, it’s not as easy as slapping up a few links on your blog and calling it a day – there’s an art to affiliate marketing.
Hands down, the best course I’ve ever taken on affiliate marketing is “Making Sense of Affiliate Marketing” by Michelle Schroeder-Gardner.
Michelle is the founder of Making Sense of Cents and she makes six figures a month through affiliate marketing so it’s clear she knows what she’s talking about.
You may also like Affiliate Marketing Programs for Bloggers.
9. Create YouTube Videos
YouTube is one of the most popular sites on the internet with billions of page views every day and you can tap into this by starting your own YouTube channel.
Start by creating videos that are funny, entertaining and/or informational and promoting the heck out of them. Once you’ve grown a following and garnered a good amount of views, you can start monetizing your videos with ads.
10. Sell Digital Products on Etsy
Etsy is the premier online marketplace for handmade products but there is also the ability to upload your digital designs and sell them through the platform.
Selling digital downloads is an excellent way to create passive income because it’s essentially set and forget – just upload your design to Etsy, set your price and the delivery is handled by Etsy (you’ll be responsible for driving traffic to your Etsy shop though, so consider starting Instagram and Facebook pages to promote your products.)
These are all great ways to generate passive income streams to allow you to live a life of freedom. My goal is to make enough passive income that I can spend my time doing the things I’m passionate about!
Do you have any other ways you generate a passive income streams? Let me know in the comments!