Table of Contents
- What is Passive Income?
- How Much Capital Needed?
- How Much can you Earn?
- Top 18 Passive Income Ideas
- 2. Vlogging
- 3. Dropshipping
- 4. Stock Investing
- 5. High-Interest Savings Accounts
- 6. Affiliate Marketing
- 7. Renting your House
- 8. Build a mobile app
- 9. Time-Deposits
- 10. Peer to Peer Lending
- 11. Create an Online Course
- 12. Selling Stock Photos
- 13. Bonds Investing
- 14. Invest in Mutual Funds
- 15. Lose Weight
- 16. Become an Angel Investor
- 17. Sell your Stuffs Online
- 18. Music Licensing
- 19. Franchise an existing business
- 20. Cashbacks Rewards
Do you want to earn passive income the right way?
Let me show you how.
But first, let’s understand the meaning of passive income.
What is Passive Income?
Passive Income is a type of income you earn without exerting or doing any work or effort. Unlike active income, you will be exerting lots of efforts and time to earn an income. In some other cases, other passive income ideas require a little amount of effort and time like starting a blog, building a mobile application, and creating Youtube videos but sooner or later, they will give you an income even when you’re asleep.
How Much Capital Needed?
There are a lot of passive income ideas that don’t any require capital such as drop shipping, vlogging, affiliate marketing, and etc. However, there are other passive income ideas that require a minimum amount of capital like starting a blog, lending, and investing.
How Much can you Earn?
Well, it totally depends on what type of business you’re engaged in. Example, if you invested in stocks that pays high dividends, you won’t just be earning from dividends but also, you will be earning income from price appreciation.
Furthermore, if you deposited your money in a high interest savings account (6% annually) and interest is compounded monthly, your savings will grow overtime and its value will eventually increase. That is the power of compounding interest! But of course, your gain will depend on the amount of money you deposited to your account.
Top 18 Passive Income Ideas
Blogging is so popular right now. According to Worldometers, in March 2019, there are over 4.4 million blog posts published every single day. While in January 2020, there are 1,742,813,617 websites worldwide.
So what does it mean? Is blogging still profitable? Of course blogging is still profitable and everyone can start a blog. You don’t need to be tech savvy because everything is simple as long as you have patience and determination. If you want to start a blog, all you have to do is to learn everything first from starting a blog to making it profitable. Acquire knowledge by doing your own research and eventually create your own blog and sharing your story to everyone.
Where to Start a Blog?
There are a lot of free blogging platforms out there like Blogger.com, WordPress.com and Medium but I don’t recommend you to start your blog on these free blogging platforms. The main disadvantage of starting your blog in these free blogging platforms is that you don’t own your blog. Instead, it is owned by the platform itself. They have the right to delete your blog too! But if you want to have a first hand experience, then start from free blogging platforms.
I highly recommend you to start a self hosted blog meaning you’re the real owner of the blog. Start creating your blog via WordPress.org. First things first, you have to choose your web hosting provider. Some of the best well-known web hosting providers are BlueHost, Siteground, HostGator, and Hostinger. Each of them have different hosting plans and fees so go check them out.
After your blog is fully established, you can now start earning money from your blog. One of the most common way to earn money from your blog is by displaying ads on your site. You can apply to Google AdSense, Mediavine, or Media.net. If your application is approved, you can now start placing ads on your blog.
There are two ways you can earn from displaying ads on your site. The first one is Cost per Mille (CPM) and the second is Cost per Click (CPC). For CPM, 1000 impressions is equal to $1 but it can go higher depending on your visitors’ country. For CPC, your blog earn a certain amount of money every time a visitor click on an ad. So, even you’re at work or asleep, you still earn money without doing anything.
That’s why blogging is completely passive income. You earn income by just publishing high quality articles and doing SEO to attract more blog visitors.
Michelle Schroeder-Gardner, author and owner of Making Sense of Scents blog, is now earning over $1,000,000 revenue through blogging. She just started it as a hobby but now she’s earning a million bucks from her blog.
If you’re good in writing, then probably you should start your own blog and make money from it. Use your talent to make money!
There are hundreds of niche ideas you can write about but I want you to think of your passion. What do you love doing? And lastly, don’t start a blog niche that you don’t know.
Have you already watched Youtube videos? Did you know that every ad you watch from their video gives them an income? The more ads you watch, the more income they get. Why not start your own Youtube channel too and make money by just making videos?
Youtube is an online video sharing app that has over 2 billion users worldwide. You can find tutorials, comedy or entertainment videos, or any kind of video in this platform. Everything you need can be found on this single app.
Vlogging can be your source of passive income. All you have to do is to create useful or educational videos then upload them on your YouTube channel.
If you love doing makeup, then why not do makeup tutorials? There are a lot of people starting to learn how to apply makeup so when you start creating a tutorial video, then that’s a big help!
All you have to do is to know your passion and what you’re good at. If you’re good on dancing then why not start creating dance tutorials.
When you reached Google AdSense requirements namely 4,000 watch hours and 1,000 subscribers then you’re now eligible for monetization. If they approved your application, ads will start showing up on your videos.
When your audience watched your videos and ads showed up, then that’s the start of your path to Youtube success. All you have to do is to publish videos on your YouTube channel and start monitoring your earnings on your Google AdSense dashboard.
Examples of YouTube vloggers that earn millions from making Youtube videos are PewDiePie, Logan Paul, Jeffree Star, Jake Paul, Markiplier and many more.
Maybe you’re wondering what dropshipping is. But did you know that you can make passive income from just doing dropshipping?
Dropshipping is a type of business just like you’re selling physical products but the main point is that you don’t own the products. Once a buyer place an order, you provide the shipping details to the supplier then the supplier will be the one to deliver the ordered product to your customer.
But before everything else, you need to set up your website but it will become more easier if you can start creating your online store via Shopify or Oberlo. All you have to do is to set it up. After setting your online store, look for products you want to sell.
It can be gadgets, beauty products, clothing, or anything you want to sell. After deciding your products, go to Amazon.com. Look for your desired products, copy the product details and place them on your Shopify store. If a customer orders your products, give the customer’s details to Amazon and they will be the one to deliver it. That’s how easy drop shipping is.
Why is it considered as a source of passive income? It is because all you have to do is to place products on your online store or website then the supplier will do the job to deliver the ordered products. You’re only job is to look for products that are always bought by the people to gain more profits as possible.
Example of the most successful man that became rich by just doing drop shipping business is Irwin Dominguez. In just 8 months of doing drop shipping, he earned an accumulated amount of $1,000,000 in sales.
4. Stock Investing
Maybe you already heard stocks on news reports, television, ad, in an article or you’re already a stock investor. Stock investing can be quite hard to understand most especially for first time investors but dedicating your time learning books about stock market can make stocks more easier to understand.
If you buy shares of a certain company, you are entitled to be a shareholder or stockholder of that company. The shares you have represents your ownership of the corporation.
So how can you earn passive income from investing in stocks?
In the stock market, you have two ways to earn money. The very first one is through stock appreciation. This happens when the price of a certain stock increase.
Second, is through dividends. Dividends serve as a payment of the company to its shareholders and stockholders.
So even you’re asleep, those stocks you have will pay you through their dividends. You don’t need to check your account because payments are automatically deposited to your account.
One notable example of a man who became billionaire through stock investing is Warren Buffet, also known as The Oracle of Omaha. He started investing during his early childhood and now, he’s the third richest person in the world.
5. High-Interest Savings Accounts
Do you have savings accounts? Do you know their savings interest rate? Well, it’s the right time for you to check it out.
If you’re planning to open a savings account, it’s very important for you to check the bank’s interest rates. Interest rates are very important because it helps you increase your savings value.
Let’s take a look at this example. Max opened a savings account with ABC Bank with an interest rate of 2% per annum. On the other hand, Eddie opened a savings account with XYZ Bank with an interest rate of 8% per annum. Let’s imagine they both deposited an amount of $100,000 and kept it for 10 years.
Bank: ABC Bank
Interest Rate: 2%
Duration: 10 years
After 10 years, Max earned an interest of $20,000 plus his capital of $1000,000. Now, he has $120,000 in his savings account.
Bank: XYZ Bank
Interest Rate: 8%
Duration: 10 years
After 10 years, Eddie earned an interest of $80,000 plus his capital of $100,000. Now, he has $180,000 in his savings account.
It’s very obvious that Eddie earned more interest compared to Max since his depository bank gives a higher interest rate. Therefore, try to look for a bank that gives higher interest rates on its savings accounts.
6. Affiliate Marketing
If you have a blog and want to make more money from it, then you should try affiliate marketing. But first, what is affiliate marketing?
When you visit a blog and purchased the recommended products by the writer, the blog or its writer earns a commission. Affiliate marketing is the process of endorsing other’s products and sell it to the public.
All you have to do is to look for a product that you want to sell and place it on your website. Once a person buy the product, you earn a commission. Your commission will depend on what product is bought by the customer and how much is the commission rate.
Affiliate marketing is good source of passive income for website owners and social media influencers. All you have to do is to endorse the product to the public and let them purchase the product.
You can apply for Amazon Affiliates, Ebay Partner Network, Shareasale, Clickbank or Commission Junction to start making passive income from affiliate marketing.
7. Renting your House
You know, there are a lot of tourists out there looking for a house to stay at least a night. Instead of knocking at every house door, they use Internet to look for accommodation.
AirBnB and Agoda are the most commonly used apps to look for a room to stay so if you listed your house’s rooms to these websites, surely they will choose your house.
Once they chose your house and booked in the app, you will be earning what we call passive income. All you just need to do is to make your rooms look presentable and appealing to the eyes of the customers.
On the other hand, you can also rent your house to strangers passing by near the street. Make a signage outside your house that there are rooms available for rent.
Renting your house is absolutely the best passive income idea you can have. All you have to do is to make your house more attractive to the visitors.
8. Build a mobile app
You don’t need to be a graduate of Computer Science to build a mobile application. Besides, you can now build your app through different websites like Andromo, Appery, Appy Pie and many more. You just need to have a brilliant idea on what app you will be making.
After building your mobile application, apply for Admob. If they approved your application, you can now put ads on your finished mobile app. Finally, you can now submit your app to Google Play store. If a person downloaded your app and ads popped up, that’s the start of earning your passive income.
Invite more people to try and download your mobile app. The more downloads you have, the higher paycheck you will receive. All you have to do is to make extra effort on improving your mobile app design because the first one every person see is the design of the mobile app.
A time deposit is an awesome source of passive income. If you already have a savings account, why not try time deposits too?
Time Deposits works by depositing a certain amount of money with an interest rate and wait for its maturity date. The maturity date can take 3 to 9 months or even years. The longer the maturity date, the higher the interest rate.
For example, you deposited an amount of $100,000 in time deposit with an interest rate of 25% and you chose to withdraw it after 5 years. So after 5 years, you earned an interest of $25,000 plus your capital of $100,000.
10. Peer to Peer Lending
Peer to peer lending (P2P) can be your ultimate source of passive income. In short, you lend your money to borrowers and after a specific agreed payment period, the borrower will pay you back with an interest rate.
Websites like Lending Club, Prosper, Upstart, Peerform, FundingCircle and StreetShares are the best peer to peer lending websites for investors and borrowers. These sites works as a middleman between the investor and the borrower.
You don’t need millions to start. In fact, you can start with a capital of $5,000 or even higher. Be mindful on the site where you lend your money to because there are lots of scams out there.
11. Create an Online Course
If you have certain knowledge on something like for example if you’re expert in photography, why not make online courses about it.
There are a lot of people online looking forward to learn photography that is why when you make online courses, you help them become more knowledgeable when it comes to photography.
You can charge each course $20 or higher. You can also choose to teach in Coursera, SkillShare or Udemy. These sites has the best and competent teachers that’s why, it’s good to join them to improve your online presence. In addition, they have thousands of students online taking different courses.
12. Selling Stock Photos
If you’re a photographer and has that excellent photography skills, why not sell your photos online?
You don’t have to own an expensive camera. If you have a smartphone with good pixels, why not use it? Be resourceful enough and never ever get jealous with photographers with high end cameras.
As long as you’re good in capturing things, then you’re good to go. If you’re a beginner, I highly recommend you to join online courses, read articles or watch Youtube videos about photography. There’s a lot of free resources out there. It just depends on how you look for them
There are hundreds of photography courses you can find online. For example are websites like Coursera and SkillShare. You can find paid and free courses on these sites.
After having enough skills in photography, go outside and capture lots of photos. It’s now the time for you to apply what you have learned.
After capturing good and excellent photos, you’re now ready to sell them online. Adobe Stock, Shutterstock, Alamy, Etsy, and iStockPhoto are the best websites where you can sell your photos to make passive income.
13. Bonds Investing
Bond investing is a good source of passive income too. To make bonds more easier to understand, you lend your money and they will pay you with an interest rate plus your capital. Interest rates depend on what institution or agency you lend your money to.
Bonds have maturity dates from one year up to 50 years. Some pays the interest annually but others pay it after the maturity date. There are a lot of bonds you can choose from that is why it’s very important for you to decide what bond is the best for you.
Why bond investing considered as a good source of passive income? It’s basically too easy. You just lend your money and wait for it to be given back to you plus the interest rate.
14. Invest in Mutual Funds
Mutual Fund is a a pooled money from different investors where the main goal is to gain profits. Mutual fund is a diversified investment meaning it is not only invested in one investment vehicle. Instead, it invests in stocks, bonds, and securities.
A mutual fund is managed and operated by a fund manager, an expert individual in charged of diversifying investments. Besides, mutual fund is the best option for you if you’re not yet knowledgeable on stocks.
First things first, you have to find for a good mutual fund company. Second is fill up the application form and submit the documents to the company’s office. Finally, deposit an amount you want to invest.
Mutual fund is a good source of passive income because you invest your money and wait for it to grow. If you want to withdraw your mutual fund investment, notify the company and they will give you your paycheck.
15. Lose Weight
These might seem funny and cliche but this is totally legit. It will pay you to get fit and sexy by doing different exercises. Every sweat that drops from your body gives you money.
If you’re slightly fat and want to lose some weight, then it’s the best time to do some workouts. You do exercises and at the same time, you earn passive income.
HealthyWage, Dietbet, SweatCoin, FitCoin, StepBet, and CharityMiles are the best site for you to choose if you want to earn passive income from just doing workouts. You can withdraw your money in your own bank account or via PayPal.
16. Become an Angel Investor
There are thousands of startups today looking for investors in their business. They look for angel investors to improve their products or services and at the same time their business as well.
If you invest in them, they promise to give you back your money in an agreed time plus interest rate. If that startup became successful, they will surely pay you back a higher interest rate.
The main disadvantage of becoming an angel investor is that it requires a higher amount of capital ranging from $20,000 – $500,000 or even higher.
If you have a lot of money in your own pocket then becoming an angel investor is your best source of passive income. You have to look for a business that you know that will become successful someday. Don’t invest in trash!
17. Sell your Stuffs Online
Do you have lots of unused personal stuffs? Why not sell them online? If you have lots of clothes, shoes, sandals, bags, or anything, you should try to sell them online to make more money.
You can sell your stuffs in eBay, Shopify, Amazon, Etsy, Bonanza, Craiglist or Poshmark. The option is on you.
Remember to take good photos of your stuffs then post them on your online store. When a person placed an order, you ship the stuff to your customer or through meet up.
18. Music Licensing
If you have that angelic voice then probably why not try to produce your own music. Find an inspiration, make your own lyrics, create the tune and rhythm of the song then eventually release your first ever single music.
Try to make a song about your life, inspiration, relationship, friends, family, or anything that you want. At this time, you have to work on your lyrics. Try to put emotions on it and never forget to express your feelings in that song. Emotions play an important role in making your music standout that’s why try to work hard on it.
After making your best ever music, you’re now ready to license your music. Moreover, you can also release your music on iTunes. If your friends, fans or family or everyone buys your album, your music will start earning. All you have to do is to promote and advertise your music so that people will buy your music.
Try to make more music and eventually this will become your source of passive income. For the most part, never forget to promote and advertise your music. You have to do this so that people will know that you released your own music.
Notable artists that became successful through music are Taylor Swift, Selena Gomez, Shawn Mendes, Camilla Cabello, Drake, Nikki Minaj and many more.
19. Franchise an existing business
If you’re a business-minded person and want to engage in a business but don’t like to spend hundreds of hours on planning and deciding, then definitely franchising a business is the best option for you.
Brands that offer franchises are already well-established and well managed. They are already popular in the market and they already have lots of customers.
Franchising a business is definitely easy. You just need to have the right amount of capital. Then eventually inform the company that you want to franchise their brand. They will contact you for further information. Next, you have to visit the company’s office to make agreements and you have to sign papers. Finally, pay the franchise fee and they will be the one to do all the works for you.
When it is finished, the company will hand over the business to you. Next is the hardest part which is the hiring process.
Make sure to hire the best of the best employees because they contributes to your success. If you have the right employees, then your business will eventually become successful. Train them, educate them and treat them as your family.
Don’t forget to advertise your business so that people will come and visit it. Work hard and money will come.
Some popular brands you can franchise are McDonalds, Jollibee, Subway, and Wendy’s.
20. Cashbacks Rewards
Cashback works best if you’re fond of traveling and shopping. Cashbacks are given in exchange of buying something.
For example, you purchased an iPad in Amazon.com. After purchasing, an amount of money will be given back to you. It’s basically called Cashback. Easy right?
Shopback is an app where you can purchase a product from different stores or brands. After buying a certain product in that store, you will receive a cashback.
In summary, passive income is the best source of income for everyone. It pays a decent amount of money and undoubtedly, it helps us achieve financial freedom.
For the most part, consider these passive income ideas as your side business. But before making any action, you must do your own research to eliminate potential risks.