29 PASSIVE INCOME IDEAS YOU CAN GET TO BUILD GREAT WEALTH

Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work these income streams start to build and are able to maintain themselves, bringing you consistent revenue without much effort on your part.

“Making money while you sleep” it is a nice thing, 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. 

Speaking from personal experience, adding passive income streams to your portfolio can help you increase your earnings and accelerate your financial goals in tremendous ways.

For example, you can use passive income streams to help you get out of debt or achieve financial independence sooner. Like Fundrise - you can start investing in real estate for just $500. It's one of our favorite ways to build passive income.

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.

Start Creating Passive Income Today

1. Dividend Stocks

2. Peer to Peer Lending

3. Rental Properties

4. High Yield Savings Accounts And Money Market Funds

5. CD Ladders

6. Invest Automatically In The Stock Market

7. Invest In A REIT (Real Estate Investment Trust)

8. Refinance Your Mortgage

9. Annuities

10. Invest In A Business

11. Sell an eBook Online

12. Create a Course on Udemy

13. Selling Stock Photos

14. Licensing Music

15. Create an App

16. Affiliate Marketing

17. Network Marketing

18. Design T-Shirts

19. Sell Digital Files on Etsy

20. List Your Place On Airbnb

21. Car Wash

22. Rent Out Your Car

23. Vending Machines

24. Storage Rentals

25. Laundromat

26. Cashback Rewards Cards

27. Cashback Sites

28. Get Paid To Have An App On Your Phone

29. Save Up To 30% On Your Electric 

What is Passive Income?

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.

What It Takes To Earn Passive Income

Before we get into the passive income ideas I think it’s a good idea to first clear up a couple of misconceptions. Although the word “passive” makes it sound like you have to do nothing to bring in the income this just isn’t true. All passive income streams will require at least one of the following two elements:

1) An upfront monetary investment, or

2) An upfront time investment

You can’t earn residual income without being willing to provide at least one of these two. Today, I have a big list of passive income ideas you can try regardless of the category you fall in.

Passive Income Ideas Requiring an Upfront Monetary Investment

These types of passive income require you to invest money up front to generate the passive income later. Don't be alarmed though - you can start with as little as $5 with some of these ideas, so it's achievable for everyone.

Our Unique List of Passive Income Ideas

1. 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 Ally Invest. They have one of the lowest fees for each trade and are a long time top brokerage. If you are interested in other brokerage accounts we have provided a good write up of all the different options.

2. Peer to Peer Lending

P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is Lending Club. You can read our full lending club review here: Lending Club Review.

What's great about Lending Club is that investors are earning 4-6% returns on average - and that's all passive income. You simply lend your money, and you get paid back principal and interest on that loan.

The median return on cash flow is 4.1% - which is better than any money market fund you're going to find today. This also makes Lending Club my favorite CD alternative.

3. Rental Properties

A cash flowing rental property is a fantastic way to bring in a monthly income. To make this truly passive you can outsource the running of the properties to a management company.

However, the internet has made investing in rental properties easier than ever before. There are a lot of ways you can invest in rental properties depending on what your goals and interests are. You can be a limited partner in large residential or commercial properties, or you can buy homes and be a landlord - all online!

Invest In Single Family Homes

If you're looking for a more traditional path to real estate investment, check out ​Roofstock. This company allows you to buy cash-flow positive single family rentals - online! You can sign up and start searching properties today.

The great thing about using a platform versus doing it yourself is that the income is even more passive.

Invest In Larger Developments

Do you not want to be a landlord, but still want real estate exposure and income? Then consider being a limited partner in a large development. With these options, you can invest in multi-family or commercial properties. You get the income and tax treatment just like regular real estate ownership, but you don't do any of the work!

Our favorite platform for this is RealtyMogul because you get the flexibility to invest as little as $1,000, but can also participate in REITs and private placements – typically not offered to the public. Investors can fund real estate loans to gain passive income or buy an equity share in a property for potential appreciation. Their platform is open to both accredited and non-accredited investors.

For Accredited Investors

One of my favorite ways to get started with rental properties is through EquityMultiple. Similar to LendingClub, you can start investing in real estate for as little as $5,000 at platforms like EquityMultiple.

This platform has a nice mix of smaller residential to mixed use residential and commercial properties.

4. High Yield Savings Accounts And Money Market Funds

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 banks provide savings account rates as good as a CD without locking in your money for several years.

For example, right now Cit Bank is offering a 2.45 percent interest rate on their Savings Builder savings account, which is close to 25 times what you’d get at the bricks and mortar bank around the corner. Sure, it won’t make you rich, but it’s safe and easy.

Our reviews of online banks that offer high-yield savings accounts include:

• Cit Bank, which boasts some of the highest CD rates around.
• Barclays, which offers only savings and CDs in the U.S.
• BBVA Compass, whose Money Market and short-term CDS are competitive.
• Synchrony, which also has limited account options.
• Ally, where you can also get a checking account.

5. CD Ladders

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 that 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. 

CD rates are on the rise, putting them at the top of our list of the best low-risk investments. As you might guess, the longer the CD length, the higher the interest rate typically is. CDs are an awesome source of passive income because your interest rate is locked in, regardless of how interest rates fluctuate during the length of your CD.

Like savings accounts, CIT Bank is one of your best bets for opening a CD, with highly competitive interest rates.

For example, what you do if you want a five-year CD ladder is you do the following. Look how the rates rise over different time periods (these are estimated):

• 1 Year CD - 2.50%
• 2 Year CD - 2.90%
• 3 Year CD - 3.05%
• 4 Year CD - 3.10%
• 5 Year CD - 3.15%

6. Annuities

​Annuities are an insurance product that you pay for but can then provide you passive income for life in the form of monthly payments. The terms with annuities vary and are not always a great deal so it’s best to talk to a trusted financial advisor if you’re interested in purchasing an annuity.

These investments aren't for everyone - they can come with high fees, and not be worth it. But if you have zero risk tolerance for loss, and are looking for a passive income stream, this could be a good potential idea for you your portfolio.

One of the best annuities products we've found is Blueprint Income. It's a no-fee income annuity that could make sense for you. You can set it up for guaranteed passive income right now, or to start at a date in the future. 

7. Invest Automatically In The Stock Market

If you're not interested in picking dividend paying stocks (and I can understand that), there are still ways to invest passively in the stock market. You can automatically invest in various ways through what's called a robo-advisor.

A robo-advisor is just like what it sounds like - a robotic financial advisor. You spend about 10 minutes answering a few questions and setting up your account, and the system will take it from there.

The most popular robo-advisor is Betterment - which you can setup to automatically invest in and they will handle the rest for you. What's great about Betterment is that they charge one of the lowest fees in the robo-advisor industry, and they make it really easy to invest automatically. 

Plus, Betterment is currently doing a promotion where you can get up to 1 year free!

8. Invest In A REIT (Real Estate Investment Trust)

If you're concerned about investing directly in real estate, or maybe you're not yet an accredited investor, that's okay. You can still take advantage of real estate in your investments through REITs - Real Estate Investment Trusts.

These are investment vehicles that hold property within them - and you as the owner get to benefit from the gains, refinances, sale, income (or loss) on the property.

Our favorite platform to invest in a REIT is FundRise. They only have a $500 minimum to get started and offer a variety of options we love as well! FundRise has really been a great performing passive income investment over the last year!

9. Refinance Your Mortgage

This may sound strange in a passive income article, but refinancing your mortgage can be a great way to free up a lot of income and save you $100,000s over the life of your loan. That's a pretty good gain in my book.

Right now, interest rates are still near historic lows, and if you haven't checked out your mortgage lately, now's a great time to shop around and compare rates. 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.

We like using services like LendingTree to compare the best rates.

10. Invest In A Business

Another way to generate passive income is to invest and be a silent partner in a business. This is very risky, but with risk comes the potential for high returns. For example, several years ago both Lyft and Uber were looking for private investors to invest in their companies. Today, they are worth billions - but you as an investor would only reap that benefit if they go public via an IPO, or get acquired. So, it's risky.

But there are ways to reduce your risk. For example, you can invest small amounts in many companies through lending them money in small bonds.

There are now tools available where you can loan money to a business and get paid a solid return for doing it!

There are two popular options - both of which provide a 5% annual return - passively!

Worthy - Invest in bonds that yield 5% annually. They take your funds and lend it to small businesses. Check out Worthy and get started for as little as $10. 

StreetShares - Invest in bonds that yield 5% annually. This company takes your funds and invests specifically in veteran backed businesses. 

11. Sell an eBook Online

​Self Publishing is mainstream today. When you purchase an eBook off of Amazon there’s a pretty good chance you’re buying a self-published book. Self-publishing is also ridiculously easy. I tried this a few years ago and couldn’t believe how simple the process was. To self-publish a book you’ll first need to write and edit it, create a cover, and then upload to a program such as Amazon’s Kindle Direct Publishing. Don’t expect instant success though. There will need to be a lot of upfront marketing before you can turn this into a passive income stream.

12. Create a Course on Udemy

​Udemy is an online platform that lets its user take video courses on a wide array of subjects. Instead of being a consumer on Udemy you can instead be a producer, create your own video course, and allow users to purchase it. This is a fantastic option if you are highly knowledgeable in a specific subject matter. This can also be a great way to turn traditional tutoring into a passive income stream!

13. Selling Stock Photos

​Do you ever wonder where your favorite websites, blogs, and sometimes even magazines get their photos? These are normally bought from stock photo websites. If you enjoy photography you can submit your photos to stock photo sites and receive a commission every time someone purchases one of them.

One of the biggest marketplaces to sell stock photos is DepositPhotos. You can upload your photos are earn money whenever someone uses them.

14. Licensing Music

​Just like stock photos you can license and earn a royalty off of your music when someone chooses to use it. Music is often licensed for YouTube Videos, commercials, and more.

15. Create an App

​If you own a smartphone or tablet then it’s safe to assume you have several apps downloaded. But have you ever had an amazing idea for an app? If so, you could consider hiring a programmer to create your app for you. You could then sell it on the App store for residual income.

16. Affiliate Marketing

​Affiliate marketing is the practice of partnering with a company (becoming their affiliate) to receive a commission on a product. This method of generating income works the best for those with blogs and websites. Even then, it takes a long time to build up before it becomes passive. If you want to get started with affiliate marketing check out great list of affiliate marketing programs.

17. Network Marketing

​Network marketing, or multi-level marketing, seems to be on the rise. Companies such as Young Living Oils, Avon, Pampered Chef, and AdvoCare are all multi-level marketing companies. You can earn passive income through network marketing by building a team underneath you (often referred to as a down line.) Once you have a large team you can earn commissions off of their sales without having to do much.

18. Design T-Shirts

​Sites like Cafe Press allow users to custom design items like T-shirts. If your design becomes popular and makes sales you’ll be able to earn royalties.

Even Amazon has gotten into this business. Amazon has a new service called Amazon Merch, where you simply upload your designs and Amazon takes care of the rest (making it, packing it, and shipping it). 

19. Sell Digital Files on Etsy

​I’ve been into home décor lately and I had to turn to Etsy to find exactly what I wanted. I ended up purchasing digital files of the artwork I wanted printed out! The seller had made a bunch of wall art, digitized, and listed it on Etsy for instant download. There are other popular digital files on Etsy as well such as monthly planners. If you’re into graphic design this could be an amazing passive income idea for you.

20. List Your Place On Airbnb

​If you have a house, apartment, spare room, or even backyard, consider listing your property on AirBNB and start earning money when you get your place booked.

AirBNB is great because you can earn money on a space you already own. It does require a little work up front to prep your place, list it, and clean up after guests, but it's pretty passive otherwise.

21. Car Wash

​It’s always been a dream of mine to own a car wash. This seems like such a great way to earn a semi-passive income. While regular maintenance will be needed at a car wash it’s something you can either hire out or perform once a week.

As a side note, I'm talking about the really basic car wash that is cinderblocks, a pressure washer, and coin operated. If you're going to run a drive through car wash, it's definitely a business vs. a passive income stream.

22. Rent Out Your Car

Similar to listing your place for rent, you can also list your car for rent. This can be truly passive because once you list your car, it can earn you income when you're not using it!

Our favorite partner to rent your car is Turo. Turo allows you to put your car out for rent, and when people rent it, Turo handles the rest!

The cool thing with Turo is that, depending on your location and what kind of car you have, you can make a decent passive income! 

23. Vending Machines

​Vending machines are another great low maintenance small business idea. I have a friend who has vending machines all over neighboring towns. He replenishes and cashes them out once every two weeks. His vending machine business is part of his retirement plan.

24. Storage Rentals

​My cousin owns a set of storage rentals and receives monthly checks for letting customers rent these out. The only time she seems to do any work for these is when she has an opening for one of the storage units.

If you're not sure about getting into this space, you can also invest in storage rentals via a REIT.  FundRise invests in commercial properties like storage rentals and you can get started for as little as $500.

25. Laundromat

​I debated on listing this one here because while in theory it seems like owning a laundromat would be semi-passive I anticipate there would be a whole lot of ongoing maintenance needed. You be the judge on this one.

26. Cashback Rewards Cards

​If you pay your bills with a credit card make sure it offers cash back rewards. You can let your rewards accrue for a while and possibly put the easy money you earned toward another passive income venture! (Be sure that the card you select doesn’t have an annual fee or you might be cancelling out your rewards)

27. Cashback Sites

​Just like cashback rewards cards you should opt to use a cashback site when shopping online. If you don’t you’re giving up free money that requires little to no work!

28. Get Paid To Have An App On Your Phone

What if you could install an app on your phone, and get paid for it? Yes, this app tracks what you're doing and it sells your data - but what's more passive than that?

If you don't want to do anything out of the norm. You simply download the app and do what you normally do. The app runs in the background and you are entered to win rewards. Simple, easy way to get money for nothing! 

Mobile Expression is a similar app for iPad. You can earn rewards for installing it and leaving it on your device for at least 90 days. And boom! You get paid!

29. Save Up To 30% On Your Electric Bill

Let's mark this one as passive saving versus passive income, but every little bit helps when you're looking at your bottom line.

Truebill is an app that helps you save money by identifying recurring subscriptions and other bills and helping you cut costs by negotiating better rates and fees. One of their partnerships is with Acradia Power, which has the potential to save you up to 30% on your electric bill. It searches for better power rates in areas where competition is allowed, and it locks in the better prices for you.

Bottom Line

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 your 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.