You can earn money outside of your job. Although there is some initial work involved, maintaining a passive income stream once established takes little to no time. It is possible to make money without working a regular job, even though it may take some time to see the results of your labor in the form of passive income.

Starting an entirely self-sufficient business and investing are two popular strategies to generate passive income.

Best Passive Income Ideas

1. Real estate investing

If you want to make a consistent living from rentals, you’ll need to buy, prepare, and maintain a property. Once established, renting it out for a short- or long-term period of time can give you a reliable source of income.

Consider using a platform like Realty Mogul if you’re interested in real estate investing but don’t want to handle the property management yourself. With as little as $5,000, anyone can invest in commercial real estate properties through Realty Mogul, a platform for real estate investing. Investors have access to a variety of real estate investments through the platform, such as development projects, rental homes, and commercial real estate.

2. Invest in art or alternative investments

You can earn passive income by investing some upfront capital because all you have to do is watch the value of your investment rise and fall. Think about alternative investments such as physical metals and even fine art, in addition to securities like stocks and bonds.

Do you believe you lack the funds to purchase fine art? You can purchase shares that represent an investment in the artwork on platforms like Masterworks—think of artists like Banksy and Warhol. SEC documents, as well as historical and average growth, can be used to evaluate the articles on the website.

3. Sell designs or art online

Do you enjoy drawing or taking photos? Think about creating a website or selling digital downloads of your images or artwork on websites like Etsy. Without requiring advanced technical knowledge, anyone can easily create a professional-looking website with platforms like Squarespace (use the TIME10 promo code to get 10% off). To help sell more after you’ve set it up, you’ll need to market your work.

Platforms like Flippa can help you through the process if you’re unsure of how to facilitate the sale; they can even help with the legalities or broker the deal. Alternatively, you can look for an established, profitable, and mostly passive business through Flippa or comparable platforms.

4. Investing in a high-yield savings account or certificate of deposit (CD)

Essentially, a timed high-yield savings account is what a certificate of deposit (CD) is. You can invest for as short as six months or as long as five years. A predetermined interest rate, which is paid into your CD account on a regular basis (usually monthly), is offered by the bank when you make a deposit. With CD interest rates rising from nearly zero years ago to as high as 5% currently, CDs have gained popularity in recent months. The 11-month, no-penalty CD from CIT, which has a $1,000 minimum opening deposit and terms that apply, is a great option. It can yield up to 4.90%. Remember that a $10,000 CD with an 11-month gain of 4.90% equals $490.

5. Dividend stocks

If you buy a stock that yields dividends, the company will pay you on a regular basis. Companies typically distribute dividends on a quarterly basis, with the amount of dividends increasing with the number of shares you own. If you’d rather not choose individual stocks, dividend-yielding exchange-traded funds (ETFs) and mutual funds may be of interest.

It’s important to remember that even high-yield stocks need a sizable initial investment to yield a living wage. One such “dividend aristocrat” that has paid a consistent dividend throughout its existence is the pharmaceutical company AbbVie. The dividend payment is only about $5.00 per share annually. You will need to own 8,000 shares of AbbVie stock, which will be worth $1,272,000 as of March 29, 2023, in order to earn $40,000 annually with the stock.

Seeking advice from a financial advisor can be beneficial in creating a well-rounded investment plan that fits your risk tolerance and financial objectives. One example of a financial advisor service that can put you in touch with local, certified financial advisors for individualized investment advice and guidance is SmartAdvisor by SmartAsset.

6. Affiliate marketing

By sharing and endorsing products to others, you can engage in affiliate marketing and get paid a commission each time a customer makes a purchase. People frequently share their affiliate links via email newsletters, social media, and their website.

This passive income stream might not require a large initial investment, but it might require a significant amount of time and work to get going. Individuals who have less than 1,000 followers find it more difficult to persuade affiliates to add them as partners; the income-generating threshold is reached when one has 50,000 or more followers. According to a survey conducted by the influencer marketing blog HypeAuditor, self-described influencers with 1,000 to 10,000 followers made an average of $1,420 per month, while mega influencers with over a million followers made an average of $15,356.

7. Peer-to-peer lending

In this kind of personal loan, borrowers receive money from you (as a peer). You will receive income in the form of repaid interest. You can lend to others or spread out your investments to help lower the risk of borrower default.

8. Investment trusts for real estate (REITs)

A real estate investment trust (REIT), which is a fund that invests in real estate and pays you a respectable dividend, can provide you with a less stressful, if less profitable, return on your real estate investments.

It’s not necessary for REITs for you to buy and oversee real estate on your own. Rather, you purchase stock in businesses that manage commercial real estate, including office buildings, hotels, and apartment buildings. You’ll get dividends on a regular basis in exchange. However, much like the dividend stocks previously mentioned, you might need to put down a sizeable amount in order to receive a return large enough to support you.

9. Rent out parking space

You can make money by renting out a parking space or spot on your property that you’re not using for your own vehicle. When driving to and from work or for a longer period of time (such as when they are traveling), some people might wish to park their car. If you can afford it, you might even think about leasing a spot so that others can park big cars like boats or RVs.

10. Rent out a room in your home

You can begin real estate investing small by renting out a room in your house rather than buying and renting out an entire house. It might be for a few months, a short-term rental (like AirBnb), or just somewhere to put stuff in storage.

11. Create an online product

It’s likely that you’ll need a committed and engaged following of customers to purchase your goods. You can teach people a skill they want to learn by creating online workshops, ebooks, or even courses.

FAQs about Passive Income Ideas

Passive income: what is it?

One form of regular income obtained without working for an employer or job is called passive income. It doesn’t involve any labor-intensive work where you are paid to perform a service. Rent vs. wages is another way to compare passive vs. active income.

You get paid for owning things when you invest the initial capital, which includes time, money, and energy. Passive income requires little work to maintain. Through compound interest from your investments, for example, your passive income may even generate profits of its own.

What isn’t passive income?

A job or other work that results in an asset that generates revenue is not considered passive income. Stated differently, passive income does not require active participation on your part to generate income. Additionally, these are investments that will yield steady returns for you.

What is the ideal number of sources of income?

You can have as many sources of income as you like, but the ideal number for you will rely on your objectives and available funds. It might make sense to start with a small number of passive income streams until you have more time if you don’t have a lot of it. Alternatively, you might need to start small and gradually increase your resources if you have a tight budget.