People are always on the lookout for ways to earn passive income. Some parallel income ideas that would provide them with an alternative source of income that would help them either pay bills more regularly or alleviate their standard of living.
Before we elaborate on the various passive income streams let us first start by answering the question –
- What is Passive Income?
According to the definition given by the internal revenue department of the US government, passive activities are those activities in which you do not materially participate. For tax purpose they have been broadly categorized into the following:
- Trade or business activities
- Rental activities
For general purpose, Wikipedia has done a better job in defining it. Passive income is the flow of cash on a regular basis that does not require much time or effort on the part of the receiver.
Hence, any activity that lets you earn money through legit means, online or otherwise, without taking up your time would be a passive income activity.
People need extra cash to pay off debts early or supplement a regular source of income. Since regular jobs already take a lot of time and effort, a person is not left with enough energy to take on another part-time job.
In such cases, earning money through passive activities becomes a great option.
Here, we have compiled a list of 36 passive income ideas that would help you earn some extra cash. Certain activities might require some talent or some sort of financial investment. You can choose the one that suits your particular situation.
- Invest in high ROI accounts
- Invest in stocks
- Invest in index funds
- Earn through robo advisors
- Invest in Real Estate
- Put up space for rent
- Rent your car
- Lend money
- Buy expensive tools and rent them out
- Earn Royalties
- Start a vending machine business
- Build a dropshipping ecommerce site
- Earn commission while reselling products
- Become owner of a comparison site
- Earn from the ads on your website
- Become an affiliate marketer
- Write an ebook
- Make an online course, guide or tutorial
- Earn money through YouTube videos
- Build an app
- Become a virtual assistant
- Become a beta tester
- Become a member of focus groups
- Earn money for stuff you do regularly
- Earn credit card cash back rewards
- Earn though price drops
- Earn money through your hobbies
- Earn while your exercise
- Earn by taking surveys
- Like babysitting, do housesitting
- Test website and get paid
- Earn by participating in mock trials
- Earn by posting on forums
- Use Bing instead of Google and get paid
- Sell domain names
- Sell your books, clothes online
Legit Passive Income Ideas That Will Make You Money
#1. Invest in High ROI Accounts
One of the best residual income opportunities is to invest your money is some high yielding savings accounts.
There are various banks that offer good interest rates through which you can earn money at top rates. Some banks offering high interest rates are shown below:
#2. Invest in Stocks
Investing in the stock market is also a great way to earn passive income. If you have sufficient cash and sound knowledge of the stock market, then you should certainly try this passive income opportunity.
One of the best ways to get high ROI would be to invest in high dividend stocks. Even most of Warren Buffet’s income comes from dividends and capital gains.
You can find some high dividend paying companies through this Google tool.
#3. Invest in Index Funds
If you are uncertain about how to invest in the stock market, then starting with index funds would be a great idea.
These funds are similar to mutual funds in which you do not need to choose which stocks to invest in. It is managed by the particular index fund through which you will be investing.
Investing in Vanguard index funds would be a good idea to get started in this passive income investment opportunity.
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#4. Earn Through Robo Advisors
Another way to invest in the stock market is through robo advisors. They are pre-programmed algorithms that would run your portfolio for you.
Some popular robo advisors are Betterment, Wealthfront and Ellevest.
According to consumerreports Betterment has more than a third of its investors aged 50 and more whereas Ellevest is a robo advisor for women investors. You can now easily earn residual income by employing one of these robo advisors.
#5. Invest in Real Estate
If you are not confident enough to invest directly in real estate, then you can use REIT-real estate investment trust. Through this investment vehicle you can invest in real estate without any hassles of landlord duties.
Some known crowdfunding investment companies are Fundrise and Realty shares. Fundrise is good for investors who want to invest small amounts. You can use their online resource eREIT for generating passive income.
- Also See | How to Start Investing in Real Estate
#6. Put Up Space for Rent
This can be done in various ways. Either you can put a spare room in your house on rent or you can rent out the whole property. Some websites like VRBO and Airbnb let you put up your property on their site for accommodation sharing.
Though, it would be better to check out your local and state laws regarding short term rental accommodations before listing your property. You can check your city’s legal framework score through a study done by R Street Institute in 2015.
If laws are favourable in your city/state, then this is one of the best ways to make passive income.
#7. Rent Your Car
Another way to generate steady passive income is to rent your car. You can list your car on online sites like hyrecar or turo and follow their listing or renting procedures.
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#8. Lend Money
If you are worried about loans going bad, then you can lend a small amount of money to different borrowers thus securing an overall good ROI.
One of the popular lending platforms is Lending club where you can earn an interest rate as high as 10%. The average ROI ranges from 6% to 10%.
It can turn into one of the best passive income if you analyse a bit and choose the right borrowers.
#9. Buy Expensive Tools and Rent Them Out
Some extra income ideas listed here might require effort in the beginning. But if you are looking for an opportunity to earn extra money without investing time and effort, then renting out expensive stuff is one of the best ways to so.
#10. Earn Royalties
This passive business idea is not that passive in the beginning. You would need to put some hard work to come up with a new book, a product or a song which you can sell.
If your product becomes popular, then you can earn money through royalties on a long term basis.
#11. Start a Vending Machine Business
Investing in a vending machine is another good residual income business. It is a low maintenance investment that just requires restocking the machine on a regular basis.
Before installing the machine you can do a little research about areas where its demand is more. You can also research about the items that are in demand and stock the machine accordingly.
#12. Build a DropShipping Ecommerce Site
Dropshipping is the latest way to earn passive income in the eCommerce world.
By using dropshipping model you do not have to worry about keeping stock or delivery. You just need to build an eCommerce site where customers can place their orders. The item is then purchased from a third party and directly delivered to the customer.
Some eCommerce website builders for dropshipping are x-cart and doba.
#13. Earn Commission While Reselling Products
This is the typical middlemen sort of passive income opportunity. You can set up a website that offers certain products. Then you can liaise with a product company and sell the products thereby earning a commission in the process.
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#14. Become Owner of a Comparison Site
If you are searching for how to make passive income online, then becoming the owner of comparison site is a good enough answer.
You would need to find a niche where there are lots of products or services on offer but each have very minuscule differences. This way you can set up a site for such products and offer useful information about them that would help consumers make a buying decision.
You can list their pros and cons and put up some supporting images or videos. Then you can put up affiliate links against each product and earn through them.
#15. Earn from the Ads on Your Website
If you are an owner of a website, then one of the great ways of creating passive income is to apply for Google Adsense.
Through adsense, Google will publish ads on your site depending upon what your site is all about. Every time a viewer clicks on the ad you will get some extra dollars.
#16. Become an Affiliate Marketer
If you have a website or a blog you can make some steady passive income through affiliate marketing. You can get affiliate links from various vendors on your site and when a user uses that link to make a purchase you get a commission.
Just make sure that the affiliate links are for products and services that are relevant to your site. You can find a list of some really good affiliate networks.
#17. Write an eBook
Creating an eBook is one of the most popular ideas for side income for bloggers or content writers. You can now create an ebook and sell it online. You can advertise it on your blogging site or through guest posting or online networking.
Before you start writing do a bit of research and find a niche where people are willing to pay a good amount for such ebooks.
#18. Make an Online Course, Guide or Tutorial
This is another great opportunity for writers. This extra income idea would help you earn more than an ebook would. It’s just that you would need to put in lots of hard work initially to prepare for the course material.
You would need a tutorial, some videos and audios, checklists and so on. You can take help of some online resources that would guide you in the process. But once everything is in place you can sit back and start earning.
#19. Earn Money Through YouTube Videos
Another answer to how to generate passive income online lies with YouTube videos.
It is a fact that Google is partial to YouTube videos. You can see an example of it when you do some text-based search on Google and its shows a couple of related YouTube videos along with other search results.
Generally, people also prefer to watch videos over reading text content. So why not come up with some short videos on popular subjects and upload them on sites like YouTube and TwitchTV.
You can then easily earn money from them as number of subscribers and viewers increase.
#20. Build an App
With the increase in the usage of smartphones, the demand for mobile apps has also increased. If you are technically inclined then building an app and selling it is a great way to earn passive income.
Even if you do not have a technical background you can either learn coding via codeacademy or outsource the creation process.
Revenue wise it is more profitable to develop apps for iOS platform rather than Android platform according to following graph published by newshub.
#21. Become a Virtual Assistant
Another great online income source is through VA work. You can perform the job of a virtual assistant from your home without leaving your current job.
There are various categories in which you can apply like admin, digital marketing, programming, writing, data entry clerk and so on. You can learn more about it from the International Virtual Assistants Association website.
#22. Become a Beta Tester
In Beta testing, companies offer people money to test their products before they are launched in the market. You are required to give a feedback after testing the product or service.
Some sites where you can find beta testing opportunities are erli bird, software judge and utest. Generating passive income through beta testing is actually quite enjoyable as you get to test new online games or apps in the process.
#23. Become a Member of Focus Groups
One of the great passive income examples is to become a member of a focus group. These groups are formed for conducting marketing research.
It gives you the opportunity to talk on various subjects and earn cash at the same time.
You can become a part of a focus group through sites like fgfinder or focusgroups.
#24. Earn Money for Stuff You Do Regularly
When it comes to adding fun and entertainment to work then the following passive income sources take the prize.
- Searching the internet
- Eating out
These are things that you do on regular basis. Now you can make some easy residual income while doing all of this. Sites like InboxDollars pay you to search the net or play online games.
You can also sign up with Uber to earn money through driving.
#25. Earn Credit Card Cash Back Rewards
You can now plan and make use of one of the most successful passive income strategies. According to the latest consumerreports nearly 50% of credit card companies that offer rewards, offer it through cash back.
You can create credit card combos and strategize your spending in such a way that you can get maximum cash back on them. Some popular credit card combos have been listed on the CR site.
#26. Earn Though Price Drops
The app links your mailbox and amazon account and checks your online purchases. If the app finds lower prices, then it would automatically request for a refund. It is probably the least active ways to make passive income.
#27. Earn Money Through Your Hobbies
Some hobbies like photography can now actually become your next source of income.
Sites like shutterstock or istockphoto help you to sell photographs. You just need to make a complete photo profile on them and they would take care of the rest. Everything related to sales is handled by these sites.
#28. Earn While You Exercise
There are apps in the market that pay you when you exercise. This is a great way to make residual income and stay in shape at the same time. Some well- known apps that you can use for this purpose are:
#29. Earn by Taking Surveys
Another residual income business is taking online surveys. Though it might become a bit repetitive but it sure gives you a steady stream of extra cash. Some sites where you can do this are swagbucks and InstaGC.
#30. Like Babysitting, Do Housesitting
Some websites that list such jobs are housesittersamerica and mindmyhouse. Apart from helping you earn extra bucks, this second income idea also helps you save on your accommodation costs for that period.
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#31. Test Website and Get Paid
Websites like usertesting pay you a flat rate for testing new sites. You need to just register on it and when there is a site that needs to be tested you will be informed.
You just need to test the site, fill a feedback form and get paid. Other than usertesting you can check out sites like startuplift or trymyUI for more testing assignments.
This is certainly one of the most hassle free residual income ideas you can use.
#32. Earn by Participating in Mock Trials
One of the most simple and effective ways to make residual income is to participate in mock trials. These trials are conducted by lawyers to test how their case will fair in an actual court room trial.
By conducting mock trials, they get to know any loopholes in their case and prepare in a better way for it. One of the sites that offer such opportunities is eJury.
#33. Earn by Posting on Forums
This is another great opportunity for writers. You can now make passive income by posting on forum sites. There are new forum sites that would pay you cash to post on them so that they can become popular.
One of the sites through which you can get this sort of work is paidforumposting.
#34. Use Bing Instead of Google and Get Paid
Now you can earn while you browse the internet. Just change your choice of search engines. You can now earn passive income by switching to Bing instead.
Through the Bing rewards system you can earn points by conducting searches through Bing. Afterwards you can redeem points for discounts or gift cards.
#35. Sell Domain Names
With so many startups coming up, people are constantly seeking appropriate domain names for their sites. By buying domain names and then selling them at a profit is a pretty good passive business idea.
Just make sure that the domain names you buy are related to some popular term. You can take help from Google’s keyword planner for this.
Godaddy is the most popular site to buy domain names.
#36. Sell Your Books, Clothes Online
There are a number of sites that would buy your used stuff like clothes, books or accessories. Make use of sites like craigslist, ebay, amazon, thredup, liketwice and so on and get rid of the stuff you are not using.
Though it is not a regular income stream but it would certainly help to add to your residual income once in a while.
Wrapping it up
Earning money through passive income sources is a great way to supplement your regular active earnings. From college students and stay-at-home-moms to 9-to-5 job holders, it helps people to pay bills and debts and even afford luxurious holidays once in a while.
With the help of the above 36 passive business ideas you can now set up your passive income streams according to your skills, monetary resources and assets and of course time.
- If you have enough investment money, then go for index funds and real estate.
- If you have exceptional skills in writing or photography or technology then choose the income streams
- Earning through cash back and shopping apps is perfect for busy people looking for some small earnings.
All the passive income streams have been tried and tested by people and proved successful.
So, why wait any longer when you can start earning some extra money now!
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