20 Passive Income Ideas for Making Money in 2023
Passive income is a great way to generate extra money while pursuing your dreams, hobbies, or full-time career. With inflation growing sky-high, earning passive income can help you maintain your purchasing power during good and bad times.
In this article, we’ll look at 20 smart passive income ideas to establish financial freedom and increase your monthly income. We’ll compare the pros and cons of each one, so you can make an informed decision and find the best ways to earn passive income on your own terms.
While there are multiple passive income streams to chime in to, it’s not easy money at first. You’ll still need to put in some time and effort. But with the right passive income strategy and amount of dedication, you can soon utilize the flexibility and freedom that comes with a passive cash flow.
What Is Passive Income
Passive income is a cash flow from a source other than a contractor or a direct employer. It’s the income you generate without putting in much time, work, and effort afterward. Once a passive income stream is established, you’ll have to monitor and tend to it now and then, but most of the time, it’s automatic.
How to Gain Passive Income
There are three main ways to gain passive income.
- Investing. Use the money you already have to generate even more money. (Dividend stocks, peer-to-peer lending, real estate).
- Asset Building. Acquire assets that generate income passively over time. (Affiliate marketing, digital goods, photo, and music licensing).
- Asset Sharing. Rent out or sell assets you already own. (Home and transportation rentals, advertising on your car).
Difference Between Passive and Active Income
Active income is the salary you earn for materially participating – performing a service or duty within a time frame. Active income is paid through tips, commissions, wages, fees, allowances, etc.
Here are some examples to help you distinguish between active and passive income.
|Active Income||Passive Income|
|Tutoring or consulting others and charging by the hour||Selling a pre-made online course over and over|
|Driving for Uber and similar services||Renting out your car|
|Freelance programming||Selling a self-made program over and over|
|Freelance writing||Writing a book and selling it over and over|
|Freelance photography||Selling art online|
|Active Income||Tutoring or consulting others and charging by the hour|
|Passive Income||Selling a pre-made online course over and over|
|Active Income||Driving for Uber and similar services|
|Passive Income||Renting out your car|
|Active Income||Freelance programming|
|Passive Income||Selling a self-made program over and over|
|Active Income||Freelance writing|
|Passive Income||Writing a book and selling it over and over|
|Active Income||Freelance photography|
|Passive Income||Selling art online|
The main point to take from this is that passive income ideas require some investment and work upfront. But afterward, you will earn money passively over time.
20 Ways to Generate Passive Income
Let’s look at 20 ways to make passive income. From an online business and affiliate marketing to real estate investing. Browse the list of pros and cons and pick the best passive income stream for you.
1. Open a Print-On-Demand Store
One of the best ways to make passive income is with POD. Open your online store, list custom products, and watch the orders roll in, skyrocketing your profits. The beauty of POD is that each order is printed, packaged, and shipped by the print provider – without your involvement.
With companies like Printify, you can access hundreds of custom products, free design tools, and easy setup and processes, as well as help and guidance along the way. Browse our success stories and get inspired.
No need to invest money upfront. No need to keep a physical inventory. No need to be tech-savvy. Launch an online store risk, hassle, and investment free. Each order is fulfilled with the final sales price of the customer, leaving you with nothing but profit.
Since a third party does everything, you don’t have much control over the fulfillment process. You have to trust your printing partners to do everything right and ensure top-notch services and quality.
2. Create Online Courses
Instead of wasting your time and efforts on endless consulting and tutoring, create an online course for everyone interested in the topic. This will require some upfront work from you – outlining, recording, and posting the course online on platforms like Skillshare or Coursera. As well as creating downloadable assets and resources for your students.
But later on, an online course will continuously generate solid passive income, helping others along the way.
Online courses can be a great passive income business if you’re a professional in your field and truly have what it takes to teach others. Earn money passively by consulting and tutoring others on topics you have mastered.
For the course to be successful, you’ll need to invest a lot of time and effort upfront. It needs to look and sound professional, be easy to understand, and cover all the essentials of the topic.
3. Sell Digital Products
Digital products can be anything from goods to printables, files, templates, plug-ins, audiobooks, kits, and more. Anything the customer can then download and use or print for their own needs. Create them once and sell digital products as many times as you want with a high-profit margin.
Selling digital products is easy and inexpensive if you have the necessary skills and equipment. Plus, if you’re an artist, this is a great way to turn your art into printables or digital goods and earn passively by doing something you love.
It could take a long time until you start generating noticeable income. In addition, host websites for your listings can charge sales and listing fees, adding additional costs.
4. Invest in Dividends and Mutual Funds
Buy dividend stocks of various companies and earn passive income in dividends. The companies give regular payouts from their profits without your further involvement. While this is an easy passive income stream, dividend investing comes with risks and complexity.
Buy stocks and shares once and never pay attention to them again. Get regular company payouts and chime in on the passive profits of your business decisions. Not only that, but in time, the price per share will rise (usually), generating more money as years go by.
You’ll need quite a lot of upfront capital to invest in stocks in the first place (we’re talking about hundreds and tens of thousands here). Not only that, dividends come with a high risk. You’ll lose your investment and passive income if the company performs poorly or goes bankrupt.
5. Rent Out Property
Another easy way to generate passive income is with rental property. Whether you’re renting out an entire apartment, house, building, or a single room, passive rental income will flow monthly.
Your options are endless with rental properties, from long-term rentals of your spare room to short-term rentals of a holiday house. You set the rules, sign a contract, and reap the benefits of one of the best passive income investments.
Whatever happens in the property is still your responsibility, as you are the owner. Some countries worldwide also struggle with squatters and very problematic clients, who aren’t so easy to get out of your property.
6. Rent Out Transportation
Similar to a real estate investment, it’s worth considering other passive income ideas that involve leasing. For example – your vehicle. Rent out cars to locals or bypassers who need a fast, safe, and cheaper solution to their daily commute.
Instead of wasting time endlessly driving around town yourself, rent out transportation for others. Sit back and relax while your car does the job. Companies like Turo offer a platform for listing vehicles up for rent – on your own terms.
You’ll have to pay for maintenance, insurance, and other services. Your car will be used and worn down with time. And insurance may object to you sharing the vehicle with others. Not only that. If a customer crashes your car, you’ll have to spend some time without it, creating additional inconvenience for yourself.
7. Indulge in Peer-To-Peer Lending
If you’re looking to invest in passive income streams with direct money, try peer-to-peer (P2P) lending. Lend money to small businesses or borrowers and chime in on residual income from interest payments.
Websites like LendingClub, Prosper, and Worthy work as mediators, connecting lenders, and borrowers. You can start with lending a minimum investment of $25 and work your way up to trustworthy borrowers and larger sums.
You’re open to scams and defaults, which can lead to a complete loss of your investments.
8. Invest in Domain Names
Flipping domain names is like trading stocks. You buy them for cheap in hopes of eventually selling them for a lot higher. Almost every business and brand needs an online presence in the digital age. Invest in short, catchy, simple, and common names that will guarantee sellability.
You can start relatively cheap and purchase a domain name for $10. All you need to do is invest your time in research and pick the best domain names to invest in.
There is a possibility you won’t be able to sell a domain name, losing your investment. Annual fees are also something to keep an eye out for.
9. Sell Spreadsheets
If you’re a natural tech-savvy wizard in Excel or Google Sheets, this might be one of the best passive income sources for you. Create spreadsheets for different purposes – tracking, budgeting, invoicing, etc. – and sell them online to those who can’t create them themselves.
You still need to get people to come to you and your product. Consider also creating a social media presence. Excel influencers are becoming more popular.
10. License Your Music, Art, And Photos
Curious about how to make money as an artist? This might be the answer. If you’re passionate about painting, making music, or photography but don’t want to be in the public eye, licensing your work is a great passive income idea.
How to sell art online? Partner with sites like Getty Images and Shutterstock and sell your images virtually. Or license your music and get paid every time someone uses it for different projects – ads, YouTube videos, movies, trailers, etc.
You slowly get your name out there as an artist and create passive income streams doing something you love.
It might take time to gather significant revenue from your work. You need to constantly upload photos and music in hopes that some will be a hit and sell.
11. Try Affiliate Marketing
Becoming an affiliate marketer is one of the easiest ways to generate passive income. That is – if you already have a potential fan base/following for promotions. Sign up for an affiliate program, promote affiliate products on your chosen channel or platform, and earn commissions from clicks and sales your links generate.
Joining an affiliate program is free, so there aren’t any upfront costs. Promote links on your website or chosen social media platform, boost traffic, grow your audience, and earn more than enough income in commissions.
If you’re a newcomer to the online world, building a big enough audience to earn affiliate commissions will take some time. You also need creativity and skills to build trust in your followers and properly advertise the affiliate products or services. Staying relevant on social media is not easy in the ever-changing trends.
12. Become a Video Content Creator
If you have the necessary skills to put fun and creative content in the form of a video – this could be a great passive income source for you. The potential of succeeding on platforms like TikTok and YouTube is very high. Just pick your niche and target audience, and create click-worthy content. Use an online video editor to customize your videos with different tools and add music to video online, so you can create eye-catching content and attract more audience attention.
Once your audience grows, you’re open to multiple income streams via ads, sponsorships, affiliate programs, and more. Plus, the only thing you’re really investing is time.
You risk investing time and effort into something that may not succeed. In addition, content creators need to constantly post more videos to grow their audience and following.
One of the most popular passive income business ideas in the modern age is podcasting. Speak directly to your audience about topics important to you, and earn money at the same time. If you love to express yourself and your opinion, podcasting is for you.
You don’t need a fancy microphone or a studio to record a podcast. A simple headset will do. There are many niches to explore and try to see if this business model is for you. Podcasting comes with ease and convenience – you can do it from the comfort of your home.
You can end up with zero listeners and revenue on your monetary investment. Finding an audience that clicks with you is not easy. It might take you extra time and effort to generate a decent passive income stream from podcasting.
NFTs are fraud-proof tokens that prove your ownership of a one-of-a-kind digital file. It can be anything from digital art to a song, painting, tweet, and whatever else lives on the digital platform. Just like with digital goods, you can create an NFT once and sell it again and again, rent it out, collect royalties and utilize the beauty of passive income.
You can use sites like OpenSea to create and sell NFTs in all their glory. Plus, this is a great way to get your name out there as an artist. And there are plenty of niches for you to look into.
You might waste your time and money by listing something nobody wants. But that’s the same risk with online sales and digital goods everywhere. You might hit the jackpot on the first try. Or you might have to list hundreds of different NFTs until something catches on.
15. Invest in a High Yield Savings Account
Some passive income ideas don’t require much time or effort. All they need is a bit of money to start with. If you have some cash to spare, invest it in a yielding savings account. These accounts give you a higher interest rate, growing your savings even faster.
This passive income business model is like building a nest for yourself. Open a high-yield account, deposit any amount of money, and you’ve already made passive income. While it’s not much at first, it’ll build up over the years. And any bank and financial institution backed by the FDIC will guarantee a return.
Third-party involvements like catastrophes, inflation, or global economic crises will affect your savings accounts and upfront investment. Not by much, but it will.
16. Advertise on Your Car
Another great way to earn passive income is by simply taking your car out for a ride or doing your daily rounds. Partner with a car advertising company like Carvertise, Nickelytics, and Wrapify and turn your vehicle into a billboard on wheels.
If you’re out and about daily, this is a great way of generating passive income. Depending on your partnership, you might even be paid by the mile.
Watch out for scammers in this niche. You’ll also have to drive around with ads, so partner up with offers that don’t compromise your values.
17. Write an E-Book
Writing an e-book is simple, easy, and accessible by almost everyone with low publishing costs. E-books don’t need to be long and can cover any topic of your choice and expertise. Writing one will take up a lot of your time, but later on, you can use the power of Amazon to reach millions of potential customers.
Low publishing and resource costs. An e-book can be entertaining and educational, like a guide.
If your e-book doesn’t pass the vibe check of the readers, all your efforts will be for nothing.
18. Record Audiobooks
Speaking of books, recording an audiobook for those who prefer to listen to your stories, lectures, or guides is a great way to generate income. If writing isn’t really for you, recording a book is the next best thing. Record it once and collect passive income when it’s sold repeatedly.
Recording an audiobook doesn’t need a lot of material resources. You need time and dedication. And there are many niches to explore. You can self-publish or use sites like ACX, list your audiobook, and earn royalties.
Same as with any other type of content, you need to find the right niche and audience for your audiobook. There is a risk of putting in work, time, effort, and even some money and not getting anything in return.
19. Create an App
If this is right up your skill alley, create a useful and unique app that users can download and put into practice over and over again. Thus leaving you with an endless passive income source. The app can be anything from games to fitness, music, calculations, and more. The more unique your idea, the more income it will generate.
An app presents you with multiple ways of profiting. From download fees to in-app ads and more. As long as your app idea has potential and use, there will always be people who can benefit from it. For educational, financial, or entertainment reasons.
You can waste all that time and money investing in an app that no one will want, download, or use. The app must be truly compelling, useful, and one-of-a-kind.
20. Invest in REITs
Invest in real estate assets without actually purchasing a whole building. Real estate investment trusts (REITs) are basically companies that own, manage, and finance income-producing properties. Invest your money in real estate investment trusts via sites like Fundrise, and earn passive income in dividends.
You can buy REITs on the stock market and invest as little as $10 at once without spending hundreds of thousands on real estate.
You need to spend a lot of time researching and analyzing good REITs to avoid blindly investing your money into something unknown. If you’re not sure what you’re doing, you can lose a lot of investment.
FAQs About Passive Income Ideas
What are the best passive income ideas?
It highly depends on your skills, knowledge, equipment, and willingness to put in a lot of work and effort. All of the above-listed ideas can generate passive income. You just need to pick something that fits your niche, abilities, and personal goals.
How much money can I earn from passive income?
There isn’t one answer to this question. In short – you can earn anything from zero to tens, hundreds, and thousands. How much money you earn from passive income depends on many factors. How original is your idea? How big is the competition? How big is your investment, and what is your potential? If you grab the right idea at the right time and present it to the right market, your potential income will be sky-high.
How many income streams should you have?
There isn’t a specific number of income streams that one must have. However, multiple income streams provide better chances of establishing financial freedom and stability. Start with at least two and work your way up if other options seem equally tempting and doable. Adjust the number depending on your financial goals for the future.
What is the most profitable passive income?
All of the ideas listed above have the potential to generate large amounts of passive income. Some of the best-earning ones are real estate related and selling goods and services online – from courses and books to merchandise, spreadsheets, and just about anything.
How can a beginner make passive income?
As a beginner, you should browse the previously mentioned ideas and see which ones require the least investment and have the lowest risk. You might want to start with ideas that only require your time. Like opening a POD store, creating an online course, etc.
Start Earning Passive Income With Printify
Printify is one of the leading print-on-demand companies, offering the best prices in the market and plenty of other benefits for your dropshipping business. Open an e-Commerce store and print custom products on demand with Printify.
Adding passive income streams to your daily life can not only generate extra money for fun spending purposes, but help you pay your student loan debt or mortgage and stabilize your overall economic situation.
From investment funds to income-producing real estate, rental property, and creative options like affiliate marketing, podcasting, and more. There are plenty of opportunities for you to generate passive income.
Explore your options, make an informed decision, and get creative.
Create Your Print-On-Demand Store!
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I like how the writer organized his thoughts in addition to he visual part.
Hi Amanda, Thank you for your kind words!