Earning passive income sounds like a dream to those of us who work to generate a regular paycheck.
But with some creativity and resourcefulness, you may be able to employ strategies that allow you to make money when you aren’t working. To see what we mean, take a look at these ideas for creating a passive income stream.
What Is Passive Income?
Passive income is generally considered any source of revenue earned when you’re doing something else. For instance, if you sell T-shirts at a festival, you earn money every time you make a sale. That’s active income. But if you sell T-shirts through an online store, customers can make purchases while you’re working at another job or are asleep. That’s passive income.
Keep in mind that passive income is often not very passive, however. With some of the passive income ideas below, you may work a lot upfront. But if all goes well, you may be able to sit back and earn money.
[READ: Home-Based Business Ideas.]
— Rent out a room.
— Rent out your driveway.
— Rent out storage space.
— Advertise on your car.
— Create a blog.
— Create an online course.
— Rent your old home.
— Write a book.
— Create a product.
— Start a business that relies on passive income.
— Become a silent business partner.
— Design T-shirts.
— Be a pet sitter.
— Be a house sitter.
— Invest in your retirement.
— Invest in cryptocurrency.
— Open a savings account.
— Create YouTube videos.
— Pay off debt or reduce expenses.
— Apply for credit cards with rewards.
Rent Out a Room
Have a spare room that’s gathering dust? Consider it an asset in setting up a passive income stream. “A large percentage of Americans are finding themselves in financial straits and out of work amid the pandemic,” says Wendi Burkhardt, CEO of Silvernest.com, a home-sharing website. “However, many own a home that they can leverage as an asset to generate passive income by renting out spare rooms to long-term housemates.”
She adds: “Estimates show that they can earn an average of $10,000 a year to put toward mortgage payments, living expenses and retirement savings.”
But Burkhardt cautions that if you’re going to share your home, you’ll want to take the proper precautions and carefully screen prospective tenants.
Rent Out Your Driveway
If you’re not thrilled about the idea of renting out a room, sites like Neighbor.com and Spacer.com can help you rent out your driveway. What you’ll earn varies, but Neighbor.com says you can make $20 to $400 a month. Spacer suggests that you might make up to $200 a month.
As you can imagine, if you live in an area where there’s plenty free parking available, this won’t fly. But if you have a home and a driveway in the city where parking is hard to come by, you may have a passive income goldmine.
Rent Out Storage Space
Another space you can rent out to create a passive income stream is an unused storage shed or a corner of your basement.
Sites including Neighbor.com, ShareMySpace.com and StoreAtMyHouse.com allow you to post photos of your storage area for rent.
According to StoreAtMyHouse.com, you can earn between $300 and $3,000 a year, depending on your location and storage area.
Advertise on Your Car
If you’re not familiar with the concept, some advertising firms will pay you to let them display ads on your car. Some of the big names include Carvertise, Wrapify, StickerRide, Free Car Media and ReferralCars. (The advertising “wrapping” can be removed and won’t damage the car’s paint.)
You make money simply for driving around, running errands and commuting to work. How much you’ll make is hard to say, but generally people report earning a few hundred dollars a month, and sometimes up to $1,000 (but that seems to be fairly rare).
While you may feel a little foolish at first, this is arguably one of the best sources of passive income. You’re going to drive anyway; why not earn money to offset at least the amount you spend on gas? Once you go through the hassle of getting approved for one of these vehicle wrap companies — and it can be a process — it’s passive income all the way.
Create a Blog
This can be a passive form of income, but it can also be a lot of work. If enough people visit your blog and thus see the ads on the page, and especially if they click on ads or affiliate partners, you’ll make money, even while you sleep. But it may not be much money, and you won’t make money if you don’t have fresh content on your blog.
Jessica LeBrun of Naples, Florida, has a graphic design business as well as a blog, OnMoxieandMotherhood.com.
“I have left the site untouched for almost a year at a time before and still earned monthly income from ad revenue and affiliate sales,” LeBrun says.
During slow months, she generally pulls in $200 to $300. If it’s a high-traffic month, she may see as much as $800 or even $1,200.
Still, she adds, “It’s important to note, this is possible because of the amount of initial work I put into the site before that time off.”
It’s also worth noting that not every blog generates $200 a month, even after a lot of initial work. You may make, say, $20 a month. It depends on how much interest there is in your subject matter.
Create an Online Course
Are you an expert on a specific topic? There are websites that can help people sell online courses, including DigitalChalk and Click4Course.
Assuming a lot of people are excited to learn about your topic and are willing to pay for a course, you could create a product that would sell over and over. Of course, there is work that goes into developing a good online course, but if people actually buy it, that’s a continuous revenue stream of passive income.
Rent Your Old Home
Yes, buying a condo or rental home requires a significant down payment, but if you can buy a property — or move into a new house and rent your old one instead of selling it — you can create a very solid passive income.
“The best way to earn passive income is through real estate,” says Omer Reiner, a licensed Realtor and president of FL Cash Home Buyers, LLC, a real estate investment company based in Ft. Lauderdale, Florida.
Reiner is biased, of course, but he makes an interesting point. “When you buy an asset like real estate, you usually make money twice,” he says. “You make money because the asset increases in value and when you rent it out and earn rental income. However, real estate can be difficult to get started in.”
“My best advice for getting started is to choose a market where you want to buy,” Reiner says. “Then, spend a few months becoming an expert in that market before you start buying. Doing this will help you avoid spending too much for a property. It will also help you start uncovering deals.”
[SEE: Best Part-Time Jobs to Pay the Bills.]
Write a Book
This is admittedly easier said than done. You could spend money to self-publish and sell next to nothing. You could do the hard work of getting an agent and shopping a book idea to publishers, and then spend a lot of time and energy writing a book — and still sell next to nothing.
Still, if you can pull it off, it can be an excellent source of passive income. Robin Landa, a distinguished professor of design at Michael Graves College at Kean University in Union, New Jersey, has written 23 books.
“Writing each book takes a lot of time and energy but once they are published, until a new edition is needed, they are a source of passive income,” Landa says.
And with titles including “Strategic Creativity” and “The New Art of Ideas,” Landa has a pretty good stream of passive income.
“My royalties have allowed me to fund many scholarships for students in need,” Landa says.
Create a Product
This can be extremely difficult to pull off, but it is the ultimate form of passive income.
Of course, you could lower your sights and do what LeBrun has done. She has an Etsy shop.
“Whenever I design something for my kids or my household, like a behavior chart or a birthday invite, I just add it to my Etsy shop. I know this income could grow if I put more time and effort into adding more products to my shop,” LeBrun says. “However, I am happy with the sales coming through for things that I designed and used for myself, listed once, and then never have to touch again to make sales. The digital products are sent to the buyer automatically once I set up the listing, so I am able to collect the money for the sales without any further work.”
Start a Business That Relies On Passive Income
Laundromats are often suggested as the perfect passive income businesses. Generally, your customers can help themselves. You may want to hire somebody to be there occasionally throughout the day, to clean the place, or you could.
Tide Cleaners is a dry cleaning and laundry franchise. For what it calls a “neighborhood drop store,” you would likely need an investment of $90,950 to $274,100.
If you have that sort of money, you could use it to run a business that makes good money while you’re doing something else. Self-service car washes and vending machine companies are also businesses that generally rely on passive income.
Become a Silent Business Partner
If you have money to invest, you could invest it in a business. This only works if things happen to line up well, but consider whether you have any friends or family members who are extremely competent, ambitious and looking to start a business.
You could consider going into business with them — but you’d be the one with the deep pockets, and your partner would be the one exerting all or most of the energy and time to run the business.
You could come up with an equitable way to split the profits, and as long as the business is a success, you’ll have a passive income.
Design T-shirts
If art is your thing, there are a lot of companies that will help you sell your T-shirt designs. Spreadshirt, Designhill, Zazzle and CafePress are a few. Some websites charge fees to sell your designs, but most don’t. Generally, these companies take care of the marketing and shipping of T-shirts; if your design is bought, you’ll receive a commission, usually around 10% to 15%. It may not make you a fortune, but once you’ve uploaded your design, anything you earn from a sale is a passive income stream.
Be a Pet Sitter
This can be a nice stream of passive income for people who work at home or are retired. Sure, it’s active in that you’re feeding and walking a dog. But often you’re doing your own thing, cleaning and cooking or watching TV while petting the dog and simply being around when the pets need you.
There are a number of websites like Fetch!, PetSit.com and Rover where you may find pet sitting jobs. You also may want to go on Facebook or Nextdoor, a popular social media site where you can find people seeking pet sitters in your area. Just mention that you’re interested in pet sitting, and maybe you’ll find a regular gig.
ZipRecruiter suggests that you could earn between $9 and $45 an hour pet sitting. Obviously, it’s up to you to set prices, and while $45 an hour may sound too good to be true, you have to consider factors such as whether you’ll be watching a dog who needs a lot of care or a canine with a ton of energy.
Be a House Sitter
Instead of merely watching a pet, what about watching a house? Just as there are pet sitting websites, there are websites devoted to finding housesitting gigs.
MindMyHouse.com, Housesitter.com and TrustedHousesitters.com are some of the websites offering access to housesitting gigs. Unfortunately, you have to pay to use some of these sites. It’s probably best to start off using social media to offer your services, and then start using housesitting sites if you enjoy this way of earning money.
According to the home services website Thumbtack, house sitters generally earn anywhere from $50 to $100 a night, depending on the location and what you’re tasked with. But given that you could earn money while perhaps doing your regular job remotely, this could be a pleasant and profitable gig.
Invest in Your Retirement
If you’re getting discouraged because you don’t have any great ideas for businesses or money to buy real estate, keep in mind that every time you put money into your retirement portfolio, you’re hopefully passively making money.
A lot of investors will tell you to invest in dividend-producing stocks versus, say, a certificate of deposit or an interest-bearing savings account, since the interest is likely to be low. But you may want to stick with an IRA or 401(k). The point is, while investing in your retirement accounts may not help you pay the bills right now, it will help you pay the bills in the future.
Invest in Cryptocurrency
Because the value of cryptocurrency is often highly volatile, this could also be a great way to lose income passively, so keep that in mind.
You don’t need much to invest. Robinhood is a stock trading and investment app, and you can invest a few bucks (literally) in crypto there. Generally, you can invest in cryptocurrency with most brokerages. There are also crypto exchange platforms — Coinbase is a popular one — where you can invest money in crypto.
If you’re smart, you’ll start off investing a small amount that you can afford to lose.
[READ: Unconventional Ways to Make Money on Crypto.]
Open a Savings Account
Granted, unless you have a ton of money, the interest in a savings account isn’t likely to net you all that much. At the time of this writing, the national average interest rate for a savings account is 0.06%.
But interest rates have been trending upward lately, and the ultimate form of passive income is a savings account. In fact, a savings account is practically the definition of passive income. You put money into a savings account, and while you live your life, your money grows. Slowly. But it will grow.
Create YouTube Videos
The nice thing about this idea is that even if you make next to nothing, you’ll probably have fun doing it. Meanwhile, your friends and family will probably enjoy watching your videos.
Ryan Scribner, a resident of Miami Beach, Florida, is a good example of what you could become — but his earnings are not representative of what most YouTubers make.
He started a YouTube channel in 2016, and that was successful enough that he quit his day job the following year to work on it full time. He also launched two blogs, FarmlandRiches.com and InvestingSimple.com. He says that he now makes north of a million dollars a year, half it from blogging and half from YouTube.
All of that said, Scribner says, “It took a lot of work to get this up and running. In the first few months of operating this channel, I earned less than $40. In fact, I actually calculated my hourly rate and it was around 17 cents per hour.”
Meanwhile, as noted earlier, it’s hard to call this type of work passive. If you’re successful, you will earn money when you aren’t working, but you have to constantly create content to continue to see your revenue stream grow.
Scribner estimates he works 30 hours a week, which is hardly passive, but on the other hand, he makes excellent money for working 30 hours a week.
Pay Off Debt or Reduce Expenses
Yes, it’s an idea that sounds like a bit of a cheat, but on the other hand, if you save $900 a month because you finally paid off those revolving credit cards or switched health insurance plans, you just eliminated the need to find a passive income stream that pays you $900 a month.
Apply For Credit Cards with Rewards
Think about it: The reason that credit cards offering cash back, miles or points is so popular among consumers is that it provides income while you’re making purchases you were going to make anyway.
If you have a good credit score, earning 1% to 5% back on everything you purchase every month could give you a pretty steady source of passive income.
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Ways to Build a Passive Income Stream originally appeared on usnews.com
Update 05/18/22: This story was published at an earlier date and has been updated with new information.
