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Passive Income Ideas

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Who wouldn’t want passive income that flows in with little or no effort on your part?

Of course, we would all like to make money while we’re sleeping, traveling, or just relaxing.

Passive income may seem like an unrealistic dream, but there are actually a number of realistic ways to make passive income. The key is finding the right opportunity for you. This article presents a list of the best passive income ideas that you can start using.

At first, you may only be making a small amount of money passively, and you may even want to reinvest that money so it compounds and grows faster. But with some time, it’s possible to create enough passive income that you could quit your job or retire early.

→ Related reading: 9 Steps to Financial Independence (How to Retire Early)

What is Passive Income?

Passive income can be a bit of a divisive topic. In general, passive income is any money that you make with little-to-no effort. The money will flow in without too much being required of you. In some cases, it could be long-term recurring income, and in other cases, it could be short-lived or inconsistent. Regardless, money that you don’t have to work for is good!

In some cases you’ll need to put in some effort up front, but then it won’t require as much effort in the future when you’re making the money.

Exactly what qualifies as passive income is up for debate. Most lists that you’ll find online will include things like blogging, writing e-books, or creating your own course. I’m not including those ideas in this post because, in my opinion, they all require too much effort to be considered as passive. Yes, there is a passive element to them, but they will all require ongoing work to maintain, unless you’re outsourcing the work.

Blogging will always require on-going work, either by yourself or by others that you’re paying.  Selling ebooks or courses will require on-going customer service, plus you’ll need a consistent traffic source in order to continue to make sales. It is possible and there are people who have been able to do it passively, but they make up a small percentage of people who actually set out to do it. These are all methods that I love. I’ve been blogging full-time for 10 years and I’ve sold ebooks and courses in the past. They’re great ways to make money, I just don’t consider them to be passive, in most cases.

Just about any business can be a source of passive income if you’re paying other people to run the business. This is true with both online and traditional businesses. That opens up even more possibilities than what will be listed here.

Best Passive Income Ideas

Now let’s take a look at some of the best ways to make passive income. Some of these are investments that will require some money to start with. Others won’t require any money to get started. If you don’t have the money to invest now, try starting with the methods that don’t require any money, and then use that money that you make to invest.

1. High-Yield Savings Account

Your first financial priority should be to build up an emergency fund that will cover all of your living expenses for a few months. But don’t put this money is a checking or savings account at a local bank that pays you a terrible interest rate. You can open a high yield savings account or money market account with an online bank that will earn a much better return for you. This interest isn’t going to make you rich, but it will outperform (by far) what you are likely getting from a local bank.

My wife and I keep our emergency fund in a money market account with CIT Bank. At the moment (October 2018) CIT money market accounts are earning 1.85% APY and CIT savings accounts are earning 1.55% APY. That’s 22x the national average! Opening an account with CIT is quick and easy, and can be done online.

→ Open a high yield savings or money market account with CIT.

2. Invest in Dividend Stocks

Some companies consistently pay dividends to their shareholders. As a shareholder, you can re-invest the dividends to buy more shares of the stock, or take the dividends in cash. Reinvesting will allow you to own more shares, which leads to more dividends in the future (ideally).

The companies that consistently pay dividends tend to be large companies with a long track record of success. Because of this, these investments tend to be considered less risky than the stock market in general.

Dividend stocks can be a great investment regardless of whether you want to reinvest all of the dividends on hold on to the stock for a long time, or use the income produced through the dividends.

For much more detail on the subject read Investing in Dividend Stocks at Investopedia. For a list of these stocks, see this collection from and this collection from

3. Peer-to-Peer Lending

Peer-to-peer lending (or P2P) has become extremely popular in recent years. Borrowers and lenders can be matched up through a website or marketplace. Instead of going to a bank, the borrower gets a loan from an investor.

In some cases the borrower might not be able to qualify for a loan through a traditional bank. And in many cases the borrower gets a better interest rate than they could get from a bank. As an investor, you can earn a good return as well.

Each P2P website operates a little bit differently, but you will be able to see the credit grade or risk of a loan prior to investing. The higher the risk, the more interest you will earn, assuming the borrower makes all of the payments.

P2P lending can be a bit risky, but there is potential for a pretty good return on your investment. If you’re interested you should take the time to educate yourself and make sure that you understand all of the details. Peer-to-Peer Lending 101 from Good Financial Cents is an excellent starting point.

The most popular P2P websites include:

4. Real Estate Crowdfunding

Real estate crowdfunding websites allow you to invest in real estate without all of the headaches that usually go along with owning real estate. You don’t have any of the work, you simply invest and take on some of the risk.

There are countless real estate crowdfunding websites and there are several different types. Some allow you to invest in commercial properties. Others may specialize in large rental properties and communities. Others may focus on smaller properties that are being flipped.

Some sites are open to all investors, while others require you to be an Accredited Investor.

This is a very popular investment because so many people want to invest in real estate but simply don’t have the time or desire to be a landlord. Also, in many cases you can get started with a relatively small investment.

For a more detailed look, see A Beginner’s Guide to Real Estate Crowdfunding from Landlordology.

Some of the best real estate crowdfunding websites are:

  • Fundrise (open to all investors, $500 minimum investment)
  • RealtyMogul (their REIT is open to all investors, $1,000 minimum investment)
  • EquityMultiple (accredited investors only, minimum $5,000 investment)
  • PeerStreet (accredited investors only, minimum $1,000 investment)

→ Related reading: 11 Ways to Invest in Real Estate (With or Without Owning Property)

5. Invest in REITs

REITs (Real Estate Investment Trust) offer another way to invest in real estate without the hassle of being a landlord. The REIT owns income-producing real estate like office buildings, apartment complexes, shopping malls, or hotels. REITs make it possible to invest in real estate on a small scale, and to earn a share of the income produced.

There are several different types of REITs. Some are publicly traded on a stock exchange, and some are not. REITs may also be in the form of mutual funds or ETFs.

If you’re looking for an easy way to get started with real estate investing, REITs can be an excellent choice.

6. Buy a Rental Property

Of course, another option for investing in real estate is the good old fashion rental property. You could buy a condo, single-family home, or multi-unit property.

Owning rental properties can be a great source of income, but whether or not it is truly passive will depend on a few factors. The more properties you own and the more tenants you manage, the more time you will need to put into it. If you want it to be a passive investment the best option is to hire a property manager.

For more information see How to Start a Rental Property Business.

7. Rent Credit Card Tradelines

Here is a potentially lucrative passive income source that may be completely new to you. You can add authorized users to your credit cards (without actually giving them a card or access to your account) and be paid to do it. People who are looking to boost their credit score can get a boost in their score by piggybacking off of your payment history. How much you make will depend on the age of the credit card account and the credit limit on the account.

If you’ve never heard of selling/renting tradelines before it probably sounds ridiculous and dangerous. The first concern usually involves putting yourself at risk for adding an authorized user that you don’t know and trust. But the process only involves adding the user to your account, the card will be sent to your address and you can destroy it. The other user actually never has access to your account.

However, there is still some risk involved. The risk involves the possibility of your credit card account being closed by the issuer, because in most cases this will be violating the terms. It’s not illegal, but it does violate the terms of the credit card companies, so they may close your account if they know you are doing it.

It’s definitely not for everyone, but some people are making good money with very little effort. If you want to learn more I recommend reading this thread at Mr. Money Mustache for lots of details from a guy who is making a few thousand dollars per month with this… and it’s very passive.

8. Credit Card Sign Up Bonuses

One of my favorite, easy ways to make money is through credit card bonuses. Many credit cards will give you a bonus just for signing up and for making a minimum amount of purchases on the card during an introductory period.

Now, this isn’t something that you can do all the time, but you can sign up for a new credit card or two a year, depending on your situation. I’ve made hundreds of dollars each of the past 2 or 3 years with this approach.

A few important things to point out:

  • It’s critical that you avoid high-interest credit card debt. Pay your bill in full each month.
  • If you don’t think you have the discipline to have a credit card, or another credit card, skip this.
  • Don’t go overboard. Opening too many new credit accounts in a short period of time can hurt your ability to get credit when you need it.

That being said, if you’re looking for an easy way to make $100 or more, this is a great option.

See a list of great credit cards here.

9. Credit Card Rewards

Going along with the previous point, credit card rewards are a great way to make some money passively. You can earn cash back, points that can be used for travel, or cash in your points for gift cards. My go-to credit card is a cash rewards card that allows me to earn 2% cash back for every purchase. Over the course of a year that adds up to a significant amount for someone who puts every possible expense on a credit card (see this list of the best cash back credit cards).

I also have other credit cards that earn higher percentages of cash back for certain purposes. The Chase Freedom card will earn 5% cash back on purchases in specific categories that rotate each month. I love being able to rack up 5% cash back for things I need to buy anyway, like groceries and gas.

Visit this page to see an updated list of the best cash back and cash rewards credit cards.

Personally, I prefer cash back credit cards to travel rewards because I find the points system on a lot of travel rewards cards to be confusing. But many people love being able to earn points on travel rewards cards. If that’s the case for you, visit this page to see an updated list of the best travel rewards credit cards.

→ Related reading: How to Stack Rewards and Cash Back

10. Bank Account Promotions

Credit card companies aren’t the only ones who are willing to pay you to open an account. Some banks will give you a bonus simply for opening a checking or savings account. Again, this isn’t something that you’re going to do all the time, but it is an easy way to make a little extra money with no work involved.

Capital One is currently offering a $25 bonus for opening a checking account or savings account (for new customers).

11. Robo Advisors

If you want to put your money to work but you’re not comfortable picking and managing the investments yourself, a robo advisor could be a good fit for you. There are a growing number of companies offering these services. You’ll enter some information related to your age, goals, and risk tolerance, and they will handle the rest. Robo advisors are ideal for hands-off investors.

Blooom is a robo advisor that specializes in 401(k) accounts. You can get a free analysis of your 401(k) to see Blooom’s recommendations. If you choose to use their service it will cost you $10 per month, fixed amount rather than a percentage of your investments.

Betterment is one of the most popular robo advisors. Betterment will lead you through personalized planning based on your personal situation, and then it will create a diversified portfolio and automatically rebalance it. The cost is 0.25% off your balance, annually.

In terms of being passive, it doesn’t get much more passive than allowing technology to do the work for you.

12. Automatic Investing

One way to invest and make money passively is to automate the process. Acorns is an app that will invest your spare change automatically. When you make a purchase it will round up to the next dollar and invest the difference. You can also set up automatic recurring investments if you’d like to grow your account faster.

Use this link to get a $5 bonus for opening an Acorns account.

13. Turn Your Car Into an Advertisement

If you’re looking for a passive side hustle, how about allowing your car to be used as an advertisement?

There are a few different companies out there that match up advertisers with car owners who want to make some extra money. It could be a rear window advertisement, panel, or full wrap. The ad will be removable, will not damage your car, and they’ll actually install it for you. You can make anywhere from $50 – $400+ per month. Some of the biggest companies in this industry are:

14. Rent Out Your Stuff

One way to make some money without much effort is to rent out your stuff to other people. There are a lot of possibilities here, and it really depends on what you have, and what you don’t mind other people using. Fortunately, there are also several websites that allow you to list your items for rent, and make it easy for renters to find you.

Fat Lama – At Fat Lama you can rent just about anything from electronics, to sporting goods, to baby items.

Style Lend – At Style Lend you can rent women’s fashion items, like clothes and accessories. If you have a closet full of nice clothes this can be a nice, easy side hustle for you.

BabyQuip – At BabyQuip you can rent all kinds of baby items from cribs to toys to safety gates. This can be an ideal side business, especially if you’re located in a area that attracts a lot of tourists and vacationers who might not be able to bring everything from home.

Getaround and Turo – These two sites allow you to list your car for rent. People can rent from you rather than going to one of the major chains, and you can make a few thousand dollars per year doing it.

Fluid Market – At Fluid Market you can list your truck for rent.

RVshare – RVshare allows you to list an RV for rent, which can be a potentially lucrative side hustle.

Boatsetter and GetMyBoat – If you have a boat that you don’t use very often, list it for rent on one of these sites.

15. Rent Your Spare Bedroom

If you have a spare bedroom in your home you could make some money without too much effort by allowing someone to rent the room. It could be a local college student, a single person looking for a cheap place to live, or you could rent it out nightly. A popular side hustle is to use sites like:

→ Related reading: How to Make Money as an Airbnb Host

16. Start or Buy a Low-Maintenance Business

As I mentioned in the introduction to this article, just about any business can be a passive source of income if you’re not putting much time into it. Usually, that means hiring people to do the work for you. But some types of businesses require a lot less work than others, and you may not need to put in more than a few hours per week. Businesses like vending machines, automatic car washes, and laundromats can be good options.

17. MobileXpression

MobileXpression certainly is not going to make you rich, but it can easily get you an extra $50 per year with basically no effort. You’ll download their app to your smartphone and they’ll get access to your browsing data, which they use for research purposes. Each week you’ll earn 5 credits. When you get 50 credits you can cash it in for a $10 gift card to a number of different stores, including Amazon. You’ll also get a bonus when you first sign up. I’ve been using it for a while now and I’ve earned a few gift cards so far.

Sign up for MobileXpression here.

18.Invest in Royalties

Royalty Exchange is a marketplace where you can invest in royalties. Artists and musicians can raise money by selling the royalties to their work. As an investor, you can make money passively from the investment.

19. Get Refunds That are Owed to You

Paribus is a free app that will automatically search for refunds that are owed to you. When you make a purchase from a store/website that has a price match guarantee Paribus will search for a lower price, and if it finds one it will help you to get a refund for the difference. It will also track your shipments from Amazon and Walmart orders to make sure that they arrive on time. If the shipments are late, Paribus will help you to get compensation for it.

It’s a free app and doesn’t require any of your time other than just a minute to set it up.

Sign up for Paribus here.

20. Invest with American Homeowner Preservation

AHP buys distressed mortgages to prevent foreclosure, using investor money. Investors receive up to 12% returns and are paid every month. I haven’t personally invested with AHP, but I did some research and found many people who had positive experiences with the investment. It’s currently closed for new investors, but there is a wait list available for their next fund. The minimum investment is only $100. I signed up to the wait list and plan to invest a small amount when it becomes available again.

21. Netspend Savings

Netspend offers pre-paid debit cards, which are often used by people who don’t have bank accounts. That may not be of much interest to you. However, a side benefit is that if you have a pre-paid card you can also set up an FDIC-insured savings account with Netspend that pays 5% interest. The catch is that you will only be paid the high interest rate on the first $1,000 in your savings account. You can have multiple accounts, apparently up to 6 for $6,000 total. For a much more detailed look at this, please see How I’m Getting 5% Interest on FDIC-Insured Savings Accounts.

Get Started with Passive Income Today

After reading through this list, pick a few that look like a good fit for you. The sooner you get started with passive income the sooner you’ll be making money, and you’ll have more to re-invest. There is definitely some low-hanging fruit on this list that is easy to get, even if you don’t have money to invest.

READ NEXT: Ways to Make Money: 150+ Side Hustle Ideas

21 Exciting and Proven Passive Income Ideas. Make more money in your sleep without working! Passive income is key to early retirement, and this post gives plenty of tips for passive income streams, even for beginners. Crowdfunding real estate, rental properties, investing in dividend stocks, REITs, and more. Some of the ideas require money to get started, and others can be done with no startup capital. Easy side hustles for extra money. #passiveincome #personalfinance