One of the people responsible for opening my eyes to passive income is Robert Kiyosaki. His latest book Second Chance focuses a lot on making money work for you, rather than working for money. This led me to think about all the ways to make passive income, or “cash flow” as Kiyosaki likes to call it.
Active income vs. Passive income
Active income is income that is directly a result of your day to day effort. If you stop working, your income stops flowing. However, this is not the case with passive income. Passive income produces cash flow that continues indefinitely into the future despite your efforts. Passive income is a great way to help propel you towards financial freedom.
So what exactly is passive income?
The idea of passive income is cash flow that comes about from resources, assets, and businesses that does not directly involve your direct participation. Some forms of passive income require more participation than others, but it does not require day in and day out maintenance to keep the cash flowing.
For example, an author who writes a book may be paid an advance from the publisher. That income is non-passive. However, the author will also receive a residual income stream on all future book sales, which is passive income. The author no longer has to work for that money. It simply comes in based on the product the author already created.
Similarly, a real estate investor purchases an investment property. The work that goes into locating, researching, and purchasing the property creates an asset that will produce income into the future without the investor having to participate in the day to day operation of the investment property.
The key to creating the best passive income ideas is to come up money making ideas that may initially require your day to day participation up front, but over time do NOT require your ongoing efforts. The beauty of having multiple streams of passive income is you can have cash flowing in, while focusing your time and energy on new and exciting opportunities.
Top 44 Best Passive Income Ideas in 2017
Buy Dividend Paying Life Insurance
Hey, we are a life insurance agency, what did you expect? However, bear with us a moment and consider the fact that life insurance is an asset. Just check out the balance sheets of major banks. Many of the largest banks have more cash value life insurance assets than real estate assets. Now why would organizations that make a ton of money and probably know the inner mechanics of money and wealth better than anyone else, be doing this? Better question, if banks are buying permanent life insurance, why aren’t you? Discover an amazing way to use life insurance as your own bank.
Write an eBook
With the introduction of e-readers and tablets, anyone can now write their own eBook and attempt to sell it on a number of platforms. For example, the Kindle Direct Publishing program allows anyone to set up a profile, upload a document, and add a cover while choosing their own selling price. As long as the book is good, it could be on any topic and have the potential to be successful. If your book gains some recognition it may provide you with a great passive income stream for the rest of your life!
Have an eBook Written
If you don’t have the time to write a book yourself, you can pay someone else to write it for you and then follow the same process as before. However, you need to ensure that you hold all of the rights before putting it up for sale because the last thing you want is the writer claiming some of your money when it does well. Upwork is a great platform to use to hire someone to write an eBook for you.
On the internet, there are certain things that people search for every single day and comparison sites are up there with the most popular. Whether you choose to go for insurance, services, or certain products, you will see traffic from people who are looking to compare prices and obtain advice. Once the site is set up, you can place ads or look for other ways, such as affiliate marketing, to make income from it.
Recently, you may have heard the term ‘drop shipping’ a lot because it seems to be the latest method for making real money. Essentially, this involves you getting in contact with manufacturers and wholesalers to sell on their behalf. Then, you keep a percentage of the sale and they will send the product directly to the recipient. Not only do you make money, you don’t have to worry about making room for inventory.
One of the most popular ways to make passive income online is through Lending Club. On peer-to-peer lending sites like this, you will see an option to lend money to other people. On average, people tend to receive around 5-10% interest over the course of a year. And you help people who require financing but can’t get it from the more traditional banks.
Angel Investor Venture Capitalist
Have you ever wanted to give back to budding entrepreneurs or be a part of a team of investors looking to take a start-up from zero to hero? AngelList allows you to participate in deal-by-deal investments, invest in a start-up fund, and invest professionally for the more seasoned investor.
Index Funds and ETFs
When it comes to making money, many people suggest investing money in the stock market but this involves paying out for a stock broker or spending time learning the process and all the various terms involved. Instead, you can try index funds which are like mutual funds and completely passive. Rather than choosing the individual investments, you can choose an index fund based on a particular market and the rest is done for you.
Also, taking some time to browse ETFs might be the better route to take. Perhaps you investigate which markets are the most beaten down and invest in these markets. Others prefer to invest in hot markets that are showing huge appreciation. Either way, ETFs may be a way to diversify your money in the market in much the same way as mutual funds, but with the added benefit of lower internal expenses.
As technology has improved, we have seen some fantastic websites come to the table and Betterment definitely falls into this category. After setting exactly what risk you are willing to take, you can put money into an account and let the algorithms do the rest of the work. As well as maintaining a balanced portfolio, you will be paying smaller fees than if you went with an actual person. Plus, many robo-advisors use passive management in contrast to active management, further limiting fees, and increasing potential passive income returns.
With the introduction of better techniques, this is now less popular than other options but it is still worth noting. In order to decrease the risks of re-investment and the interest rate, a CD ladder will see you divide money between different certificates of deposit (CD) in equal amounts. As well as deciding the amounts for each, the investor will also choose the maturity dates.
Over the years, YouTube has taken the internet, as well as the whole world, by storm. Nowadays, people are making careers from the site and, although you don’t quite have to do this, there are some great ways to make money on YouTube. If you manage to build a following on your channel, you can place ads on your videos and receive revenue depending on how many views you receive.
Again, this is now a huge industry and one that you should definitely look into. With major sites like Amazon and even smaller retail sites, they will run affiliate schemes which sees you use their banner, image, or just a link to use on your website, blog, YouTube channel, and any other place where people will see it. Whenever somebody clicks through and buys something using your link, you will receive a percentage of the sale as commission.
Here is a great way to quickly earn passive income online. Much like we saw earlier with the eBook, people are also selling whole courses online for certain skills or things that people want to learn. Although this will require a lot of investment (mainly in time) at first, there is an opportunity to earn money passively in the long-term as long as it is relevant, helpful, and high-quality.
With this, you need to think about what people will be searching in the search engine now as well as what people will be looking for ten years down the line. Rather than just writing about dogs and sticking some ads on the site, go for something that has legs such as ‘Best Places to Visit in…’. Then, you can sell advertising from companies within this location as well as space for guest bloggers who want to be seen.
Be the Middleman of Services
In the world, there are people looking for services. At the same time, there are services looking for customers. With this in mind, you can be the middleman to connect these two people over the internet. After reaching out to customers, you can outsource all work to professionals and keep a percentage of the fee.
Build an App
With seemingly everyone having a smartphone or tablet these days, the next option for you would be to create your very own app. As long as the app is relevant, funny, or helpful, there is no reason why you can’t have the world’s next big thing in the app world. In the past, this would be an expensive experiment but this is no longer the case.
Earn for Nothing
If there are certain tasks that you do anyway on the internet, you might as well make some money from them and now you can with sites like Swagbucks and InboxDollars. For example, watching videos and shopping will see you earn whatever the site’s currency may be which you can normally convert into money or prizes.
In a similar vein, you can receive cash-back for occasions where you are going to use your credit card anyway. Nowadays, it can be cheap or even free to switch credit cards so see what options there are on the market. In truth, you could find a card that offers between 1-5% in cashback and you can even earn fantastic amounts of money as a sign-up bonus.
When you read an article or visit a website offering a certain service, do you ever wonder where the picture of the guy in the gym or the lady sitting holding a meeting comes from? If you want to make some money, they could be coming from you. With sites like Shutterstock and iStockPhote, you can upload your very own general photos that people will then purchase to use for themselves. Whilst some sites offer a flat rate for photographs, others will pay you a percentage of each sale.
Ranking at the top of any cash flow assets ideas list would be real estate. Of course, we could talk all day about real estate and the passive income opportunities that there are for you. Although an investment will always require a little attention, this is a great way to make money without really doing anything after your initial due diligence. For example, after buying a property, you could rent it out and all you would have to do is maintain it and ensure that it stays livable over time and that your tenants are happy. Better yet, hire a property management company to do all the dirty work for you.
Buy a Blog
So far, we have discussed websites, blogs, and YouTube channels but these all require starting from scratch and working hard to build a viewership or following. However, like real estate, buying an existing cash flow blog is a great solution to jump start your online passive income earnings. It is not difficult to purchase an existing blog. Every year, thousands of sites are sold or abandoned even though they have good traffic so this could be your entry point with some or most of the work already completed. In the future, you could keep it for ad revenue or continue to build it out for an even better return on investment.
Similar to the affiliate marketing we discussed earlier, network marketing looks to target social media and you will recognize it if you have friends that try to sell products every so often. Essentially, it works in the same way in that you will receive a percentage of each sale. At the end of it all, everyone is a winner because the consumer has the product, you make money without having to get involved with the actual product or shipping, and the company makes a sale.
Become a Writer
Rather than setting up your own blog or website, why not look for other blogs that you can contribute towards and still take a share of the AdSense revenue? This way, you don’t have the hassle of starting everything up and you already have a certain amount of traffic to target. As long as the writing is good, you can continue to earn good money over time. The key would be to find high ranking websites with high traffic to allow you to share in their revenues based on the performance of your post. Not an easy task but highly rewarding.
These days, people are always looking for work to be done by other people. Therefore, you can set up a place for these people to find exactly what they need. Whether it is melodies, small tunes, photographs, blank logos, or anything you can make. Whenever someone uses this or purchases it, you will make some money.
With the internet so readily available these days, we always look for reviews before spending money on anything. Nowadays, even books boast detailed reviews so you could make a book review website. This is a great way to make some passive money online if you enjoy reading and writing. Over time, people will begin to trust your word and if they like what they have read, the affiliate link will be available to them so you can make money. Plus, if you are a budding writer, you may already have a pretty good following that will want to buy your book one day!
If you aren’t creative yourself and would struggle to write an eBook or create your own course, why not team up with someone who can help? For example, you could set up the website, complete all the marketing, and then find someone else who actually does the product and split the earnings with them. Just recently, we have seen many people team up with lawyers to provide legal kits and this is the same thing.
Pay Off Credit Cards
When you reduce a fixed expense that has been plaguing you for so long, this will essentially be the same as making passive income because your disposable income will have increased. Of course, this might be easier said than done but there are real options to pursue. For example, changing accounts would be the first step as many offer 0% (or a low percentage) interest which will allow you to start shaving off the actual debt rather than paying interest every month. And if you find yourself constantly behind on credit cards and other high interest debt, find out how to recapture your interest through infinite banking.
Real Estate Investment Trusts (REITs)
Earlier, we discussed the opportunity to buy commercial or residential property to have it rented out but this requires maintenance work. If you want to be truly passive, you can invest in REITs as this is similar to mutual funds. Without having to get involved, managers are hired to look after your money on your behalf.
Whether it is a startup or a well-established business looking for capital to expand, there are many businesses out there looking for funds and you could be the one to provide it to them. Rather than giving the money as a loan, it could be a business opportunity if you become a silent partner. While they continue to run the business each day, you can invest money and see the rewards through the profit.
If you don’t want someone living with you all-year round, another option would be to put your room or whatever you have available on Airbnb. This way, tourists and locals alike can book to stay for a certain amount of time. Depending on where you are located, you can charge different prices whilst staying under the cost of pricey hotels in the area.
Rent a Room
Sure, this may not be a viable long term passive income option as the others on this list we have provided but it is always a cash flow opportunity to rent out a space in your home that you aren’t using. If you have a free bedroom all-year round, you could benefit from the company and the money. Better yet, convert a portion of your home to a granny flat and advertise it on Airbnb. One bedroom studios are easy to maintain and if you live next to a college or university it should be easy to find a tenant or vacationer.
Local Car Wash
If you have a computer and an internet connection, this is all you will need to run a small car wash venture in your area. After setting up, advertise your business and ask the local car park owners if you can run a little car wash section on some days. Once you start to attract customers, find some young students in the areas who are looking for a little extra money to work for a few hours. Instead of paying them a flat rate, you could agree a percentage of revenue so you aren’t left paying someone when no customers come in.
On sites like Cafepress and Teespring, you can design your very own clothing before putting it available to the masses. Rather than worrying about inventory and actually making the clothing, it will often require a certain amount of people to show interest. Once a target has been reached, your clothing will go ahead and you will keep a percentage of all sales while the site deals with production and shipping.
In today’s world, there is simply so much information out there regardless of what topic you are trying to research. Often, this leads to frustration because we don’t know what to believe and there isn’t one place to view everything. However, you can step in and change this. Often, you can charge money just for being organized and compiling information into one handy guide.
Become an Inventor
If you don’t have the time to start a whole business, you could become an inventor and give your patented ideas to people to earn money without effort. Rather than worrying about a website, product, marketing, packaging, delivery, customer service, and more, you could simply sell your idea or offer it in return for a percentage in a business.
By utilizing the various discount and reward programs out there, you aren’t really going to earn a second income but it will earn you enough to be paired up with other ideas on this list. Over the course of a year or so, you could earn yourself around $1,000 which is better than nothing.
Buy Overseas, Sell at Home
As you can imagine, this requires quite a lot of work but you can soon turn it into passive income by hiring someone to deal with everything. After buying popular products in bulk from overseas, you can then sell it at home and even online using sites like eBay. And the more you can automate the process, the more you can call it passive income, as you focus your new found time on other business ventures or on optimizing your existing business.
With a certain population always on the look-out for deals, you have a chance to attract these people all in one location by showing the best deals around. Of course, you would have to choose a particular niche rather than showing every deal that currently exists. If possible, you could even combine this idea with the price comparison website and have an all-inclusive service.
Similarly, you could do the same thing but for jobs within a particular niche. Even if you choose ‘off-the-shelf’ templates, this can still be time-consuming but it can be worth the effort once set up. On the internet, there are things that people are always searching for and jobs fall into this category nicely. Further, provide resume and cover sheet templates for a fee, or farm out the service to your associate, to earn even more passive income.
Outsource an Active Business
If you already run a business or are looking to set one up, the best source of passive income will come from outsourcing active roles. If you can minimize your input on a day-to-day basis, it will be as passive as possible for you as long as you outsource these roles to the right people.
Create Content with Experts
When providing advice within a niche, credibility is important and something that you can struggle with if you start writing articles and guides randomly. Therefore, you can build your credibility through interviews with experts. After choosing a niche, find experts in this field that are willing to talk to you. With this, there are many options including charging for premium content, affiliate marketing, and more.
If you drive often and cover a good amount of distance each week, you could earn money advertising on your car. After signing up to the site, they will check that you drive often enough before offering certain campaigns. After choosing, your car will be covered in print (which can be removed afterwards) and you can earn money for just driving.
Buy a Bouncy Castle
For this idea, all you need is an investment in one bouncy castle and one employee. After advertising and gaining some interest, people can book your service where the one employee drops it off to the customer in the morning, leaves and does whatever for the day, and then returns to pick it up in the evening. Even if you do it yourself, you can earn good money for about an hour’s work in total. If it goes well, you could buy a second, third, and fourth bouncy castle. If you hire a good office manager you can simply focus on marketing, and leave the scheduling and service to your employees.
Nowadays, people don’t expect to see receptionists in gyms anymore and this is why there is a spout of new 24/7 fitness centers. Although this will require huge chunk as a first investment, the running costs can be extremely low and you should see a good profit in a short amount of time. And if you are a fitness trainer you can offer your services to your members for an extra income stream.
As you can see, the amount of passive income ideas out there are virtually endless. Do you have more passive income ideas that you would be willing to share? Please leave a comment below, we would love to hear from you!