Today, having a single source of income is becoming increasingly risky. The constant and massive layoffs, changing economies, inflation, and skyrocketing real estate prices are making everyone look for additional income streams. Gone are the days when an average family could live on a single income!
The problem with looking for passive income ideas is that there’s a limited amount of time we can dedicate to additional activities beyond our daily jobs and other responsibilities. That’s why, regardless of whether you want to supplement your main income, or start a business and gain financial independence, we picked out the top 24 passive income ideas to help you start making money in 2024.
What is Passive Income?
Passive income is the money you earn without investing too much time or effort. Unlike traditional active income sources, which require you to work a certain number of hours, passive income is an activity that generates income passively.
Common and more traditional examples of passive income include real estate renting or investing in indices like S&P 500. However, The growing popularity of digital products has created new opportunities for passive income. People are finding new ways to monetize these digital products and online businesses, like YouTube channels and affiliate marketing.
Passive Income vs. Active Income
Passive income is the money you earn with little to no effort. Once you spend enough time and effort, you can establish a system to generate passive income which requires minimal supervision in the long run.
In contrast, active income is usually the main source of income for everyone, requiring active participation for a dedicated amount of time to generate a weekly or monthly salary. Essentially you exchange your time and labor for a predefined payment.
Why is Passive Income Important?
Passive income is becoming an important goal for any person looking for better financial stability to withstand the increasingly demanding economy. Key benefits include:
- Financial security. Passive income has the potential to help diversify your income sources, allowing you more freedom and stability.
- Personal freedom and time efficiency. Choosing the right passive income stream can help generate money without actively working, leaving more time to pursue other activities.
- Scalability. Unlike traditional jobs, passive income has the potential to scale considerably with minimal increases in time and effort.
Top Passive Income Ideas to Make Money
So, what can you do to start earning passive income in 2024? In this section of the article, we’ll go over an extensive list of 24 passive income ideas you can explore to make extra money.
We’ll start from some of the more traditional ways, and end with newer, and more accessible passive income ideas.
1. Sharing Your Internet on Pawns.app
What better way to start off the list with one of the easiest passive income strategies? That’s exactly what you can expect with Pawns.app. The app is a platform offering a unique way to earn extra money on the side – by sharing your internet.
If you want a quick and straightforward method to start a passive income system and literally forget about it after it’s up and running, you can do that with Pawns.app. It’s a web platform and mobile app you can easily install on your phone, log in, choose internet sharing, select how much bandwidth you want to share, and that’s it!
Most of us have way more internet than we actually need or use for that matter, so why not put that unused bit to good use? And to make sure that everything’s smooth and secure, Pawns.app is designed with the highest privacy and security standards, so you can be sure that all of your personal data remains private.
2. Buying Dividend-Paying Stocks
Another traditional method of earning passive income is with dividend-paying stocks. Investing in these stocks can provide a reliable income stream, making them attractive for long-term stability.
Essentially, when you invest in these stocks, you receive a portion of a chosen company’s profits in the form of dividends. Payments for these dividends are usually made quarterly, though some companies pay monthly or annually.
Now, in terms of how much you can earn depends on several factors, including dividend yield, stock price appreciation, reinvestment, and payment consistency. Earnings can vary drastically, but a good estimate is between 2% and 5% and more in annual returns.
Additionally, this method requires certain experience and know-how, so if you’re new to the concept, it’s best to consult with financial specialists on how to invest your money. But to get you acquainted with the process, here’s a brief rundown on how to get started:
- Choose a reputable brokerage account.
- Do your homework and research dividend stocks.
- Evaluate dividend yields and look for balanced growth.
- Diversify your portfolio to reduce risk.
- Track your investments and regularly monitor stock performance.
3. Participating in Peer-to-Peer Lending
Peer-to-peer (P2P) lending is a less-known passive income idea where you can lend money directly to borrowers through online platforms, without third-party or traditional financial institution involvement.
If you have saved up a substantial sum in your savings account, you can divide the sum, leave a part in the account, and use the other half to lend to others for profit. There are great P2P platforms that can connect you with potential borrowers, like LendingClub or Prosper.
These platforms require borrowers and lenders to create detailed profiles for better transparency on risk tolerance and desired return rates.
Once you sign up to a P2P platform, you can choose a potential borrower, and agree on the terms and payment frequency. All that’s left then is to kick back and see your money return with interest!
To talk numbers, The peer-to-peer lending market was valued at $209.4 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of over 25% from 2024 to 2032.
4. Investing in REITs (Real Estate Investment Trusts)
Investing in REITs (Real Estate Investment Trusts) is a great passive income strategy for those interested in real estate, but without managing it first-hand.
Essentially, a REIT is a company that owns, operates, or finances income-producing real estate in different sectors, like commercial, residential, and industrial. And as with stocks, REITs allow you to buy shares in large, income-generating properties.
To explain a bit more how it works, REITs pool together investors’ money to buy and manage real estate. These companies are required by law to distribute at least 90% of their taxable income as dividends to shareholders.
Compared to owning and managing real estate yourself, investing in REITs allows you to be involved in real estate by simply investing money and watching your rewards grow steadily over time.
When it comes to calculating how much passive income you can earn, historically investing in REITs resulted in an average annual return of 8% to 12%, making REITs an incredibly lucrative way to generate passive income.
5. Investing in Bonds
Investing in bonds is a traditional and stable way to generate passive income for a long period of time. A bond is essentially a loan that an investor makes to a corporation, municipality, or government in exchange for regular interest payments and a return of the principal.
From the majority of investment options, choosing to invest in bonds is one of the safer options, though it’s always recommended to consult with financial professionals and advisers before investing your money anywhere.
When it comes to the investing process, when you purchase a bond, you are basically lending money to the issuer for a fixed period. In return, the issuer agrees to pay you interest at predefined intervals. When a bond’s term ends, the issuer repays the initial amount.
It’s difficult to give an exact estimate of how much you can earn as it heavily depends on the bond types, issuer creditworthiness, and market conditions. However, Investopedia reports that if you invest $1,000 in a 10-year bond with a 4% rate, the issuer will have to send you an interest payment of $40 every year.
6. Investing in Index Funds
Another popular idea for earning passive income is investing in Index funds. These funds are a type of investment that mimics the performance of a specific market index, like the S&P 500 or NASDAQ-100.
Index funds are extremely popular and more accessible to a wider audience because of their low fees, diversification, and potential to generate passive income through dividends and capital appreciation.
Moreover, most bigger banks offer an option for their clients to store a specific percentage every month and invest it into a chosen index fund. Usually, this is done in the background and planned for some years, so there’s no need for active management on your part. Basically, it’s an invest-and-forget type of passive income.
Historically, the S&P 500 has returned an average of 7% to 10% per year over the long term, which includes price growth and dividends.
7. Investing in Cryptocurrency Staking
Cryptocurrencies have become a preferred portfolio diversification method for investments. While it takes some know-how, cryptocurrencies are also becoming more widespread, with the market now focusing on educating the public about cryptocurrencies.
Cryptocurrency staking is a way to earn passive income by holding and “staking” specific cryptocurrencies to support the operation and security of a blockchain network. In return, participants are rewarded with cryptocurrency rewards, similar to earning interest on a savings account.
This strategy has become popular for crypto investors who want to grow their assets without actively trading. Once again, you should be aware of the crypto market’s dynamics and volatility. But cryptocurrencies like Ethereum, especially Bitcoin have become popular investments for their storing value.
If you want to stake cryptocurrency, you can use exchanges like Binance, Coinbase, or Kraken to simplify the process.
8. Purchasing Vending Machines
This may sound like one of the less expected passive income ideas, but buying a vending machine and placing it in a high-demand location can prove to be a lucrative decision. Moreover, it’s a relatively low-maintenance business model.
The idea is simple: you purchase a vending machine, choose a high-traffic location, decide on what product you’ll want to distribute, get permission to sell in that area (laws and policies vary per country), and that’s pretty much it. All that’s left is to regularly check up on your vending machine for maintenance and product count.
This model is especially well-suited for someone who doesn’t mind having a location-based passive income business. Plus, with minimal upkeep, you can start to invest in multiple vending machines, thus increasing your earnings without investing too much time.
To give an example, someone who lives near a mountain could place several vending machines with water and high-protein snacks. As for rewards, Quinn Miller, a vending machine owner, reports making $30,000 per month.
9. Renting Property on Airbnb
While bigger-scale real-estate flipping or renting may not be the first passive income stream for most, Airbnb renting could be a great alternative for anyone interested in this strategy. You can also buy Airbnb property with little money.
Investing in small apartments and renting them out for short stays on popular platforms like Airbnb is a great way to earn a consistent passive income. And unlike dealing in large-scale real estate investments, renting out smaller properties and rooms is flexible, and fairly easily manageable.
Now, when it comes to earning potential, it varies drastically. You have to take into account the location, property type, design, and popularity. For example, for properties in New York, London, or San Francisco, a night could cost from $100 to $500 or more per night.
One host claims to have made around $20,000 in a single month, as her Airbnb is near Lake Tahoe. In off-peak seasons though, revenue can drop to $0. This shows that choosing Airbnb as a side hustle idea requires strategizing and planning in advance.
10. Renting Cars
Perhaps you’re interested in cars? Well, the car rental business is a fast-growing passive income strategy. It’s a great idea because you shoot several birds with one stone – you provide a valuable service to a growing market need and you help the environment.
Public transport is becoming increasingly convenient and modern, making vehicles if not obsolete, then definitely a nice-to-have rather than a must-have. Sure, there are big companies that offer car renting services, but these big businesses usually have high prices, which is where you could step in.
Owning a small-scale car renting business with low to moderate prices can become a sustainable passive income. The best part – you can use Turo, Getaround, or HyreCar to get started, without investing in setting up your own website. These platforms allow you to provide your car renting services and connect you with renters.
Specifically, Turo or Getaround can also handle insurance and payment processing, and sometimes even offer pricing suggestions, making it that much easier for you to get started. Now, in terms of expected pay, a midsize car rental company makes around $235,000 to $940,000 in a single year.
11. Renting Out Storage Space
The majority of homeowners in the US have unused storage like a garage, basement, attic, parking space, or an extra room. What many don’t even consider, is that this kind of space can be easily rented.
People are looking for more affordable and convenient storage solutions for different purposes like storing simple belongings or equipment. And luckily, you don’t have to start with local ads, although it could also be a good option.
Peer-to-peer storage platforms like Neighbor, Stashbee, and Spacer allow you to easily list the storage you don’t need and connect you with potential individuals looking for storage.
This strategy requires little maintenance and allows you to monetize unused space and earn passive income. You can expect to earn around 50% of what bigger storage companies charge.
12. Renting Equipment
If renting properties, cars, or storage spaces doesn’t appeal to you, how about renting equipment? This can be an excellent way to generate passive income to monetize unused stuff, including construction tools, gardening equipment, renovation tools, outdoor gear, or even party supplies.
Many individuals and companies are choosing to rent equipment instead of buying it to save money during inflation and avoid investing in items they will only use briefly.
Evaluate your items, confirm that they’re good to be used, and start listing them on Fat Llama, Loanables, or ShareGrid. You can also choose to rent directly through local connections or by simply advertising on Facebook.
Decide how much to charge based on the equipment’s value and demand in your area. You can charge hourly, daily, or weekly depending on what you’re renting.
Here’s an interesting fact, the equipment rental market is projected to reach a whopping $120 billion by 2027, so take that as a sign and start renting!
13. Creating an Online Course
Sharing is caring, and in the case of sharing knowledge on digital platforms, you can also earn passive income for many years to come. That’s right, creating and selling online courses is one of the most rapidly growing passive income methods, particularly for teachers.
Platforms like Udemy, Teachable, and Skillshare offer a chance for virtually anyone to create a course on a subject they’re knowledgeable about and earn money as people enroll. Though creating an online course will initially require significant time and effort, once you’re finished, you can upload your courses to a platform and that’s it.
While you will have to pay a fee for these platforms, in return you’ll get professional tools, infrastructure, and access to a global audience.
Moreover, depending on the subject of your courses and its demand, the online course platform may also recommend your courses to potential students.
This is a perfect model for anyone looking to share their knowledge and have a recurring passive income strategy. To talk about rewards, full-time course creators can receive around $40,000 to $120,000 annually in the US.
14. Licensing Your Music
If you’re an aspiring musician or someone with a passion for creating music in your spare time, why not monetize your hobbies? Licensing your music can allow you to earn passive income by granting permission for others to use your work in TV shows, films, commercials, video games, and online content.
This strategy is a perfect way to earn a passive income by using a highly marketable skill you already have. Licensing your tracks or partnering directly with brands can provide you with ongoing revenue, which can easily turn your passive income into active income.
If you choose to license your music, you’ll be giving someone the right to use your tracks in their projects for an agreed fee. To help manage this process there are many different platforms, like Epidemic Sound, Artlist, and AudioJungle, which help facilitate the process of licensing your music to interested parties.
On average, music licensing fees can range from $250 to $400, but they can reach much higher ranges as well. Keep in mind that the fee depends on the music, vocals, frequency, demand, genre, size, and many other factors.
15. Licensing a Patent or Invention
Shark Tank might’ve been a fun watch, but it remains an inspiration to anyone who has a product idea but doesn’t quite take the step further. Well, taking out a licensed patent for an invention or product you create can be your passive income idea.
While there are other legal policies to go over with specialists, essentially, licensing a patent means to grant either companies or individuals the right to produce, market, and sell your invention in exchange for royalties or upfront payments.
This is the perfect model if you don’t want to think about production, distribution, and promotion, and simply focus on inventions. And if interested parties approach you, you can set your terms and license your patents for royalties, which are usually between 3% to 10%.
As an alternative, you can also sell the entire patent for a one-time up-front sum. Note that you should weigh this decision with a couple of advisors, especially if we’re talking about high-value patents.
16. Starting a Dropshipping Business
Starting a dropshipping business is one of the most popular ways to generate a passive income, especially for those of us who don’t want to handle and manage product inventories and shipping.
The process really couldn’t be simpler, and since this business model has made a lot of people wealthy, the internet is full of success stories, guides, tutorials, and walkthroughs with real-life examples.
If this sounds like something you’d like to try out, the process is as straightforward as it gets. You first have to choose a product that caters to a specific niche need, is easy to ship, and has enough providers.
Once you narrow down on the product, you’ll need to set up an ecommerce online shop. You can choose Shopify, Webflow, or Squarespace for this. Finally, set up a system for shipment and delivery, run ads on relevant social media platforms, and see those profits flow! As for earnings, it’s reported that on average, the order value for a dropshipping store is $23.50.
17. Creating a Blog
Blog writing is one of the most popular ways to earn passive income. In fact, according to Indeed, bloggers make around $37,073 annually, making blogs a popular choice for passive income.
If you ever wanted to try your hand in writing, and are now looking for passive income ideas, blog writing could be the right choice for you. It’s important to note that blog writing is the slowest to bring rewards compared to other passive income strategies.
But if you stay consistent, and continue publishing unique and high-quality content, you’ll start to see the benefits pile up.
Writing blogs requires minimal funds, so to get started, all you really need is to choose a niche, choose a reputable website-building platform with a focus on beginners like Wix or Squarespace, and start writing.
Once you become more comfortable with writing, start researching ways to optimize your content with Search Engine Optimization (SEO). A good rule of thumb is to also check how other writers in the same niche as you are positioning their content.
18. Creating Mobile Apps
Today, over 5 billion people globally have smartphones, making the mobile app market incredibly attractive, not just for big companies, but smaller-scale app developers.
Additionally, with more and more free tools and learning platforms offering knowledge and guidance, people can experiment more freely and become independent developers.
There’s a huge potential market for apps catering to entertainment, productivity, education, and other niches. When apps are developed and published on platforms like the Apple App Store or Google Play, they can generate ongoing revenue with relatively little maintenance.
According to Statista, apps on Google Play average between $1 to $10, and some of the most popular apps gave millions of downloads. But simply pricing the app isn’t the only way to earn income, you can also introduce in-app purchases, virtual goods, or offer subscription models.
19. Selling Stock Photos
Selling stock photos is another great passive income idea. What makes it popular is that literally anyone can take advantage of this idea, from beginners to seasoned professionals. Plus, this model requires minimal effort to get started.
Platforms like iStock, Adobe, Shutterstock, and many others allow anyone to upload their photos to these platforms to be licensed to anyone willing to buy a specific photo. Though, it’s important to mention that there are specific requirements for the photos. But once you get past that and start uploading photos, it’s an easy process from there.
Selling stock photos is one of the easiest passive income opportunities, mainly because it’s so accessible and requires little effort.
Depending on the stock image platform’s commissions, your experience, and the photo quality, you can earn between $0.02 to $10, and more dollars per photo download. To maximize your earnings, it’s a good idea to find out which photos are in higher demand.
20. Starting a YouTube Channel
Back in 2010 when YouTube reached mainstream popularity, there was a boom of aspiring YouTubers who quickly became popular, and some even built decade-long, full-time careers, like Pewdiepie, Smosh, Markiplier, and many other famous channels. But today, finding a unique niche in all that noise of YouTube channels can be difficult, but not impossible.
Let’s start with the key pros of YouTube, which will show why rating a channel could be a great way to make passive income online. First things first, YouTube has over 2.7 billion active users, so no matter how many channels there are, you’re bound to get views.
Secondly, you can create an account and set up a channel completely for free. Now, you don’t have to start with the best video equipment, especially with smartphone cameras becoming increasingly better each year.
The only thing that’s left is to decide on a niche, review how similar channels are producing content, create unique content, and most importantly – plan an upload schedule. No matter how many videos you upload, as long as you do it regularly, YouTube’s algorithm will catch this and start recommending your content early on.
Finally, when it comes to earning passive income, in 2024 the typical compensation for YouTube content creators in the United States is approximately $120,226 per year.
21. Creating a Subscription-Based Product
While selling unique items on Etsy is one of the most popular passive income ideas, creating products for a subscription-based model can be a more sustainable source of revenue.
For this model though, you’ll need to create your own ecommerce website and set up a subscription system. It’s best to start small and offer only a few options as you start.
As for the product, choose whatever appeals to you most. Think of it this way, what kind of subscription box would you enjoy most? Once you identify this product, do your homework, and arrange your first subscription box.
To apply a subscription model, you can begin with something simple, like monthly or seasonal boxes. For example, if you’re selling natural candles, research the scents specific for each of the seasons! Cardamon, cinnamon, and pumpkin spice have become staples for the Autumn season.
The final step is to start advertising and selling. When it comes to pricing, it would be good to research the market and price your products in a similar range as other providers.
22. Selling Digital Products
With the rise of free online tools and software, creating and selling digital products is becoming a quick and scalable way to make passive income. Not only that, but digital products like eBooks, online courses, printables, templates, software, or music, can be sold repeatedly without the need of physical inventory or shipping.
You hear about this all the time, social media and YouTube are full of self-made success stories and people inviting you to take their special classes, promising an immediate return. While this may be inspiring, there’s no one way to succeed. You have to do your own research and zero in on the digital product that works for you and your target audience.
When it comes to earning, it of course depends on the product and platform where the product is sold. One experienced Etsy planner seller reports earning over $95,000 in just a year.
This seller utilized the Etsy platform’s usability, uploaded a large variety of planners, and timed specific planner ads with special events and dates to boost sales. So, if you’re looking for passive income sources that don’t require any experience, you should consider trying your hand in digital products!
23. Flipping Websites
You might’ve heard about property or car flipping, but website flipping is also a thing. What it means is that you purchase an underperforming website, improve it, and then sell it for a profit.
If you work with website building or design for a company, you could try utilizing these skills to flip websites. The improvement process depends on the type of website and the improvements needed, which will ultimately also influence the price.
To get started with this model, you’ll need to:
- Find an underperforming website with growth potential on Flippa, Empire Flippers, or FE International.
- Improve the website by enhancing content, boosting SEO, updating the design, and increasing the website performance.
- List the updated website on a marketplace or sell it privately for a higher price than you originally paid. On average, website flippers see a 120% ROI within the first year.
24. Engaging in Affiliate Marketing
Affiliate marketing is fast becoming one of the most popular passive income streams for many. This is because affiliate marketing requires no starting funds and no prior knowledge.
In essence, affiliate marketing is all about promoting products, companies, profiles, or accounts. The process is simple – you embed an affiliate link to a social media post or blog article that promotes a specific item or service and receive a commission for every sale, lead, or click.
What’s important to note is that this method does require a moderately active social media account and presence to engage in affiliate marketing. And when it comes to rewards, beginners can expect to earn around $50 to $500, while advanced marketers see rewards go as high as six figures annually.
How to Choose the Best Passive Income Source?
The list of potential passive income sources in this article only goes to show how there are loads of ideas and strategies to choose from. But how do you pick the one that’s the best for you? Let’s review the most relevant factors:
- Initial investment. Some ideas require a large upfront investment (like real estate), while others, such as affiliate marketing, need little or no money to start.
- Time commitment. Blogging or creating online courses takes time to set up but can run mostly on autopilot once they’re established.
- Risk tolerance. Investment options like stocks, bonds, or crypto staking come with varying risks while renting out a room tends to be a safer choice.
- Personal skills. Use the skills you already have to earn passive income by creating a blog, online course, or mobile app.
- Market demand. Check if there’s demand for your chosen passive income method in your target market or area.
Best Passive Income Ideas for Different People
What we just discussed above may apply to the general audience, but what about specific people? In this subsection, let’s identify the three most common audiences, and what types of passive income fit their needs best.
- Teenagers and students. This is a demographic that usually doesn’t have a lot of starting funds, so the best way to earn extra money would be to start blogging, creating online digital products, engaging in affiliate marketing, or starting a YouTube channel.
- Working professionals. Young adults and young families can find themselves with some extra savings, so a good idea would be to choose stocks, Index funds, or REITs as a way to start saving and employing the saved money.
- Retirees. Ideally, all retired individuals should have some savings. At this age, passive income isn’t about earning money but choosing an activity they could enjoy. Examples would be renting apartments, storage, and equipment.
How to Earn Passive Income without Money?
Earning passive income without a significant initial investment is more than possible, and with the list of 24 strategies, let’s list out the best passive income opportunities that don’t require money to get started:
- Creating and selling digital products like eBooks, courses, or guides on Gumroad, Udemy, or Amazon.
- Setting up an affiliate marketing business and earning a commission every time someone presses on an affiliate link or buys a product.
- Renting out unused space, storage, or equipment to earn extra money for short-term but consistent rentals.
- Starting a YouTube channel or a blog to create and share unique content.
- Licensing your creative work like music, photography, writing, and designs.
While there’s some upfront effort or creativity involved, once they’re established, you can start generating passive income in no time.
Conclusion
In 2024, it’s easier than ever to start making passive income. Whether you want to boost your salary, save for retirement, or achieve financial freedom, there’s a way for you to do it. By picking the right passive income stream that fits your goals and resources, you can begin building wealth with less hands-on effort and more flexibility.
