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Best Ways to Make Passive Income Online

Best Ways to Make Passive Income Online
Donata Tamulionyte

Donata Tamulionyte

Last updated - May 15, 2023

These days, financial security doesn’t come from your regular paycheck. Unless you’re holding a managerial position at a Fortune 100 company, you’re probably finding it hard to make ends meet. The prices of goods are rising drastically, thanks to a combination of factors. COVID-19, the war in Ukraine, and shipping issues are just a few reasons for the inflation rate we’re experiencing at the moment. 

While things may be looking bleak for most of us, all hope hasn’t gone out the window. Before you start applying for that second (or third) job, take a pause and consider your options. Have you ever thought about making passive income instead? Don’t let your lack of knowledge limit your chances of making more with less effort. 

Passive income is all about earning continuously with minimal work. You may have to spend time and energy setting things up in the beginning. However, if you make the right choices and have a sound financial advisor by your side, the days will look brighter in no time. 

This article will guide you on earning passive income, expound on the most accessible methods, and answer some burning questions. Financial freedom is within reach! Let’s start things off and explain how.

How to Start Earning Passive Income

Those of you who haven’t earned passively before might feel wary about the whole venture. There’s no reason for that! One point you must understand is that passive income is not a treasure reserved for the 1%. However, you also should know that there are no free meals – some form of effort and sacrifice is necessary for a fruitful venture. 

Follow the process outlined below to determine the best method at your disposal. 

  • Make a note of all your assets

You may own a car or house. If that’s not the case, how about a closet full of clothes and shoes? Perhaps you subscribe to a broadband package from your ISP. All of these are assets that you can monetize for passive income. 

Renting out your belongings is the easiest way to make money. You can make this a long- or short-term venture; it’s entirely your choice. There are many things that are constantly in demand. Rooms, cars, parking spots, fashionable items, camping equipment, sporting gear, and baby stuff are just a few examples. 

You may not realize it, but your home will contain a lot of items you don’t use regularly. Instead of letting them gather dust, put them up for rent! 

  • Consider what you have to offer the world in terms of skills and knowledge. 

Suppose you aren’t comfortable with the idea of strangers using your belongings. That’s fine, too; we haven’t reached a dead end here. However, in that case, we’ll need to look inward. 

Everyone has something to share. They may care for babies like a pro or organize a drawer like a boss. What skills do you possess? Can you cook, sew, write, handmake jewelry, teach math, or clean? Do you do these things exceptionally well? If you’re a pro in a particular area, it’s time to share your knowledge. While it may take a bit more effort and time to record videos, develop courses, or create designs, you’ll earn passively when people buy your products.

Modern society is always hungry to learn new skills, so why not educate them? Teaching is a noble profession, and it pays well if you know how to market yourself. 

  • Determine how much time and effort you want to put in.   

Many of us don’t have a moment to spare in our day, what with family matters and other duties. On the other hand, you may have free time in the mornings to dedicate to earning passive income. 

If you fall in the first group, you need a venture that’s less demanding. It may entail renting items out or buying dividend stocks. The latter subset has more freedom. Suppose you have a few spare hours. You can use them to create content and market your products.  

  • Use all the resources you can find. 

The internet is a wonderful piece of technology. Everything you need to learn is available on the web, whether through short courses or blogs written by other entrepreneurs. Discover the mistakes others make so that you can avoid repeating them. If there are shortcuts, take them!

You can also find many online platforms that will aid your passive income adventure. For example, if you’re renting out a room, Airbnb is an indispensable tool. Conversely, if you’re selling jewelry designs, you’ll want to use Etsy to locate clients. 

Some of the most valuable platforms available are Reddit and Quora. On these forums, you can pose a question and get quick and accurate answers from people with knowledge in various subject matters.

Best Passive Income Investments

While you don’t really need startup money to make more of it, ready cash does make things easier. If you have some savings set aside, it’s time to put your money to work. What should you invest in? Here are some brilliant options: 

  • Rental Properties: Owning a property is a surefire way to build generational wealth and passive income. Have you ever heard someone say that? For a profitable venture, compare the potential returns with the total costs and expenses, and study the risks. For example, if you want to make $24,000 annually in rent, and the mortgage and other costs amount to about $3,000 a month, you need your tenant to fork up $5,000 monthly. 
  • Discounted Merchandise: Have you heard of the term “flipping?” Here, you’re taking advantage of price differences. Basically, you’re purchasing items at a discounted rate and then selling them for market value. You may have to buy in bulk, so partnering with a reliable supplier is crucial. In this venture, you’ll have to be an excellent marketer. How you promote your products is up to you. You can make full use of social media platforms, Amazon, and other online marketplaces. 
  • Real Estate (Crowdfunding): Investing in property requires a lot of upfront cash. Luckily, you can buy a portion of it. On specific platforms, you won’t have to handle all the nitty-gritty of property investment. Repairs and managing tenants are not of your concern. With this venture, you can invest as little as a few hundred dollars and receive periodic returns. Make it a point to study every prospectus to learn the investment’s pros and cons. 
  • Peer-to-Peer (P2P) Loans: As a P2P lender, you’ll earn interest on loan payments. These loans go through a third-party such as Prosper, Funding Circle, and Payoff. The interest rates applied differ according to the platform, as do the minimum investments. P2P lending comes with its own risks, especially with unsecured loans. You’ll want to analyze historical data and diversify your portfolio to maximize your bets. 
  • Dividend Stocks: These are shares in companies that pay regular returns. Shareholders may receive quarterly payments based on the profits generated. The money goes into the brokerage account. Research into every company you invest in is vital for success. Study the financial statements thoroughly. According to experts, dividend stocks are a fantastic venture as they’re easy to understand, don’t require a high investment, and pose better potential returns than mutual funds. 
  • Real Estate Investment Trust (REIT): REITs are companies that own and manage properties. You can invest in them much like other stocks and earn dividends on them. The idea is to diversify your investment. Therefore, stay away from owning individual REITs. Instead, aim for funds as they come with automatic diversification to lower your risk. 
  • High-Yield Savings: A certificate of deposit (CD) and high-interest savings account provide healthy returns. If you go for an online bank, you won’t even have to leave your home to invest. Aim for investments below $250,000 at an FDIC-backed bank to guarantee a return of principal. While interest rates are not as substantial as the investments listed above, you’ll fare better than keeping your money in a checking account. 

Laundromat Business: If you’re interested in running a business, how about setting up a laundromat? It’s a safe and profitable venture, provided you choose the perfect location for it. The upfront costs may be on the higher end, so if you have a partner, that’s even better. Returns are about 20%, and 95% of laundromats live past five years. As always, research is essential. Determine the level of competition and demand, and strive to provide value-added services!

Alternative Passive Income Ideas

The options above are great, especially if you have a healthy amount of money to invest in the first place. If you don’t, you can hop on these ideas: 

  • Create a course: With platforms such as Udemy and Coursera, anyone can share and get paid for their knowledge. If you’re a great educator and can present your ideas in a highly organized manner, you’ll see success. Make your course engaging with beautiful visuals and market it far and wide for higher traffic and enrollments. 
  • Write an e-book: A book is much like a course, where you can use it to educate folks on parenthood, living free, meditating, or working from home. The list of topics to write about is limitless. However, it would help to write a book on a subject you love. Without interest as a driving force, you’ll find completing chapters tiresome. You can sell your e-books on platforms like Google Books.
  • Be an affiliate marketer: If you have a substantial following online, it’s time to take advantage of your influence. With the varying affiliate marketing programs available, you can promote Amazon products, hotel stays, beauty products, and game subscriptions. They work with special URLs that your followers click on. If the traffic leads to a purchase, you get a cut of the profit. If you aren’t sure where to start, check out’s affiliate program!
  • Set up vending machines: Motels, apartment buildings, and busy offices are excellent for vending machines. They’re a relatively low-cost investment, and you can buy used machines on Craigslist and eBay. Much of your effort will revolve around finding sites for your vending machines and restocking them. As your business grows, you can hire someone to do the legwork.
  • Sell jewelry designs and tutorials: If you already sell handmade jewelry as a main business, you can diversify your income streams by selling designs and tutorials. You’ll earn without putting in additional effort for each sale. Moreover, you’ll establish yourself as a pro in the field!
  • Narrate books: If you’ve got a great voice and can tell stories really well, use your skills to narrate books. You’ll earn from royalties, and your bank account will grow as you gain popularity in the industry. Find out how to audition, the proper narration techniques, and your preferred niches. Familiarize yourself with recording and audio editing tools.
  • Create apps: Contrary to what you may think, you don’t need to know how to code to develop apps. Many platforms exist for beginners, such as Appy Pie, Adalo, and Bubble. You need a good concept, so figure out what problem you’re trying to solve, first and foremost. You will earn through subscriptions, ads, or memberships. 
  • Be a social media influencer: Anyone with a substantial following can be an influencer. In fact, this career choice is gaining popularity by the minute. Young people are venturing into this field because it’s highly profitable. You’ll earn passive income with sponsored posts and merch sales.
  • Run a blog: A blog is inexpensive to set up and pretty easy to monetize. Moreover, you have the freedom to cover topics you’re passionate about, whether it’s parenting, love, fashion, or food. Despite social media and video-sharing platforms, blogs have not gone out of style. They’re an excellent way to promote products, so you can use them to profit from affiliate marketing programs. 

Launch a YouTube channel: Do you need expensive recording equipment for YouTube videos? Not at all! Many content creators use their iPhones because of their high-quality cameras. You can pivot your channel according to your interests and share videos that appeal to your followers. Monetization occurs through ads, sponsored videos, the platform’s partner program, and more. 

Factors to Consider When Choosing Passive Income Streams

As there are countless options for those interested in earning passive income, finding the best method is crucial. One can invest in stock dividends, bonds, or real estate. Other options include putting in a bit more legwork and seeing delayed returns, for example, venturing into the world of content creation. 

So, what do you need to keep in mind when deciding on an income stream? Let’s discuss. 

  • Your Financial Goals 

Picture the perfect scenario, but remain reasonable. Are you aiming to live off your passive income, or is it just to cover vacations or a property purchase? How much would you require to live comfortably? Different people answer these questions differently, so it’s important to think for yourself. 

For example, let’s say you aim to earn a passive income of $3,000 monthly. A vending machine business may offer a thousand per machine per month. In that case, you’ll need at least three vending machines to sustain your needs. 

Passive income methods come with varying rates of returns. Obviously, the more profitable ones require more investment, whether in terms of finance or effort.  

  • Risk Factors 

You must understand that every venture comes with its risks. Factors determining risk involve the economic landscape and the available competition. 

Let’s picture buying a piece of rental property. In the beginning, you’ll research the popularity of the area and your potential tenants. Consider the possibility of your tenants defaulting on their rent payments. If the risk is high, you should look at other options. You do not want to be left in the lurch if you cannot cover your mortgage.

Another scenario involves investing in dividend stocks. As long as you’re receiving steady returns, you’re happy. However, what if the company goes in the red? Are you comfortable losing your initial investment? If this risk sounds too hard to handle, it’s best to seek other opportunities. 

  • Time to Profit 

Figure out how long it will take before the venture starts pulling in a profit from the time you start making the product or providing the service. Put simply, calculate the volume of sales required before breaking even. 

How long would you have to wait before seeing a sustainable return? To find out, check other similar ventures. For instance, a blog promoting parenting products may record a two-month period to profit. However, a niche blog could take years before registering a good return.  

  • Financial Resources 

How much money do you have to invest? Can you obtain a bank loan to start things off if necessary? Some passive income ideas, such as renting out a car, may not require upfront funds, especially if you already own one. However, others, like opening a laundromat, will demand substantial financial investment.

Consider the savings you’ve accumulated from your current day job. Additionally, figure out if you have a partner who’s willing to put up some money to support your venture. Make an appointment with your bank to discuss small business loans. These actions will give you an idea of how much funds you have available for your investment.  

  • Available Support 

Are you a beginner in the field of investing, blogging, or content creation? Don’t worry. Everyone started off as a novice in their industry. Understand that you do not need to traverse difficult paths alone. If you’re interested in investing in a local business and don’t know where to start, get in touch with the chamber of commerce in your locale. 

Otherwise, the internet is a lovely place. On the web, you’ll find educational resources and forums with people willing to give their two cents.

Key Differences Between Stocks and Alternative Investments

A stock refers to equity and represents partial ownership of the company that issues it. Stocks go for sale on exchanges and entitle the owner to a percentage of the issuing company’s assets and profits. The trades are regulated by the SEC. Corporations will issue stocks to generate funds for operations. They’re a popular avenue for growing passive income and generally outperform other investment options in the long run. 

When people talk about investing, they usually picture traditional investments such as stocks and bonds. But the story goes way beyond the conventional with alternative investments. These include: 

  • Private Equity
  • Real Estate
  • Commodities
  • Hedge Funds
  • Collectibles
  • Private debt 

In general, the SEC does not regulate these investments. Moreover, they’re less liquid than stocks, making them more challenging to convert into cash. Finally, alternative investments don’t necessarily move according to the flow of the market, making predictions slightly riskier.


What’s the difference between active income and passive income?

Active income is payment for performing job-related tasks. In general, one earns it through a day job, which requires an investment of effort and time. On the other hand, passive income is money earned through minimal effort. People make it through investments, royalties, and renting out their assets, among other things.

How can you make passive income with little to no money?

The misconception among many is that you need money to make more of it. While it might be easier to grow a million dollars into two with less effort, you can make passive income despite starting off with no money. Sharing your internet connection through is one example. Other options include writing and selling e-books and online courses.

Can you live off of passive income?

That’s certainly the dream, isn’t it? Many people live off their passive income. However, they probably didn’t do so from the get-go. To live off your passive income, you must reinvest it in the same venture (or a bigger one) until the returns can support your living expenses.

How do you pick the right passive income idea?

When trying to settle on a passive earning method, consider your available funds, assets, skills, and time. In addition, consider the rate of returns and the venture’s chances for success. You’ll fare better if you’re passionate about the idea!

Donata Tamulionyte

Donata Tamulionyte

Community Manager,

Donata is the heart and soul behind the community. As a communication wizard, she brings an exceptional blend of specificity, gentleness, and patience to her role. Donata has a remarkable ability to "read" people just from a few sentences, making her the perfect conversational partner for our users worldwide. When she's not building community connections, you'll find her singing, crafting melodies, and writing. Donata also loves animals and enjoys spending time analyzing their behavior and engaging in training.

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