You’ve got a steady paycheck from your 9-to-5 job, and that’s cool. But deep down, you know you’ve always wanted more. More money. More freedom. More flexibility. And so you decide it’s finally time to increase your current income. One of the best ways to earn more with little effort is to build a passive income stream. This article breaks down 23 ideas for how to generate passive income while keeping your full-time gig. So you can finally make more than you’ve ever dreamed of Click here.
What is passive income?
Table of Contents
Passive income is money you earn that doesn’t require you to do a lot of “active” work to continue making it. In essence, you can do most of the work upfront and put in some additional effort along the way to earn an income. For example, if you create an online course, you just need to update its content to keep the money flowing. You’ve probably heard the expression “make money while you sleep.”
That’s the biggest draw that entices people to earn passive income. You can create something (a blog, course, ebook, videos, or an online store) that generates money even when you’re not working. Or you can make passive income investments (property or stocks) that allow you to earn passively. (We’ll tell you more ways to earn like this shortly.)
Active income vs. passive Income: Which is best for me?
In theory, all of your income sources carry similar weight. But when it comes to achieving financial freedom, passive income leaves active income in the dust. You see, active income is the money generated from all those efforts you’re currently making. And you need to keep working if you want to continue making a living. If you quit, you don’t get paid. Your time literally equals money. And then you have passive income. An income that doesn’t require you to work actively.
And the money continues to flow in for years and years. If you’re looking to design a dream life where you are financially free, it might be better for you to focus on passive income. Just remember, while you might be able to build a passive income stream with a small investment, you’re not making any less of a commitment than someone investing their time. Making passive income comparable to income earned from active efforts requires a good amount of work upfront.
10 passive income ideas to help you make money in 2023
1. Start a dropshipping store
Dropshipping is one of the most profitable passive income sources. With dropshipping, you can find trending products on marketplaces like AliExpress to sell to customers around the globe. You can fill your online store with items from various dropshipping niches, such as fashion, home décor, or beauty. The magic of dropshipping is that you build your own business and decide how much you charge for the products. In fact, from all the passive income ideas on this list, dropshipping is the one where you have the most control over your margins. You can sign up for Shopify to start dropshipping today. Once you create an online store, install one of these dropshipping apps to find high-quality products to sell.
Note: A close alternative to a dropshipping store—but with a lot more input into product selection and quality control—is buying wholesale products to sell on your store. Using a wholesale marketplace, you can connect with local US-based suppliers, purchase products at wholesale prices, and sell them on to your audience. You can even combine this option with dropshipping by finding wholesalers who are willing to send products directly to your customers.
2. Build and monetize a blog
Another popular passive income stream originates from blogging. Blogging has helped countless entrepreneurs earn passively through affiliate links, courses, sponsored posts, products, book deals, etc. It can indeed take quite a bit of upfront work to build a successful blog. However, it’s one of the most sustainable ways to generate an audience through organic and social traffic or building an email list. The biggest perk of having a blog is that you can turn that one asset into several different streams of income. So, if you’re looking for an easy passive income idea, blogging might be the perfect option for you. Desirae Odjick, founder of Half Banked, explains, “I started my blog to make talking about personal finance more approachable, and as part of that.
I tend to share a lot of personal stories. They often included shout-outs to the tools I was using and found helpful, so it was a natural transition to add affiliate links as I joined those companies’ programs. “Now that I’ve been covering personal finance for almost four years on my blog, those links reliably bring in four figures every month, as people discover my articles and start to get their finances in order—and I feel fantastic recommending them, because I do personally use all of my affiliate products. It’s a great way to add passive income to your business, especially if you don’t have passive products of your own to sell … yet!”
3. Create and sell online courses
If you’re an expert in some subject or field, selling online courses may be a great passive income idea for you. Whether you sell them through your own website or online learning platforms like Udemy, you’ll find plenty of individuals who are willing to pay to access your content. Of course, things are easier if you sell on platforms like Udemy, but your course may be heavily discounted during certain periods. This will affect how much passive income you earn. In contrast, selling through your own website gives you control over pricing, meaning you don’t have to sacrifice your margins just because others are selling at a discounted price.
Sumit Bansal, founder of TrumpExcel says, “I started a blog about Excel spreadsheets in 2013. I did it as I was learning a lot about spreadsheets and thought it would be a good way to share my knowledge with others. It slowly started getting traction in two years; it was getting 100,000+ page views a month. I decided to create an online course and see if it would fly, and it did. I made a good side income for a few months and then decided to do this full time and launch more courses. Since then, the blog has grown a lot, and I have been featured on many prominent sites and publications such as Problogger, YourStory, GlassDoor, CEO Magazine, etc.”
4. Publish Instagram sponsored posts
If you have followers on Instagram, you might want to try your hand at creating sponsored content. Instagram sponsored posts are content pieces that endorse a specific product or service (usually owned by the sponsoring party). Sponsors compensate publishers for creating and distributing content that promotes their business. The secret to getting sponsored is to get more Instagram followers. You’ll also want to be super consistent with the type of content you post so sponsors know what to expect.
And be sure to focus on just one niche—brands prefer creators who can publish quality content around a specific topic. When it comes to your Instagram bio, be sure to add your email address. As your account grows, you can hire virtual assistants to create sponsored posts on your behalf. The more sponsored post requests you get, the more passive income you will be able to generate.
5. Create a print-on-demand store
With ecommerce being one of the most popular ways to make passive income online, it only makes sense to give a shout-out to print on demand. Print on demand allows you to sell your custom graphics on products like t-shirts, clothing, mugs, canvases, phone cases, bags, and more. The best thing about this is that you can build your own branded products. The only downside is that you need to be savvy at graphic design, because the margins are often too thin to outsource the designs affordably. However, if you create that unique winning design, your sales will take off. Plus, it’s not a super competitive business, since other brands are unlikely to sell the same designs. Don’t hesitate to start right away with Shopify!
How profitable is print on demand? Find the answer in our collaboration with Wholesale Ted, where we compare dropshipping with print on demand. Veronica Wong, the founder of Boba Love, shares how her love of bubble tea helped her earn passive income: “I’ve been drinking bubble tea for as long as I can remember, so combining my love for boba with my love for design seemed like a perfect fit. I started designing and selling bubble tea apparel and accessories last year and the journey has been incredible. With Printful handling the production, fulfillment and shipping, I can focus on marketing and building my brand. I’ve connected with boba lovers all over the world and recently reached 10,000 followers on Instagram. I’m just starting my journey to earning more passive income, but Shopify and Printful make it very easy, and I am very optimistic!”
6. Create an app
By now, you’ve probably noticed a trend: creating stuff tends to lead to passive income. This is even more true in the world of mobile software. If you’re a developer or programmer, you might want to try creating apps as a passive income stream. You can go about it in two ways. First, you can charge a fee for people who want to buy your app. Second, you can make your app free and monetize with ads. My fiance did this a few years ago and still makes a side income from his app to this day.
He bought code from CodeCanyon. Then, he used a tool called Eclipse and installed the Android development SDK to make modifications to the code to create his own unique app. You can monetize an app in a number of ways, including running in-app advertising, offering paywalled content, and charging for premium features.
7. Invest in stocks
When analyzing the income sources of the world’s richest people, it’s pretty safe to say that stocks have played a big role in their deep, endless bank accounts. While the act of investing in stocks is pretty passive, the research that goes into it is active. Warren Buffett reads 500 pages a day, but he’s not reading your average mystery book. Nope. He reads business’s annual reports.
By doing this he better understands whether or not a business is performing well, which helps him improve his ability to invest in stocks. Stock investments can help you earn passive income that stretches far beyond what your value at your 9-to-5 job is worth. So, consider this passive income idea if you’re up-to-date on various markets and industry movements.
8. Buy and sell properties
Depending on where and when you buy, real estate can be a good way to make passive income. In popular cities like Toronto, housing prices are expected to rise by 10% from last year’s average price of $1,054,992. By purchasing pre-constructed condos, you may land some lower-cost properties that’ll increase in value by the time it’s finally built, allowing you to sell the property for a profit once it’s complete. As with all investments, it can be risky, so it’s best to speak with a real estate agent if you’re new to the game to help you buy the right investment property. Shawn Breyer, owner of Breyer Home Buyers, shares: “My girlfriend, now wife, graduated law school with $173,000 of school debt, and we set the duration of the loan to be paid over 15 years, which made our monthly payments come out to be $1,459 per month. We wanted to use rental property cash flow to cover our monthly law school debt.
Our first decision was to buy a duplex and live on one side while we rented out the other side. This alone saved us the $1,350 in housing expenses that we had prior to buying the duplex. “Instead of allocating that money towards extra principal payments on the school debt, we saved that money and bought another duplex two years later. This acquisition added $650 in monthly cash flow, which we snowballed into a third property. The three properties provided us with an extra $2,500 per month in savings and income that we were able to then put toward extra principal payments. The beauty of this approach is that our tenants are paying down our law school debt and if we were to lose our jobs or have a medical emergency, then we can rely solely on the rental income to pay for the school debt for us.”
9. Rent out your spare room
If you have an extra room in your apartment, you can rent it to someone for a specific duration. Platforms like Airbnb will connect you with people who are looking for their next gateway. Airbnbs are preferred because they’re usually cheaper than hotels, meaning you can make a higher passive income by listing your free space on Airbnb. It’s worth noting that becoming an Airbnb host requires work upfront. You might have to renovate or furnish your room before listing it on the marketplace. To make it truly passive, you can hire a part-time property manager to create listings and look after your properties. Keep in mind, though, that they’ll charge a monthly fee between 8% and 10% of the monthly rent collected.
Martin Dasko, founder of Studenomics, makes passive income renting his condo on Airbnb. He explains, “I decided to give Airbnb a shot when I stayed in one on a visit to NYC. I loved the concept and wanted to get in on it. I put my condo up for rent and was surprised by the demand. I was able to charge $169/night in downtown Toronto. My biggest win came when a company contacted me because they were sending a few employees to Toronto. “They booked the unit for the entire month. I didn’t have to worry about finding new guests. The beauty of Airbnb is that you can turn it on and off as you please. When you’re looking to make some extra cash, you can put your place up for rent. You can also rent out that spare bedroom.”
10. Become an affiliate marketer
Affiliate marketing is one of the best passive income opportunities available today. The upside to it is that almost every big brand has an affiliate program, so you can sell some pretty popular products and rake in the dough. The downside is that you only make a commission on the sale. Shopify’s affiliate program, for example, allows you to earn up to $58 per referral, which is a decent income. Other online companies only give a measly $5 to $10 in referral bonus. So you’ll want to make sure you do some research into the best affiliate marketing programs before you get started. Blogging tends to be the most cost-effective way to make recurring affiliate commissions without having to spend money on ads.
Sireesha Narumanchi, founder of Crowd Work News, shares, “I started my side hustle as a blogger a little over two years ago, and this has been the most incredible journey so far. As a content creator, most of my income is from affiliates, and it’s totally passive. It wasn’t easy to juggle my job and business, but it was totally worth it. I do put in a lot of hours researching, crafting, and working on business strategies, but once my content is done, it generates income passively again and again. The immense pleasure of helping people and showing them that there is a choice of working from home and earning a decent income is my trophy at the end of the day.”
