These passive income ideas may be the tools you need to enable your money to work for you.
Before I get into our best passive income ideas I want to make it clear that no income without an initial monetary investment is 100% passive and I’m not going to show you how to make money fast in some “get rich quick scheme” kind of way. Those never work.
We’ve personally come up with dozens of passive income ideas that have earned us over $20,000 per month while we sleep and we want to share those with you today.
But, just know that if you don’t have a bunch of money lying around to invest today, then don’t expect to earn money without doing any upfront work.
In this post I’m going to share with you the very best passive income ideas for 2021 and beyond. If you’re wanting to make some extra money on the side, or you want to generate an income that works for you, rather than the other way around, then you’ve come to the right place.
Table of Contents
What is Passive Income?
Before we get started, I think it’s best that we explain exactly what is passive income.
As Wikipedia puts it:
“Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.”
While no money is 100% passive, it is possible to set up a deferred income stream wherein you put in a considerable amount of work upfront to get a system in place that can continuously pay you dividends with little or no effort on your part.
Thanks to the internet, there are more passive income ideas today than there ever have been in the past and earning money while you sleep has never been easier.
But that doesn’t mean you’re going to hit the jackpot and figure out how to make money fast on the first try. This is a numbers game. You need to try as many different passive income strategies as you can and hopefully one will stick.
Here’s How Passive Income Generally Works
Step 1: Come up with a passive income idea
Step 2: Work hard on your new passive income idea for a few weeks to set up the automation
Step 3: A/B test, tinker with and adjust the passive income model to try to optimize your revenue
Step 4: Sit back and watch your bank account grow.
Sound too good to be true? It’s not! We have found a few great passive income ideas that earn us thousands each month. The key is to find an idea that works, and then try to repeat it as much as possible. For every 10 tries, only one idea might stick, but once one does it’s worth all of the trouble along the way.
How To Make Income Passively
To earn passive income you basically have two options.
- Have an upfront monetary investment.
- Put in the time and work up front, then reap the benefits later.
Some people who want to earn passive money already have a considerable amount of money in the bank and don’t mind spending some money to make some. While others simply put in the time and energy, without investing any money.
Dariece and I didn’t have a lot of extra money when we first started searching for passive income ideas, so we knew we’d have to work upfront, but that in the long run, it would be a lot better than trading dollars for hours in our traditional jobs.
Today we only work around 15 hours per week on our businesses, so our hourly wage is much higher than it ever could’ve been in Canada. That’s because we’re earning passive income and our money is working for us, rather than the other way around.
Passive Income Ideas For 2021
Okay, let’s get into the good stuff. It’s time to learn all about the best passive income ideas for 2019 and beyond. Each of these ideas can be implemented by you today and within a few months, you can start seeing some real results.
I’m going to break my passive income ideas down into 3 sections. Online, Investment & Fast-track.
Because there are so many different ways to earn passive income online, I’ve made it its own category. The Investment category includes passive income ideas which will require you to have a bit of money upfront. Lastly, the Fast-Track ideas are not only ways to put money in your bank, but ways to massively cut down on your current spending, earn some rewards and build up a passive income profile without having to invest too much time or money upfront.
Let’s get started.
Online Passive Income Ideas
In my opinion, the best way to earn passive income is online. There are just so many different routes you can go and it’s not expensive to start your own online business and begin building it.
While it took us over a year to earn any money from this blog, there are ways to earn money much faster on the web.
This is one of the main ways that people earn passive income online. A niche site is a website on a very specific topic that has the potential to earn money through product sales, affiliate sales or advertising.
Niche sites don’t have to be well-designed and you don’t need to write a lot of content or create a lot of pages for them to be successful.
Basically, all you have to do is think of a topic that you’re passionate and knowledgable about and think of what products & services you can sell or recommend to earn money.
If you’re passionate about gardening for example, you could create a niche site about gardening and then write some posts about that topic on the site using SEO to help boost the site’s traffic to those blog posts.
Once the posts get a bit of traffic, you can add in some Amazon Affiliate links for different gardening-related products so that you will earn a commission when your readers make purchases through your links.
Setting up affiliate links only takes a few minutes and once they’re added to your site, they will automatically track sales from your website and pay you via bank wire transfer or Paypal.
You can also use Facebook Ads to drive some traffic to the top-converting posts once they start earning an income.
The key to earning money with niche sites is to create posts that people are likely searching in Google right before they’re about to buy something.
Instead of writing “Gardening in Canada”, you might want to instead write “Best Garden Tools in 2021”. The latter is a potentially more lucrative blog post because if people come to your site after searching those types of terms in Google, they’re more likely to purchase an item.
Most amazon affiliate categories are around 4%. If you have 10 posts that rank well on your niche site, you’ll be able to build up your monthly income quite quickly.
Amazon isn’t the only way to earn money from niche sites either.
Perhaps you build a travel-related niche site. Then you can also have affiliate links for travel insurance, hotel bookings, tour companies etc. If it’s a finance-related site you may have affiliates for credit cards. If it’s a parenting site you may have affiliates for toys, strollers, baby food etc.
Or maybe you have your own product to sell. That would mean instead of taking 4% from an Amazon commission you could take 100% of the sale, minus any overhead.
Niche sites are a great way to earn money there are many people earning tens of thousands of dollars per month from a variety of niche sites on a variety of topics.
This is a prime example of differed income rather than passive income. It’s going to take you a long time to actually build an e-course that people will want to buy.
It took me months to finish my Complete SEO Course and I’m still updating it and adding to it. But once you’ve created your own course and it’s live, you can start earning money from it while you sleep.
First, you’ll need to think of a topic that you’re an expert on. This can be anything from applying makeup to taking photos. Once you have that, you can sign up for Teachable.
Teachable is an online platform that makes it super easy to create and sell your own online courses. They give you every tool you need to outline, record, build, market and sell your online course.
Teachable also has their own marketplace with hundreds of thousands of potential buyers, so if you create a useful course that gets great reviews, you’ll likely sell a lot to their audience as well as your own.
Depending on how you build your course, it may not be 100% passive. In my courses, for example, I also set up a Facebook support group which means I’m in there every day answering questions and helping out new bloggers. It’s your decision on how you want to build your course and how passive you want the income to be.
I find that by having a little bit of a more hands-on approach, you can help people more and thus you’ll be able to sell more products and get better reviews.
Sell ebooks Online
Creating an ebook will likely take you a lot less time than creating a course, so it’s a great passive income idea for those who don’t have a lot of extra time to spend upfront. First, you can write out your ebook using a free word processor on your Mac or PC, then you can use free tools like Canva to easily design a professional-looking book in PDF format.
Once you have the book, you can either sell if yourself on social media pages or on your own website, or you can upload it to Amazon and sell it there.
I’ve personally created a few ebooks online, and while I do make a couple of hundred dollars per month from them, I’ve mostly offered mine for free on our website to introduce people to more useful products like our premium courses. However, ebooks can be a great source of income. I know of some people who are earning over $2,000 per month selling ebooks through Amazon and through their own channels.
Sell Stock Photos
If you’re a great photographer, you likely already have a massive library of valuable photos sitting on a hard drive somewhere. While I’m not going to lie to you and say that it’s easy to earn money selling photography, it can be a way to earn a small amount of extra income on the side which doesn’t require a lot of time.
You can sign-up for sites like Deposit Photos and upload all of your good photos to their platform. Then simply wait and see if you’re able to sell any.
Full Disclaimer: While we have sold some images in the past, this has never been a decent source of income for us. Selling stock photos is best used as an extra passive income idea rather than attempting to make it your main source of income.
Affiliate Marketing (My Favourite Online Passive Income Idea)
Affiliate marketing is my favourite passive income strategy.
We currently earn around 65% of our total income through affiliate marketing and while there is a considerable amount of work upfront – writing long, useful posts and building up the SEO – once a blog post ranks in Google it can earn a lot of money.
Basically, you choose companies that resonate with your business and every time someone purchases that product through your link, you receive a commission from that company.
This might be a particular clothing brand, hotel booking engine, remote work platform, tour company, etc.
We have some posts on this blog that earn 6-figures per year by themselves. I’m not saying that every post earns money, but if we write with SEO in mind maybe one in 10 will rank in Google and earn some money, while 1 in 100 might earn a significant amount of passive income each month.
The key to affiliate marketing is the same as the key for niche sites. Basically, you need to write posts that have a lot of searches in Google and are near the end of the buyer’s journey. You need to appear on the first page of Google for terms that people search for right before they are about to make a purchase.
We cover how to write great SEO content that can rank in Google in our Free SEO Training Video. Click Here to sign up to watch it now.
Once you have the SEO techniques figured out, you can continuously write posts that have the potential to rank in Google. If you have one post that earns $500 per month, that’s great. But once you have 10 posts that earn that much, you’re doing very well for yourself.
Affiliate marketing is one of my favourite passive income ideas because it has worked so well for us.
Good Affiliate Programs For Passive Income:
- Amazon Associates Program
- REI Affiliate Program
- Bluehost Affiliate Program
- CJ Affiliate Network
- Shareasale Affiliate Network
- Get-Your-Guide Affiliate Program
- Booking.com Affiliate
- WorldNomads Insurance Partner Program
Start a Blog
Starting a blog and building it to the point that it can earn money takes a long time. In my experience, it takes at least six months to a year to really earn any reliable income sources through blogging. But the best part of building up a successful website is that you can diversify your income streams and earn money from many different sources.
Here are some of the main passive income ideas for blogs:
On-Page Advertising: Once a blog has enough traffic (20,000+ hits per month) you can easily turn on in-content ads and earn $900+/ month from these. It’s possible to grow your traffic to this level within six months to a year if you use proper SEO. Click Here to learn how to earn good money from on-page advertising.
Direct Advertising: This is when companies contact you and pay you to link to their website from your blog. Typically these partnerships don’t take much time/effort on your part and pay between $200 – $1,200 each.
Product Sales: This is when you create a product like an ebook or an e-course and sell it on your blog. The amount you make from product sales will depend on how much traffic you have, how good your products are and how much you sell them for. Many bloggers earn $10,000+ per month from product sales alone.
Affiliate Marketing: We’ve already talked about this as one of the best online passive income ideas for 2019. If you have a successful blog, you can recommend products and services to your readers and get a commission any time they purchase through your links. Click Here to learn more about affiliate marketing.
Keynote Speaking: When you’re an expert on a topic, you may get invited to speak at different events around the world. Keynote speaking jobs will include all-inclusive travel and pay upwards of $20,000 for a 30 minute+ speech.
Selling Memberships: If you have an online course or learning platform that is updated on a regular basis, you can sell memberships instead of one-time access. Membership sites can be very lucrative because even if you only charge $10 / month to your members, once you have 1,000 members that’s $10,000 per month in revenue.
Sponsorship: When you grow a large enough audience on your blog, you may be considered an “influencer”. When you reach this level, you may have companies contacting you and offering to pay you in exchange for you using their product or service and sharing your experience with your audience. Some sponsorships pay very well with bloggers earning 6-figures per year or more from a single contract.
For more info on how blogs make money, check out this post.
Basically drop shipping is a very low-risk way to start up a business selling products online. Traditionally if you wanted to do this, you would have to create a product, market it, store it in a warehouse and ship it out yourself, while having to deal with refunds, returns, etc.
Dropshipping basically hands most of the responsibility off to someone else. This entity is known as a manufacturer, dropshipping supplier or warehouse outlet.
Your job as a drop shipper would be as the middle man. You’d need to find a wholesale manufacturer who would manufacture, store and ship your product, and you would then create an online store (website/blog) or an Amazon Storefront in order to promote and market the product.
Check out this great list of dropshipping suppliers that can help you get started.
To get more sales, many successful drop shippers use Facebook Ads to show their product or service to a larger audience. In this case, you’d need an upfront monetary investment, but you could wait until you were selling enough of your product and have an income from the business before using that revenue to pay for ads.
Ads can be wildly effective and some drop shippers are earning hundreds of thousands of dollars per year in passive income from their drop-shipping businesses.
Investment-Based Passive Income Ideas
These are passive income ideas that will require an upfront monetary investment on your part. You’ll need to pay to play, but the tradeoff is that unlike most ideas in this post, if you have money to invest upfront, you won’t have to spend any real time getting your passive income idea off the ground.
Here are some of the best investment-based passive income ideas for 2021.
A dividend stock is a mini-investment into a company. Essentially, for every share of a dividend stock that you own, you are paid a portion of the company’s earnings.
To get started, you’ll want to open an account with a good online brokerage company. There is plenty of information online about how to choose the best online brokerage firm, but you’ll basically have to do your own research and go with a company that you trust.
What you’ll want to do is reinvest the money that you earn from your successful dividend stocks. That is how you will be able to compound your earnings over time and walk away with a lot more money.
There are even some online platforms like M1 Finance that will allow you to start a portfolio for free and then automatically re-invest your dividend income. A lot of people go for these types of online platforms because they make the process of earning an income through dividend stocks even more passive.
Rental Properties on Airbnb
The best way to earn money passively through your rental properties is by renting them out short-term on Airbnb. Of course, if you had to check-in and out every guest that showed up, this wouldn’t be a very passive income model, but these days there are Airbnb management companies all around the world that can manage the properties for you.
We know people who have started with one Airbnb property and expanded to five or six within a couple of years. Not only will you be earning equity on the property, but you’ll also get tax breaks and be bringing in higher rental income by renting short-term rather than traditional long-term rentals.
Click here to learn more about becoming an Airbnb host.
Automated Stock Market Investments
This passive income idea almost sounds too good to be true, but bear with me. Automated Stock Market Investments is when you use what is known as a “robo-advisor” to automatically put your money into a variety of stocks.
While I haven’t done this myself, there is a popular robo-advisor tool called Betterment which you can quickly set up to automatically invest your money into stocks without much work on your part.
They charge a very transparent 0.25% of your total balance each year and they don’t take long to set up. You’ll have to answer a few questions and invest your money to get started, but they claim to offer a full satisfaction guarantee and a lot of perks.
Real Estate Turn-Over Investments
Before you scroll through this passive income idea because you think that you’ll have to buy a house, renovate it and flip it yourself, consider this. There are websites online like PeerStreet that essentially allow you to help professional real estate flippers with their acquisition and renovation costs and in return, you can earn 7-9% on your investment.
The benefit of PeerStreet is that their loans are backed by the property itself, so if the borrower stops paying, you have some recourse (ie: foreclosure) to recoup some of your investment. As they say on their website:
“In the event of a default, PeerStreet will handle the workout process and work on behalf of investors to protect their investment and maximize proceeds.”
The only issue that many people have with PeerStreet is that they require a minimum of $1,000 investment upfront and are only available for accredited investors.
A lot of people are earning a lot of money through flipping real estate investments like these, without having to actually do any work renovating and flipping the house themselves.
Fast-Track Passive Income Ideas
Here are some passive income ideas that don’t necessarily require any upfront time or money investment. You can get started with these today and perhaps help build up your bank account without much work.
Cashback Rewards Credit Cards
This has long been a great way to not only be a travel hacker, but to hack your life and earn cash-back on all the money you spend. Many credit cards offer massive sign-up bonuses and, depending on where you live, becoming credit card savvy can be extremely lucrative.
The key to successfully earning a lot of money through rewards cards is to apply for the right ones, meet the minimum spending requirements and never be late on payments to avoid interest charges.
If you can manage all of your cards properly, you can earn thousands of dollars per year in rewards and discounts, plus enjoy the perks offered by different cards.
If you’re American, some great cards include the Barclay’s Frontier which offers a 40,000 point sign-up offer (which can pay for 2 short-haul round trip tickets within the US) and the Chase Saffire Preferred card that offers a 50,000 point sign-up bonus. On top of the sign-up bonuses, you’ll also get points on your day-to-day spending.
An example would be Citi Premiere credit card which offers 3x points for money spent on travel, 2x points on dining, and 1x point on everything else (as well as a 60,000 point bonus).
Look at the 3x category – there are a lot of rewards!
3x points means you’ll get 3 points for every dollar you spend in that category. If you buy a $1,000 flight, you’ll receive 3,000 points. If you spend $5,000 over the year in gas expenses, you’ll receive 15,000 points.
In the case of Citi “Thank-you Points”, they’re worth approximately 0.5 cents per point, so your sign-up bonus is worth around $300 and you’re getting around 1.5% back on your travel expenses. Not bad.
Basically, if you’re not currently earning rewards points from your credit cards, then you’re missing out.
And don’t worry, travel hacking isn’t just for Americans! As Canadians, Dariece and I use the TD First Class Infinite card which after all said and done offers us around 1.5% cashback on all of our purchases when the points are used on travel through the Expedia for TD platform. Pretty good.
In Australia, the Citi Rewards Platinum Credit Card offers 120,000 bonus points for signing up and meeting the minimum spending as well as 1 point per dollar spent on the card. If you’re from the UK you can apply for the American Express Rewards Low Rate Credit Card and enjoy 2,500 bonus points for signing up as well as 1 point per £1 spent on the card.
Turn Your Car Into a Billboard
Assuming you already have a car, this is a pretty easy way to add a bit of passive income to your portfolio. Depending on where you live and how long your commute is to work and back each day, you can earn around $100 / month by plastering your car with ads.
The more targeted customers that could potentially see your commercialized car, the more money you stand to earn. If you’re worried about what happens when you no longer want to drive a billboard on wheels, these companies will pay to remove the stickers for you.
Typically these opportunities are only for Americans in select cities, but if you’re from those places and have the right commute, this could be one of the easiest passive income ideas you’ll likely find.
Rent Out a Room in Your House
I know we already talked about investing in property and then earning money by renting it out on Airbnb, but that takes a significant upfront monetary investment. But what if you already have a house with an empty bedroom? In this case, you could be able to earn around $50 / night by simply renting out one of the rooms in your house.
We’ve stayed in private rooms on Airbnb and they’re a great way to save money on accommodation costs, and meet the locals. Plus, it’s a great way for homeowners to earn some extra passive income towards bills.
Homes that are close to airports, hospitals or in popular neighbourhoods in large cities typically have a very good fill-rate. Make sure you encourage all of your guests to leave a review on Airbnb when they check out. That way you can become a “Superhost” on the platform and Airbnb will send you even more business.
Get in The Passive Income Mindset
A lot of people treat passive income as some kind of mythical dream that would never really work for them. In reality, passive income is a real thing and it can earn you real money.
The key is to try and implement as many different passive income ideas as you can in order to earn money this way. Whether you put a lot of time and effort in upfront or you invest a significant amount of money to get started, passive income is the best way to earn a living.
When we first started making money online, we had no idea just how many ways there are to earn a passive income. Thanks to the internet, a plethora of apps and a lot of websites about how to do this sort of thing, it’s never been easier to make an income outside of your normal salary.
If you have the right mindset, you can shift the dollar-for-money paradigm and see that the work no longer has to be a place and you don’t have to clock in and out in order to earn a full-time salary.
I hope this article helped you find some new passive income ideas that you can implement in your life today. If I missed any ideas, please comment below. If they’re reputable and legitimate, we might add them to the post.
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Some images in this post are courtesy of Shutterstock.
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