10 Ideas For Passive Income That Will Make You Rich

For many of us, making money while dozing off or enjoying mimosas on the beach is a pipe dream (and anyone who claims otherwise is lying flat out). Is it possible to become wealthy without ever working though?

Thanks to these fantastic passive income ideas, you’ll be one step closer to having all the money you need to live the life of your dreams!

“Passive income” – what is it?

The word “passive income” is frequently misused or misunderstood, so it’s crucial to define it before discussing the best passive income possibilities for your lifestyle and skills.

Although passive income isn’t a magical way to become wealthy without working hard, it is a way to maximise returns so that you can eventually work less and less. That is to say, as time goes on, the amount of labour required lowers while the amount of money earned rises.

An good example of passive income is buying a home to rent out. When your tenants are in, you can start making money with little work even though it takes time and effort to find the right property, deal with the legal side of things, and get it ready for renters. You also need to invest money in the form of a mortgage and a deposit. The majority of your time as a landlord will be spent taking advantage of the passive income provided by the rent, despite the fact that you will occasionally have to deal with property inspections and tenant changes.

Passive income is essentially a long-term investment with short-term costs and benefits. If you’re willing to invest the time, money, and effort required to accomplish your goal of retiring early or earning passive income, you could ultimately make thousands of dollars.

What doesn’t qualify as passive income?

As mentioned before, passive income is occasionally understood incorrectly and mistaken with side occupations. Even while a second job or side hustle is a great method to boost your income, it isn’t truly passive until it allows you to relax (while making more and more money).

However, your passive income isn’t…

  • Your task – A passive income stream’s purpose is to either complement your regular income or allow you to retire earlier. Your side business is not your main source of revenue.
  • A side hustle can theoretically generate passive income, but it is more likely to require your attention and effort to keep up. However, it might eventually become passive income if your side job enables you to ease off without losing momentum.
  • Consulting is a terrific side job or online business to start if you have a specialty that you can share with the world, but it is not a passive income source. If you want to be paid for your coaching or consulting work, you must grow your clientele to include people who can undertake the grunt labour while you relax and earn money.
  • Speculative investing – A lot of people advocate stock market investing as a means of generating passive income. For one simple reason—stock appreciation isn’t the same as income—we disagree that speculative investing is one of the finest passive income options. On the other hand, investing in high dividend-yielding stocks is an example of passive income because it gives you a consistent flow of cash without asking you to do anything.
  • It is easy to distinguish between passive income and appreciation/speculation if you see a cash-on-cash return, such as dividends (passive income), or if you only get money when you sell the investment (appreciation).

How can I begin creating passive income?


Though it’s excellent to have several goals and ideas for passive income, keep in mind that not all of them are worthwhile. Even though you’ve seen others succeed financially using a particular strategy, it doesn’t necessarily indicate it will work for you, your abilities, or your way of life.

If you want to find the finest methods for making passive income, you must start with some specific objectives and ideas. You’ll need to be aware of your financial and time commitments. In order to accomplish your long-term objectives, you must also be prepared to make short-term sacrifices.

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Top ten passive income suggestions

Even though there are a lot of passive income possibilities available in 2022, you’re sure to find one that fits your skills, responsibilities, goals, and passions. Passive income may seem perplexing at first. Here are a few of the best passive income suggestions that nearly everyone can use to support you on your path to financial independence.

1. Invest in real estate


Real estate investing has been a well-established strategy for generating money for almost as long as real estate has been around. It used to take a lot of time, effort, and understanding to get started in real estate investing. On the other side, real estate investment applications have made the process easier and made it feasible to become a real estate tycoon from the comfort of your own home.

Consider investing in a real estate investment trust, or REIT, if purchasing real estate is out of your price range. These investments often have high dividend yields and follow the performance of the stock market. Similar to real estate, the value of your investment will rise and fall in this way. However, it will be much simpler to acquire and sell, and you may diversify your portfolio by investing in different markets.

2. Invest in dividend stocks


We have previously stated that we do not view capital gains investing as a form of passive income. On the other side, you might be able to gain a lot of money if you invest in companies that distribute big dividends to shareholders. If your shares appreciate in value while you possess them, you’ll be able to cash in on dividends and capital gains when you sell.

If you are not an expert in the stock market, you may want to consider hiring a broker or even Robo-advisors for a very passive investment strategy.

Remember that investing entails a high degree of risk and that you could lose more money than you invested. Always get advice before beginning an investment portfolio.

3. Buy or start a blog

A blog is an excellent way to earn money quickly. Naturally, this will require effort and time to maintain, since you will need to create a following and blog frequently. Even so, selling ad space on your website or engaging in affiliate marketing might help you generate a sizable income from a blog.

You might make money by buying an existing blog if you don’t know how to create one. This is an excellent “hack” because you can benefit from the traffic and revenue that have already been produced.

4. Start an affiliate marketing


Affiliate marketing is collaborating with a business to display and advertise its goods or services. When a user clicks on one of your affiliate links and navigates to one of your partners’ websites, you get compensated.

There are a few ways to use your affiliate marketing relationships to generate passive income. On your podcast or YouTube channel, you can make mention of sponsors, link to their products while giving buying advise, collect product reviews, record video unboxings, and do a variety of other things.

Do some research and find a company that resonates with your core values and the needs of your target market to find the appropriate business to affiliate with. Being an associate for a butcher is useless, for example, if the majority of your blog’s followers are vegans.

5. Write an eBook

A book or eBook is far better because you only have to write it once, even though maintaining a blog and selling it is a great method to get passive money.

Spend some time sharing your creativity or specialised knowledge by writing and selling a book or eBook rather than starting a blog. Every time someone purchases a copy, you will receive royalties. If you hit the right note, these royalties might soon add up.

A printed book’s royalties typically vary from 5 to 20% of the purchase price. With a profit margin of about 25%, eBooks are substantially more profitable. Typically, audiobook royalties range from 10% to 25%.

Obviously, you need to produce a great book if you want to become a successful author. On the other hand, a few sales can enable you to bring in the additional funds required for a pre-planned vacation or to move one step closer to your early retirement goals.

6. Create a course online


Similar to writing a book, creating an online course that people may purchase repeatedly is a great method to generate passive income. Yes, creating the course will need effort, time, and ability, but once it is finished, you can upload it to the internet and make money from each purchase.

Nowadays, there are basically no restrictions on the subjects you can cover in your online course. Personal trainers could create a library of workout videos, chefs could start an online cooking school, and accountants could instruct individuals on how to manage their money. Simply put, you can earn from creating an online course if you have a skill or specialised expertise.

You might need to provide evidence of the requisite knowledge and/or qualifications in order to produce an online course that can be sold. Everyone appreciates a good life hack, so even if you lack professional training, you might be able to earn money with a YouTube channel.

7. Sell stock photos

If you are known for taking excellent pictures and carry your camera with you at all times, you may make money from your pastime by selling your images to stock photography companies. With them, if someone purchases your photo from a third-party website, you will receive a portion of the sale price.

The best places to sell your photos are to well-known businesses (as these have the most customers who might see, love, and buy your images). Try Alamy, Adobe Stock, Shutterstock, and other such websites.

This passive income strategy doesn’t require expensive equipment because many stock image companies will purchase high-quality photos produced using a smartphone.

8. Make an app

Making a downloadable app is one way to transform your technical skills into a passive income stream instead of renting out your programming and IT expertise on an hourly basis. Software doesn’t have to be ground-breaking or even free to download in order to be profitable. For example, the free smartphone game Angry Birds, which was introduced in 2009, made €272.3 million in 2020.

You can generate money by creating an app even if you’re not particularly tech-savvy. You could either learn some fundamental coding—which is surprisingly interesting and helpful—or you could team up with someone who possesses the essential skills and divide the profits. You’ll certainly earn more money if you work alone, but if you develop the next Fruit Ninja, you might not mind sharing!

9. Create a podcast or a channel on YouTube


Without considering YouTube as a potential passive revenue stream, where would we be?

Although it takes some time to build up a sizable enough following to monetize your YouTube channel, you might make a tonne of money via relationships with affiliate marketers and advertisers.

The number of subscribers, engagement rates, average views, and other variables all affect how much money you can make on YouTube. The average YouTuber can anticipate making between $0.01 and $0.03 for each ad watch. By asking donations through Patron, many YouTubers monetise their channels.

If YouTube isn’t your thing, you may still make money off of your podcast by selling VIP episodes, selling sponsorships, joining an ad network, or giving premium membership tiers.

10. Purchase a rental home

It’s possible that rental homes were the first kind of passive income, and they are still prized assets today. To make the rental property truly passive, you can delegate day-to-day management and maintenance to a management business. All that’s left to do is get a mortgage and watch the cash flow!

It’s also possible to buy turnkey properties, which let you avoid the renovation and tenant-finding procedures that the majority of landlords must go through in order to start collecting rent. When you buy a turnkey property, you are buying a home that is already rented out to renters. Therefore, all you need to do to maintain happy tenants is to ensure that the building is properly maintained. Once more, you could let a management company handle this.

Last Words

Believe it or not, the bulk of the world’s wealthiest individuals rely mostly on passive income. Any successful entrepreneur’s portfolio should include passive income sources since they let them earn money with little effort, reinvest it wisely, and keep tabs on their spending.

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