18 Passive Income Ideas for 2020: Which Is Right for You?

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There are many different income streams to choose from, especially when it comes to earning money without having to lift a finger. Who knew you could potentially make supplemental income while you sleep? Passive income is the most common solution to do just that. Even though it sounds too good to be true, there are many ways to create passive income streams. Read on to learn about the different types, investment amounts, and time you may have to put into your passive income stream.

What Is Passive Income?

Passive income is derived from projects that may require upfront work, but can make you money for little to no upkeep. Creating different passive income streams could be a creative side project that earns supplemental income easily.

Take writing an eBook for instance. If your passion is fitness, you can create a downloadable eBook workout plan. You could focus on your social media audience or your LinkedIn connections to invest in your program. Over time, you’re able to promote your eBook, but since you’ve already created the product, you won’t have to worry about creating something new. Since these types of “products” are categorized as sales, most of the time they’re taxed.

Outside of eBook and online courses, other passive income types include renting out properties, investing, or selling your artwork. If you’re ready to start investing and need some additional insight, check out our brokerage page. Continue reading for a more in-depth description on passive income ideas or jump to the infographic.

18 Passive Income Ideas to Earn Money While You Sleep

18 Passive Income Ideas to Earn Money While You Sleep

Earning passive income can be a great move for everyone. Whether you’re in high school, college, or well into your career, consider investments with decent yields, or utilize your passion and monetize it. And, luckily, there are many different ways to go about it, both safe and risky. Either way, you’re able to pick and choose what works best for you and set up your bank account for the future.

1. Consider Buying Index Funds

Index funds are normally a mix of stocks or bonds designed to match a specific financial market. Most of the time, you’re able to diversify your investment portfolio rather easily. That way, if one investment goes south, you can have other options to pick up the slack.

  • Pro: Typically, these investments can be liquidated in 1-3 business days.
  • Con: This type of investment could be considered high risk.

2. Review High Dividend Stocks

For those looking to try investing, high dividend stocks may be for you. High yield dividend stocks are those that have a higher yield than the benchmark average. This type of investment does have higher payoffs, but can get a little riskier. If you consider this option, be sure to read the fine print and calculate your potential earnings.

  • Pro: High dividend investments typically bring in a higher dividend rate. This rate could help supplement your yearly income more than other options.
  • Con: Some high dividend stock earnings cap out at a certain amount and come with more investment risk.

3. Research Money Market Investment Funds

As for money market investment funds, these can be relatively stable short-term loans. Money market investment funds are highly stable short-term debt securities. The goal of this investment is to earn money from interest. These investments may be backed by high-quality corporate or bank securities.

  • Pro: Earnings on these investments can be low risk, but also can be easily liquidated.
  • Con: Earnings may be low and fees may apply.

4. Pay Off Some Debt

A simple way to invest in passive income is by making larger payments to your outstanding debts. Over time, you could be spending hundreds, or even thousands, on debt interest rates. If you’re looking for different areas to invest, considering paying off debt first.

  • Pro: Taking care of your debt can help build your credit. Not to mention, cut long-term investment payments, and free up your budget. Every dollar extra you pay off past your minimum payment goes directly towards paying down your loan principal balance. The lower your principal balance is, the less interest you will pay overall.
  • Con: With this option, you aren’t technically earning money, you’re saving money over time.

5. Examine Real Estate Opportunities

If you’re ready to settle down in one area for about three to five years, investing in a home may be a topic of interest. While renting can be rather simplistic, your payments aren’t contributing to an investment. Instead, purchasing a home will allow you to contribute monthly payments to an investment that could earn you money if you were to sell in the future.

  • Pro: Over time, your housing investment could grow in value earning your equity in your home.
  • Con: You may have to deal with more upkeep and repairs compared to renting your living space. Plus, your home may not always increase in value.

6. Consider Peer-to-Peer Lending

If purchasing a home isn’t in the cards, consider peer-to-peer lending. Peer-to-peer lending is where you offer your money resources to another individual. This could be to a friend to start a business or even to purchase a much needed car. They may pay you a monthly payment, plus interest, all without having to go through a financial institution.

  • Pro: Since you’re cutting out the middleman, this can be a fast investment option with monthly returns.
  • Con: This investment option may be uncertain and involving a lawyer before building a contract may be best.

7. Look into Renting Out Unused Space

As traveling has become a hot commodity, you may not be using your apartment or home as much as you normally would. Instead of letting it sit empty, consider renting out your unused space. There are many online renting options that allow you to easily list your home for rent.

  • Pro: You have the flexibility to post and restrict renting dates whenever you choose.
  • Con: This option may take some time and work to learn and build consistent short-term renters.

Add to a High-Yield Savings Account

8. Add to a High-Yield Savings Account

If you’re in high school or just starting out your investment journey, you may want to start out simple. Consider contributing to a high-yield savings account. This allows you to earn higher than normal interest on your payments. Once you’ve practiced this for a while, you may research other ways to invest this money saved.

  • Pro: You may have the flexibility to contribute as much as you want and take out whenever you choose.
  • Con: As most low-risk investment options go, these earnings may be lower.

9. Utilize Cashback Rewards

As we all spend money on necessities, look into different cashback rewards cards. Cashback rewards cards pay you a percentage of your purchasing amounts back to you over time. This may be a good option for those that don’t have a lot of time or money to invest right away.

  • Pro: Most of the time, cashback cards have sign-on bonuses that can amplify your earnings.
  • Con: Over time, these cards may charge you a certain amount every month, or year to obtain and use their card.

10. Incorporate Affiliate Marketing

If you’re an entrepreneurial spirit at heart, you may consider affiliate marketing. Affiliate marketing is where you earn a percentage on products or services you recommend. For instance, if you have a high volume of followers on your blog, talk about products or services you love. While doing so, sign up for affiliate marketing platforms to create custom links. The links followed and purchased from may increase your commissions earnings.

  • Pro: Most of the time, these links stay active as long as your post is live. You could earn money off these purchases even years after posting.
  • Con: Your earnings aren’t guaranteed. If you have a strong follower base, you may have stronger potential to earn more commissions.

11. Take Stock Pictures to Sell Online

Consider turning your passion into your passive income. If you like going out on the weekends to take photos and videos, consider posting them for sale online. There are many people on the hunt for new stock images and videos each day. Plus, you’re able to sell these images for as long as you have them posted online.

  • Pro: If you have an abundance of images or videos, you may be able to earn a decent amount on a “passion” project.
  • Con: Some stock image websites charge commission rates and other fees to sell your work on their site.

12. Write and Sell an eBook

If you have a story to tell or a skill you’d like to share, consider writing an eBook. This could be in various forms and something you could have full control over. For instance, you could create a fitness eBook that lists out all your favorite exercises. You may have to keep up with re-promoting your products to get it in front of those that may not have seen it.

  • Pro: You have complete control over your story, message, and pricing.
  • Con: If you don’t have a strong and loyal following, sales may be slower to come.

13. Post Items For Sale Online

Over time, there may be items you don’t use anymore and that you know still hold monetary value. You could sell these items on eBay, Amazon, Poshmark, and various other sites. The only downside is you may have more upkeep than other passive income ideas.

  • Pro: You can sell whatever you want, whenever you want, for however much you want.
  • Con: You may have to pay seller fees or commission rates depending on what seller platform you use.

14. Create an App

For creatives that are looking for a bigger project, creating an app may be top of mind. If over the years you’ve found an opening in the app market, you may already have an idea of what you’d like to create. With the endless amount of video tutorials and learning guides online, you may have all the right tools right at your fingertips.

  • Pro: Your investment option is available through a couple clicks of a button. Plus, you’re able to have full reign on your creation and its listing price.
  • Con: You may have to endure a rather steep learning curve. Not to mention, that curve could take a lot of upfront time to create.

15. Build an Online Course

Similar to an eBook, you could create an online course. Especially for those of you who have mastered certain skills, this may be perfect for you to demonstrate them. You could create an online course on any topic you’d like, from building a blog to starting a side hustle.

  • Pro: You’re able to use your authority in a certain space and have full control over the creation and sale value.
  • Con: Once again, there may be a steep learning curve. Not to mention, a lot of upfront time you may have to set aside to put your best work forward.

16. Design and Sell T-Shirts

If you like photography or creating unique designs, consider putting it on a t-shirt and selling them. There are many platforms that allow creatives the ability to post and sell their art pieces. If you’re big into art, consider purchasing the supplies to make your own. Once you’ve added your creative touch, sell them online to make a profit off of a side-hustled hobby.

  • Pro: This can be a fun and creative way to increase your passive income over time.
  • Con: You may have to deal with upfront costs of purchasing your materials. Along with that, you’ll incur the costs of outsourcing operations and have to deal with upkeep.

17. Start a Blog

Creating your own website could be a base for many different passive income sources. You could create a blog, increase your following, and boost your income with sales. You could create your own eBook, online course, or even your designed t-shirts to sell all on one platform.

  • Pro: Creating a website has relatively low initial investment rates. Plus, it can be done in just a few hours to days, depending on your design.
  • Con: Online platforms require consistency and updates. Not to mention, your following won’t accumulate overnight.

18. Take Up Freelancing

Looking for the flexibility to travel, work from home, and create your own schedule? Freelancing may be a great option to consider. Most of the time, you’re able to choose the projects you’d like to work on, when you’d like to work, and who you’d like to work with. Plus, the connections you establish could have a long-lasting impact on your career.

  • Pro: You have sole ownership, and you’re able to earn as much as you’d choose.
  • Con: You may have inconsistent earnings and it may take a while to build your brand.

If you’re looking for ways to build your wealth, creating passive income outlets is an easy place to start. If you start early enough, you may end up earning more than you ever thought you would a couple of years down the road. Check out our infographic to see which passive income passion project fits you the best. Then, see how much time and money you may need to kickstart this new investment adventure.
Passive Income Infographic

Sources: Sure Dividend | LiveChat | Author Imprints | Pros and Cons | Pat Fynn’s YouTube Channel | Investopedia 1, 2, 3 | Infusion Media |

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35 Passive Income Ideas to Grow Your Wealth

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What if there was a way for you to effectively make money while you sleep? Sounds like a dream come true, right? Even for the biggest workaholics, there are only so many hours in a day. If only you could get paid multiple times for something you did once—that’s exactly how passive income works! Thanks to technology, the potential to create multiple income streams is even easier than ever before. We’re no longer held back by the limitations of a traditional 9-to-5 job, and financial freedom is at our fingertips. Even if you already work a full-time job you can still improve your financial health with passive income.

Now, how do you do it? Building a passive income will require some work up front, but choosing a method that plays to your strengths will yield the most success, and it can even become a fun hobby! Have an aptitude for photography? License your photos to stock photography websites. Or maybe you’ve always wanted to invest? Learn how with a robo-advisor. No matter what your strengths are, we’ve gathered 35 ideas for different ways you can generate passive income and build your wealth.

What is Passive Income?

woman having breakfast in bed

We’ve already covered the basics, but let’s break it down even further. In a technical sense, passive income is money earned from an enterprise in which a person is not actively involved in. Just like active income (money earned from performing a service), passive income is taxed by the IRS — just in a slightly different way.

Why You Should Establish a Passive Income Stream

man with his dog by the lake at sunrise

If you’re familiar with the phrase “don’t put all your eggs in one basket,” you know that it applies to just about any area of your life including—and especially—your finances. In addition to retirement becoming an ever-elusive goal, no one has guaranteed job security so by diversifying your income you can feel more secure about saving for your future. You’ll be less likely to find yourself in credit card debt and happier as a result of being financially secure.

How To Make Passive Income

There are four main ways to earn a passive income: investing money, investing time, renting things out, and getting paid to do activities you already do.

Invest Your Money

illustrated house for rent

  1. Invest with a robo-advisor. An option that requires little to no effort, a robo-advisor is a digital platform that provides algorithm-driven financial planning services by collecting information about clients’ financial situation and goals.
  2. Invest in dividend paying stocks. Dividend-paying stocks are a great way to build long-term wealth because you get paid a portion of the company’s earnings simply for owning the stock.
  3. Buy a rental property. Have some space you’re not using? Rent it out to a long-term tenant or capitalize on the growing demand for short-term lodging by listing it on an accomodation-sharing site.
  4. Participate in crowdfunded real estate. Investing in real estate has a high financial barrier to entry. If you’re not quite there yet, consider a crowdfunded real estate venture that allows you to invest in a small percentage of real estate.
  5. Invest in a Real Estate Investment Trust (REIT). REITs are companies that manage income-producing properties in a variety of sectors. They trade on major stock exchanges so anyone can invest in a portfolio of real estate assets.
  6. Buy royalties. Music royalties come from a percentage of the money earned from the sale or use of a song. Even if you’re not a musician yourself, music royalties are often up for auction and will send a monthly check your way.
  7. Invest in index funds. Index funds are similar to mutual funds, but instead of having a portfolio manager make selections it is up to an asset management company. This type of investment is a great option because it’s relatively hands-off and has a low turnover which means lower transaction costs.
  8. Become a silent partner. The sole responsibility of a silent partner is to provide a business with capital. Silent partners are rarely involved in an operational capacity, making it a great form of passive income.
  9. Invest in cryptocurrencies. Cryptocurrencies are buzzing with opportunity at the moment, and it is possible to earn a passive income simply by holding certain cryptocurrencies.
  10. Start peer-to-peer lending. Get matched up with a borrower online to start peer-to-peer lending—a simple way to lend money to businesses and individuals. You can earn higher returns than similar transactions through traditional financial institutions.
  11. Open a high-yield savings account. If you’re already putting money into a savings account on a consistent basis, consider opening a high-yield savings account. This special type of account offers a safe way to make a consistent income.

Start a Side Business

illustrated woman walking dogs

  1. Develop a mobile app. If you have the programming skills and a one-of-a-kind idea, turn it into an app! The app marketplace is rife with opportunity for apps of all kinds.
  2. Start (or buy) a blog. With a little entrepreneurial spirit and a lot of creativity, you can create a successful blog—it just might take a little while. Prepare to work hard in the beginning, but through multiple revenue streams like running ads, sponsorships, and affiliate marketing your work will more than pay off.
  3. Affiliate marketing. There are several ways to utilize affiliate marketing in addition to having a blog. Although a large audience helps, even some local businesses offer a word-of-mouth referral program for referring friends and family to their businesses.
  4. License a business idea. If you have a great idea for a business or product, but don’t have time to start it yourself, consider licensing that idea. Interested companies are willing to pay royalties in exchange for the right to use your idea.
  5. Buy a vending machine business. You’ve probably never thought twice about who actually owns all those vending machines, but the vending machine business can be a lucrative passive income source! Once you find the right spot, hire someone to restock the machines for you and you’ve got your own business going.
  6. Start house or pet sitting. This one is a sort of hybrid passive/active income source, but if you’re going to be hanging out at home doing nothing, why not get paid to do it somewhere else? Watch someone’s house and pets while they’re on vacation for a little extra cash.
  7. Start a YouTube channel. Although the YouTube space is competitive, there’s little overhead cost to get started. If you’re passionate about your chosen niche and provide value to your viewers, ad placements and sponsorship opportunities can help you earn a sizeable passive income.

Monetize Your Creative Skills

illustrated computer and art supplies

  1. License your photos. If you have a natural eye for photography, consider selling your photos to stock photography websites. Once approved, you’ll earn royalties each time a customer downloads one of your photos.
  2. Design t-shirts or other products. Create fun and trendy graphics for e-commerce sites like Zazzle or CafePress to put on all sorts of products from t-shirts to mugs. Production is taken care of and you’ll earn a commission on the products sold.
  3. Create website templates. If you fancy yourself an HTML wiz, designing and offering website templates for bloggers or e-commerce websites could be a great source of passive income for you.
  4. Sell graphic design files. Even amateur graphic designers can earn a passive income by designing and selling graphic design files like icons or templates of all kinds.
  5. draft an ebook. Do you have a story you’re itching to tell? Writers no longer have to wait for the attention of a drafter to release their work. If you market your book well (think social media), self-drafting an ebook will earn you plenty of residual sales.
  6. License music. For the musically inclined, licensing music, especially instrumental tracks, can generate a decent passive income and help companies or video creators looking for high-quality audio.
  7. Sell digital art files. To lower overhead costs and minimize supply chain logistics, design a piece of art or photography and offer a digital download for a lesser price. Many people are looking to furnish their homes on a budget and would happily print the art themselves.

Teach

illustrated man writing on a chalk board

  1. Create an eCourse. An eCourse can be about anything you’re passionate about. Have a lot of knowledge about digital marketing? Create an eCourse! Are you an expert in the field of bird watching? Create an eCourse! Whatever you love, there’s an audience out there.
  2. Record a video course. Similar to e-courses, there are endless options for video course topics. Video as a medium offers a personal connection and a different way to learn, making it an equally viable option.
  3. Sell a lesson plan. If you’re a teacher you can make a passive income simply by selling your lesson plans online to other teachers. It’s something you’re doing already, so why not share the knowledge?
  4. Make an online guide. If you’re an expert in your field or have in-depth knowledge of how something works or how to fix something, you can write a guide for it.

Get Paid for Everyday Activities

illustrated car with advertisement sticker

  1. Sign up for cash back credit cards. Many credit cards offer some sort of cash back benefits, but finding one that offers the most rewards for your lifestyle is the key to maximizing your return.
  2. Advertise on your car. Some companies will pay money for ad space on your car. All you have to do is drive around—which you’re probably doing anyway!
  3. Participate in research studies. Get paid to let researchers track anything from your shopping habits to you sleeping patterns. If you’re comfortable sharing this information, it can be a great source of passive income that requires little to no effort.
  4. Rent a room in your house. If you already have an extra room in your house, rent it out. You can make extra money with just some basic hospitality.
  5. Shop with cash back sites. Shopping through websites that offer cash back rewards can be as effective as couponing, if not more! Simply shop as you normally would and earn rebates on your purchases.
  6. Rent your stuff. Do you have random equipment filling your garage that you seldom use? Rent it out! Specialized equipment for lawn maintenance or home improvement projects is often a one-time use for most people. You’ll make some money and other people will be able to use your tools for a fraction of the cost of buying them outright.

Launching a side business or figuring out how to invest your money when you’re strapped for time isn’t easy, but the payoff makes it all worthwhile. The money you earn from passive income will undoubtedly have you well on your way to achieving your financial goals and that much closer to true financial freedom. If you’re wondering how your finances currently stack up, find out where you stand financially. No matter the result, Turbo’s personalized advice will help get you where you want to be.

Sources: Reit.com | Investopedia | Dividend.com | Well Kept Wallet | Money Done Right | The College Investor

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