Do you want to make money while you sleep? With these passive income ideas, you can!
Having passive income means freedom to live, work and do whatever you want, whenever you want. It frees up your time to do more fulfilling activities and live life to the fullest.
That being said, having passive income doesn’t mean you’re getting paid for doing nothing. It may also not replace your entire salary (it’s possible though).
It’s really about leveraging your time and existing assets to create an income stream that’s not tied to you specifically working.
I am going to answer that question in this post and share the best passive income ideas for 2020 that will help you to get paid after the work is done.
This post may contain affiliate links. See our disclosure page for more information.
What is Passive Income?
Before we go any further, let’s talk about what passive income is about.
According to Wikipedia, passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
Traditionally, this may include rental income, dividend from stocks and even royalty payments. As you can see they all involve some sort of initial investment or upfront work to generate a return.
The opposite of passive income is active income. It refers to income received in exchange for a service.
These include wages, tips, salaries, commissions and income from business in which there is material participation. People who work for a monthly paycheck receive active income.
Earnings from driving for Uber and those from the gig economy jobs are also considered active income. So I won’t be including any for those in my passive income ideas below.
While there’s nothing wrong with earning an active income, the amount of money you can earn is limited by your time.
This makes the idea of generating passive income even more appealing to many.
How Can I Generate Passive Income
There are two ways to earn passive income:
- By investing your time
- By investing your money
Generating passive income is easy if you have a lot of money or time to invest.
For example, if you have money, you can buy up several properties and rent them out to start generating passive income instantly from the rental income.
Or you can purchase high-yield dividend stocks that provide you with consistent cash flow.
If you have time, you can write an e-book or start a blog. You’ll continue to earn from the ebook sales or blog monetization after the work is done.
Unfortunately, most people usually don’t have both the time and money to begin with.
But don’t worry, you’ll find the best passive income ideas to try out regardless of how much time or money you have initially.
Examples of Passive Income Ideas
The passive income ideas listed below includes everything from easy which require the least amount of effort to ones that require the most.
While it’s possible to make a good living from one passive income source, most people generate small amounts from several passive income streams.
So give several of them a go to discover the ones that you enjoy doing or that will make the most money for you.
1. Get Cash Back for Shopping
This first passive income idea allows you to save money effortlessly for doing what you’re already doing anyway, i.e. online shopping. Money saved is money earned!
Rakuten – Formerly Ebates (get a $30 sign-up bonus here) is an online shopping site and an app that gives you cashback for your online purchases.
As a member, you’ll enjoy up to 40% cashback at over 2,500 online stores.
To earn the $30, you’ll need to spend at least $30 in total purchases through Rakuten within 90 days of joining.
Download their browser extension to make sure you get cash back and coupons at stores like Amazon, Walmart, Sephora and more.
If you shop a lot, the amount you save can add up substantially without you even noticing it.
Also, take advantage of their referral program. When your friend sign-up through your affiliate link, you’ll get $30 and they’ll get $30.
2. Check If Stores Owe You money
Paribus is a free shopping app that tracks if stores owe you a refund.
This app doesn’t necessarily generate passive income but rather create passive savings without you even realizing it!
It sends you money when you buy items and there’s a price drop or your guaranteed shipment shows up late.
Currently, they track 25+ major retailers including Amazon, Walmart, Macy’s and Nordstrom. They also monitor hotel room rates booked through Expedia, Booking.com, Priceline, Hilton etc.
Just sign up using the email provider where you receive online shopping receipts and they’ll do the hard work for you.
3. Invest Your Spare Change Automatically
What are the best passive income investments?
One of them is investing in stocks that pay high dividend allowing you to make money without doing much work.
Enter Acorns, a beginner-friendly investing app with a few extra bells and whistles.
Acorns helps you invest spare change or extra cash without you really thinking about it even when you think you don’t have enough money to start investing.
It works by rounding your credit or debit card purchases up to the nearest dollars and invests the digital change. This adds up over time.
Their cash back program deposits free money into your Acorns account simply for shopping with brands through the Acorns app at no extra charge to you.
Did I mention that Acorns will pay you $5 bonus just for signing up?
4. Lower Your Bills Using Money-Saving Bot
Here’s another way to make money passively by saving money using the Trim app.
Trim analyzes your accounts to find recurring subscriptions and determine where you can save more money.
You save money when Trim cancels subscriptions that you pay but have long forgotten about, negotiates your Comcast bills, finds you better car insurance and more.
So far Trim users have saved over $1,000,000 in the last month alone.
The automate savings feature supports automated weekly transfer into a high-yield saving account.
Sign up with Trim here and get your results in less than a minute.
6. Rent Out Your Spare Room
If you have a spare room, an apartment, or a house, you can list it for short-term rentals on Airbnb and make money from it.
Your income can vary based on your location and on the amenities you offer. Airbnb charges hosts a 3% fee that covers the cost of processing payments.
As for the payment, Airbnb pays you 24 hours after your guests check-in.
To make this option more passive, you can hire a cleaning service to clean the room after the guest leaves
7. Get Paid for Browsing the Internet
Would you like to get paid just for doing what you’re already doing i.e. browsing the Internet?
While this won’t make you rich, it’s probably one of the easiest ways to earn passive income.
Nielsen, the surveys and market research company will pay you $50 a year to keep their app on your device.
To join, start by answering questions at their website to tell more about yourself, your household and the devices you use. Then download the Nielsen App, either on your tablet or smartphone.
Nielsen rewards you just for browsing the Internet as you normally would. They collect stats about your Internet usage over time.
It’s perfectly normal if you’re concerned about privacy but your info is completely anonymous.
The data is encrypted, bundled with other statistics and research, and then used to make charts, graphs, and analysis.
The app itself is only 2.5MB in size and won’t slow down your phone or tablet at all.
Install Nielsen mobile app now and collect $50 and get a chance to win $10,000 each month.
8. Open a High-Yield Savings Account
Opening a saving account is one of the safest and easiest investment options but the low interest makes it less appealing for most people.
The good news is, you can easily increase your passive income by opening a high-yield online savings account.
Online banks like Cit Bank boasts some of the highest interest rates at 2.45% with their Savings Builder Account.
To earn that rate, you’ll need $100 minimum to open an account and deposit a minimum of $100 per month. You can also get that rate by maintaining a balance of $25,000 or more.
Cit Bank deposit accounts are FDIC-insured for up to $250,000 for your peace of mind.
Did I mention there’s no monthly fees, no mail check fee, no online transfer, no incoming wire transfer fee and no account closure fee?
If you have $100, you can open a high-yield savings account with Cit Bank now.
9. Get Paid to Advertise With Your Car
Do you want to make money driving without having passengers or delivering food? Well with Wrapify you can!
Wrapify pays you to advertise brand and business on your car.
Get started by downloading their app and they will track your mileage and location. The more you drive, the more ads you qualify for and the more money you make.
According to their website, you could earn from $100 to $400 per month.
If you drive regularly, you can see how this can put extra money in your pocket passively for doing things you’re already doing.
Watch the video to learn more.
10. Invest in Crowdfunded Real Estate
If you have money to invest in real estate, you should be able to see the return on your investment quicker.
Unfortunately, because this is expensive and not to mention risky, it’s out of reach for many people.
The good news is there’s an easy and cheap way to invest in real estate without breaking the bank.
Companies like Fundrise allows you to invest your money in a dozen real estate projects without writing million-dollar checks.
You can get started with as little as $500 and invest in more than 48 real estate products through the real estate investment trusts (REIT).
You buy shares in the trust and they use your money to develop a variety of real estate projects. In 2018, their portfolio posted returns of 9.11%.
If for any reason you’re not happy with your investment, Fundrise will buy your investment back at the original investment amount within the first 90 days of your investment.
It’s worth noting that since this is a private fund and not stocks, your money will be tied up for six to five years depending on the plan you select.
That means you won’t be able to easily cash out your investment anytime you want but you should be able to get a consistent income stream depending on your investment plan.
11. Rent Out Your Car
With Turo, you can rent out your vehicles online and via the mobile interface and make money from it.
You can let Turo determines the rates or set your own rates.
If you are worried about damage, Turo covers your car with $1 million in liability insurance and 24/7 roadside assistance throughout the trip.
Here’s an idea. You can have the money going into a separate account that is dedicated to your car payment and insurance. That way, your car pretty much pays for itself!
Some people even choose to take public transport so that they could rent their car to others and make extra money.
12. Rent Out Your Garage or Driveway
Do you know you can make money renting out your unused parking space, garage and driveway? Well, now you know!
Thanks to the sharing economy, renting out your garage is a great way to earn a side income passively.
The amount of money you’ll make largely depends on your location, whether or not your spot is covered and the type of spot it is as well as the number of hours your spot is available.
Large city garage spaces may rent for $150 per month and up, whereas suburban spots may rent for $50–100 per month.
Some services allow owners to rent out spots for other vehicle types besides cars such as bicycles, campers and boats.
Here are a few websites to get started:
More Ways to Earn Passive Income Online
Below are a few more passive income ideas that could generate a true life-changing income and you don’t even need to invest a lot of money to start with them.
The bad news?
They may require massive time investment and tons of work in the beginning. And you probably won’t make enough or any money at all during the first few months or even the first year.
If you decide to explore any of these ventures, consider doing them as a side-hustle on top of your regular job first.
Over time, as your venture gains traction, your passive income streams should begin to increase multiple times to the point where you no longer have to rely on your active income sources.
That’s when you can truly make money while you sleep!
That being said, if you’ve got a passive income from an online business, chances are you’d have a lot of competition from people trying to grab a piece of the pie too.
So you’ll still need to do some work to remain competitive if you don’t want to see that passive income decline over time.
13. Start a Blog
Starting a blog is one of the best ways you can create a passive income.
There are many ways you can make money from blogging.
Some of the most popular ways include displaying ads as I do here, accepting sponsored posts, affiliate marketing, or selling your own products or services.
Affiliate marketing is where you earn a commission for selling other people’s product or service.
Truth be told, creating a successful blog requires serious effort, dedication, massive time investment and won’t happen overnight.
Expect to make little to no income in the beginning. Over time, the income should start to trickle in and then it will snowball, making you six or seven figures per year or even more.
Then, you’ll no longer be trading your time for money. Instead, you’ve built a way of generating passive income and it’s highly scalable.
Blog income is passive because once an article is published, you can continue to make money from it from ads or affiliate links as long as there are readers visiting your blog.
If you think you’re not a good writer, I myself is not a native English speaker.
Having no technical skills is not a good excuse either. You got to start somewhere and most people learn as they go.
If you don’t give blogging a shot, you will never know how it could truly change your life.
To learn more about how to make money with a blog, check out my post How to Make Money With a Blog for Beginners.
Already planning to start a blog? Why not learn how to install WordPress on Siteground? It’s the same hosting I use to host this blog!
14. Make Passive Income From YouTube
Do you know that YouTube is the second most popular search engine behind Google?
You can leverage this massive audience by creating a YouTube channel, post some videos to attract viewers and start making money from ads.
Unfortunately, the reality is not as simple and effortless as that sounds.
In January 2018, Google has changed its ads policy where one must have at least 1,000 subscribers or 4,000 hours of watched content monthly in order to qualify for their advertising program.
But once you’ve overcome this initial hurdle, you could make money from video ads indefinitely. It just takes time to build up your audience.
Instead of relying on ad income alone, you could:
- Sell your own products with Shopify or via your blog.
- Use affiliate marketing and direct viewers to your affiliate links.
- Attract sponsorships and keep all the money earned to yourself
- Ask your followers to support you via Patreon each time your release a video.
If you love making videos, have an expertise or a talent, Youtube is the place you can showcase your creation to teach, inform and entertain others.
The cost to start a YouTube channel is free. You can even start recording videos using your mobile phone.
Who knows, one day you could be making millions on Youtube like these four dads from The Piano Guys.
15. Create and Sell an Online Course
If you have an expertise or knowledge that other people will gladly pay for, you can consider creating an online course.
It’s relatively cheap to start and once it’s released, you’ll continue to make money from it passively.
Like any online business though, you may still have to answer questions and update the course from time to time, so this is not truly passive.
You can use platforms like Udemy to create and sell your course.
The amount you can make can be substantial like this guy who made more than $60,000 in 30 days.
16. Write eBooks
If you are a good writer or have a specialized knowledge that could benefit others, you can write a book, or even easier an ebook to help generate passive income.
You can sell the ebook on your own blog and keep 100% of the profit.
Alternatively, you can leverage Amazon’s massive audience and use Amazon’s Kindle Direct Publishing and get 70% royalty on sales.
Writing an ebook is a great passive income idea because you will only have to write once, and then continue to sell the ebook indefinitely.
The royalty you get from an ebook is usually higher than that of a paperback and getting it to market is also faster.
17. Sell Your Photos Online
Nowadays more and more businesses, website owners and bloggers use stock photos for their websites and marketing materials.
If you have a good camera and a decent photography skill, you can sell your photos on dozens of stock photography websites that will pay you cash.
Whether you take beautiful landscapes, portraits of people, everyday tools, food, animals or travel shots, this is another passive income idea to consider.
However, selling photos online is a number game. You need to have a sizeable portfolio of images before you can start generating good money.
You need to upload new images regularly to compete with other contributors and get noticed. Also, not every image you submit will be accepted for publication.
Once you get past the initial hurdle, you should be able to make more money from your photos with little to no maintenance on your part.
The amount paid for each photo varies depending on the platform, the type of license and several other factors.
On average, you could get anywhere from $0.25 to $100 for a single photo.
Here are sites where you can make money selling your photos:
How to Pick the Best Passive Income Streams in 2020
Passive income is a topic of conversation for many who are trying to make money effortlessly and automatically. But many are unable to understand it fully.
Unless you have lots of money or time, you’ll have to put in a lot of effort up front and can expect very little return in the beginning.
Depending on how much time or money you have, or how many hours you’re willing to put in, try to identify the right passive income for your situation.
The easiest methods which require little money and time commitment won’t make you rich. But they are what they are, easy money.
To make more money, focus on one or two of the harder passive income ideas. Take the time to learn and really grow your passive income stream using them.
Ideally, you would want to consider doing things you will enjoy or are wanting to learn anyway. By doing so, you’ll always look forward to doing them.
Getting started is usually the trickiest part. But when you know what action to take, and follow along with a few simple steps, you can do it.
Now it’s your turn.
Have you tried any of these passive income ideas? Do you have your own favorite avenue to generate passive income?
I’d love to hear them in the comments!