If you often have too much month at the end of the money (like most people), it’s natural to think about creating additional income streams to top up your regular income.
The economic upheaval brought about by the COVID-19 crisis has prompted both self-employed and working professionals to critically rethink their finances.
To tackle modern financial challenges, you need to leverage modern methods. Everyone seems to be talking about getting a side hustle. It’s the first step towards financial freedom.
However, taking on another job is not always possible due to a lack of time and energy.
That’s where passive income comes in.
As we start a new year, you probably have new financial goals. If among your goals is making extra money passively, then you’re in luck.
This post will discuss some of the best passive income ideas that will help you actualize your earnings potential in 2023 and beyond.
What’s Passive Income?
What’s the first thing that crosses your mind when you hear the term passive income?
Do you visualize yourself chilling on the beach – sipping Margaritas and staring down at your phone, smiling and watching your bank account grow?
Or maybe you consider it a fad that will soon come pass?
Forget owning a home — passive income is the real dream for most people.
You know how they say make money in your sleep? While it sounds like a dream for most, it’s very much possible.
Let me take you back a lil’ bit.
There are 2 types of income: active and passive income.
Active income is that money you earn as payment for services, typically an hourly wage or monthly salary. It requires your active involvement in tasks (think – your job).
Passive or residual income is the recurring revenue you make (from a source other than an employer) with minimal to zero active effort.
Don’t get me wrong. Passive income is not free or quick money. I’m yet to come across a way of getting rich overnight that doesn’t involve winning the lottery or jail time.
You’ll have to put in some legwork, but afterward, the money just comes in.
A good example is earning interest from your savings account. The money is sitting in your account and accruing interest even though you’re not doing anything to it directly.
The best passive income options start slowly and build up over time. They include income from business and rental activities in which you do not actively participate in.
Why Is Passive Income Important?
Passive income supplements any income you earn actively.
Yes, you may have the best job in the world, earn a lot of money, spend wisely, stash away as much money as you can, and retire someday as a millionaire.
While this is possible, it’s a painstakingly difficult way to go about it
For your typical corporate 9-5 job, which requires you to clock in for 8 hours a day, you’ll be compensated by a fixed amount based on that amount of time.
You have 24 hours in a day. You’ll spend the remaining 16 hours eating, exercising and spending time with your loved ones. As you can see, your job isn’t a very scalable method of earning money.
So how do millionaires make their millions given that they have the same 24 hours as everyone else? Passive income! The average millionaire is estimated to have 7 streams of income.
Passive-earning opportunities (combined with a little online marketing magic) allow you to pretty much just set and forget.
In the event of a job loss or your business crashing, it will always back you up.
You can use this cash flow to pay down credit card debt or put a down payment to a new home.
The Best Passive Income Ideas 2023
There’s no reason why you should work all your life to retire comfortably.
You’ll have to invest something first in order to get the ball rolling. After all, it takes money to create money.
But the good thing about passive income is that you can tap into most ideas with limited capital. After setting up, you can forget about most of these streams and still earn many years down the line.
So what are these passive income opportunities that we’re talking about?
1. Start and Monetize a Blog
Don’t get me wrong.
I don’t mean that blogging does not require active effort, because it does. To drive in any noticeable passive income, you may need to blog for at least a few years.
But when you calculate the long-term results and potential income, the active effort you put upfront pales in comparison.
Blogging is a viable passive income solution. Thanks to the variety of Content Management Systems, you can launch your blog within a couple of hours and start filing it up with fresh content relevant to your niche.
Regardless of what you blog about, there’s an audience out there waiting to read about it. Once your blog is up and running, it can easily sustain itself.
Blogging offers wide-ranging, income-generating opportunities such as affiliate marketing, displaying ads and placing sponsored posts.
You can vlog instead if writing is not your strongest suit.
2. Start a YouTube Channel
Do you love being in front of a camera? YouTube gives you a platform to get your face out into the world while earning an income.
We live in a time where people are obsessed with video content. 1 billion hours of video are watched on YouTube every day.
If you have a novel content idea, open your YouTube channel and produce high-quality and consistent videos in a targeted niche.
When starting out, you can use your smartphone camera to record decent footage. Reach out to friends and family and ask them to subscribe to your channel. Focus on growing it to over 1,000 subscribers and 4,000 watch hours to start earning.
YouTube is very competitive, so consider investing in a better camera and sound as you gain traction.
Create passive income by securing sponsorships, playing ads on your videos, affiliate ads and selling your own digital products.
It takes lots of work to get a YouTube channel going. But once you pivot your channel into being an influencer in your niche, you can make the big bucks. The top YouTubers make hundreds of thousands of dollars per month for their content.
3. Rent Out Space
Do you have an extra room or garage at home? Or maybe you travel a lot and your home is almost always unoccupied.
If so, why not rent it out and make some money? Instead of digging into your own pockets while on vacay, cover your expenses this way.
Holiday rental site Airbnb lets you decide when you’re willing to rent out your spare space and when you’d rather have it to yourself. Since you already own the space, you won’t require any money upfront.
Even if it’s just a few nights per month, you can still pad your wallet effortlessly.
It might feel weird leaving your precious home in the hands of a stranger, but Airbnb has got you covered with liability insurance in case something goes wrong. Thanks to the rating system, so you can check the potential renters’ reviews before letting them rent your place.
If you live in a populated area, consider renting out your individual parking spot.
4. Make Your Car Work for You
Your home isn’t the only property you can rent to other online.
Consider offering your car for short-term rentals to travelers if you don’t use it often. You could make thousands of dollars per year just by making your car available to people who need it.
Turo and other car rental online platforms will connect you with these people. You get to set your own daily rate and can also decide to offer discounts on longer trips.
If you don’t want to rent out your car, you can turn it into a moving billboard.
But how, you ask? Specialized advertising agencies like Wrapify and Carvertise will wrap your car with advertisements for a particular company. As you drive through traffic as you normally do every day, people will see the ads.
To be considered, you must have a clean driving record and drive your car around actively. If you’re a match with one of their clients, the company will wrap your car with the ads at no cost to you.
5. Create Your Own App
There’s an app for everything! Literally.
Awesome new apps are added to App Store and Google Play every day. With clever marketing, many go viral and earn their creators a lot of money.
If you’re a coding ninja and have a digital solution to an everyday problem, put it in an app.
Maybe you’ve been thinking about this game that will help people kill boredom. Or there’s something you don’t like about the apps you regularly use. Or perhaps you have an idea of a great way of helping people connect.
Whatever your inspiration, building an app could be your way into earning the big bucks.
You can earn passive income by running ads, having in-app purchases (hints, extra lives, episodes) or charging for your app.
An app may require more investment, expertise and time than the other passive income ideas mentioned so far, but also has the highest potential of making you rich (it’s unlikely, sadly).
6. Create and Sell Digital Products
Here’s a fun one for all the creatives out there.
From digital graphics to stickers to worksheets to online webinars and worksheets, there are various downloadable digital products you can put up for sale online.
You just have to create and upload these files to multiple platforms once. eCommerce platforms like Etsy and Shopify make it easy to set up your online shop.
The sales model works the same way as with any item sold online, but you won’t have to worry about shipping or fulfilment.
7. Sell Online Courses
As you may have observed, the education landscape is changing. Online courses have become popular these days and people are making a kill selling them!
Don’t underestimate the value of what you already know. If you’re an expert in a certain field or topic, transform your smarts into wealth.
People love learning new things – pass that knowledge and charge them.
Courses don’t have to be technical. Anything from dancing tutorials to crocheting to beginners’ piano can be taught online.
Your pre-recorded online courses can be bought and accessed by whoever wants to learn what you have to offer. You’ll earn from your courses passively for as long as you keep them active.
8. Sell Stock Content
Advertisers, websites, app creators and self-publishers all need stock content, from photos to video to music and sound effects to sell their product.
If you spend your free time singing, sketching or snapping anyway, this could be a great passive income idea for you.
You don’t need to be a pro to be successful at selling stock content.
If you don’t have unused images and video footage in your computer storage, get creating.
Pick up a guitar, record yourself playing and upload your songs on SoundCloud!
Snap a pic of the beautiful sunset you’ve just seen on your way home from work or the tantalizing ice cream your friend is digging in to and upload the images to stock photo websites.
While the royalties per photo are typically low, you’ll make a decent income if your photo trends.
9. Write an eBook
If you have knowledge in a certain subject, you can self-publish your eBooks on Amazon Kindle and other similar platforms.
Thanks to these platforms, the online publishing process is relatively straightforward.
So what would you write about? You don’t have to write the next Hunger Games series to make money writing a book.
If you’re in it for the moolah rather than the Pulitzer, research what’s trending and work back from there. If there’s a topic you know (perhaps a hobby or something related to your career?), use it!
In the digital space, people do judge a book by its cover. So spend time making it look professional. Take advantage of the free image editing software out there to make a professional cover.
This can be a lot of work upfront, but once you’ve published an eBook and done some initial marketing, sales happen passively.
Given the amount of time required to constantly monitor and research the market, it’s hard to categorize traditional investing as a passive income trade.
But thanks to the rising popularity of AI-integrated investing platforms, investing has never been this easy. When you sign up for robo-advisor investing, your money will be invested in a portfolio of low-fee funds based on your risk tolerance.
Your investments will be automatically managed and rebalanced. You’ll receive automated smart suggestions, monitoring and notifications based on real-time data and in-depth analytics.
The result is considerably reduced risks and higher returns without the necessary effort.
Whether you’re employed or not, building a passive income stream can be the best decision you’ll ever make.
If you create multiple passive streams, you can retire and live your life on your terms. Isn’t that what we all want?