23+ Best Passive Income Ideas in 2023 [Online for High Returns]
Are you, like me, sick of trading your valuable time for money?
Then why not build a source of passive income and invest in time? I will show you the best passive income ideas which have the potential to earn money without being directly present. It’s like having your little money-making machine!
Wouldn’t it be a great feeling to wake up every morning and find extra money in the bank account without putting in any effort?
The advantage is that this kind of working time is not traded for money one-to-one, but returns potentiated in the form of passive income at a later point in time.
And that’s what makes it so worthwhile.
The concept of passive income is more than a silly idea. With the appropriate tactics, as I will show you all around in my blog, it is attainable for everybody.
I have collected the best passive income ideas for you.
My focus is:
- Online
- Potential for High Returns
Disclaimer: Some of the links below are affiliate links, meaning they come at no additional cost to you. I will receive a commission if you click through and make a purchase. Thank you for that! For more information, please read our full affiliate disclosure here.
Note: We are no financial advisors. Everything in this blog is just our own private opinion. Do your own research.
What Are the Best Passive Income Ideas?
Here is my well-curated list of the best passive income ideas to make money while you sleep:
1. Affiliate Marketing
In my eyes, affiliate marketing is one of the best ways to earn a passive income. It’s a type of commission-based income. It allows you to earn a commission by promoting other people’s products.
The beauty of affiliate marketing is that you can do it from anywhere in the world at any time without having to create or store products, making it a truly passive income stream.
2. Digital Products
Creating digital products of any kind, such as ebooks, templates, digital art, or graphic design products is a good way to generate a passive stream. Once created, they can be sold repeatedly, or leased against a license, generating recurring revenue with little to no additional effort.
This allows for a scalable and low-maintenance source of passive income.
3. E-Commerce
E-commerce offers a low-cost, flexible, and scalable way to start a business and generate passive income. By leveraging the technology and power of the internet, you can reach a global audience and create multiple streams of revenue with minimal effort, making it one of the best ways to build a passive income stream online.
4. Online Courses
By creating online courses or learning programs (for schools and corporate clients), you can turn your passion into passive income by sharing your knowledge and skills with the world.
5. Online Advertising
Online advertising is another way to turn your website or blog into a passive income powerhouse. With a little bit of strategy and effort, you can create ads that generate a steady stream of income 24/7.
6. Content Creation
Content creation is a great way to generate cash flow from your passion! Whether it’s through blogs, like this one, niche websites, videos (vlogs), podcasts, or any other form of digital content. By creating valuable content you can share your expertise with the world and earn passive income at the same time, such as through affiliate marketing, online advertising, or sponsored content.
7. Dropshipping
Dropshipping is a popular business model where you sell products without holding any inventory. It’s a great way to earn a passive income because you can run your online store from anywhere and you don’t have to worry about storing or shipping products.
8. Selling Print-on-Demand Products
Selling print-on-demand products is a special kind of dropshipping. It means creating graphic designs that can be printed on various products, such as t-shirts or mugs. They will only be printed when they are sold. Because it requires no upfront inventory cost, it is another suitable way to generate passive income. You earn a profit from each product sold without having to do any of the printing or shipping yourself.
9. Online Tutoring
Online tutoring is a way to teach others your skills or knowledge through a YouTube channel or other platforms. You can reach a global audience and get paid for your expertise without having to leave your home.
10. Selling Software or Apps
Creating and selling software, plugins, or mobile apps you’ve developed yourself can be a great way to get passive income. Once the code is written and the software is released, it can generate continuous streams of income with minimal effort. The key is always to create a high-quality, in-demand product that solves a problem for users.
11. SaaS – Software as a Service
Instead of selling your software or app, you can also license it through subscription plans. This business model, called Software as a Service (SaaS), is even more suitable for generating a regular passive income stream.
12. Offering paid Memberships on a Website or App
By offering paid memberships on your blog, app, or social media channel you charge a recurring fee for access to premium content or features. This creates a steady stream of passive income as long as people are willing to pay for the membership.
13. Cryptocurrencies
To be honest, this is my favorite because I’m a crypto enthusiast. The world of cryptocurrencies offers a huge amount of opportunities to get rewards and commissions from staking, liquidity mining, lending, and borrowing services.
14. Building up and Monetizing a Social Media Account
Building up a social media account on YouTube, Instagram, Facebook, or TikTok and monetizing it is another great way to earn a passive income, assuming you manage to build up a loyal audience. Then you have countless possibilities, like ads and sponsored content, product promotions, affiliate marketing, selling (digital) products or services directly to your followers, creating and selling a merchandise line, or partnering with brands for product collaborations or endorsements.
15. Selling Stock Photos or Video Footage
Selling stock photos or video footage allows you to monetize your creative talents and resources.
By uploading and licensing high-quality images or footage to stock photo websites, you can earn a royalty every time someone downloads and uses your work.
This provides you with a steady passive income without actively selling or marketing your content.
16. Setting up a Referral Program for a Business
By offering incentives to existing customers who refer new customers to your business you can drive more sales.
17. Collecting Royalties
Royalties can be earned in several ways, such as by licensing intellectual property rights such as patents, trademarks, or copyrights or by receiving a percentage of the proceeds from the sale of products such as books, music, software, video games, or other creative works. Even from natural resources if they belong to you and a company decides to exploit them. This makes royalties a great way to earn passive income.
18. Product Reviews
Product reviews are a specific form of content creation where an individual tests, evaluates and provides their opinion about a product. A written review on a blog, or a video review on YouTube are two examples of this. Through affiliate marketing, product evaluations may produce passive money. The reviewer receives a commission for each transaction made using their specific affiliate link.
19. Commission-based Income
Commission-based income is a type of income in which you get a proportion of sales generated by your efforts. As a real estate agent, for example, you would get a commission on the sale of a property, but as an affiliate marketer, you would earn a commission on each transaction made through your unique referral link.
20. Investing in Dividend-Paying Stocks
Investing in dividend-paying stock means buying shares of a company that pays out its profits in form of a dividend to its shareholders. For example, you could buy stocks of a blue-chip company that has a long history of dividend payments (see also dividend kings, dividend aristocrats). This type of investment is very popular and suitable for generating passive income as it allows you to earn money regularly without actively managing the investment, as long as the company continues to pay dividends.
21. Investing in Rental Properties or REITs
If you have enough capital you can invest in rental properties to earn some passive income from rent. In contrast to an investment in dividend stocks, an investment in rental properties involves more effort. In return, you have something ‹real›. And, if the location is right, there is a good chance of capital gains if the property is sold at a later date.
Instead of a real apartment or house, you can also invest in a Real Estate Investment Trust (REIT), which has to pay out 90% as dividends.
22. Use Robo-Advisors for a Passive Income
Robo-advisors automate investment processes. They utilize cutting-edge algorithms and data analysis to provide investment advice and manage portfolios, often at a lower cost than traditional financial advisors. Robo-advisors are often used by fintech companies (financial technology).
23. Peer-to-Peer (P2P) Lending Platforms
Peer-to-peer (P2P) lending platforms allow individual and institutional investors to earn money by investing in consumer loans originated by various loan originators. They operate as a marketplace connecting borrowers and lenders, allowing lenders to diversify their portfolios and access higher returns on investment compared to traditional savings accounts or bonds.
24. Renting out a Room or Space on Airbnb
When you rent out your property through the Airbnb platform, you allow someone to live in it temporarily for a fee. This is a great way to generate passive income. You can also rent out individual unused rooms. It’s very convenient because you can decide when and to whom you rent out your space, which makes it a very flexible source of income.
25. Renting out a Storage Unit or Parking Spot
Do you still use your parking space in front of the house or in the underground garage? If not, rent it out for a fee. Or why not rent out your empty garage for storage? This can be a convenient way to earn money without you having to put in a lot of effort.
26. Trading Stocks, Futures, Options, Forex, or Cryptos
Even if trading is not a «real» passive income source, it can be incredibly rewarding. The advantage of trading is that you only need a computer and internet access to work from anywhere in the world.
In the beginning, it requires a lot of research and dedication to learn the ins and outs of trading, but with the right resources and knowledge, you can make informed investments that could pay off in the long run.
More to come.
