Generating ongoing money while you sleep is no longer an unattainable goal. In fact, passive income opportunities could be the ideal form of business ideas for those looking to make money without requiring extra labor. While high-yield savings accounts and cashback credit cards may work for some short-term financial goals, it doesn’t compare to the steady stream of income created by passive income.
What is Passive Income?
Passive income is money earned through activities that don’t require the person generating the income to be actively involved. It is often taxed differently than wages from traditional employment but can provide a steady income stream when managed correctly.
Passive income is an income that comes in regularly without any extra effort or time from the earner. It can provide a residual and consistent source of financial support with little or no effort required to keep it up. This income provides more freedom and less stress, allowing you to focus on other aspects of your life and providing you with more financial security.
15 Proven Passive Income Business Ideas
Start an Online Store.
If you are interested in retail, then launching an online store is a great way to generate passive income. Setting up a website and stocking it with inventory, even digital downloads or custom products, can be one of the most reliable sources of passive income. From e-commerce platforms like Shopify to print-on-demand suppliers like Printful, you can find something that works for your business model.
Start a dropshipping store
Dropshipping is one of the best business ideas to consider to make passive income, as it allows people to make money from wherever they are. Successful drop shippers report earning upwards of $100,000 per year. To get started, you’ll need to set up an e-commerce store, where customers can browse and purchase products. What’s great about this model is that you don’t have to handle the products yourself – minimizing your upfront investment in time and energy.
Rather than investing in products upfront, all you need to do is find a supplier who handles the manufacturing and packaging of your products, and only then will you send them money for the order. With platforms such as DSers aiding in the search for trending products in different niches, dropshipping can be an excellent way to generate passive income while learning how to run an e-commerce business.
Create a print-on-demand store
Print-on-demand offers an excellent opportunity to earn passive income and take advantage of your artistic side. It’s a business model that involves working with suppliers to create white-label products such as t-shirts, backpacks, books, or posters, which are then sold on a per-order basis. Dropshipping and print-on-demand service providers like Printful ensure that there is no need for bulk buying or creating inventory — each product is only paid for after they are sold.
This also means that it’s far easier to generate content quickly and have it put up for sale in minutes. Shipping and fulfillment processes can also be automated with little effort. Overall, the print-on-demand system effectively starts a passive income stream fast without the risk of other business models.
Sell digital products
If you’re looking to generate some extra income, creating digital products are a great way to get started because they require minimal initial investment and can offer relatively high profit margins. Digital products could include downloadable or streamable files such as Kindle books, templates, plug-ins, or PDFs and provide a passive income stream in your business since these assets have no physical inventory requirements.
Selling items such as design kits, printables, files and other materials can assist anyone looking to generate a steady stream of income from their online business. Take UX Kits for example; boasting 10,000 customers in more than 100 countries, this savvy brand has successfully leveraged digital resources to create various products with tangible monetary value. Digital sales are a great way to make money and nurture long-term relationships with your customers.
Teach online courses
Creating and selling online courses is a great business idea for entrepreneurs looking to make passive income while educating others. With minimal limits, individuals can start selling pre-recorded courses on various topics such as marketing, illustration, or entrepreneurship. If you are able to invest some time upfront crafting your course outline and recording the materials, you can have a sustainable stream of income without worrying about inventory or stock. Furthermore, providing downloadable assets like templates for student use can improve the overall learning experience.
You can create courses that students can download and complete at their own pace, or you can use software to automatically deliver lectures and materials on a set schedule. Yegi Saryan, the founder of Yegi Beauty, saw success with her online lash classes and was able to expand her business by helping entrepreneurs kickstart their beauty careers both online and in person. Developing an online course takes time but offers a low startup cost and potential for far-reaching passive income streams.
Start blogging
Blogging can be a great source of passive income. To get started, create content your audience will find valuable, then promote it through social media or other platforms to build an audience. Over time, this audience should generate enough traffic to give you a reliable passive income stream. Planning and launching a successful blog with a steady income may take some time, but the results are worth the effort!
There are many ways you can monetize your blog, including:
- selling affiliate products
- creating sponsored posts
- selling your own products
- running ads through Google AdSense
You don’t need coding or design skills- setting up a blog with hosting services like Shopify is fairly straightforward. With some effort and time put into creating an SEO marketing strategy and content production/promotion, returns on these investments can be upwards of $30,000 per month.
Run an affiliate marketing business
Looking for ways to make some extra money without requiring all your time and energy? Affiliate marketing is a great option to consider. Here, you simply use your platform (blog, newsletter, social media) to recommend products or services that interest your audience. When they purchase through your link, you get a commission – and it’s a form of a passive income!
Affiliate marketing offers multiple benefits for online entrepreneurs. As it requires very little financial investment, there is limited risk in becoming an affiliate marketer. Also, the scalability of this business model allows you to bring in passive income without having to hire extra help, while traffic sources you create and campaigns you develop have the potential to drive sales and commissions. All in all, affiliate marketing is a relatively easy way to earn money online with minimal upfront work.
With affiliate marketing, you can generate revenue for your business by dedicating a little of your time. All it takes is a few hours invested initially – then you’ll be able to reap the rewards continuously.
Become an Instagram influencer
Maybe you don’t have The Rock-style chiseled abs, but that doesn’t mean you can’t earn money from Instagram. Becoming an influencer on the platform requires building a community of people who like similar topics and have an active audience. Are you into comics, sports, diving, home décor or something else? Take your passion and start posting! You can increase your earning potential by partnering with businesses to promote their products, selling your own merchandise or creating other passive income sources.
Start a YouTube channel
If you’re looking to generate passive income through business ideas, YouTube could be a great option! With 74% of US adults already using the platform, there’s a lot of potential eyeballs to target with your projects. Creating content can involve upfront work and no initial return, but once you gain traction it can generate huge rewards.
Take Ali Abdaal, for example. In just four years, he surpassed the income from his job as a doctor with earnings from his YouTube channel.
Affiliate sales, sponsorships, ads and branded integrations are all possible passive income sources if you’re dedicated enough to attract an audience and keep them engaged with your content.
Sell designs online
Establishing passive income streams from creative business ideas is one way to turn your design skills into cash. For instance, web-based services such as 99designs, ThemeForest, and Creative Market are perfect for creating a digital store and selling your designs online. You can create logo’s, branding resources, website templates, illustrations, fonts or any other digital design resource. The graphic design industry in the US is worth over 13 billion dollars each year and is only getting bigger. So get your piece of the pie by selling your product creations passively!
Rent out your unused space
Consider renting out an unused space like your basement or garage. Storage rental platforms like Neighbor, Peerspace, and StoreAtMyHouse provide an easy and safe way to do this. The storage industry is projected to be worth as much as $64 billion by 2026! This means it’s a great source of long-term income. You can store vehicles, boats, RVs, and even business inventory for others. Not only is this great for making money but it also helps avoid any legal issues that may arise along the way.