By Areej Khan

What comes to your mind when you hear the term Passive Income? Well, if you think it is easy money that can be earned while sitting on a beach without doing anything, you are absolutely wrong. Yes, it can be an excellent supplementary source of funds for a lot of people, but it requires lots of work as well. Passive income demands an upfront investment and a lot of nourishing at the start. However, after some time, these income streams can sustain themselves and bring you a significant amount of money.

Passive Income Ideas

What is Passive Income? 

People love to hear about this earning method, yet it is the most misunderstood concept. In simple words, Passive income is when you keep getting paid for work, even after it is completed. It involves royalties from movies, books, songs, etc. It also includes the wealth that comes from investments in the real state or business investments where your physical presence is not necessary.

Why is it important? 

The reason why everyone must start working on Passive Income ideas is its unmatchable significance. Let’s suppose you wake up one day, and out of nowhere, you find out that you are fired from your job. That’s where Passive Income proves its worth. The most recent example is the recent lockdown that was imposed by the government due to the Coronavirus outbreak. A lot of people have gone through a financial crisis during this pandemic, except the individuals who had secondary earning sources. So, whenever you lose your job or face any kind of financial hardship, passive income will ensure the cash flow does not stop.

How to make Passive Income? 

This is the most common question asked by people who are willing to earn through different sources. There are a lot of Passive Income ideas and strategies that can help everyone. Some of them may require a lot of investment, but you can start making money even with as little as $5! Sounds unbelievable, right? We have discussed more of such strategies below.

1- Rental Income

A cash-flowing rental property is an excellent way to earn passive income, but it requires a lot of work. Before investing in real estate, you must learn how to make it a profitable investment, otherwise, there are a lot of risks involved. Also, if you want to make it truly passive, outsourcing your property to a management company is the best option. However, this is obviously not something you can start with a little extra cash.

2- Dividend Stocks

This is an authentic and tested way to earn passive income. Your job will be to do extensive research and find good stocks where you can invest money and receive a significant number of dividends. If you keep investing in dividend stocks, you can accumulate a good residual revenue with time. Choosing the right company to invest in is the tricky part. If you succeed in selecting the right company, you will receive payment at regular intervals.

3- Peer-to-Peer Lending

Peer-to-peer, commonly known as P2P is the method of lending money to borrowers who do not qualify for conventional loans. This kind of lending is usually facilitated by a third-party agent, such as LendingClub. As a lender, your income source will be the interest payments made on the loans. However, there is some risk factor as the loan is unsecured.

4- Affiliate Marketing

If you are a social media influencer, a blogger, or a website owner, this method can be the best option for you to earn some extra cash. It is a commission-based job, where you promote a third party’s product on your website, and on every purchase, you will get your share. The most popular affiliate partner is Amazon, but there are other platforms like Awin, ShareASale, and eBay as well. Please remember that you will need to invest a lot of time in the start to attract traffic to your website.

5- Investing in CDs

If you are a risk-averse person, investing in Certificates of Deposits (CD) can be a pretty good option for you. It is often more profitable to go with an online bank than your local bank. This way, you will be able to select the best rate of return available in your country.

6- Selling Information Product

If you are good at something, you can always record an audio or a video course and sell it to interested people. Also, writing an E-book can be a pretty good source of earning passive income. The only problem with this method is that you must put a lot of effort into creating such a product. Some popular examples in this regard are Udemy, Coursera, Skillshare, etc.


Real Estate Investment Trusts are specially made for people who are not comfortable investing directly in real estate. REITs have a kind of legal structure that enables them to pay little to no corporate income tax if they pass along most of their revenue to shareholders. You can easily purchase shares of REITs from the Stock Market just like other companies.

8- Invest in a Business

This is another great way to make passive income. You can invest in a business and be a silent partner. This is the riskiest method we have discussed until now, but if you are a risk-taker, you will understand the high returns that are associated with high risk. For example, did you know that Uber and Lyft were looking for private investors once? Well, both of these companies are worth billions now!

9- Car Advertisement

Earning money while driving your car around town – doesn’t it sound fascinating? Well, it surely does, and a lot of people are doing it. You can contact any experienced advertising agency, and after making some inquiries, they will link you to one of their advertisers.

10- Renting out a room in Your House

This is a straightforward method of earning passive income. In simple words, you are taking advantage of the space that you were probably not using anyway.

The ideas discussed above are only a few out of hundreds through which you can make passive income easily. It is about time we start looking for additional income sources that can improve our living. However, there is no such thing as easy money. If you are looking for high returns, make sure to put the significant effort.

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