Updated December 1, 2022
While I was working for THE MAN, spending hours every day at a job I hated, there was a dream that just wouldn’t quit. Could I get passive income? I was commuting into the city, sitting in a grey cubicle, and dreaming about a world where I didn’t have to trade time for money.
Passive income, AKA making money while you’re sleeping, can come from many different places. And while I have seen a lot of posts with passive income ideas, I wanted to create this one specifically for the people who read this blog.
The thing is, I think that some of the things people talk about as “passive income” are bull$#*t. And I think more of us should be open to some less-known types of passive income. I’ll show you these. I hope that these 14 passive income ideas help you work with what you’ve got, and think differently about growing your wealth!
This post may contain links to affiliate products, which–if you choose to purchase–pay us a commission at no extra cost to you. This helps to support our work. We only promote products we’ve used and love.
What is passive income?
Passive income is money that is brought in with little to no active work on your part. While passive income can be lucrative, and should be an essential part of any individual’s wealth plan, “passive” does not necessarily mean “easy.” Many sources of passive income require high initial investments, either of time or money.
Our best passive income ideas
14 Viable passive income ideas
1. Licensing a Patent
Some inventors make things. Some inventors license their patents to other people, who make the things. And they just collect the royalties.
If you’re doing research, especially if you’re in an advanced degree, there’s a good chance that some of your work is going to be something that hasn’t been done before. If you get positive results, you might consider a patent.
Then, you could build it yourself, or you could shop around for an established company to buy it.
Either way, your first stop should be a university tech transfer office (if you’re still in one or have just left). Otherwise, you can check with local business centers and incubators–but you might need to shell out a bit of money for a patent lawyer–or learn to write it yourself. There’s more info on the government’s patent page.
2. Teach an Online Course
One of the things I think smart people need to do to make their income work is to teach it! And with so many online course platforms out there, you really don’t need to be a prof at a university to teach your knowledge. Platforms like Udemy or Skillshare are ready-made to bring your knowledge to the world.
But here’s the real truth about building an online course. Most of the advice out there is bullshit. It’s getting harder and harder to actually make money off an online course.
So here is my BIGGEST piece of advice — ignore it at your peril. Make your course ridiculously focused. It’s the only way to win with courses now. Don’t think about “personal finance.” Think about “personal finance for millennial working moms.” The more niche you can be, the more likely you’ll make money.
If you’re trying to figure out what works for courses in 2023, here’s my recommendation. Try a cohort course. A cohort course is taught live. The thing that sucks about this, contrary to a prerecorded course, is that it’s not TOTALLY passive. But honestly, you can friggen PRESELL the thing — meaning you can charge before you ever teach the course. And people are so tired of canned courses, they’re willing to pay a premium for live instruction.
If you’re creating a course-based business, the platform I recommend is Mighty Networks. It’s freaking awesome and the place where I host my courses and community.
Most of the passive income ideas aren’t 100% passive. TBH, there’s ALMOST 0 passive income options that you will never have to do anything with.
But investing can be pretty close. You’d be hard-pressed to find a more common way of generating passive income.
So if you do have a little to put away, you could learn investing. I learn some basics of personal finance when I was in university, and built some wealth in low-cost index funds (I took a lot of my advice from the book The Millionaire Teacher and personal finance blogs like Mr. Money Mustache).
I’m not giving you investment advice here. Not my thing.
But I will say, learn about investments.
Spending even a few hours a week and a few hundred dollars learning to invest may pay dividends (literally) for the rest of your life.
I’m re-writing this post in December of 2022. I don’t really even use the word “blogging” anymore to talk about what I do. But I still swear that this is one of the single best ways to generate passive income. It’s so fucking possible, and so few people will do it.
At the end of the day, if you can create amazing written content (or video, but we’ll get to that), you can monetize it.
The economics of blogging are pretty straightforward. You buy a domain name, and write some stuff online that people hopefully read. You can make money from display advertising, affiliate marketing, coaching, speaking, and about a billion other things.
Some of these things, like advertising or affiliate marketing, are totally passive. I make passive income off of Roostervane even while I sleep. It’s not all of my income; I do consulting, speaking, and a bunch of other non-passive stuff. But at least a portion of my income is…. which is cool!
Stories abound of people who make 50k a month off of affiliate marketing, like Michelle Schroeder-Gardner, who sails the world with her husband. While these people are the exception to the rule, even making a few hundred a month off of advertising or affiliates is some great walking around money! Michelle even has a course on affiliate marketing that I took to get me started. You can check it out here!
I’m a proud affiliate partner for Bluehost, which is what I used to start Roostervane. If you want to start a blog, I totally recommend them! Click here to check your domain name and get started for $2.95/mo!
YouTube channels are pretty much the same principle as blogging. You can build an audience, and through the wonders of search, people can keep finding your videos!
I’m proud to say I’ve launched my own YouTube channel because I love making videos. And even though I’m certainly not making passive income on it yet, I hope to reach the elusive monetization threshold this year (you need 1000 subscribers and 4,000 hours of watch time as of writing this– for up-to-date requirements click here).
YouTube takes work to grow a channel, but once you monetize– it is passive. HOWEVER, if you want to make a full-time living off of YouTube ads, you’ll need a LARGE audience.
psst- By the way, one of my favorite tools for YouTube is TubeBuddy, which I use for keyword research and optimization.
It lets you explore video ideas, gives you step by step tips to make sure your video ranks, and is just overall amazing.
6. Write a Book
If you’re creative and educated, chances are you got a book in you.
When I wrote my book, I had the choice between self-publishing it on Amazon or going the traditional publishing route. I chose to self-publish. I liked this option, I kept more of the money I made. HOWEVER, It also meant that I had to do all my own promotion–a traditional publisher can give you a boost here.
People write a lot of books. But most authors barely break even.
If you want a book to actually become passive income, you’re going to need to do a few things well. You’ll not only need to write the thing, you’ll probably have to build an audience and get half-decent at promotion too.
When Stephen King use to submit manuscripts, he’d nail the rejected ones to a wall in a big stack. That was once the process, mail it away and wait.
Obviously, submission has now moved to email, and the most common practice is to query an agent for representation. You can find advice on writing a query letter here.
Fiction is still about the quality of the story and its fit with what agents want to try to sell. If you have a novel ready, you can try pitching it tomorrow.
Non-fiction is different. You’ll probably have to do a larger book proposal, and perhaps have what they refer to as “a platform.”
At the end of the day, publishing is an economic equation–and that’s why publishers want to know they can make money from your book.
Publishing is one of the harder passive income ideas, but it is still possible. If you’re looking for strict profit margins, self-publishing wins by a lot. With Amazon KDP, and other self-publishing options, the world has opened up.
There are a lot of good resources on Reedsy, including free, professional typesetting software.
Try this Skillshare course to learn the game!
7. Rent a Room
If you happen to have a bit of extra space, you could rent a room in your house.
It’s a guaranteed monthly income with not a lot of work on your part–as long as your new roommate cleans up after themselves!
8. Write a Code
If you’re a half-decent developer, and especially if you know websites or apps, you could write a program or code to sell. People are looking for all sorts of coded templates, everything from calculators to figure out a mortgage payment to quizzes to find out which Friends character you are (I’m Ross).
9. Become an Airbnb Host
If you have a cute apartment, a separate property, or even a spare room, you could put it on Airbnb. Even if all you have is your principle residence–which let’s be honest, is most of us–even renting it out a few nights a month and staying with friends or family could make a huge difference to your bottom line.
10. Sell Stock Photos
I’m an amateur photographer, so I love this idea–even though I’ve never done it. If you love to take photos, you can sell stock photos online from a bunch of different sites. There’s a good guide to it here.
11. Write a Technical Manual
The famous podcaster Pat Flynn made his first money selling a guide to passing the Leed exam, helping people to study for and succeed at an accreditation that architects needed for green building design. While incredibly niched and specific, Flynn’s PDF book still sold a bunch of copies.
And this brings us to a slightly different form of publishing online for money. Certain resources, technical manuals, study guides, etc. are SUPER specific, but also things people pay for on a regular basis. The course prep company Kaplan has built a thriving business on study guides.
If you have field or domain-specific knowledge that is in high demand, NO MATTER HOW SPECIALIZED, you might be able to find a market for it. You could follow the steps to sell it on Amazon above, or else you could sell it on your own website.
12. Invest in a REIT
A Real Estate Investment Trust (AKA REIT) is a way of investing in real estate without having to own or operate real estate holdings. They’re becoming more popular, and there are more and more ways for smaller-scale investors to get involved. I’m doing more reading on this subject, and will update this with more details in the future!
13. Rent Storage Space
If you have some extra space you’re not using–like a shed, garage, or basement–you could rent it out for storage. Sites like Neighbor will help you find someone interested in renting your space out and help you make the transaction!
14. Rent Out Your Textbooks
Textbooks are SUPER EXPENSIVE! There are some new startups that capitalize on RENTING instead of OWNING textbooks, which makes a lot of sense considering it’s a $1,000 book you probably need for 4-8 months. If you have bought expensive textbooks in the past, you could resell them. OR, for truly passive income, you could rent them out!
Companies like ValoreBooks promise to make this sort of exchange possible.
These 14 passive income ideas aren’t necessarily easy, but they promise some extra income over time. Why not give it a shot? Spend a bit of time each day learning about a passive income stream and growing it. You never know, it might be the thing that changes your life.