The phrase/term “Passive Income” could be the buzzword of the 21st century, quickly surpassing YOLO and Side Hustle… at least within personal finance circles.
Ask someone about their future financial plans and most likely you will hear them say things like, “Getting into real estate,” or “I am focusing on my investments.” Some will make a mention of finding a passive income stream.
Thanks to the internet, authors like Robert Kiyosaki, and the fact that working hard for someone else forever doesn't sound too fun, many adults are searching for ways to make more money. Whether it is for reasons like paying off debt or wanting to have more time on their side, many are turning to ongoing income sources where they can make money wherever and whenever.
Today, we will share with you some our favorite Passive Income Ideas for 2021!
Our Top Passive Income Ideas for 2021
1. Rent out your spare room
Got a spare room that’s full of junk or simply not being used to its full potential? Get it listed on one or more of the various room for rent / roommate finder websites that are out there and start earning some passive cash. Examples include:
2. Invest in high yield stocks
Investing and real estate are the top passive income sources for most who have created passive income. So naturally, investing in high yield stocks is a given as far as we are concerned when it comes to finding your ongoing income source!
Per Nerd Wallet, there are two main ways to invest in dividend stocks: Through mutual funds — such as index-funds or exchange-traded funds — that hold dividend stocks, or by purchasing individual dividend stocks.
This takes some research on your end, but it is a less risky approach compared to day trading. An approach referred to as “Dollar Cost Averaging” is an effective way to approach investing. Put simply, dollar cost averaging refers to investing a specific amount of money each month no matter what into index-funds or ETFs.
3. Refinance student debt
If you’ve got student debt, chances are it’s costing you more than it should be. By simply refinancing any student loans you might have, and securing even a slightly lower interest rate, could save you thousands of dollars in interest over the life of the loan.
While this is more of a saving money technique, the money saved when you refinance student loans is essentially passive in nature. Keep in mind though, student loan refinancing is not for everyone, and it's best to ask yourself these questions about refinancing prior to doing so!
4. Start a blog
Passionate about something? Got knowledge that other people would find useful? Then why not start a blog!?
Blogs are one of the best passive income ideas, but you need consistent traffic to earn money — and that requires dedication on your part. Nevertheless, as your traffic numbers grow, you can make money via affiliate offers, ads, and/or selling your own products/services.
An example of affiliate income would be the small commission we earn when readers start their own blog with Bluehost. From there, the goal is to produce content that is user-friendly, engaging, and consistent.
Similar to most worthwhile passive income opportunities, blogging is something that will take persistence and patience. However, it is worth it in the long run and we recommend starting with these simple blogging pitfalls to avoid if you're serious about blogging!
5. Get involved with peer-to-peer lending
Peer-to-peer lending platforms connect people who want to borrow money with people who are willing to loan it. The beauty of such platforms if you’re looking to be a lender are that they allow you to stipulate your terms. With returns typically ranging between 6% and 10%, peer-to-peer lending can be pretty damn lucrative.
The most popular peer-to-peer lending platforms include:
6. Get paid for your insights
Companies love data, information, and insights. That’s why many are more than willing to pay you for yours.
Platforms like InboxDollars, Survey Junkie, and others enable you to take surveys and be paid for your answers. While it’s not exactly a passive income idea, it is an easy way to make some quick cash on the side.
Popular platforms include:
7. Rent your vehicle
If you’ve got a car or a truck, you could earn some passive income by renting it out through a car sharing website. Turo is one such platform and it allows you to connect with people who are looking to rent a vehicle.
Obviously, your vehicle needs to be roadworthy, have suitable insurance, and you should always do your own due diligence before handing over your keys.
8. Advertise on your vehicle
Not sure about renting your vehicle out? Maybe earning a passive income by allowing some advertising on it is more up your alley.
You can literally get paid for letting companies use it as a mobile billboard and driving it around. Wrapify can help you get started if this passive income source interests you. If you're serious about wrapping your car (you will have to drive enough to qualify), here is a great car wrap guide to get started!
9. Publish an eBook
If the thought of committing to writing regular blog posts doesn’t fill you with excitement, then why not consider creating an eBook. Okay, so while the initial time and dedication investment is still needed, once created, the eBook can generate you a passive income for potentially years to come.
You will need to be an expert in a specific field or industry to have material worth reading and that is also credible enough for others to want to purchase. However, once written, selling an eBook on a platform such as Amazon is 100% passive – driving the sales happens to be the trick!
10. Build an affiliate marketing website
Niche websites are a great way to earn a passive income through affiliate marketing. The basic idea is that you create a website focused on a specific topic. People visit the website because of the value you provide. You then get the opportunity to subtly push relevant products and services onto your visitors, earning yourself a commission for each completed sale.
11. Start a podcast
Like blogs and niche websites, podcasts can help you earn a passive income through advertising, and affiliate marketing, as well as by having people pay to be a guest.
Obviously, to make some decent dollars you need to create a loyal following and provide real value in your episodes. Recently, it was estimated that there is one podcast for every 31 adults in the United States. So podcasting isn't an overnight wonder type of income opportunity, but then again, no passive income idea is quick.
Sponsorship deals are how most podcasters make the big bucks. Work hard and you could be the next $100 million podcaster like Joe Rogan!
12. Sell stock photos
The beauty of modern smartphones is that almost anyone can take decent pictures, and this is especially true if you’re able to capture brilliant one-off shots.
Best of all is that there are loads of stock photo websites out there where you can sell your pictures. Examples include: Alamy, Fotolia, Shutterstock, Dreamstime, and Stocksy. Just be aware that not all of them will accept smartphone images, so investing in a camera — particularly if you enjoy photography — could be an idea.
13. Flip domains
Buying and selling website domains can be a lucrative passive income (although it requires some ongoing input from you, so isn’t exactly passive).
Can you imagine how much money you could make if you owned a domain that a large organization wanted to purchase!? That’s why it can be pretty profitable if you snap up domains relating to emerging markets.
>> If flipping domains interests you, check out Flippa.
14. Rent out equipment
If your garage is full of tools and other useful equipment, you could earn money passively by renting some of it out. People will pay a pretty price to rent equipment and you can take advantage if you’ve got tools, office equipment, or even a lawnmower that you’re willing to part with temporarily.
15. Sell your old stuff
How much stuff do you have in your house that you never even use? While we’re not advocating selling your memories, much of the stuff you’ve accumulated in your home over the years can be turned into cash if you are happy to let it go. The obvious places to start are eBay and Craigslist.
Other places include:
- Facebook Marketplace
- Offer UP
>> Learn how to become a Flea Market Flipper here!
16. Make money being a sleep guinea pig
Get paid to sleep. Wait, what!? Believe it or not, there are companies out there that will pay you to participate in sleep studies.
You get dollars and they get insights into sleep. Sounds like a win-win, right!? You can actually make money while you sleep for sleep studies. Simliar ideas to make money include:
- Work on your computer and donate plasma at the same time
- Due medical trials
- Sell your poop (Yes, this is real, just Google it!)
17. House sit
Even though people aren’t leaving their houses quite as much at the moment because of COVID, there’s always going to be a need for reputable housesitters.
When people are planning on being out of town, they will pay you to look after their home and their belongings. So you can literally earn money while chilling out in front of the TV.
18. Invest in a high-yield CD or savings account
While they are not the most exciting way to generate a passive income, Certificates of Deposit (CDs) are one of the safest and surest savings options available.
The basic idea is that you deposit some money in a CD for a fixed period of time, such as six months, one year, five years, etc. While the money is deposited, the issuing bank pays interest. When you cash in or redeem your CD, you receive original investment plus any interest earned.
19. Invest in a REIT
Real estate investment trusts (REITs) enable individuals who want to invest in real estate, but are a little cautious, to get started. REITs are investment vehicles that contain property within them. As the owner, you can realize income from property gains, refinances, sale, income (or loss).
Fundrise is one of the most popular REIT platforms at the moment. This is also one of the simplest ways to “Get into Real Estate,” without having to make a
20. Use Network Marketing
Network marketing, whether you have had positive or negative experiences is a multi-billion dollar industry. The way network marketing works (sometimes called multi-level marketing) when done correctly allows people to potentially create passive income with a large enough team.
Similar to how a real estate broker will have agents working for them, network marketers can expand their team, train them to sell, and make a bonus based on performances. A large enough team can mean ongoing income!
Popular Network Marketing Companies:
21. Refinance your mortgage
Like student debt, mortgages often cost you more than they need to. By refinancing your mortgage, you can secure lower interest rates and have a bit more cash available each month. While some time and legwork is required to sort out the best deal, you’ll passively benefit going forward.
That said, refinancing your home has to make sense! In order to recoup your closing costs, typically you want to make sure you will get:
- Save at least 1 percentage point
- Plan on staying for at least 2-3 years
- You are aware of resetting loan terms
22. Take advantage of cashback websites
Sites like Ibotta, InboxDollars, and Swagbucks literally give you cashback on your everyday purchases. So rather than just shop as you always have, why not take advantage of such platforms and earn a little bit every time you spend.
Is this technically a form of passive income? Yes. Will you get rich from taking advantage of cash back apps? No. But it doesn't hurt to have the following apps downloaded when you shop:
- Ibotta << Personal favorite, read my full review here!
- Inbox Dollars << Get $5 for signing up
23. Get paid to have an app installed on your phone
There are apps out there that track behaviors, and companies will pay you to have them installed on your smartphone. The companies benefit from having accurate information relating to how you use your phone on a daily basis. The Nielsen Mobile App and MobileXpression are two such examples.
While it might sound like something from the book 1984, and not everyone will be comfortable with it, it is, nevertheless, a source of passive income. On a side note, you can also make money with gig apps similar to installing apps.
24. Switch power providers
You’re always going to pay for power; that’s a given. But the amount you pay doesn’t have to be. By switching power providers, you can save money monthly on your power bills. A great place to start is with a comparison website, like Power2Switch.
25. Design and sell t-shirts with Amazon Merch
If you are somewhat of an artist or designer, you can sell your designs on t-shirts on Merch by Amazon. You will have to go through their onboarding process to qualify and the platform is competitive as far as making sales goes.
However, if you are a Merch seller, the income is 100% royalty based, meaning you will make a percentage off of every sale and you don't have to worry about shipping, creating, printing, customer service, and so on!
26. Own a Car Wash
I know a guy who has five car washes. He visits each on a monthly basis, the rest of the time he works out of his house or from a beach. Put another way, he has created passive income with his car wash.
This will require some capital investments and upfront management, but once a carwash is moving in the right direction, it is a great way to create steady, ongoing income!
27. Own Vending Machines
Start a vending machine company, hire someone to stock the vending machines, make passive income. Simple, right?
While owning a vending machine is a great passive income idea, keep in mind there are state regulations, laws, and taxes involved. You will want to do your research and learn how to start a vending machine business first!
27. Design Websites, Charge for Maintenance.
One form of passive income I currently have is website maintenance. I have designed websites for clients in the past who pay me monthly to maintain and keep an eye on their websites. If there is an issue, I fix it.
This is a great form of passive income and while building the site is active, I can typically make $45-$100 per month for retainers.
The Verdict on Passive Income Ideas
What you will quickly notice about the list of ways to create passive income above is that creating passive income can be done many ways. There are really three phases of creating passive income that I think you will experience during your journey:
- Doing & Struggling
- Doing & Learning
- Doing & Growing Your Ongoing Income
Notice that the keyword is doing. Sure you can technically call your Ibotta cashback app a form of passive income, but in all reality, if you're talking REAL passive income – anything can become passive.
Any company you scale correctly can become passive income. The goal is to start by making money with a side hustle or small business. From there grow it and scale it, using your profit to reinvest back into your growing asset.
Eventually, you can use your income to invest and save, thus letting your money make money for you!
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! I got serious with money when I used Personal Capital to track my finances.