15 Best Passive Income Ideas – How to make $10,000s per Year!

15 Best Passive Income Ideas – How to make $10,000s per Year!
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It is not enough to have a side hustle, you need a passive income generating stream that makes you money around the clock, in and out of season. In this day and age of high billable, longer working hours and overstretched salaries you need to come up with, and implement passive income generating ideas.

The trick here is in learning to identify viable ideas with the highest potent of complementing your earnings in the short term but with the possibility of turning into wealth creation machinery in the long run.

We have simplified this for you by coming up with 15 of what we consider the best passive income generating ideas and explaining their implementation. These are scalable, require minimal investments, and even less effort to maintain. But first, we debunk some passive income stream myths that may be keeping you from starting the next big thing.

 

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Things nobody tells you about passive income streams

If you don’t have money, you need to put in work: Passive income streams aren’t born out of thin air. Creating a scalable passive income generating stream requires a skill or a monetary investment or both. The upside to this nevertheless is the fact that you only need fair skills and small investments, less than $100 at times.

It isn’t entirely hands-free: If you are looking forward to creating a passive income generating stream born out of your skills, such as authorship or teaching, you will need to put in significant time developing them, be it writing the book or growing a blog/website. You also need to update your content or adjust your money making strategies once in a while to adapt to the dynamic markets. This, however, shouldn’t take less than a few minutes per day or week.

Your idea is only as good as the research you put into it: The level of effort you put into researching about the different passive money making ideas and how to monetize them has a direct impact on how much you make as well as its scalability.

15 best passive money making ideas

1. Invest in stocks and securities- 3%+ annual gain

Come to a serious windfall or have saved significant amounts over time? Don’t just let it sit in a fixed deposit account, earning minimum interest. Invest in the more lucrative government bills and bonds or buy stocks from some of the best performing listed companies on NewYork Stock exchange, London Stock Exchange or NASDAQ . You get to earn interest and dividends and still maintain the integrity of your initial deposit amounts when you buy into State Federal bonds.

And before you brush either of these off as too conventional, understand that there is a reason they have stood the test of time. It is largely due to the fact that they remain one of the safest and low-risk passive income generation ideas of all time.

Pros

Stock and security certificate can be used as collateral for loans

Guaranteed returns for bonds and bills

Higher interests

Cons

Requires an understanding of the money markets

Stocks markets can be quite volatile

 

2. Deposit with a hedge or mutual funds- 10%+ gains annually

The global economy is rife with highly rewarding investment opportunities, but you need expert skills on how to identify these leads and analyze their viability and profitability. Hedge funds and mutual trusts have done the legwork for you and put in place analysts and economic experts to guarantee maximal utilization of client’s funds. And most ask for considerably low deposits for investments, sometimes below $1000.

You just have to find the most reputable and most profitable firm, the likes of Renaissance Technologies and JPMorgan Asset management. The return on investment from these alternative investment firms has time and again beat that of banks and government bond as they concentrate on high-risk but highly-rewarding ventures like distressed debt management. Like bonds and any other passive income generating investment opportunity, how much you make from the fund depends on how much you invest.

Far from the promise of higher returns, these firms are also open to the public, easily accessible and are also highly liquid. They are, however, riskier when compared to stocks and bonds given that the SEC is always on their necks and forces them to wind down on cases of insider trading. But these are isolated cases that can also be avoided by practicing popper due diligence before deciding on the best alternative investment company.

Pros

High returns when compared to stocks and bonds

Professional management minimizes risk

Makes money regardless of the economic condition (buying long or short)

Cons

High hedge fund fees

Mutual funds have a long history of mismanagement

 

3. Rental properties and crowd-funded real estate projects- 15%+ gain on rentals

Rental properties have the highest return on investment over time, beating even the stocks. This is evidenced by the role the sector plays in influencing global economies. Building rentals, therefore, ranks highly on the list of passive income ideas. And with the automation of rent payments, the hardest part of it all is the initial building phase or deciding on the property to buy. Everything else is effortless and involves simple renovations every few years.

Don’t have enough savings to buy or build rentals or just want to avoid the haggles that come with the entire process, but still want to reap from the Real estate industry? Consider online crowdfunding projects on crowdfunding platforms such as Realty Mogul and Fundrise. Investments here start from as low as $500 and you don’t even tend to be an accredited investor.

Pros

Rental property gains value consistently over time

Posts higher returns that can be adjusted upwards every now and then

Both rentals and crowdfunded projects are insurable, thus minimizing risk

Cons

Subject to taxes and homeowner association fees even when unoccupied

Rentals require huge startup capital

 

4. High-yield savings account- annualized 2%+ gains

The interest rates offered by most banks on their savings accounts are laughable, to say the least. Some will even charge you a monthly fee for maintaining an account with them. This informed the need for the online based high-yield savings accounts like HSBC Direct Savings and Ally Bank that offer compounded annual interest rates (APY). Most start at above the 2% rate.

Granted, a 2%+interest rate on savings will not make you rich and neither will it earn you immeasurable wealth. It, however, helps you avoid unnecessary charges of operating a savings account. Plowing back profits into the account over time nevertheless goes a long way in expanding your principal amount and increasing the returns drawn from these returns.

Pros

Higher APY’s than traditional banks

No monthly or administration fees

Highly liquid

Cons

Most don’t have a physical location

Most don’t offer ATM services

 

5. Rent out extra space in your house or backyard- gains depend on available space

Technological revolutions have led to the birth of such platforms as Airbnb, VRBO or FlipKey that connect travelers and tourists with cheap rental facilities across the world. They are championing an evolution from the age of depending on the expensive restaurants and motels by introducing the aspect of room sharing. You too can rent out extra space in your house or even the entire house when going out for vacations.

City camping is also steadily gaining steam and these space rental platforms give you a chance to rent out your backyard to campers. There are no overheads in either case as the renters will either carry with them food and necessities or ask that you provide them at a fee. The upside to this is that it is free and doesn’t call for an initial investment.

You have an added advantage if you own a second home. Alternatively, consider leasing apartments or family homes in busy coastal towns and other parts of the country or world with an influx of tourists and marketing these homes as possible hosts on these platforms.

Pros

Insures property from damages caused by clients

More flexible compared to longer term tenancy

No association fees

Cons

Tenancy is not guaranteed

Incomes keeps fluctuating

 

6. Private lending and peer-to-peer lending groups- 8% annual gains

Have you considered putting your savings into meaningful use by having them work for you, literally? You can achieve this by lending out your savings to friends and acquaintances and having them repay back with little interests. Most individuals consider this a risky affair, but it doesn’t have to as long as the advances are secured. You can mutually agree on holding onto a household item for small loans or share certificates and even vehicle log books for significant monetary advances.

If you don’t want to strain possible friendship and relations over cash loans, then join a popular peer-to-peer lending website like Prosper or Lending Club. It works like the loans advances to friends and acquaintances but from a centralized body. You just deposit your funds to the group with the promise of guaranteed returns per month or after the agreed period. Returns from the peer to peer groups will always outperform the bank’s interest rates.

Pros

Higher returns

Not subjected to taxation and other fees

Cons

Higher credit risk

No insurance in case clients default

 

7. Let the robo-adviser manage your money market investments- 2%+ daily gain

Did you know that up to 80% of all forex and money market trades are executed by automated expert advisors? Banks, alternative investment firms, and high volume traders lead the pack in the adoption of automated traders, robo-advisers. These analyze the markets, identify profitable trade opportunities, enter and exit these markets at the points that guarantee maximum profits. To benefit from an automated trader, you only need to open an account with Reputable brokers like eToro Broker, fund it and integrate it with an efficient robo-advisor.

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  • Crypto, FX, Stocks & Commodities
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Trading the markets with a robo-advisor remains one of the most viable passive income generating ideas as it requires no prior experience in money markets or huge disposable savings. Most trading accounts don’t even have a minimum operating balance implying that you can start your trade with as little as $100.

Pros

Regularly updated trade settings

Highly liquid

Allows for real time monitoring of the performance of your investment

Cons

Dominated by scams

High acquisition and maintenance fees for the few genuine ones

 

8. Start a blog or lead generation website (or buy an established one)-  Unlimited gains

What are you most passionate about? Is it cooking, real estate, writing or finance management? You can also turn it into a passive income stream by starting a blog or lead generating website around it. The blog works by providing our readers with informational and educational content around your areas of interest.

You can then sign up with Google Adsense and have it display adverts on the blog where you get paid depending on either traffic directed from the blog or as views and impressions. As it gains popularity and becomes an authority in the field, you can attract the more lucrative direct adverts from corporate and institutions.

Lead generation websites work like blogs, where you first concentrate on winning reader confidence and becoming an authority in your chosen niche. And apart from the Google Adsense adverts, you can have individuals interested in what you offer be it finance consultation or real estate services contact you. Then direct them to companies and experts in the specific field at a fee. Unlike the cold leads from Adsense, these are considered warm leads and post highest conversion rates.

Pros

No limit to how much one can make with a blog or website

Doesn’t need extra special skills to operate

Requires little to no capital

Cons

It is not entirely hands free as content needs to regularly updated

Huge competition and extremely low commissions

 

9. Hire out your car or use it for advertisement- gain from $100 per month

Long before the advent of ride-sharing services like Uber and Lyft, there were taxi and VIP transfer companies that used to hire out well maintained personal vehicles, paying a monthly commission for their use. Uber and Lyft have only amplified their significance and the impact they have on the transport industry. Earning passively from your vehicle can start with registering it under Uber or Lyft services and hiring a driver to run its operations.

However, if you are after a more hands-free opportunity that doesn’t involve dealing with vehicle maintenance and general servicing, consider renting it out to a transport industry operative such as New York’s VIP Connection. How much you make here depends on such factors as the type and age of the vehicle, as well as whether it is a short term or long term lease.

You can also make passive income from your vehicle without losing control over its use. You only have to get in touch with the different advertisement companies like CarVertise that pay you a monthly or one-time lump sum fee for turning your vehicle into a moving billboard.

Pros

Easy to join

You don’t lose control of your car with Uber or Lyft

Companies do all the marketing for you

Cons

These are often a preserve of the big city dwellers

 

10. Angel investing and silent partnerships- 100%+ gains

There is only one thing that’s more beautiful than having residual income, having it work for you. In a world where access to startup capital for young entrepreneurs and established businesses looking to expand operations has proven to be an uphill task, you can step in to save the day turning it into a passive income generating stream.

Startups and individuals such as the ones at Silicon Valley are always looking for angel investors, individuals that can lend them the necessary capital needed to kick-start their innovative operations. Consider funding them using your savings and in return become a silent partner in this new business. Note however that how much you make from such a deal is entirely dependent on your analyses of the business and the business model.

If you are willing to invest in startup companies, but you lack the needed capital, you can still be a shareholder thanks to the rise of equity based crowdfunding platforms. You can now invest in companies that traditionally were only accessible to venture capitalists.

Pros

Unlimited earning potential when th

No involvement in company operations, no need for special skills

Relatively liquid

Cons

Stand to lose all your investments should the idea fail

No involvement means you constantly have to tolerate policies you deem inhibitive

 

11. Participate in a cryptocurrency ICO- 100%+ gains

The blockchain and crypto revolution does more than just guarantee internet security. It has opened new and promising investment opportunities that individuals from all walks of life can engage in, regardless of their disposable incomes or money market trading experience. Among the numerous passive income streams the decentralized network have helped create, ICO investments comes off as the most profitable.

For instance, do you know that had you invested in Ethereum (ETH) during its presale in 2013, at the cost of $0.30, and disposed it at its current value of +$170.0, you would have made a 53,000%+ return on investment?

While the ICO ship for the popular coins may have long sailed, you can still catch up on the new but equally strong ICOs being launched today. And with the surge in popularity for cryptocurrencies and crypto investments, one can only expect these new digital currencies to reach their peak faster than their predecessors. You will, however, have to conduct a lot of background research on these tokens, vetting the challenges they hope to solve and their developers as they all come together to determine the coin’s ultimate viability.

Pros

Highest liquidity

No counterfeit risk

Greatest potential for high returns

Cons

Possible mismanagement

High risk of failure for new crypto coins

Risk of investing on false cryptos

 

12. Write a book or create a course on Udemy- unlimited gains

Do you consider yourself creative or your life story interesting? Publish a book or express it in an eBook. While it takes a few weeks or months to get it in order, it presents you with an opportunity to earn passive incomes in the form of royalties or direct sales for a lifetime.

Note that it doesn’t have to be just about you. An eBook can cover any topic of interest, from weight loss to self-empowerment or even personal finance management. The upside to this is that you don’t even need to win the confidence of the publishing house when there exist such platforms as Amazon Kindle that facilitates self-publishing.

Alternatively, if you feel confident enough with a particular skill, consider developing an online course that you can then sell through such educational websites as Udemy or Coursera. An eBook, for instance, the hardest part is in its development. After which you only have to promote it and make a few updates once in a while.

Pros

Unlimited earning potential

Opens doors to more income generating platforms like public speaking

Doesn’t require investment capital

Cons

Limited chances of success

High incidence of copyright infringement and piracy

 

13. Franchise your business- Agreed percentage of franchisees revenue gain

McDonald’s would probably have never attained its global household name status if its founders had not considered franchising. Do you run a successful or wildly popular business or consultative agency? Consider branching out by licensing franchises.

This presents you with a scalable passive income generating idea and unlimited income potential. Like any other passive income idea, effort is only needed when starting out. When branding and packaging each new franchise and as soon as they hit the ground, incomes start flowing in effortlessly.

Pros

Requires little to no capital

Grants you access to better capital

Access to better talent

Cons

Lost business control

Inhibits innovation and flexibility

 

14. Rent out storage space- 7% to 8% gains

One in every eleven Americans rents out a storage space or is in need of one. This explains the mushrooming of storage facilities throughout the country and the boom that is currently being experienced in the storage space industry. You too can join this wagon, riding on this insatiable demand for extra space in the country to come up with a passive income stream.

For starters, you can decide to acquire several storage units from such reputable space storage companies as U-Haul or CubeSmart companies and then sublet them, hiking the fees and benefiting from this margin. The fact that storage companies take care of the unit’s security and basic maintenance means that you don’t have to worry about overheads.

Alternatively, you can consider renting out your garage as a storage space. Just like the third-party storage spaces, home garages require little to no maintenance. They can be treated like a rental property that only requires simple renovations once in a while.

Pros

Completely hands-free

Expands your income base

Cons

Tenancy not guaranteed

It is subject zonal limitations

 

15. Clear your debts- Gains equivalent to the current loan interest

The saying a penny saved is a penny earned has never found a more fitting home than in clearing debts as a form of passive income. If you had a credit card debt or mortgage you are servicing and a savings account, wouldn’t it be wise to just pay off the debt or clear the mortgage with these savings? The reasoning behind debt clearance as a form of passive income takes into account the fact that savings bring in less interest than is charged for debts and mortgages.

Some banks will also impose an ‘administration fee’ for every month your account remains hosted with them. Clearing the debt this month, therefore, reduces the impact of next month’s interest. In most cases, the banks will offer discounts for early repayments thus ensuring that you pay them less than you owe them.

Pros

Saves you thousands of dollars in future interest

Lowers your debt-to-credit ratio

Frees up cash for other uses

Cons

Deprives you the chance of building a credit report

Paying debts early means more taxation as it minimizes tax deductions

 

How do you determine the best passive income idea?

When deciding on the best passive income generating idea, you are looking for the one that requires little effort, offers the highest return on investment, less risky, and one that can be converted back to cash fast, highly liquid. Keep in mind that while some passive income earners like franchising, eBook writing, and blog popularization require a lot of dedication and effort at the early stages, they call for little to no effort upon maturity.

When taking up a passive idea that requires initial capital investment, be sure to only part with what you can afford to lose. Importantly, maintain a healthy emergency fund considering the fact that most investments take time to liquidate. It is also advisable that you prioritize investments that can be used as collateral should you need emergency funds.

Even more importantly, only go after a passive income earner that falls within your strengths, especially if you are not willing or just don’t have the time to put in countless hours learning how to go about it. For instance, if you run a successful business, consider franchising. Similarly, if you operate in the real estate industry, consider starting a blog or a lead generation website within this niche. Just remember that success comes in effortlessly when you follow your dreams.

 

Bottom line

As you age and responsibilities pile up, don’t turn to loans. Instead, consider using the little savings you have while cutting back on some expenses and use this fund to start a passive side hustle. And no, you don’t to be an expert in anything or have millions lying idle in the bank to start a passive income generating scheme. You just need to learn how to use what you have however insignificant it may seem, and grow it one step a time.

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