These are the best ways to make passive income this year
Earning money while you sleep? Possible! Passive income can completely change your life, as it not only provides financial security for you but also offers a perfect opportunity for wealth accumulation and maintaining a high quality of life. We have collected 20 residual income sources for you that work, so you can find the idea that works best for you!
Passive income, everyone’s dream
Imagine waking up in the morning with more money in your bank account than the previous night. What would it feel like to go on vacation while your income grows every day? And what if you could invest your savings where it grows every month? As dreamy as it may sound, it’s not impossible at all! Passive income is exactly that. But how can you have this type of income?
In this post, we have gathered 20 ideas that can provide passive income for you, and we’ll guide you on how to get started!
The meaning of passive income
First, let’s take a look at what exactly we mean by ongoing or passive income! Passive or residual income refers to income sources that do not require you to work continuously or actively. These are sources that you can start with either money or time investment and then they continuously generate money for you without you having to work for it day in and day out. Passive income comes in various forms, and you can read some examples below!
Does completely residual income exist?
In short, no – 100% passive or residual income does not exist. It’s important to know that ongoing income sources are not just started once and then you wait for the profits to come in. Often, a residual income source requires changes and ongoing supervision to ensure it keeps functioning. For example, consider owning a rental property. Initially, it requires a financial investment because you have to buy the property. When you rent it out, money comes in monthly, but anything can happen: tenants move out, and you need to find new renters, you need to renovate the property, something breaks down and requires repairs that might cost the entire month’s rent, etc. So, it’s not enough to invest energy once; periodically, you need to deal with it to keep it working.
What isn’t residual income?
Now that we’ve looked at the meaning of passive income, let’s also see what doesn’t fall into the category of residual income! Anything for which you actively, continuously, daily work is not ongoing income because these are active income sources. Essentially, these include the activities you call work: the 9-5 job, your side hustle, or the business you work on even at midnight.
Passive and active income do not exclude each other; in fact, they work perfectly alongside each other. You can truly experience the benefits of combining the two in the long run when you can noticeably and significantly increase your income.
Why does everyone need passive income?
But why is it worth having a passive income? What are the benefits of having some form of passive income every week or month? In addition to being a great complement to your salary, having a passive income source comes with many other advantages.
Financial freedom
If you have a passive income, you are much less dependent on your monthly salary. If there are unexpected expenses or an irresistible opportunity arises, you can take action because you can be financially stable and independent.
Security
Residual income provides security because if, for any reason, you lose your active job (whether due to illness, resignation, layoff, etc.), you still have something to rely on.
Location independence
Imagine not being tied to a place because of your job. You can be anywhere in the world, do anything, and money still comes into your account. Morning surfing? Digital detox for a whole week? It fits! Of course, location independence is achievable even if you work remotely or as a freelancer, but in this case, you still have to work several hours a day, while passive income only requires periodic attention.
Financial well-being
The combination of active and passive incomes ensures financial well-being, especially when you can start several passive income sources. Are you ready to get passive income too? Read on for a list of passive income ideas and find out what you would like to do!
Passive income sources
Now that we’ve covered the concept and benefits of passive income, let’s move on to the list of passive income opportunities. Whether you want to start small or have the opportunity to invest a lot of money right from the start, you will surely find something ideal for you here.
Here are the best residual income ideas!
Starting an online store
Online stores are thriving because customers can easily and quickly access anything from anywhere in the world. Starting an online store is not always a passive income source, but you can make it one by hiring employees over time whose salaries you can easily cover from sales.
Dropshipping
Dropshipping is one of the most profitable passive income sources. Essentially, the concept means selling products through an online store that you select from a manufacturer’s range without storing or sending them yourself. In this case, you only need to purchase the product when an order is received; you don’t have to pay for it beforehand.
Advertisements on your website
If you blog, placing ads on your website can be a significant source of passive income for you. It’s essential to have many readers who spend quality time on your blog because this way you can connect with platforms that place ads on certain parts of your website (such as Google AdSense).
Influencer marketing
Do you have a knack for content creation? If you are comfortable on social media and have a large enough following, you can earn income through influencer campaigns. If you are truly authentic and produce quality work, companies may even pay you for collaboration.
Affiliate marketing
Affiliate marketing is somewhat related to active participation in social media and blogging as well. The essence of it is that a company provides you with an individual link or code. If your followers visit the advertiser’s website through it and make a purchase, you can earn a commission on the sales.
Online courses
If you have exceptional knowledge in a particular area, creating and selling online courses can be a good source of passive income for you! You can sell your courses on your website or online learning platforms.
Selling digital products
Digital products include e-books, worksheets, checklists, and even templates. If you have any ideas for a digital product and you can delve deep into the topic, selling a digital product could be a perfect opportunity for you.
Selling presets
Presets are one of the most popular online products among social media users. Presets are settings that buyers can use via a photo editing application to enhance their images with filters.
Selling stock photos
If you’re into photography, you can earn passive income from selling your photos. There are several websites where you can upload your photos, and you get a commission every time a user downloads them. Websites like Pixabay or Shutterstock are examples of such platforms.
Creating your app
You can develop your app if you have the necessary skills or with the help of a professional. It could be a game, meditation app, notepad for phones, music platform, or anything people need. You can sell the app through the Google Play and Apple Store.
Get paid to advertise on your car
Car advertising means using your car as an advertising space for a company. This involves displaying logos, images, text, phone numbers, etc., typically elements you’d find in an advertisement. You remain the sole user of the car and receive a commission directly from the company or an intermediary partner, usually an advertising agency, in exchange for the advertisement.
Renting out property
Renting out property can mean earning a larger amount of money per month. If you have a property that you’re not using or can afford to buy, it’s worth renting it out because you’ll receive rent every month, significantly boosting your income.
Airbnb
Do you have an apartment in the city center? Or a countryside holiday home you only visit a few times a year? Airbnb allows you to rent out apartments, houses, or rooms through their platform, even for just one night. This concept can generate continuous income for you, as you can set the nightly rate and rent out the property to someone every week that’s not in use.
Renting out items
Renting out board games, wedding decorations, or tools, or perhaps renting out cameras and photography equipment? If you have items that you can rent out periodically, it’s worth generating passive income from the rentals! Some people prefer not to buy certain products if they know they’ll only use them a few times, so they’ll take advantage of renting!
Renting out transportation equipment
If you have a car, scooter, bicycle, or rollerblades that you’re not using but are in good condition, you can earn passive income by renting them out. This business model works particularly well if you’re located in a place frequented by tourists who need vehicles for transportation.
Car wash
Although opening a car wash involves financial investment upfront, it can quickly recoup the money invested. Consider an automated car wash that operates with coins, without staff. This way, you can make a significant profit every month.
Dividend Investing
You can invest in a business and receive dividends based on its profit. This doesn’t mean investing and waiting for the return in the long term. Here you take on greater risk, but it can truly be considered passive income.
Crypto staking
The emergence of cryptocurrencies has brought many new opportunities for passive income. Cryptocurrencies are digital currencies that can be mined and traded. But why is staking one of the best passive income sources in the crypto world? Staking means locking up the purchased currency for a longer period, meaning you don’t use it. This way, you can support the developers and owners of the currency, and in return, receive a commission.
NFT staking
Similar to crypto staking, NFT staking is also among the possibilities for passive income. The main concept of NFTs, or non-fungible tokens, is that money can be invested in items that cannot be physically owned. These can include graphical images, digital artwork, etc. NFTs usually appear in collections designed by teams or digital artists, and for the sake of supporting the project, there’s the option of NFT staking. So, if you purchase an NFT, you can lock it (meaning you don’t resell it), thus supporting the team behind the project, and similarly to crypto staking, they pay you a commission at certain intervals.
What is needed to earn passive income?
Passive income can be earned in two ways. Some sources require capital (such as real estate investment, or starting a car wash), and some require repeated time investment (such as writing an ebook, creating an online course, and influencer marketing). Passive income is not a matter of luck; you need to work hard beforehand to enjoy its benefits later.
How to get started?
Do you want to earn passive income but don’t know how to get started? We’ll help you get started! These 4 steps will help you find the best passive income source for you and get tuned into the implementation process.
Do what interests you
First, gather the different areas that interest you and list the tools available to you. Do you have enough free time to start blogging and prepare the basics of affiliate marketing? Or maybe you have a larger sum of money available to buy real estate? Gather all the possibilities from the list of passive income ideas, then choose what truly interests you from among them. As in all areas of life, you’ll be motivated when you can connect with what you’re doing while building passive income.
Focus more and more
Once you’ve decided which source interests you the most, focus all your efforts on it. Starting a project that brings passive income requires time, energy, and money, so it’s best to focus on one thing at the beginning to make it truly successful! If you manage to start it, later on, there may be multiple passive income sources in your portfolio.
Stand on more legs
Passive income alone is not enough to make a living. Just as completely passive income does not exist, relying entirely on income from passive sources for a living is not very realistic either. Of course, it may take 10-20 years and dozens of successful projects to reach a point where you don’t have to work actively alongside passive income, but at the beginning, it’s very important to stand on more legs and not put everything on one card!