Passive Income Ideas: 12 Proven Ways To Earn While You Sleep

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This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

Article Approved By Banking Expert

This article has been reviewed and deemed factual by our content auditor with 8 years of banking experience.

Few things in life better than extra cash, and with the right passive income ideas, you can earn money in your sleep.

Whether you’re trying to break the paycheck cycle or just want to set yourself up for a brighter financial future, the right passive income ideas make all the difference.

What is passive income? It’s a stream of additional cash flow that requires little to no work. There’s a countless assortment of passive income options. But for this list, we stuck to only the tried-and-true methods. Ones that have a proven track record of generating passive income.

Passive Income Benefits

passive income ideas

Passive income ideas are a dime a dozen for a reason. Because the benefits are unmatched, no matter who you are or what you do. The luxury of putting your time or money into something that subsequently generates additional, new incomes is the crown jewel of financial stability. Passive income benefits include but certainly are not limited to:

  • Increased overall earnings
  • Reach financial goals faster
  • Financial freedom
  • No income limitations
  • Less demanding than a job
  • Eliminate debts
  • Free up time
  • Reduce stress
  • Multiple sources of income

But be aware, this doesn’t necessarily mean that you press a few buttons and you’re well on your way to instant cash flow. These passive income ideas require work. But with sufficient time and effort, you could set yourself up for life with these suggestions. Sign up for them and take it serious!

Best Passive Income Ideas

When it comes to Passive Income, you’ll want to do your research. First and foremost, you need to understand that some routes require time, while others only require a monetary investment.

Invest Your Money

Investing in stocks is one of the best passive income ideas. Robinhood is our favorite stock market trading app (by far). Sign up today for a free stock! This route offers opportunities that vary from dividend stocks, individual stocks, and stock mutual funds. While some avenues have a higher risk, it’s important to know where you’re putting your money and the possible reward.

For beginners, investing can be tricky and downright confusing. A good starting point is figuring out what type of approach you’re going to take. If you’re on the fence, Robinhood offers a wealth of educational resources, tips and access to advisors–all included free!

Robo-Advisors

For those with little to no experience, you’ll always have some handy to ask questions to. They even have robo-advisors that are programmed and customized to your needs based off of a series of questions and profile. Give it a shot. Investing is the gold standard of passive income ideas.

Great returns and low fees are why we love Wealthfront.

For those that are more experienced or are extremely confident in making the jump, you have a bit more control of how you invest your money. If you’re going to become an investor, you’ll need to open an investment account. This can be done through that same robo-advisor for those that are just beginning.

For the more experienced investors, an online brokerage account may be your best option as it offers you the least expensive avenue to buying stocks while providing additional forms of investing.

Invest your spare change on auto-pilot with Acorns.

Now set your budget and start investing! It takes thoughtful risk, know-how, and/or a professional on your side to ensure you’re making all the right moves. Be diligent!

Become A Lender

Peer-to-peer lending allows you to lend money to borrowers and get paid in interest and principal. Lending Club is the perfect, all in one, marketplace that connects borrowers and lenders with the click of a button.

You have full control over who you lend to and how to delegate your money. Alternatively, you can choose to have your investments controlled by automation by answering a few simple questions.  We understand investing is a big commitment though, so if you’d like to learn more before taking the plunge, give our Lending Club review a read. Lending Club is a true pioneer in this space, so start with them.

While the percentage of your return can vary, you can utilize services that make it easy for you.

Invest In Real Estate

If investing in stocks is the gold standard, real estate investment is the platinum standard of passive income ideas. There are multiple avenues one can take to invest their money wisely into real estate, from being a landlord in a single-family rental property to running an entire apartment complex! As you can imagine, this can be extremely lucrative. But the reality is, investing in properties is not a cookie-cutter option.

Make 5-25% back on everyday purchases with Dosh.

Being a landlord has its perks, and while yes, you’ll have to deal with your renters when issues arise, it’s worth your return.

Multi-Family Homes

Although it may cost a pricier penny to invest in larger real estate properties, it will be easier to finance. Banks are more likely to approve a loan for larger properties because of the strong monthly cash flow it will generate. Predictable cash flow, tax deductions, and long term security are the top perks. Even with revolving tenants or predictable renters that are late on monthly payments, you don’t run the risk of foreclosure, as there’s no full vacancy at once.

Crowd Funded Real Estate

Crowdfunded real estate is a way to get a piece of the pie without throwing all your eggs in one basket. This works by pooling a certain amount of money from a handful of investors to finance one or few properties.

Fundrise is a simple, low-cost way to access real estate’s consistent returns.

Crowdfunding is proven to be successful thanks to the advancements in social media, and its convenience in attracting potential investors. This could be considered “low-risk” depending on the amount of money you are investing, in the fact that there is not one sole individual putting all of their money on the line. Both investors and real estate developers can come out victorious with their financial returns in the long run when they try this type of real estate investing.

Get Cash Back for Everyday Shopping

While you might not think of getting cash back as something that contributes to your passive income stream, taking advantage of credit card rewards and getting cash from apps like Ibotta is a perfect example of making money passively. There are a few different ways to make money from your everyday purchases, and it’s worth exploring these options in detail as you decide how you want to get some free cash from your favorite passive income source.

Cash Back Credit Cards

While mail-in rebates are a thing of the past, almost everybody has cash back credit cards these days. These types of credit cards don’t require a lot of work to set up, but they drop a surprising amount of extra money in your bank account every month for purchases you would have made whether you had opened your cash back credit card or not.

No matter which bank you have, chances are that your financial institution offers some type of cash back credit card. However, the cash back cards your existing bank offers might not be as impressive as some of the options offered by other companies, so you might want to consider broadening your horizons and opening a card from one of the highest-paying cash back cards on the block:

Citi Double Cash Card

With this card, you get 1% cash back when you make a purchase and a further 1% back when you pay your bill. What makes the Citi Double Cash Card number one in our book, however, is that this card doesn’t have an annual fee. It’s 100% free to open a Citi Double Cash Card, and the potential 2% rewards you can receive apply to all your purchases instead of just a few categories. You won’t pay a dime of interest on purchases you make with your Citi Double Cash Card as long as you pay off your balance within 18 months.

Capital One Savor Cash Rewards Credit Card

We’ll start with the bad news: this card has a $95 yearly fee that kicks in 12 months after you open your Capital One Savor Cash Rewards Credit Card. Even so, this card offers some of the best deals in the industry; you get a $500 bonus when you spend your first $3,000 on your Capital One Savor Cash Rewards Credit Card, and you get 4% back on dining and entertainment purchases, 2% back on groceries, and 1% back on everything else.

Chase Freedom Unlimited

This card is easy to understand and even easier to use as a source of passive income. You get 3% cash back on the first $20,000 you spend with your card, and then you get 1.5% cash back on every further purchase you make with your Chase Freedom Unlimited card for as long as you keep our account open. Best of all, this card doesn’t have an annual fee.

Chase Freedom

Opening a Chase Freedom card is the right option if you have an adventurous spirit. This card gives you 1% cash back on all your purchases, but it gives you a bonus 5% cash back on your first $1,500 of purchases within a certain rotating category. You’ll have to keep track of the current category if you want to use your Chase Freedom card to its fullest potential, but as long as you stay alert, you can make some serious bank with this high-yield cash back card. Categories change frequently, and examples of eligible categories include gas, dining, travel, and apparel.

Rebate Platforms

What could possibly be better than getting passive income from a cash back credit card? Using a cash back credit card and one of the following rebate platforms at the same time. The following four platforms often have highly specific requirements you’ll have to fulfill to access the deals they offer, but once you jump through a few hoops, you’ll be good to go with making some serious free money for shopping on some of the biggest e-commerce platforms on the internet:

Ibotta

You can use Ibotta to make money from purchases you would have already made online. Whenever you spend money online, you should check your Ibotta mobile app for Apple or Android devices to see if you can get some money back from your purchases. To access Ibotta deals, you might have to watch 30-second videos or complete four-question polls, but once you’re done, you’ll be able to get up to $20 back from eligible transactions.

Ebates

This platform turned 20 years old in 2018, which goes to show that Ebates has a business model that can endure the test of time. While you can’t make a decent living with Ebates, the rebates you receive for purchases you make with this service can be an excellent revenue stream to add to your passive income collection. To get started with Ebates, make an account, and install the Ebates extension in your favorite browser to start earning rebates.

Swagbucks

You can make money on Swagbucks in a variety of different ways. From doing surveys to watching videos, this platform pays you for lots of different kinds of actions and activities, but you can’t make much money with Swagbucks unless you take advantage of its cash back services. This platform gives you $5 just for signing up, and you can start earning rewards for your online purchases as soon as you make an account.

Evoshare

This rebate platform does things a little bit differently. Instead of sending cash to your PayPal account whenever you pay out, Evoshare sends the money you make from rebates directly to your retirement savings. If you want to start preparing for the future, you should definitely add Evoshare to your passive income toolkit.

Cash Back Services

Is making money with your credit card and getting cash back for online purchases not enough for you? Then you should link your card to one of the following cash back services to receive money back with no fees on purchases you make from an online store or in the real world:

Yelp Cash Back

While you can only get rewards from Yelp Cash Back for money you spend at restaurants, having this tool in your kit will be useful even if you only go out to eat once or twice a month. Whenever you go out to eat at your favorite restaurant, Yelp Cash Back will tell you if you’re eligible for rebates. While Yelp Cash Back provides some serious benefits, it offers less than similar platforms in terms of eligible purchases, and you can’t link your card to Yelp Cash Back and another similar service at the same time.

Dosh

This platform has only been around since 2017, but it’s already an all-time-favorite among many consumers for the excellent rebates it offers from real-world shops and online businesses alike. Once you’ve connected Dosh to one or more of your credit cards, you’ll be able to see the rebate options that are available from your favorite companies like Uber, Starbucks, Sephora, and Walmart.

Drop

While this platform is similar to Dosh in many ways, it offers payment in gift cards instead of cash. To get passive income with Drop, you’ll need to earn points for completing purchases and convert these points into gift cards.

Post-Purchase Cash Back Services

Do you have a habit of keeping your receipts? If you’ve ever run a small business, you know how important accounting is, and all that accounting know-how you accumulated as a business owner can now come to bear with one of the following post-purchase opportunities for generating passive cash-back income:

Receipt Hog

Before you get started with this platform, you should understand that Receipt Hog requires constant access to your location information, and it shares your receipts online for marketing purposes. If none of these potential issues bother you, however, you can use Receipt Hog to get money back for your everyday purchases. To use this platform, simply snap pics of your receipts whenever you go shopping and watch the rewards come rolling in.

Walmart Savings Catcher

Do you shop at Walmart a lot? If you already use Walmart Pay, using Walmart Savings Catcher will be a walk in the park. To use this app, all you need to do is upload your receipts every time you shop at your local Walmart. If Walmart Savings Catcher determines that any of the items you bought were offered for a better price by a nearby competing retailer at the time of purchase, you’ll receive the difference in cash back. While this app might not be that useful for everyday purchases, you can save some serious money when you use Walmart Savings Catcher for big electronics or automotive expenditures.

Paribus

Ever bought something online only to see the price drop shortly thereafter? Many retailers will refund you the difference between the price you paid and the newly-discounted cost, but reaching out to customer service for each item you buy can be a hassle. Thankfully, Paribus takes care of the hard work for you, and it delivers your refunded price difference without even selling your information to third parties.

Rent Or Advertise With Your Car

If you live in a big city, you probably don’t use your car as much as you should. While owning a vehicle costs more than $8,000 per year, your car gradually loses value, which can make car ownership seem like you’re throwing money down an endless hole.

With apps like Getaround, however, you can make back some of the money you spend on your car every year by renting it out when you aren’t driving around town. With this platform, you’ll gain access to parking spots you otherwise couldn’t dream of snagging, and you even get $1 million in insurance coverage.

All you need to do to get started with Getaround is make a free account and provide information on your car’s availability. People from around your city will use your car whenever you don’t need it, and you’ll get paid on the 15th of every month like clockwork.

Can I put my car to work without renting it?

We can understand that letting strangers rent your car might just seem too weird. However, you can still generate passive income with your car without renting it out by using Wrapify.

The sides, front, and back of your car are billboards waiting to be exploited by businesses around your city, and with Wrapify, you can offer your car’s advertising potential to the highest bidder. Apparently, you can make as much as $400 a month with Wrapify, but not every driver has the same earning potential with this service.

Drivers who get around town more get more money from Wrapify, and if you keep your car in the garage where no one can see it all month, this platform won’t pay you a dime. To get started with this service, you’ll need to provide Wrapify with location data whenever you drive until this app can determine how much money you’ll get for turning your vehicle into a billboard. Keep in mind that Wrapify has short-term options if you decide you want to stop selling your car’s advertising potential after a month or two.

Open a Money Market Account

Are the interest rates offered by traditional savings accounts not high enough for you? Then you should consider opening a Money Market Account (MMA). Banks pay higher interest rates on MMAs because they can use your money for low-risk investments, but these types of accounts don’t pose any more risk to your personal finances than normal savings accounts.

Even though MMAs are practically risk-free, these types of accounts often offer interest rates as high as 3%. This type of passive income opportunity can provide you with serious cash back over time, and keep in mind that your new high-yield savings account will be completely FDIC-insured to make sure you’ll get the most out of your income investment.

NOTE: It’s important to know the difference between money market accounts and money market funds (MMFs) before you proceed. While MMAs have practically no risk, MMFs are significantly risky, and they even contributed to the financial crisis of 2008. Avoid MMFs if you want to play it safe with your investments.

Share Your Home

Renting out a room is one of the oldest passive income tricks in the book, but there’s a reason why generations of consumers have regarded this approach to home ownership as a high-quality way to generate passive income on the side. Any space you aren’t using in your home is wasted, and unless you own your house outright, you’re paying for that part of your home whether you’re using it or not.

While you could always post your open room on Facebook or Craigslist, working with Airbnb might be the easiest way to rent your room for short periods of time. This platform makes it easy to put your room up for rent, and Airbnb hosts usually get paid handsomely for giving random guests the privilege of staying in their homes.

Airbnb

If you’re going out of town for a while, you could even rent your whole home on Airbnb for a lot more cash. Plus, keep in mind that areas in your house like finished basements and detached garages are great places to set up a permanent Airbnb haven without having strangers in your business at all hours of the night and day. Having opportunities to meet new people is one of the best parts of using Airbnb, but it’s also good to have some space to enjoy your home in peace.

NOTE: Some cities have recently cracked down on Airbnb operation and restricted where homeowners can take advantage of this service. Learn more about your city’s relevant regulations before you proceed.

Sell Pictures Online

If you’re an amateur photographer, you’ve probably envied those who make money by taking pictures. While you might think that only professional photographers can get paid for this type of work, the fact is that sites like Shutterstock pay amateur photographers like you every day for pictures just like those you’ve been taking for years.

Shutterstock has been around since 2003, and since then, it’s paid out over $500 million to its contributors. Making money with Shutterstock is easy; all you need to do is make an account and upload some pictures. Whenever someone buys usage rights to one of your photos, you get a royalty payment.

If your photos become popular, you could make hundreds or even thousands of sales per day. While the royalty payment you receive for a single photo isn’t anything to bat an eyelash at, once you sell a picture dozens of times, you’ll be forced to recognize the incredible passive income potential of posting your amateur photographs on Shutterstock.

Try Affiliate Marketing

Affiliate marketing is when you direct your blog readers to buy products. This passive income strategy is almost as old as the internet itself, but affiliate marketing is still going strong. To become an affiliate marketer, you’ll need to offer your services to a business. Many businesses offer 5-10% commissions for sales you generate from your blog, and if you’re marketing big-ticket items, you could get some serious cash from affiliate marketing.

However, becoming a successful affiliate marketer isn’t as easy as starting a blog and posting some links with the special purchase tracking code that the business you’re marketing for provided. To make any money with affiliate marketing, your blog will need some serious reach, which means you’ll have to gain authority in your field.

For instance, say you’re marketing a medical device that costs $500, and the company that makes the device offers its affiliates 5% of the sale price for every sale they generate. You stand to make $25 per sale, but your metrics indicate that only one out of every 1,000 readers clicks one of your affiliate links and completes a purchase.

If you want to make $100 a month from your affiliate deal, therefore, you’ll need to get at least 4,000 visitors to your site within that period. That’s no easy feat when you’re starting out as a blogger.

What about influencer marketing?

Influencer marketing has become incredibly popular in the last few years, but it isn’t exactly passive income. To become an influencer, you’ll need to get a huge following on Facebook or Instagram, and you’ll need to post to promote affiliated products multiple times per day. With an affiliate blog, on the other hand, you can simply write an article once and sit back to wait for sales.

Purchase a Successful Blog

If going through the process of building a successful affiliate blog from the ground up seems too difficult, we don’t blame you. It might be easier to simply purchase a successful blog outright and start reaping the benefits of your new platform’s existing reader base.

Buying a successful blog is expensive, however. After the purchase date, it might take you months or even years to make back the amount you spent in affiliate marketing dollars. If you’re in it for the long haul, however, and you don’t mind adding new content every now and then, getting behind the helm of a successful blog might be right for you.

If you’re considering going down this path, we suggest you check out Empire Flippers and Flippa. Both of these blogs operate on an auction basis. Blog prices go up to $2 million or more. But, opening bids start at $1, so you might get lucky and score a high-paying blog for a low price.

Set up a YouTube Channel

It’s true that operating a YouTube Channel doesn’t pay as much as it used to, but if you make it into the top 10% of YouTube content creators, the sky is the limit in terms of how much money you can make with this platform. As your career as a YouTube personality progresses, invest in some high-end equipment.

The concept of making money on YouTube is easy; simply shoot videos on your chosen topic, upload them, and make sure they’re eligible for monetization, which is YouTube’s fancy term for “eligible for advertising dollars.” Since YouTube is the world’s second-biggest search engine, however, you’ll need to make your videos stand out if you want to get paid for writing on this platform.

If your content is popular, YouTube will rush to place ads from high-profile advertisers on all your videos. If your content isn’t popular or it conflicts with YouTube’s political biases, however, it’s likely that you won’t see a cent for all the hours you spent in front of the camera talking about video games, fashion, or whichever subject gets you excited.

Before you get too excited about making money on YouTube, you should know that your channel will need at least 1,000 subscribers and 4,000 hours of watched video before you’ll be eligible for monetization. However, keep in mind that 7-year-old made $22 million on YouTube for reviewing toys in 2017, which means that making a killing on this platform doesn’t require tons of experience or business know-how; it just requires persistence and a significant amount of sheer luck.

Write an eBook or Online Course

A well-crafted book or course will keep selling without any effort on your part. Keep in mind, however, that writing a hit eBook that will sell thousands of copies isn’t easy; there’s a glut of information on the internet these days, so you’ll either need to be a genius or scam artist to make a significant chunk of cash from your eBook.

If you find the right niche, however, you could make tons of money from a well-placed eBook. Close to 20 years ago, somebody had the idea to post information on all the dangerous passes that RV’ers and truck drivers have to face every year, and Mountain Directory was born. At $17, this eBook is a steal for big rig drivers, and the author of Mountain Directory makes a killing every year.

Sell Your Online Course

While it’s getting harder to make money with eBooks every year, online courses are only getting more popular. YouTube offers content on pretty much every topic under the sun, but if you’re trying to tackle a difficult subject, free YouTube videos often leave you wanting more.

From social media marketing to web design to calculus, people from all over the world use platforms like Teachable to provide authoritative and entertaining courses on practically every subject under the sun. You’ll need to stand out in a field of fierce competitors to get a significant amount of passive income with Teachable, but the more courses you make, the greater the chances are that you’ll generate a serious income stream within a few months.

Keep in mind that eBooks aren’t the only options at your disposal if you want to generate passive income from writing. Despite the early-2000s scare that the Kindle would make print books obsolete, paperbacks and hardcovers are still selling strong. To make money writing physical books, however, you’ll need to either be extremely lucky or extremely talented.

What’s your favorite passive income idea on this list? Sign up and let us know how it goes in the comments.

Brian Roberts

Brian Roberts

Editor at CarefulCents
Featured in The Washington Post and published in Entrepreneur, Forbes, Business Insider, Time, Inc., CNBC and others.