We all need more than one income source, but there are only so many hours in a day to work. Here are 31 passive income ideas to make money while you sleep.
What is Passive Income?
There is a lot of chatter in the personal finance world about passive income, why you need it and how great it is. But what is it and why is it such a topic of conversation?
Passive income is money that you earn without doing much to make it. Some passive income ideas take a degree of upfront work to earn, like writing an e-book and some don’t take any effort at all.
Active income is money earned when you perform a service. This is money you make from a job and includes salary, tips, commission and any other extra cash you make from a side hustle.
Residual income is when you continue to get paid after the work is done. This includes royalties from books, movies, or songs and also revenue that comes from real estate investments or business investments where you don’t have to be present to earn it.
Why You Need It?
It’s never a good idea to put all of your eggs in one basket whether it comes to income streams, your portfolio, or applying for jobs. Almost no one has 100% job security and with automation set to take over more and more industries, finding and keeping a job is more uncertain than ever.
Having passive income streams may not replace your entire salary if you were to lose your job but having something coming in is better than having nothing coming in. It can keep you from depleting your emergency fund and can help keep you from sliding into debt.
Pursuing some of your passive income ideas can also speed your path to financial freedom.
How Much Can You Earn?
If you read a few stories about passive income ideas, you might be under the impression that you can start a blog or write an e-book and two weeks later you will be raking in N1,000.000.00 a week. Sorry, it doesn’t usually work that way.
While some people make a great living from one form of passive income, it’s more common that you will have small amounts from a few different sources coming in.
Choose a few things that sound interesting to you and try them out. Try to choose a few that do require some work as an e-commerce site and some that don’t like buying dividend yielding stocks.
Something will emerge that either you enjoy the most or is making the most money. Focus on that thing. Put some time and effort into it. We all hear stories about blogs making millions of naira a month but what we don’t know is how much time and effort went into that blog before it was able to break even, never mind make money.
How to Use This List
Each suggestion is ranked by how much effort you need to put in up front before you might start seeing some money come in. 1 is the least effort, and 5 is the most.
Remember, usually just one of these is not going to be the million naira answer. You should try out some of the low effort passive income ideas and one or two of the higher effort ones and see which work best for you.
Investing is the ultimate and most accessible form of passive income. You can undoubtedly devote lots of time to researching companies and markets, but you don’t have to do that to invest.
When you own stock in a company directly or through a fund you may receive dividends. A dividend is a distribution of a portion of a company’s profits. They are decided by the board of directors and can be issued as cash payments, like shares of stock or other property. It’s an opportunity for a company to reward shareholder loyalty.
The amount you receive depends on how much stock you own and how much profit there was to divide. Investors, mainly retired investors, like the steady income that dividend stocks provide and also like the option of reinvesting dividends to buy more shares of stock.
Peer to Peer Lending
Banks don’t lend money out of the kindness of their hearts. They do it because it’s profitable. You can get in on some of that action through peer to peer lending. Peer to peer lending matches those who need to borrow money with those who have money to lend.
The benefit for the borrowers is that they often don’t qualify for traditional loans from banks or credit unions. For the lenders, the interest they get on the loans can be higher than that of more conventional investments, sometimes averaging above 15%. Get a legal practitioner involved while entering into agreement in this transaction.
Real estate has a significant place in the world of passive income but a lot of people just think of it regarding rental property, and that is out of reach for many. But rental property is only one passive income idea in the real estate arena. You can also build and sell at 100% profit depending on the location and the structure.
Online Businesses that are Scalable
The level of difficulty depends on what you’re selling. If you are making things yourself, it’s harder than re-selling already existing items. Either way, E-commerce sites have made it easier than ever to make money selling items online.
Selling stuff is a great way to make extra money whether you sell things you make or re-sell stuff you buy. If you want to build an online store, Shopify makes it easy. They have ready-made templates, so you don’t have to spend time designing your store.
They also have a lot of tools to help you do things like create coupons and promotions, process payments, handle returns, and share your store on sites like eBay, Google Shopping, Facebook, and several price comparison sites like Nextag, Bizrate, and PriceGrabber.
Start a Blog
We wrote this article to make money, and the way to do that is by providing value to you readers which drives traffic to your site and then monetizing it with affiliate links. Remember, the more niche your website and topics are, the better.
If we go back to our discus aquarium example, you can provide value by writing updated information. Part of providing value is building trust. Don’t link to things that aren’t of good quality or people won’t trust your recommendations. The other part of making an audience is consistency. It matters less how often you post than how consistently. If you only have time to do one post a month, that post should come out on the same date and time each month.
An excellent way to stay consistent is to write several posts before you release the blog. That means if life gets in the way and you don’t have time, you have a backlog of material you can consistently publish.
Google Adsense pays to post ads on your blog. There are two ways to make money with Adsense; impressions which give you money for every 1,000 page views and clicks which provide you with money when a visitor to your site clicks on a displayed ad.
You can sell information to your readers. If you write a travel site, for example, you could write a series of city guides and charge people to download them.
You can design courses and charge for access to those. In fact, plenty of bloggers sell classes on how to make money blogging.
This is another place to find a niche, and you’ll do better writing some non-fiction like a how-to or a book on some aspect of fitness or wellness. This is not the format to try to make a splash with your “great American novel.”
Ebooks don’t have to be terribly long either, so you don’t have to write an opus to make some money. There are several places you can publish including Amazon’s Kindle Direct Publishing. Booktango, and Lulu. The essential services on most of the publishing sites are free, and you can pay for premium services like marketing and editing.
Doing an audiobook is more complicated than an e-book but you’ve already done the work of the e-book so why not get it out there in another format. You don’t have to have all of the specialized equipment to do it yourself; outsource it to someone else on a site like Up work or Guru.
Write a Guide or Online Course
The best vacation guide I had for any trip was not a book but a free site a friend recommended to me; Tom’s Guide to Paris. Tom wasn’t a travel writer he is just an American ex-pat living in Paris and knew the city well. I would happily have paid for the guide he wrote for free.
If you know anything well, a place, how to fix something, how to make something, how to do something, you can write a guide for it. You can sell your guide as an e-book, offer it as a download for a fee on your site or reach out to bloggers with similar content and ask if they will offer it as a paid download on their website (for a price of course).
Give out your car to Uber
That car sitting down in your garage why can’t you give it to UBER while you make between N100,000.00 to N140,000.00 extra income on a monthly basis.
Buy a Blog
You can also buy an existing blog that is already making money. People sell successful blogs for all sorts of reasons; they’re tired of doing it, they no longer have time to do it, it’s not making enough money, or your offer was too good to refuse.
It takes some research to find a blog worth buying though, kind of like choosing the right rental property. There are some minimum criteria that should be met before you delve further. The blog should be at least 12 months old and get at least 10,000 visits a month with at least half those coming from search engines (meaning the site’s SEO is pretty good), and it should be under-monetized meaning the current owner isn’t fully exploiting the potential.
You can then choose to take over the blog yourself or make an offer to keep the founder on as a writer and perhaps the face of the blog too while you collect the income generated.
Buy and Sell Domain Names
Internet domain names can be valuable! That’s why famous people rush to trademark their children’s names because if someone is going to pimp out a baby, it’s gonna be Beyonce and Jay Z and not some internet nerd.
There is some luck involved in choosing a good domain name to buy, but there are also ways to research what might be a good one. You want to look for hot keywords and buy a name that in the future, a business would want to buy. You can purchase domain names at Flippa.
Brick and Mortar Businesses
The right brick and mortar business can be a good investment, but there are much more overhead and more moving parts. Therefore much more research has to be done than you needed to invest in an online business.
Invest in an Existing Business
Starting or buying a business indeed isn’t passive, but you can invest in the business as a silent partner. For some of us, this is harder than it sounds. When you agree to become a silent partner, you have to stay silent which can be hard when it’s your money on the line, and you think things should be done differently.
Rent it Out
You can make money renting out lots of things.
Rent your house or room
A lot of places are cracking down on renting out an entire house or apartment, but there aren’t restrictions on renting out a room in your home. You can do this on sites like Airbnb if you don’t want a full-time roommate. If you live in a desirable place, a big city, a charming hamlet, the chances are that someone would like to stay in your home for a few days. And they’ll pay you! Airbnb connects those with space to rent to those looking for a place to stay. I know of a family that made the sum of N2,000,000.00 from this within six weeks from rentage of 6 rooms in Asokoro.
Start a Pyramid scheme
Decide on a product to sell. There are lots of fat people who want to be thin but who don’t want to eat less and move more, so some kind of magical weight loss product like a shake or a body wrap are two good ideas.
Make all kinds of captivating claims about your product, with regulatory agencies gutted, who’s going to stop you? This shake will help you lose ten pounds overnight! This wrap will eliminate cholesterol and excess body fat in just two weeks!
It helps if you are good looking, fit, and charismatic. Even very dumb people will sometimes have a moment of credulity, so you need to be able to overcome that with your charm. Now you have to recruit people for your scheme.
Where do you find them? Anywhere and everywhere. You can’t swing a cat without hitting a moron so you won’t have any problems here. Set a minimum purchasing requirement for your product. If people want to get in on this once in a lifetime opportunity, they must pay up X Naira . Let them know that while this product is guaranteed to sell itself, the real way to make money is to recruit others. Not only will they make more money, but they’ll get to be someone’s boss!
They go out and rope their family and friends into this, and you sit back and watch the money roll in.
Not all of us are going to get rich from our jobs. Soon some of us may not have jobs given that so many are set to be eliminated through automation. If we want to achieve a level of financial independence, we are going to have to start earning passive income.
This list should give you a few passive income ideas. Pick one and get started. But put some effort into it. If you want even more send a mail to firstname.lastname@example.org