How To Earn Passive Income Online - 21 Options

Making money while you sleep. Best Ways To Earn Passive Income Online. Learn more on making money. After reading books like “Rich Dad Poor Dad” and “4 Hour Work Week,” I became obsessed with making passive income.

Whenever someone needs additional income. The stereotypical suggestion offered is to “get a part-time job.”

21 Best Ways To Earn Passive Income Online

1. Try out index funds: Best Ways To Earn Passive Income Online

Index funds provide you with a way to invest in the stock market that is completely passive.

For example, if you invest money in an index fund that is based on the S&P 500 Index. You will be invested in the general market. Without having to concern yourself with choosing investments, re-balancing your portfolio, or knowing when to sell or buy individual companies.

All that will be handled by the fund which will base the fund portfolio on the makeup of the underlying index.

2. Make YouTube videos: Best Ways To Earn Passive Income Online

This is a venture that is growing rapidly. You can create videos in just about any area that you like — music, tutorials, opinions, comedy, movie reviews — anything you want . . . then put them on YouTube.

You can then attach Google AdSense to the videos, which will overlay your videos with automatic ads. When viewers click on those ads, you will earn money from AdSense.

The keys will be to create compelling videos, to promote those videos on social media websites. And to create enough of them that your income will be coming from multiple sources.

3. Try Affiliate Marketing And Make Sales: Best Ways To Earn Passive Income Online

This is a passive income technique that is better suited to people who have blogs and active websites. You can sign up to promote certain products or services on your site, for which you will be paid either a flat fee or a percentage of the amount of the sale completed.

This isn’t as hard to do as you might think, since there are thousands of companies in the world who want to sell their products in as many places as they can.

You can find affiliate offers either by contacting vendors directly, or on dedicated websites, such as ClickBank. It’s always best if the product or service is one that you are either very interested in or is highly relevant to your website.

4. Put your photography to work on the web.

Do you like photography? If you do, you may be able to convert it into a passive income source. Photography websites such as Shutterstock and iStockphoto can provide you with platforms to sell your photos.

They may offer either a percentage or a flat fee of each photo that is sold to a site client.

In this way, a single photo could represent a cash flow source since it can be sold again and again. You simply need to create your photo portfolio, put it on one or more photo platforms, and then the activity becomes completely passive.

All the technicalities of the photo sales are handled through the web platform.

And yes, that’s me in a stock photo you can purchase from iStockPhoto.com. My good is a photographer and has uploaded a few hundred photos to their platform and makes a good residual income from it.

5. Purchase high dividend stocks.

By building a portfolio of high dividend stocks, you can create regular passive income at an annual rate that is much higher than what you get on bank investments.

Just as important, since high dividend stocks are stocks, there is always the potential for capital appreciation.

In that way, you can earn passive income from two sources — dividends and capital gains.

You will need a brokerage account to purchase these stocks and complete the research needed.

6. Write An eBook: Best Ways To Earn Passive Income Online

This can be a lot of work upfront, but once the ebook is created and marketed it can provide you with a passive revenue stream for years.

You can either sell the ebook on your own website or offer it as an affiliate arrangement with other websites that provide content related to your ebook.

7. Get cash-back rewards on credit cards.

There are credit cards that provide cash-back rewards ranging anywhere from 1% to 5% of the amount purchased. You’re going to be out shopping and buying anyway, right?

Rewards will give you an opportunity to earn some passive “income” (in the form of reduced outgo) from doing what you would do anyway.

We recently started being mindful of collecting reward points on our cards especially since we like to travel.

In the past year we’ve been able to use our reward points to pay for 9 round trip flights and few nights in a hotel. Now that’s what I’m talking about!

8. Sell your own products on the internet.

The possibilities here are endless — you can sell just about any product or service that you like. It could be a product you have created and can manufacture on your own or it could be digital in nature (such as software, DVDs, or even instructional videos).

You can set up a dedicated website for this product or service, unless of course you have a website or blog already in place.

Alternatively, you can also sell it on an affiliate basis, either by offering it direct to websites and blogs related to your product or service, or through a platform such as ClickBank.

If you make a lot of money in your current job and you’re not sure that you can make a similar amount by selling products online, think again.

A while back, Steve Chou from MyWifeQuitHerJob.com was interviewed and he explained how his wife quit her job to become a stay-at-home mom.

Now, being a stay-at-home mom is a full-time job — but Steve Chou’s wife also started an online business that replaced her former salary and started bringing in a six-figure income! Wow, right?

You can learn to sell products online too and make quite a bit of money. While it’s not entirely passive, it’s certainly more passive than getting up and heading out the door to work every morning!

9. Invest In Real Estate: Best Ways To Earn Passive Income Online

This probably falls more in the category of semi-passive income, since an investment in real estate is always at least a little bit of an active venture.

Still, once you have a property that is established and fully rented, it’s mostly a matter of managing the property and keeping it performing well.

Additionally, there are professional property managers who can manage your property for you, usually for around 10% of the monthly rent.

This professional management can make the investment much more passive, but will take a bite out of your cash flow.

According to Brandon Turner, an active real estate investor and co-host on the popular BiggerPockets Podcast,

The key to success with rental properties is buying smart. Not every property is going to provide a good return or prove to be passive.

Understanding how to analyze potential real estate opportunities is incredibly important. As the old adage goes — you make your money when you buy!

Another benefit of investing in rental properties is the loan pay down. If you obtain a loan to buy the property, each month your tenants are paying off part of the loan.

Once the mortgage on the property has been paid off, your cash flow will increase dramatically, allowing your mediocre investment to skyrocket into a full-fledged retirement program.

It wouldn’t take many paid-off properties to provide a pretty great, and mostly-passive, future for you and your family.

10. Buy A Blog: Best Ways To Earn Passive Income Online

Thousands of blogs are created every year, and thousands are either completely abandoned by their owners sometime afterward.

If you can buy blogs with a reasonable amount of web traffic — as well as a demonstrated cash flow — it could be a perfect passive income source.

Most blogs employ Google AdSense, which provides a monthly revenue stream based on ads that Google places on the site.

There may also be affiliate programs generating additional revenue. Both income sources will be yours once you purchase the blog.

From a financial perspective, blogs usually sell for 24 times their monthly income. So if the site generates $250 a month in income, you can likely buy it for no more than $3,000.

Translation: a $3,000 investment will buy you $1,500 per year in cash flow.

You may even be able to purchase the site for less than 24 months’ earnings, if the site owner is particularly anxious to get out.

Some sites have good “evergreen” content that will continue generating revenue even years after the site has gone silent.

Bonus tip: If you were to buy such a site, and then to reinvigorate it with fresh content, you may be able raise the monthly revenue enabling yourself to sell the site at a later date for substantially more than what you paid for it.

Finally, instead of buying a blog, you might want to create your own blog. You can make some money either way!

11. Pay off a credit card (or two or three).

Reducing a fixed expense is the financial equivalent of creating passive income. This is certainly true when it comes to credit cards.

Let’s say that you owe $10,000 on a credit card, on which there is a monthly payment equal to 2% of the balance, or $200 per month.

By paying the card off, you’ll be free up $2,400 per year in cash flow that would’ve gone to the monthly payments.

That’s like getting a guaranteed 24% return on a $10,000 investment. Good deal?

12. Write a book and collect royalties.

Much like writing an ebook, there’s a lot of work upfront. But once that’s done, and the book goes into the sales stage, it becomes a completely passive venture.

This is especially true if you can sell the book to a publisher who will pay you royalties for the distribution and sale of the book.

You’ll get a percentage of each sale made, and if the book is fairly popular, the royalties could be substantial. Just as important, the royalties can continue flowing for many years.

Mike Piper from OblivousInvestor.com did just that. He wrote a book, Investing Made Simple, which was sold strictly on Amazon.

He had decent success with the first book that he created an entire series of book. Those books now net him over 6 figures per year. Not too shabby.

13. Set up a website selling a product.

If there is a product that you are particularly knowledgeable about, you may be able to sell it on a dedicated website.

The technique is similar to what you would use for your own product. Except that you will not to be concerning yourself with product creation, but only with the sale of someone else’s product.

You may even find after a while that you are able to add other products that are related. Should that happen, the site could generate substantial revenues.

If you are able to have the product drop shipped to customers directly from the manufacturer, you won’t even have to get your hands dirty. That may not be 100% passive, but it’s darn close.

14. Invest in real estate investment trusts (REITs).

In #10 we talked about investing in real estate. But let’s say that you want to invest in real estate, but do it in a truly passive way.

You can do that through a real estate investment trust. This is something like a mutual fund holding various real estate projects. The fund is managed by professionals, so you never have to get involved.

One of the big benefits of investing in REITs is that they typically pay higher dividends than stocks, bonds, or bank investments.

You can also sell your interest in a REIT anytime you like, which makes it more liquid than owning real estate outright.

15. Become a Business Silent Partner.

Do you know of a successful business that needs capital for expansion? If so, you can become something of a small-time angel investor and provide that needed capital.

But rather than offering a loan to a business owner, you instead take an equity position in the business.

In this way, the business owner will handle the day-to-day operations. While you will act as a silent partner who also participates in the profits of the business.

16. Become a Referral Source.

Every small business needs referral sources in order to maintain sales. Make a list of small business providers that you use on a regular basis and feel you can recommend to others without reservation.

Then contact the owners and see if they have any kind of cash referral offers available.

You can do this with accountants, landscapers, electricians, plumbers, carpet cleaning services — the list is endless.

Keep a list of these businesses, and be ready to refer them to your friends, family and coworkers. You can earn a fee on each referral just from talking to people.

Don’t overlook referral programs at work either. If your company offers a referral bonus for either new employees or for new customers. Then take advantage of that plan. It’s easy money with virtually no work.

17. Rent out unused space with Airbnb.

Airbnb is a concept that has only been around for a few years, but it has exploded around the globe.

Airbnb allows people to travel all around the world and to stay in accommodations that are a lot less expensive than traditional hotels.

They do this by staying with participating Airbnb members who rent out part of their homes to travelers.

By participating in Airbnb, you can use your residence to accommodate guests and earn extra money just for renting out space in your home.

Paula Pant, cubicle renegade AffordAnything.com took a stab at making extra money renting out locations exclusively through Airnbnb.

Her Airbnb experiment netted her an extra $19,000 in revenue and 1 police visit!

How much you will make will depend upon the size and condition of your home and your location. Naturally, if your home is located in a high cost city. Or close to a popular resort, your income will be much higher.

It’s a way of earning money on space in your home that might just be sitting empty otherwise.

18. Build an app: Best Ways To Earn Passive Income Online

Apps can be an incredibly lucrative income source. Think about how many people today have smartphones. Come on, it’s just about everybody! People are downloading apps like crazy — and for good reason . . .

Apps make people’s lives easier. Whether it’s an app that helps people put together nice pictures for their blog or an app that keeps track of tasks, there are helpful apps out there for everyone.

You might be asking if there are so many apps out there, why would you want to attempt to create an app? Isn’t there a lot of competition?

Well, yes, but fresh, creative ideas can win. If you can come up with something unique, you can make quite a bit of money. Simple — yet unique — apps can be pretty passive.

Don’t know how to code? No problem. First, you can learn. Check out Nathan Barry’s success in his inspiring article, “How I Made $19,000 on the App Store While Learning to Code.”

Nathan also put his design expertise to work in an ebook teaching others how they can design their own apps.

Second, you can hire a developer to build your app based on your idea. This could end up being an expensive option, although it will probably yield a professional-looking app.

The end result is an app that has the potential to make you some relatively passive income. Don’t downplay the idea to build an app — it’s a good one!

Turn your passion into an online course. Flickr / Tech Hub.

19. Create An Online Course.

Everyone is an expert at something. Why not create an online course about your passion?

My buddy Ramit Sethi at IWillTeachYoutobeRich.com is an expert at creating online courses. He has made an insane amount of money selling his lessons.

Most people would be happy making a fraction of what he makes online.

There are a number of ways you can produce and host your own online course. One very simple way is to use a website like Udemy.com.

Udemy as over eight million students and is a great way to get your content in front of others for their consideration.

Once you create an online course, it can work for you while you sleep!

What do you put in your online course? Good question. You can add video lessons, checklists for completing steps you recommend in your video lessons, small ebooks to supplement the lessons. Audio files for people listening while traveling, informative interviews with like-minded experts, and a whole bunch more!

In fact, you can create several packages at different price points. Some people will want everything. So you can include ‘the works’ for the highest price point and then have two lower price points so that you can receive the largest possible volume of orders.

20. Make An Online Guide.

If writing articles or creating videos isn’t your thing. And you want to make money online, try creating an online guide.

A good example of this comes from Pat Flynn’s website, SecurityGuardTrainingHQ.com. On the website, he has a map of the United States that allows someone to click on any state to see the security guard requirements for that state.

By providing specific information in a guide-like format. You can make money through some of the means already addressed. Advertisements through Google AdSense, affiliate links, and even memberships you can sell from your online guide. It’s a fantastic idea!

21. Outsource most if not all of your business needs.

If you’re spending too much of your time on an existing business running it yourself. Why not outsource most if not all of your tasks?

Yes, it will require you to give up some control. But in many businesses it’s the only way to free up your time so you can focus on other tasks that will result in more income.

If you don’t want to hire employees, consider hiring freelancers who work as contract laborers. Look for freelancers with a strong work ethic who provide quality results.

Here’s a list of tasks that you might want to outsource:

Bookkeeping
Writing
Web design
Editing
Task management
Social media marketing
and so much more!

Yes, many people can turn their existing businesses into passive income businesses. As long as the main product or service isn’t something only you can do. You can transform your business into a passive moneymaker.

21. Make money for tasks you’d do anyway.

Yes, you can make some money doing some of the things you’re already doing. Best Ways To Earn Passive Income Online

For example, InboxDollars allows you to make money by playing games, shopping online, searching the web, and more! Swagbucks also allows making money doing similar activities.

It’s amazing. Take advantage of these websites and make some extra money!

I’ve purposely provided a long list of passive income ideas in the hope that there is something on this list for everyone.