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Written by Ryan Scribner on July 13, 2020
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18 Best Passive Income Ideas For 2021

Wouldn’t it be nice to make money while you sleep? This isn’t just a dream…. Residual income will earn you money even when you're not on the clock. In other words, residual income will continue to earn you revenues long after the work is done. So, go ahead and snooze!

Active income comes as a direct result of our efforts. This is when we work for one hour and get paid a certain amount for that 60 minutes of work, typically an hourly wage or annual salary.

Earning a high active income is often a lot of hard work and most people aren’t that motivated. It also has limited potential, because no matter how much money you get paid, you still need to show up to work to earn the big bucks.

Earning Passive Income

Also known as passive income, some examples of residual are royalties from books, movies, or songs and also income that comes from real estate or business investments where you don’t actually have to be present to earn it.

A house earns money to the landlord being paid rent; a business is an asset to the business owner who does not need to be involved in the day-to-day activities anymore.

Many people dream about passive income in hopes that they will never have to do anything to keep that income going. The truth is, you will regularly have to keep your eye on things if you want it to run smoothly.

In order to get started bringing in residual income, you need to come up with something that people will continue to buy on a regular basis long after you’ve created it. A house is a great example of this, as people will continue to pay rent in order to live in the house.

It won’t happen overnight…you will want to find a path that transitions from active to residual income steadily over time. It’s highly improbable to start a new business today and create residual income tomorrow, so you must have equal amounts of patience and perseverance.

As you make more residual income, the idea is to scale back the number of hours you put into active income. This will hopefully mean your residual income will grow even faster once you put forth more time and effort.

Be aware that motivation is a huge part of the equation, especially at the start. Give it your all!

1. Real Estate

So, you’ve always wanted to invest in real estate, but haven’t been able to pull together the funds for a decent two family home? There’s a new way to add real estate to your investment portfolio that pools money towards a specific project, allowing you to decide how much to put towards it. This is called crowdfunded real estate investing.

What are the risks of fundrise

Fundrise is one of the most popular platforms out there that allows you to pool your money with other people and invest in real estate all over the US. This is portfolio based investing, which means you simply pick a portfolio that fits your investment goals and then invest money. They have growth, income and blended portfolios.

The starter portfolio has a minimum investment of just $10!

Realty Mogul is another platform that is ballooning in popularity. They are very similar to Fundrise in that investors from all over are pooling money together to purchase real estate or finance loans. One advantage to Fundrise is that they have a lower minimum balance of just $10.

These platforms pay quarterly or monthly dividends in some cases, and you can reinvest those dividends in order to earn compound interest!

AcreTrader gives investors the option to buy into farmland as a real estate investment. You know, that stuff we grow all of our food on? This is a rather unconventional real estate investment, but for those looking to diversify it could be a very interesting option! Essentially, a piece of farmland is divided up into shares. Then, those shares are sold to individual investors!

Best Real Estate Platforms

2. Stock Market

stock investment

It may seem dicey or risky, but if you put in the time to learn about the ins-and-outs of investing in the stock market, you can take small steps to start based on a long-term plan. The stock market has been generating wealth for people for hundreds of years.

You can follow passive investing strategies like index fund investing which allows you to make money without actively picking stocks or investments. This means you could be making money around the clock!

There are tons of sites for tutorials aimed at newcomers to the stock market, teaching you the lingo, how to assess your risk tolerance and even giving stock tips. On top of that, there are numerous free investing apps out there that make the process of investing so easy.

Here are a few of our favorites:

Webull is ready to help you get started on your stock market investing journey. If you open an account with them and fund it with $100, you will get a free stock! It is a lottery system, so it could be a low or high-value stock.

Regardless, you can't beat free. This platform is great for active traders.

M1 Finance offers a different portfolio based approach to investing. You simply build your own portfolio or "pie" from scratch. Or, if you want to lean on the advice of experts, they have dozens of expert built portfolios you can invest in as well.

This brokerage is 100% commission and fee free.

Betterment is a robo advisor that takes all of the guess work of investing out of the equation. You simply answer a few questions about what you are investing for (like retirement), how old you are and they will build you a custom portfolio tailored to your specific goals! They will also maintain that portfolio for you year in and year out.

The only difference is Betterment does charge an asset management fee of just 0.25% a year for managing your money.

Best Free Stock Promotions

Robinhood Logo1 Free Stock (Up To $225)Download
Webull Logo2 Free Stocks (Up To $1,850)Download
Firstrade trading platform2 Free Stocks (Up To $400)Download
M1 Finance Robo AdvisorGet $30 When You Deposit $1,000Download
Acorns LogoFree $10 BonusDownload
SoFi Robo Advisor1 Free Stock Up To $1,000Download

3. Get Paid To Shop

rakuten logo

Do you like to shop? If so, this will likely seem like a dream come true.

Rakuten (formerly Ebates) is a platform that will pay you for doing the online shopping you were already doing. This app partners with online retailers who provide cash back every time you shop on their websites.

Examples of websites listed on Rakuten are:

  • Walmart
  • Nike
  • Target
  • Old Navy
  • Petsmart
  • Sam's Club
  • lululemon
  • Lowe's
  • And dozens more!

Once you sign up for an account, you'll see a portal listing all of their partner sites. By clicking on these, you'll be taken through to their website and any purchases you make will count towards your cash back.

That's all there is to it! Just shop online and get paid.

Rakuten will send you a check or PayPal deposit every 3 months with all of the cash back you have built up so you don't have to do anything.

If you use our referral link below, you will get $40 for free to get started! All you have to do is spend $40 through one of their partner sites.

4. Cryptocurrency Investing

Let's face it... there are varying opinions out there about Bitcoin and other cryptocurrencies.

A lot of people made some serious dough with this currency back in 2017 when the price soared to just under $20,000. Will Bitcoin have another rally? Nobody knows for sure!

Buying crypto is a speculation, meaning you should only invest what you are willing to lose. However, it is an exciting new investment that has made some people a substantial amount of money!

Coinbase is the most popular platform for trading popular cryptos like Bitcoin, Ethereum, Litecoin and more! The best part is, you can get $5 of free Bitcoin when you buy $100 worth. That means you get an immediate return on your investment!

5. Selling A Course Online

Ready to demonstrate how to write the perfect resume? Knit a sweater? Read tarot cards? Buy a car? Balance a checkbook?

If you’re an expert (or willing to do the footwork and become an expert) on any topic, you can create an online course to teach others your skills.

Setting up the curriculum requires a time commitment, as does marketing your course, but once it’s up and running, you’ll earn passive income based on the number of students.

Ryan Scribner offers a free course all about building a successful online course or membership site. You can enroll here!

This is one of the best ways to make passive income. Once the course is completed, you just collect the payments! Hosting sites like Teachable will handle the rest.

6. Buy A Business On Flippa

Buy and sell businesses online with Flippa

Building a business from scratch is a lot of work. Not to mention, it often takes many months if not years before you begin making any money from it.

Flippa has created a unique solution to this problem by offering a marketplace where individuals can buy and sell online businesses. Rather than starting from the ground up, you can invest in a business that already exists to earn passive income from it.

This site offers a lot of different businesses such as sites, apps, domains and even eCommerce sites. Some of these businesses are well established, earning thousands of dollars per month. Others are still in the growth stage. You can find a wide range of businesses for sale anywhere from $100 to $100,000 or more.

At any given point in time, there are thousands of businesses listed for sale with hundreds of thousands of potential buyers checking out the listings. You could also purchase a business, build up additional revenue streams, and sell it for a profit!

Check out the current listings on Flippa here.

7. Dropshipping

One of the most popular ways to make money online these days is by dropshipping. Essentially, you are selling products that you are never putting your hands on. You build out a website, run ads to get traffic to the site and then fulfill the order.

For example, many people are creating a Shopify store where they can sell products from AliExpress. Keep in mind that it will take weeks if not months for products to ship from China, so you want to be transparent about this on your site!

A better way to dropship is to ship the products to the United States first and pay for fulfillment services. This will significantly reduce the shipping time.

8. Creating YouTube Videos

One of the coolest ways to make passive income is to start a YouTube channel. Once your channel becomes established, you can run ads on your videos and collect a check every single month!

You will need to continue to post new content in order to keep the views coming in, but if you enjoy doing this it can be a great way to earn passive income. Take Financial Education for example. He uploads a daily stock market commentary video and typically gets 50,000+ views per video.

In his videos, Jeremy has shared that he is making over $16,000 a month with his YouTube channel! There are countless YouTube channels out there pulling in over $100,000 a month just in ad revenue.

9. Affiliate Marketing

The idea here is you market someone else’s product for them and earn a commission on each sale you’re able to provide for the original seller. This works best when you have a large audience of some sort on social media. This could be a blog, a YouTube channel or even an Instagram account.

One of the best ways to do this is with Amazon Affiliate Links. In this video, Ryan Scribner will teach you how to make passive income with these links.

Link a product to your blog, YouTube, Instagram, Facebook, etc.

Every time someone clicks on the product and buys it, you get paid a royalty.

There are countless affiliate opportunities out there. The key here is to become the authority in your niche and then reach out to the biggest companies serving these customers. Many of these companies will pay you for referrals!

10. Scalable Business

Last on our list, another great way to earn passive income is by creating a scalable business. An example of this could be a barbershop or a landscaping business. At first, you will be doing most of the leg work yourself. As your business grows, you will hire people to do the work for you. Eventually, you will have a team of barbers or landscapers working under you.

For every lawn they cut or haircut they do, you will be earning money. Basically, you are making money from someone else's effort while providing much needed employment. A win-win!

11. Make Money With Your Spare Room

Have a spare bedroom you’ve just been using to store junk? Let that room earn you money! How does a roommate sound? Rent out that extra room and earn residual income.

Look for a quality tenant who you’d be okay living with (a friend or family member would be ideal) and list your spare bedroom.

Live in an area popular for tourists? Consider vacating your house for a week or more and list it for rent during peak season. You could earn enough for your own vacation.

The most popular site for short term rentals is of course, Airbnb.

You can sign up fast and start listing your rooms or even the whole house today. Some brilliant people have even listed their backyard for people to camp or hold parties in. Be creative.

12. Start A Blog

Although they’ve been around a while, and may not seem cutting edge, blogs are still hot. Launching a blog means you have to do the research, find a niche, fact check everything you write, and motivate yourself to sit down at the laptop and do the work until you’ve given it your best. Do that every single day at least once, more if you really want to reap rewards.

To create a successful blog that’s a money-maker, you will absolutely need to invest time and a lot of hard work. But once you scale things up, blogging can provide a good amount of residual income.

So, how do blogs make money?

Blog generate revenue in two ways. First, through advertising. We’ve all seen those pop up adds and banners that we watch out of necessity to get to the good stuff. You may click through most of them, but many people are interested in the ads and may actually make purchases based on those ads. So, advertising revenues are generated through direct ads placed on the website.

The second way blogs can make money is through affiliate marketing. This is another form of advertising that gets paid to you when a member of your audience clicks on the link and completes an action, like buying a product or service. Every time someone makes that move, you will earn a commission of some sort. Perhaps it will be a set dollar amount, or a percentage of the overall cost of the product or service. Whatever you receive, it’s all good, because it’s all residual income you will earn over and over and over to infinity.

13. Create An App

Fantastic new apps appear every day, and with lots of hype, many go viral and earn their creators a lot of money, sometimes millions. Think about it this way: you make the app once and then it earns you money perpetually.

There are two primary ways to make money with an app:

  1. Sell access to the app or sell content within the app
  2. Run ads within the app

If you have a great idea for an app, you can use sites like Appy Pie that will make your app for you so you don’t need coding experience to take your app to market. Joel Comm made over $1 million from his iFart app.

Or, partner up with a friend who knows how to develop an app. You can focus on what you want the app to do and your friend can develop and design it!

Once your app is complete, you can make money 24/7 selling it on an app store.

14. Peer To Peer Lending

In the same manner a bank or credit union gives out loans, peer to peer lending allows you to help others with personal and business loans, college tuition loans, car loans or just about anything else under the sun.

These lending platforms pair people willing and able to lend up to around $40,000 to others needing a loan. There’s a percentage of interest, of course, allowing you to make a profit. As a bonus, you will know you’re helping others finance something important in their lives.

There are multiple sites like this one that match you with someone who needs to borrow money.

It is important to consider the risk involved with peer to peer lending, however. Most of the borrowers on these platforms have been rejected from traditional financial institutions, so they are on peer to peer lending sites as a last resort. However, this is an interesting and unique way to diversify your investment portfolio!

15. Vending Machines

Every time you put in money or swipe your card for a Coke or a Kit Kat Bar or bag of chips, someone somewhere is gaining a profit from your purchase.

Jump on that band wagon by investing in a quality vending machine, which will range from $3,000 to $4,000 a piece, then find a prime location to set up.

Negotiate with the property owner, say a laundromat, and offer a slice of the profit pie in return for the optimal site.

This can easily be a single employee business (you) when you take care of restocking and checking the machine. Reinvest your profits into another machine, and repeat the process over and over until you have a small business!

This business will require some involvement of your time at first. You will need to manage the machines, stock them and collect your money. However, with time you can hire these tasks out to employees making this a passive business!

If you want to be on the cutting edge, there are even healthy vending machines now! Rather than dispensing candy bars and other junk foods, these machines offer healthy options like fresh produce. A lot of people are cutting back on sugar and soda, so this may be the way to go.

16. Sell An Ebook

Learned a lot about home improvement? Discovered secrets to small space gardening? Restored an old sailboat recently? Put your knowledge onto the page by penning your own non fiction book and hook up with Amazon for sales.

Then, invite everyone you know, from family to Facebook friends, to order a copy of your new publication, and earn both accolades and extra income. It could be fiction or non fiction but the sweet spot here is usually 50 to 60 pages of well written content.

Ebooks generally do not sell for a lot of money. Some are even as little as $0.99 a piece.

But here's the kicker: they are completely digital! You don't have to print copies or ship anything to customers. You simply offer your ebook on a site like Amazon, then every time someone purchases it you earn a cut of the sale!

People making money with this strategy often have many different ebooks. They aren't as long as regular books in most cases, so they don't take as long to write. If you have 10 ebooks out there that are all generating sales for you day in and day out, this could begin to add up!

17. Flip Domain Names

Domain names are unique identifiers for websites, and some are highly sought after. You can easily brainstorm domain names that could be the next big thing, then buy them up early for as little as a few bucks.

Be specific by identifying potential markets ahead of time with a bit of time invested in research. Once you have identified what may draw interest in a particular field or sector, buy the domains they offer them for sale with a mark-up so you make a profit.

Most people who buy and sell domain names hold onto them for many years. Consider our domain name for example. Originally, this site was Investing Simple .blog because the .com was taken. We were able to track down the owner of the domain and we purchased the domain from him for a few thousand dollars.

He ended up making a lot of money, considering it only costs about $10 to $15 a year to park a domain!

18. Make Money With Honeygain

Honeygain earn money online renting your internet

Here's the easiest way to make 100% passive income. 

Honeygain is a free app that allows you to rent out your internet when you aren't using it. All you do is install the app on your computer and decide when you want to run it!

How about the 8 hours a day while you are sleeping? Or the time when you are at work? You can use Honeygain to make some extra cash!

Here's a few stats on Honeygain:

  • Over 20,000 people have gotten paid already
  • The total Honeygain users have earned is over $500,000 collectively
  • It takes on average 48 days to earn your first $20
  • Per year, that means you can earn over $150

If you use our referral link below, you will get $5 for free to get started!

Final Thoughts

There are countless ways to make money in a passive way. Your goal should be to stop working for every dollar you earn and to make money while you sleep! While it will likely be slow at first, it will grow over time.

The first few months of running this blog did not make us very much money at all. However, over time it has grown into a small passive income source!

What is your favorite way to make passive income? Drop us a comment below.

“If you don't find a way to make money while you sleep, you will work until you die." - Warren Buffett

passive income
Article written by Ryan Scribner
Ryan Scribner is a personal finance YouTuber that is approaching 500,000 subscribers on his channel. He has created a thriving business around his passion, which is helping others navigate the complicated world of investing.

Platform Reviews

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Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
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Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
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