25 Passive Income Ideas To Make Extra Money

Passive income can be a great way to generate extra cash flow, whether you’re running a side hustle or just trying to get a little extra dough each month. Passive income can help you earn more during the good times and tide you over if you suddenly become unemployed, if you decide to voluntarily take time away from work or if inflation keeps chipping away at your purchasing power.

And if you’re worried about being able to save enough to meet your retirement goals, building wealth through passive income is a strategy that might appeal to you, too.

If you’re thinking about creating a passive income stream, check out these strategies and learn what it takes to be successful with them while also understanding the risks associated with each idea.

Top passive income ideas

1. Write an e-book
2. Sell photography online
3. Create an app
4. Create a blog or YouTube channel
5. Sell designs online
6. Buy dividend stocks
7. Set up a bond ladder
8. Invest in a high-yield CD or savings account
9. Set up an annuity
10. Try peer-to-peer lending
11. Buy a municipal bond closed-end fund
12. Invest in preferred stock
13. Create rental income
14. Buy crowdfunded real estate
15. Invest in REITs
16. Rent out your home short-term
17. Engage in affiliate marketing
18. Develop sponsored posts on social media
19. Advertise on your car
20. Flip retail products
21. Create a course
22. Rent out a parking space
23. Rent out useful household items
24. Buy a local business
25. Buy a blog

What is passive income?

Passive income includes regular earnings from a source other than an employer or contractor. The Internal Revenue Service (IRS) says passive income can come from two sources: rental property or a business in which one does not actively participate, such as being paid book royalties or stock dividends. While legally that’s true, in practice passive income may take other forms.

“Many people think that passive income is about getting something for nothing,” says financial coach and retired hedge fund manager Todd Tresidder. “It has a ‘get-rich-quick’ appeal … but in the end, it still involves work. You just give the work upfront.”

In practice, you may do some or all of the work upfront, but passive income often involves some additional labor along the way, too. You may have to keep your product updated or your rental property well-maintained in order to keep the passive dollars flowing.

But if you’re committed to the strategy, you can find ways to generate income and create extra financial security for yourself along the way.

“One of the questions people always ask me is: ‘When will I be financially successful?’” says Jerry Lynch, a CFP® and senior vice president at OneDigital Financial Services. “The answer I give them is: When your passive income exceeds your expenses.”

“That can include Social Security, dividend income, real estate income or if I own a company and I’m not actively working there,” Lynch says. “There’s a variety of different sources that could kick off this income.”

Passive income is not …

• Your job. Generally, passive income is not income that comes from something you’ve been materially involved in such as the wages you earn from a job.
• A second job. Getting a second job isn’t going to qualify as a passive income stream because you’ll still need to show up and do the work to get paid. Passive income is about creating a consistent stream of income without you having to do a lot of ongoing work to get it.
• Non-income-producing assets. Investing can be a great way to generate passive income, but only if the assets you own pay dividends or interest. Non-dividend-paying stocks or assets like cryptocurrencies may be exciting, but unless you’re staking your coins, they won’t earn you passive income.

Passive income ideas for creatives

1. Write an e-book

Writing an e-book can be a good opportunity to take advantage of the low cost of publishing and even leverage the worldwide distribution of Amazon to get your book seen by potentially millions of would-be buyers. E-books can be relatively short, perhaps 30 to 50 pages, and can be relatively cheap to create, since they rely on your own expertise. You can quickly design the book on an online platform and then even test-market different titles and price points.

But just like with designing a course, a lot of the value comes when you add more e-books to the mix, drawing in more customers and providing them with a steady stream of content.

Opportunity: An e-book can not only deliver good information and value to readers, but also be a way to drive traffic to your other offerings, including audio or video courses, other e-books, a website or potentially higher-value seminars.

Risk: The field for e-books is crowded — Kindle alone has more than 4 million digital titles in its library. Your e-book has to be very strong to build up a following, and you have to be the one to market it through your own website, promotions on other websites, appearances in the media or on podcasts, etc. You could put in a lot of work upfront and get little back for your efforts, especially at first.

“Can you get passive income from an e-book? Yes. But you don’t have to be just an author but also a marketer,” says John H. Graves, author of “The 7% Solution: You Can Afford a Comfortable Retirement.”

“Selling a book is about marketing,” Graves says. Plus, for every dollar you spend to publish and market your book, remember that Amazon takes 30% of sales, Graves says.

An e-book can be a great option but it’s not an easy — or guaranteed — income stream. It can help to write more than one book, to build a business around the book or even to make the book a part of your business that strengthens the other parts.

2. Sell photography online

Selling photography online might not be the most obvious place to set up a passive business, but you may be able to scale your efforts, especially if you can sell the same photos over and over again. To do that, you might work with an organization such as Getty Images, Shutterstock or Alamy.

To get started, you’ll have to be approved by the platform, and then you license your photos to be used by whoever downloads them. The platform then pays you every time someone uses your photo.

You’ll need photos that appeal to a specific audience or that represent a certain scene, and you’ll need to tease out where the demand is. Photos could be shots with models, landscapes, creative scenarios and more, or they could capture real events that might make the news.

Opportunity: Part of the value of selling or licensing your photos through a platform is that you have the potential to scale your efforts, especially if you can provide pictures that will be in demand. That means you could potentially sell the same image hundreds or thousands of times.

Risk: You could add hundreds of photos to a platform such as Getty Images and not have any of them generate meaningful sales. Only a few photos may drive all of your revenue, so you have to keep adding photos to figure out what buyers are interested in — and willing to pay for.

It may require substantial effort to go out and shoot photos, then process them and keep up with the events that may ultimately drive your revenue. And motivation could be hard to maintain: Every next photo might be your lottery ticket, though it almost certainly won’t be.

3. Create an app

Creating an app can be a way to make an upfront investment of time and then reap the reward over the long haul. Your app might be a game or one that helps mobile users perform a hard-to-do function. Once your app is public, users download it and you can generate income.

Opportunity: An app has a huge upside if you can design something that catches the fancy of your audience. You’ll have to consider how best to generate sales from your app. For example, you might run in-app ads or otherwise have users pay a nominal fee for downloading the app.

You’ll likely need to add incremental features to keep the app relevant and popular.

Risk: The biggest risk here is probably that you use your time unprofitably. If you commit little or no money to the project, you have little financial downside. However, it’s a crowded market and truly successful apps must offer a compelling value or experience to users.

You’ll want to make sure that if your app collects any data that it’s in compliance with privacy laws, which differ across the globe. The popularity of apps can be short-lived, too, meaning your cash flow may dry up faster than you expect.

4. Create a blog or YouTube channel

Are you an expert on travel to Thailand? A maven of Minecraft? A sultan of swing dancing? Take your passion for a subject and turn it into an Instagram or a YouTube channel, using ads or sponsors to generate your income. Find a popular subject, even a small niche, and become an expert on it. At first, you’ll have to build out a suite of content and draw an audience, but it can create a steady income stream over time, as you become known for your engaging content.

Opportunity: You can leverage a free (or very low-cost) platform, then use your great content to build a following. The more unique your voice or area of interest, the more likely you become a person to follow, which will then draw sponsors to you.

Risk: You’ll have to build out content at the start and then create ongoing content, which takes time. And you’ll need to be really passionate about what your subject area, since that can help you maintain the motivation to continue.

The real downside here is that you can end up spending a lot of time and resources with little to show for it, if there’s limited interest in your subject or niche. Your area of expertise may be too niche to really draw a profitable audience, but you won’t be sure of that until you experiment.

5. Sell designs online

If you have design skills, you may be able to turn them into a money maker by selling items with your printed designs on them. Businesses such as CafePress, Vistaprint and Zazzle allow you to sell items including T-shirts, hats, mugs and more with your own designs. You can even sell on Etsy.

Opportunity: You can start with your own designs and see what the market is interested in, and expand from there. You may be able to capitalize on the surging interest in a current event and design a shirt that captures the spirit of the times or a snarky take on it. You can also set up your own web storefront through a site such as Shopify to market your goods.

Risk: One risk is tying up your capital in inventory, but you can avoid this risk by working with printing companies that allow you to ship items without directly investing in the merchandise yourself. (But you may be able to get better pricing if you invest in the inventory yourself.) Another risk is that you could invest a lot of time with little payoff.

Passive income ideas for investors

Markets fluctuate so it’s important to do your research, monitor your investments and pay attention to market-moving factors like interest rates. Plus, it’s important to be mindful of extra income pushing you into a higher tax bracket.

“If I was doing passive income and I was in a high tax bracket, what I would probably be looking at is things that are tax efficient like municipal bonds” that are exempt from federal and sometimes state taxes, Lynch says.

6. Buy dividend stocks

Shareholders in companies with dividend-yielding stocks receive a payment at regular intervals from the company. Companies pay cash dividends on a quarterly basis out of their profits, and all you need to do is own the stock. Dividends are paid per share of stock, so the more shares you own, the higher your payout.

Opportunity: Since the income from the stocks isn’t related to any activity other than the initial financial investment, owning dividend-yielding stocks can be one of the most passive forms of making money. The money will simply be deposited in your brokerage account.

Risk: The tricky part is choosing the right stocks. For example, companies issuing a very high dividend may not be able to sustain it.

Too many novices jump into the market without thoroughly investigating the company issuing the stock, Graves says. “You’ve got to investigate each company’s website and be comfortable with their financial statements.”

That said, there are ways to invest in dividend-yielding stocks without spending a huge amount of time evaluating companies. Graves advises going with exchange-traded funds, or ETFs. ETFs diversify your holdings, so if one company cuts its payout, it doesn’t affect the ETF’s price or dividend too much. Here are some of the best ETFs to choose from.

Another risk is that economic stress can cause companies to cut their dividends. Diversified funds may feel less of a pinch.

7. Set up a bond ladder

A bond ladder is a series of bonds that mature at different times over a period of years. The staggered maturities allow you to decrease reinvestment risk, which is the risk of reinvesting your money when bonds offer too-low interest payments.

Opportunity: A bond ladder is a classic passive investment that has appealed to retirees and near-retirees for decades. You can sit back and collect your interest payments, and when the bond matures, you “extend the ladder,” rolling that principal into a new set of bonds. For example, you might start with bonds of one year, three years, five years and seven years.

In a year, when the first bond matures, you have bonds remaining of two years, four years and six years. You can use the proceeds from the recently matured bond to buy another one year or roll out to a longer duration, for example, an eight-year bond.

Risk: A bond ladder eliminates one of the major risks of buying bonds — the risk that when your bond matures you have to buy a new bond when interest rates might not be favorable.

Bonds come with other risks, too. While Treasury bonds are backed by the federal government, corporate bonds are not, so you could lose your principal if the company defaults. And you’ll want to own many bonds to diversify your risk and eliminate the risk of any single bond hurting your overall portfolio. If overall interest rates rise, it could push down the value of your bonds.

Because of these concerns, many investors turn to bond ETFs, which provide a diversified fund of bonds that you can set up into a ladder, eliminating the risk of a single bond hurting your returns.

8. Invest in a high-yield CD or savings account

Investing in a high-yield certificate of deposit (CD) or savings account at an online bank is one of the easiest ways to generate passive income at a high interest rate. You won’t even have to leave your house to make money.

Opportunity: To make the most of your money, you’ll want to do a quick search of the nation’s best CD rates or top savings accounts. Online banks generally pay higher interest rates than your local bank. And if you choose an FDIC-insured bank, your money will be protected up to $250,000 per person, per ownership category, per bank if the bank fails.

Risk: As long as your bank is backed by the FDIC and your account is within FDIC limits, your principal is safe. Investing in a CD or savings account is about as safe a return as you can find. Still, that return — that is, the interest rate you’re earning — may pale in comparison to inflation.

9. Set up an annuity

An annuity can be a good option for setting up reliable income. With a typical annuity, you make payments to an insurance company, which will provide you with a stream of monthly income, either immediately or in the future.

Opportunity: Annuities can be structured in multiple ways, depending on exactly what you need. If you want a monthly payout immediately, the insurance company can set that up, or you can structure the payment to start when you retire, for example. Plus, you can set up an annuity that has a fixed return or one with a variable payout depending on how the annuity’s underlying investments perform.

An annuity can be set up to pay out for a set period, say 20 years, or a lifetime. It could cease payments on your death or it could continue paying out to your spouse. There are many options.

Risk: Annuities are tremendously complex, and when you set one up, you’re often locked in for a long time, though you may be able to get out of one by paying a significant penalty. Read the fine print on the contract carefully so that you understand the pros and cons of the specific contract.

You typically need to hand over a large chunk of money to the insurance company to fund the annuity. Every annuity contract is different, and each may offer a unique set of benefits in order to cater to your specific needs. So it’s vital to understand what you’re signing up for.

10. Try peer-to-peer lending

A peer-to-peer (P2P) loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper. Other players include LendingClub and Upstart.

Opportunity: As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you could end up with nothing in the event of a default.

To cut that risk, you need to do two things:

• Diversify your lending portfolio by investing smaller amounts over multiple loans. At Prosper.com, the minimum investment per loan is $25.
• Analyze historical data on the prospective borrowers to make informed picks.

Risk: It takes time to master the metrics of P2P lending, so it’s not entirely passive, and you’ll want to carefully vet your prospective borrowers. Since you’re investing in multiple loans, you must pay close attention to payments received. Whatever you make in interest should be reinvested if you want to build income.

Economic recessions can make high-yielding personal loans a more likely candidate for default, so these loans may go bad at higher than historical rates if the economy worsens.

11. Buy a municipal bond closed-end fund

Municipal bonds offer tax-free dividend income to investors in exchange for financing public projects for states and cities. A closed-end fund focused on this area of the market owns a variety of these bonds and then juices the overall return by borrowing money to buy more. Like investing in CDs or dividend funds, a closed-end fund is the most passive kind of income.

Opportunity: A closed-end municipal bond fund can be an attractive way to earn tax-free income, especially for those in high-tax states or high tax brackets. These funds typically pay better dividends than an average municipal bond because they use leverage (itself a risk), though a fund owns a variety of different bonds, helping to reduce overall risk. Closed-end funds should usually be purchased at a significant discount to their net asset value, helping reduce risk, too.

Risk: Bond prices — and therefore bond fund prices — decline when interest rates rise (and vice versa). But a closed-end fund’s leverage magnifies this effect, so the average fund will decline more than the average bond in a downturn. At the same time, the bond fund may need to cut its payout in order to pay increased expenses on its borrowing, hitting the fund’s price still more. So a closed-end fund can be volatile as rates shift quickly.

For this reason, Lynch says he prefers buying municipal bonds outright instead of going with a closed-end fund. “I could buy a muni bond, and I will know if I buy it today, and I hold it for X period of time, it’s going to give me X in terms of percent of income on an annual basis. And at the end, I get my principal back,” he says. “In a closed-end fund that’s traded on the open market…whatever anybody’s willing to pay for it at that moment in time is what I’m going to get for it.”

12. Invest in preferred stock

Preferred stock is a type of stock that acts more like a bond, making attractively large dividend payouts on a quarterly schedule. Like bonds, preferred stock has a face value and may have a specific maturity, though it may also be perpetual, meaning the company need never redeem it. Typically, it can be redeemed after five years of issuance. Preferred stocks trade on an exchange, so you can buy them easily, and liquidity is relatively good.

Opportunity: Preferred stock can pay out larger-than-usual dividends, compared to a company’s bonds, but that’s in exchange for foregoing a capital gain (unless you buy preferreds at a discount to their face value). But it can be an attractive way to earn a passive return. Many REITs, banks and other financial companies issue preferreds to finance their operations.

Risk: Preferred stocks’ prices will fluctuate, particularly in response to changes in prevailing interest rates. As rates rise, the price of preferreds will likely fall, and vice versa, though the price likely won’t rise much above face value. And like bonds, you’ll need to carefully understand the company and its ability to pay its dividends, or your investment could permanently decline in value.

If you don’t want to pick individual preferred stocks, then opt for a preferred stock fund. You’ll get a diversified collection of preferreds, reducing your risk.

Passive income ideas in real estate

13. Create rental income

Investing in rental properties is an effective way to earn passive income. And it could have added benefits: If you buy a vacation home or a place in your kid’s college town, you’ll have a place to stay that could be paid for by the rental income alone. But it often requires more work than people expect. 

Opportunity: To earn passive income from rental properties, it’s important to consider the property’s total costs and expenses.

“Probably the most important thing is to be able to have positive cash flow from day one,” says Jennifer McManus, a licensed real estate agent for Coldwell Banker in New Jersey. “Be realistic with what you’re buying and what it’s worth today and not what it might be worth tomorrow.”

For example, if your goal is to earn $10,000 a year in rental cash flow and the property has a monthly mortgage of $2,000 and costs another $300 a month for taxes and other expenses, you’d have to charge $3,133 in monthly rent to reach your goal.

Run the number to see if your expectations are realistic based on the going rate for rents in the area. If not, McManus cautions, you’re going to wind up with vacancies, which could cost you money in lost rental income while you’re carrying the expenses of the house.

You’ll also have to decide if you want to manage and market the property yourself, or hire someone else to do it. If you choose the latter, that will cost you money and eat into profits. But it also means you won’t have to run out to fix the dishwasher the night before Thanksgiving.

Natalie Moore, who works with McManus at Coldwell Banker, owns a beach house in the Jersey Shore town of Ocean Grove. She and her family spend a month there every summer and rent it out the rest of the year. She and her husband choose to manage the property themselves — they like having a direct connection to the property and the clients renting it. 

“You have to always keep the renter in mind,” Moore says. “Keep your house accessible, keep your house up — you want to make sure you don’t get a bad review.”

Risk: There are a few questions to consider: Is there a market for your property? What if you get a tenant who pays late or damages the property? What if a big repair is needed? What if you’re unable to rent out the property? Any of these factors could put a big dent in your passive income. 

Economic downturns can pose challenges, too. You may suddenly have tenants who can no longer pay their rent, or you may not be able to rent it out for as much as you could before. It’s essential to have a contingency fund to cover unforeseen costs with the property.

14. Buy crowdfunded real estate

If you’re interested in investing in real estate but don’t want to do a lot of the heavy lifting (management, repairs, handling tenants and more), another option is using a crowdfunding platform to invest in property. An experienced investing team picks out the real estate, and then you decide to invest in it and how much you’re comfortable with.

You’ll pay an annual management fee to the real estate platform and have minimum investment amounts that could range from ten dollars to tens of thousands of dollars.

Opportunity: You can get access to private real estate deals that may be attractive, and they’ve been preselected by knowledgeable investors. You can check out the returns on the platforms, so you’ll have some idea of what level of returns you can expect and over what time frame. Real estate investments can also help diversify your portfolio.

Some platforms invest in equity (stock), while others invest in debt. Generally, stock offers high returns in exchange for more risk, while debt offers lower returns in exchange for less risk. Some platforms require you to be an accredited investor, with a certain minimum income or assets. Popular platforms include Fundrise, Willow Wealth (formerly Yieldstreet) and DiversyFund.

Risk: You’re on the hook to make your own investments on many crowdfunding platforms. So while past returns may look good, they’re no predictor of future success. And you’ll have to make the judgment call about what to buy. That means you’ll need to read the prospectus for every deal you’re interested in and understand the pros and cons.

In addition, real estate is typically funded with high levels of debt financing, making it more susceptible to any economic downturn. You’ll also want to understand how long your money will be locked up in the investment and when you can access it, especially in an emergency.

15. Invest in REITs

A REIT is a real estate investment trust, which is a company that owns and manages real estate. REITs have a special legal structure so that they pay little or no corporate income tax if they pass along most of their income to shareholders.

Opportunity: You can purchase REITs on the stock market just like any other company or dividend stock. You’ll earn whatever the REIT pays out as a dividend, and the best REITs have a record of increasing their dividend on an annual basis, so you could have a growing stream of dividends over time.

Like dividend stocks, individual REITs can be riskier than owning an ETF consisting of dozens of REIT stocks. A fund provides immediate diversification and is usually a lot safer than buying individual stocks — and you’ll still get a nice payout.

Risk: Just like dividend stocks, you’ll have to be able to pick the good REITs, and that means you’ll need to analyze each of the businesses that you might buy — a time-consuming process. And while it’s a passive activity, you can lose a lot of money if you don’t know what you’re doing. Like any stock, the price can fluctuate in the short term.

REIT dividends are not protected from tough economic times, either. If the REIT doesn’t generate enough income, it will likely have to cut its dividend or eliminate it entirely. So your passive income may get hit just when you want it most.

16. Rent out your home short-term

This straightforward strategy takes advantage of space that you’re not using and turns it into a money-making opportunity. For example, if you’re going away for the summer or have to be out of town for a while, consider renting out your space while you’re gone.

Opportunity: You can list your space on any number of websites, such as Airbnb or Vrbo, and set the rental terms yourself. You’ll collect a check for your efforts with minimal extra work, especially if you’re renting to a tenant who may be in place for a few months.

Risk: You don’t have a lot of financial downside here, though letting strangers stay in your house is a risk. Tenants may deface or even destroy your property or possibly steal valuables, for example. Also, legal requirements for short-term rentals vary by city and state. It’s important to know what the law is in your area, or risk hefty fines. In some cities, for example, you must register your property.

Marketing-based passive income ideas

17. Engage in affiliate marketing

With affiliate marketing, website owners, social media influencers or bloggers promote a third party’s product by including a link to the product on their site or social media account. Amazon might be the best-known affiliate partner, but eBay, Rakuten, Awin and Pinterest are among the larger names. Both TikTok and YouTube have become huge platforms for those looking to grow a following and promote products.

You could also consider growing an email list to draw attention to your blog or otherwise direct people to products and services that they might want.

Opportunity: When a visitor clicks on the link and makes a purchase from the third-party affiliate, the site owner earns a commission. The commission might range from 3% to 7%, so it will likely take significant traffic to your site to generate serious income. But if you can grow your following or have a more lucrative niche (such as software, financial services or fitness), you may be able to make some serious coin.

Affiliate marketing is considered passive because, in theory, you can earn money just by adding a link to your site or social media account. In reality, you won’t earn anything if you can’t attract readers to your site to click on the link and buy something.

Risk: If you’re just starting out, you’ll have to take time to create content and build traffic. It can take significant time to build a following, and you’ll have to find the right formula for attracting that audience, a process that itself might take a while.

18. Develop sponsored posts on social media

Do you have a strong following on social media such as Instagram or TikTok? You might be able to get consumer brands to pay you to post about their product or otherwise feature it in your feed.

You’ll need to keep filling your profile with content that draws in your audience, though. And that means continuing to create posts that grow your reach and engage your followers on social media.

Opportunity: Leveraging your social media presence is an attractive business model. Draw eyeballs and clicks to your profile with strong content and then monetize that content by setting up sponsored posts from brands that appeal to your followers.

Risk: Getting started here can be a catch-22: You need a large audience to get meaningful sponsored posts, but you’re not an attractive option until you get a meaningful audience. So you’ll have to focus a lot of time first on growing your audience with no guarantee that you’ll be successful. You can end up spending tons of time following the trends and building content, in the hopes that you eventually get the sponsorship that you’re aiming for.

Even when you’ve got the sponsored posts you’re looking for, you’ll need to keep posting to draw in your audience and remain an attractive option for advertisers.

19. Advertise on your car

You may be able to earn some extra money simply by driving your car around town. Contact a specialized advertising agency, which will evaluate your driving habits, including where you drive and how many miles. If you’re a match with one of their advertisers, the agency will “wrap” your car with the ads at no cost to you. Agencies are looking for newer cars, and drivers should have a clean driving record.

Opportunity: While you do have to get out and drive, if you’re already putting in the mileage anyway, then this is a great way to earn hundreds per month with little or no extra cost. Drivers can be paid by the mile.

Risk: If this idea looks interesting, be careful to find a legitimate operation to partner with. Many fraudsters set up scams in this space to try and bilk you out of thousands.

Other passive income ideas

20. Flip retail products

Take advantage of online sales platforms such as eBay or Amazon, and sell products that you find at cut-rate prices elsewhere. You’ll arbitrage the difference in your purchase and sale prices, and may be able to build a following of individuals who track your deals.

Opportunity: You’ll be able to take advantage of price differences between what you can find and what the average consumer is able to find. This could work especially well if you have a contact who can help you access discounted merchandise that few other people can find. Or you may be able to find valuable merchandise that others have simply overlooked.

Risk: While sales can happen at any time online, helping make this strategy passive, you’ll definitely have to hustle to find a reliable source of products. Plus, you’ll have to invest money in all of your products until they do sell, so you need a robust source of cash. You’ll have to really know the market so that you’re not buying at a price that’s too high. Otherwise, you may end up with products that no one wants or whose price you have to drastically cut in order to sell.

21. Create a course

One popular strategy for passive income is creating an audio or video course, then kicking back while cash rolls in from the sale of your product. Courses can be distributed and sold through sites such as Udemy, SkillShare and Coursera.

Alternatively, you might consider a “freemium model” — building up a following with free content and then charging for more detailed information or for those who want to know more. For example, language teachers and stock-picking advisors may use this model. The free content acts as a demonstration of your expertise and may attract those looking to go to the next level.

Opportunity: A course can deliver an excellent income stream, because you make money easily after the initial outlay of time.

Risk: “It takes a massive amount of effort to create the product,” Tresidder says. “And to make good money from it, it has to be great. There’s no room for trash out there.”

Tresidder says you must build a strong platform, market your products and plan for more products if you want to be successful. “One product is not a business unless you get really lucky,” Tresidder says. “The best way to sell an existing product is to create more excellent products.”

Once you master the business model, you can generate a good income stream, he says.

22. Rent out a parking space

Do you have a parking space that you’re not using or that could be used by someone else? You could trade that spot for some cash. It could be an even better set-up if you have a larger area that could fit several cars or that would be useful for multiple events or venues.

Opportunity: In particularly high-demand areas or during high-demand times (for example, during a concert or sporting event), your parking spot could be worth real money. For example, if you live near a place that has frequent commuters but that is strapped for parking spots, you might have a money-maker on your hands. You might have the best chance of turning a profit by renting to someone who needs the spot on a daily basis, rather than for one-off events.

Risk: This idea might not be particularly risky, but you do want to make sure you aren’t violating any restrictions where you live. It’s probably worthwhile having a disclaimer of liability as a condition of parking in your spot, too.

23. Rent out useful household items

Here’s a variation on renting out an idle car: Start even smaller with other household items that people may need but that may be collecting dust in your garage. Lawnmowers? Power tools? Mechanics tools and toolbox? Tents or large coolers? Look for high-value items that people need for a short period of time and where it might not make sense for someone to own the item. Then put together a way for clients to discover your inventory and a way for them to pay for it.

Opportunity: You can start small here, and then scale up if there’s interest in a particular area. Do people suddenly want a tent for weekend camping when the weather gets warmer? Figure out where the demand is, and then you could even go buy the item, rather than having it right on hand. In some cases, you might be able to recoup the value of the item after a few uses.

Risk: There’s always the possibility that your property is damaged or stolen, but you can mitigate this risk with contracts that allow you to replace the item at the client’s expense. If you start small here, you’re not exposed to much risk, especially if you already have the item and you’re not likely to need it in the near future. Pay particular attention to liability issues, especially if you’re renting out equipment that has the potential to be dangerous, such as power tools.

24. Buy a local business

A local business offers you the potential to generate a cash flow stream through an existing and established company. If the business is profitable enough, you may even be able to hire a manager to run it for you while you make only the biggest decisions or none at all. You may be able to get a loan to buy it, so that you put less of your own money at risk early on.

Opportunity: Local businesses may have attractive and profitable niches that you can buy into, and ones that cannot be easily replicated by competitors. You may be able to piggyback off the seller’s expertise or credentials, especially at the start as you get up to speed. Sellers may be willing to finance part of the sale, giving them some incentive to see the business succeed. Also, you may make part of the purchase price contingent on certain profit goals or other metrics.

Risk: You’ll need to carefully vet any potential acquisition candidates, lest you end up with a business that’s much less profitable than it appears or that has fading prospects. It can prove valuable to work with experienced and honest brokers to get the best deal and avoid pitfalls, or hire a consultant to help evaluate a potential deal. In addition, if you’re hiring a manager to run the shop, you’ll want to be sure they’re honest and competent, or you’ll have problems.

25. Buy a blog

If you want to get into the blogging game, consider buying one and skipping the line on building it. You can get the contacts and relationships of the prior owner and may be able to bring your own, too. And you can be generating income from day one rather than building and hoping.

Opportunity: Buying a blog gets you in the game today rather than tomorrow, but you’ll want to already be knowledgeable and passionate about the subject. It will be even better if you have a few ideas to improve the blog (better content, higher efficiency, lower costs, etc.) so that you can leverage it into greater profitability than might have been indicated by the purchase price.

Risk: A blog, like any business, is not that liquid, so if you decide you want to move on to something else, you may not get what you paid for it or even be able to sell it at all. And of course, you have to be able to gauge the market effectively, producing content that readers want or that attracts sponsors or other revenue drivers.

Which passive income source is best?

The question of which passive income source is best depends on several factors, but some of the most important include the amount of money you have to invest, the total opportunity size, your interest and ability in the area, the amount of time you need to invest and the potential to succeed.

You’ll need to weigh the opportunity against these factors and see which passive income strategy works best for you. But it can be helpful to have natural ability and an interest in your target area, because these can help motivate you in the early days when things are likely to be tougher.

Owning a rental property, for example, requires a lot more time and energy than investing in bonds or mutual funds. But Moore says it’s worth it for the time her family, and the families she rents to, get to enjoy the property.

“I don’t create memories in my index fund!” Moore quipped.

But if you don’t have the money to buy a rental property or a business, there are passive income opportunities for people who are starting out with little or no money.

How can I make passive income with no money?

If you have little or no money to start, you’ll have to rely mostly on your own time investment to power you through, at least until you build up a little money.

That means focusing on passive income sources that take advantage of the following traits:

• An area where you’re an expert. Here you can build your expertise into a useful product or service for consumers, e.g. design, software coding and others.
• An upfront work-heavy opportunity. You’ll need an opportunity that requires a time or work investment, such as creating a course, building out an influencer profile or other options.
• Items you already own. Look at what you own (your house, car, power tools, etc.) and see if you might be able to extract some passive income from renting out something.

In effect, you’re substituting your time for your lack of capital, until you can get enough capital to expand your set of opportunities.

How can I make passive income with money?

If you have money to invest in a passive opportunity, you have not only the opportunities listed above but others, too. Money is a prerequisite for taking advantage of the following passive income areas:

• Investing in dividend stocks, preferred stocks or REITs. Investing in stocks means you need money upfront, but you’ll receive some of the most passive forms of income around.
• Save with bonds or CDs. Other purely passive activities include buying bonds or CDs.

You can use your money to make money with little or no effort on your part, if that’s what you’d like to do. Of course, you could pair your money with a time investment to move into an even more lucrative niche.

How many income streams should you have?

There is no “one size fits all” advice when it comes to generating income streams. How many sources of income you have should depend upon where you are financially, and what your financial goals for the future are.

Lynch recommends being diversified. Markets — and investments — go up and down, so it’s smart to not put all your chips on one source of income. 

“I’m a fan of non-correlated assets — things that work differently. Something zigs, something zags,” Lynch says. “If you have other sources that are coming in, you’re not tied to one thing working.”

Of course, you’ll want to make sure that putting effort into a new passive income stream isn’t causing you to lose focus on your other streams.

When you’re trying to figure out a passive income source that’s right for you, Lynch advises doing some research and talking to people who are successfully generating cash flow in that area.

“If I’m looking at being in real estate, for example, I want to talk to a successful real estate investor now,” Lynch says. “I’d rather learn from somebody else’s mistakes than my own.”

Passive income ideas for beginners

• High-yield savings account. A high-yield savings account can be an easy way to get an extra boost on your savings beyond what you’d receive in a typical checking or savings account. It won’t be much, but it’s a simple way to get started with passive income.
• Certificates of deposit. CDs are another way to generate some passive income, but your money will be tied up more than it would be in a high-yield savings account.
• Real estate investment trusts. REITs are a way to invest in real estate without having to put in all the effort that comes with managing properties. REITs typically pay out the majority of their income in dividends, making them an attractive option for investors looking for passive income.

Note: Bankrate’s Rachel Christian also contributed to this story.