Making money while you sleep has a beautiful ring to it. That’s the idea behind the passive income concept.
It provides the opportunity to make money outside of a traditional salaried or hourly job to pay off a student loan, dig out of credit card debt, save for retirement, or advance personal finance goals.
Wanna get started? Here are 35 passive income ideas to make money, increase your wealth, and become less relevant on a day job.
Table of Contents
- 1 What is Passive Income?
- 2 How Does Passive Income Work?
- 3 8 Truly Passive Income Ideas
- 4 11 Semi-Passive Income Ideas
- 4.1 1. Rent Your Apartment or House
- 4.2 2. Rent Out an Extra Bedroom
- 4.3 3. Rent Extra Land
- 4.4 4. Renting Your Car
- 4.5 5. Refer Friends to Great Products You Already Use
- 4.6 6. Make Money Playing Video Games
- 4.7 7. Try Affiliate Marketing
- 4.8 8. Run a Site with Display Ads
- 4.9 9. Start a YouTube Channel
- 4.10 10. Create a Print-on-Demand Online Store
- 4.11 11. Create an App
- 5 5 Passive Side Hustles
- 6 5 Residual Income Ideas
- 7 6 Small Businesses
- 8 The Bottom Line
What is Passive Income?
Passive income is defined as income that requires minimal effort or even zero effort to earn. Passive income can mean your money works for you instead of your effort is 100% correlated to your income. It's a “work smarter, not harder” approach. Passive income avenues take varying degrees of effort.
How Does Passive Income Work?
Since you're already busy with your everyday life, you want to build a passive income stream that eventually works while you sleep, play, socialize, or whatever you want to be doing with your time. Another route to passive income is investing in an asset that produces revenue. Of course, there's no such thing as a free lunch.
The good news is that you don't need a pile of cash to start your passive income stream. If you already have an asset that you are not fully utilizing, that can serve as your investment. Or stop letting your money stagnate in a bank account and lose its spending power. Instead, put even small amounts of savings to work for you and invest in your future.
8 Truly Passive Income Ideas
These truly passive income ideas require a one-time investment upfront and zero future effort. There's no upkeep, no fuss, no muss. These are some of the easiest passive income ideas that you could implement to generate money.
1. Alternative Assets
Alternative assets, or alternative investments, are often the focus of news headlines. The volatility of the stock market and low interest rates for savings accounts for the foreseeable future have many people looking for alternate options.
There are many types of alternative investments. Some of the more popular offerings are hedge funds, private equity, crowdfunded real estate investments, and commodities like wine, geeky collectibles, and even luxury watches.
LuxeStreet offers partial shares of high-end watches at a minimum investment of $10,000. This luxury watch investment pays 12% per year at the rate of 1% each month. The best part of it is your investment is backed by luxury watches owned outright by Luxe Street.
Pro: Alternative investments give you exposure to unique asset classes, different from everyday stocks, bonds, real estate, etc.
Con: Alternative investing is a fledgling industry with developing regulations. There’s likely to be more risk than with typical investment choices.
2. Passive Real Estate Investing
Talk to any landlord, and they'll tell you that “passive” is the last word they'd ever use to describe apartment repairs. However, many companies give you the ability to invest in commercial and residential real estate projects without being involved in the day-to-day management.
One example is DiversyFund. It's a private REIT (real estate investment trust) that allows you to invest in professional real estate passively for as little as $500. DiversyFund focuses its investments on lower-risk multifamily housing. They use technology to scour the country for properties that fit their specific criteria.
DiversyFund looks for high occupancy and positive cash flow properties, but that needs some work. These aren't complete renovations. Instead, a typical DiversyFund property could just need an updated bathroom or kitchen, or maybe just a fresh coat of paint. After minor renovations, the upgraded properties merit increased rents. And that increases your cash flow and the value of the properties.
Holding periods for DiversyFund properties tend to be in the five-year range. Preferred returns for their properties are in the 7% range.
Pro: DiversyFund does all the hard work for you, giving you exposure to residential real estate without requiring you to be a landlord.
Con: There’s always a give-and-take to using a third party—namely, their fees.
3. Earn Passive Income with Lending Club
If you're looking for another way to earn passive income, you may want to consider Lending Club's peer-to-peer lending platform. Lending Club allows passive investors to diversify their assets by investing in different types of loans. Lending Club allows you to loan your money out to people and groups looking for funding. The type of loans you choose will determine your investment return and risk exposure.
All you need to do is invest as little as $25 in a single loan. Then, your investment is combined with other investors to make up the entire loan amount. While others may invest more, many investors choose to stick with $25 minimums across multiple loans. This diversification tends to decrease risk.
After you make your initial investment, you will start earning passive income from the borrowers’ repayments. As a borrower pays down their loan, you will receive monthly interest payments. Since this is a peer-to-peer lending platform, you're essentially the lender. That means that you collect the principal and the interest. After you're repaid, you can choose whether to cash out or reinvest your funds in other Lending Club loans.
Pro: Lending Club allows you to help many different loan seekers while earning passive income yourself.
Con: If a few of your loaners cannot repay your loan, it can be easy to miss out on profits or potentially even lose money.
4. Invest in Dividend Stocks
Dividends are profits paid out to owners of stocks. Some companies pay dividends regularly, which means that dividends can become a dependable source of income if you amass a significant number of shares over time.
Investors who love dividend-paying stocks will talk about how their investment is generating dividend income and appreciating. In other words, they're getting a regular supply of money (from the dividends), and the underlying stock is increasing in value (as the company grows).
Keep in mind that stocks with high dividends still carry risk. Dividend stocks can drop in value like any other stock. They are similar to other equities in that they're usually best to buy and hold for a long time. And with that long-term mindset, it's reasonable to purchase stocks even at all-time highs.
But if you have some extra cash to invest and understand the risk involved, dividend stocks are something to consider. Perhaps an index fund full of them would be right for you. Just make sure you learn about the risk (or lack thereof) from the index fund bubble.
Pro: A proven income stream with over 100 years of heritage, backed up by some of the world's most blue-chip companies.
Con: “Prior results do not guarantee future outcomes.” Your initial investment could lose 50% overnight if the stock market crashes.
5. Open a High-Interest Savings Account
If you are afraid of investing, there's a chance you have a decent chunk of change saved in a checking or savings account. But, of course, saving money is always a good thing.
Sadly, brick-and-mortar banks barely pay any money in interest. Institutions like Wells Fargo, Chase, Bank of America, and others pay around 0.08% interest. So you could have $100,000 in that bank, and you'd earn less than $100 per year in interest. That's nothing!
That's why keeping your savings in a high-yield savings account is clutch. The best high-interest banks are online-only, so you won't need to mess with going into the bank to get started. The best part is that some pay as much as 0.70% interest per year. So with $100,000 in the bank, you'd earn $700 per year. That's much better!
You could also look into money market accounts, treasury bonds, or certificates of deposit for low-risk, stable return investments.
Pro: As safe as safe can be.
Con: Meager returns. In fact, inflation might cause you to lose buying power.
6. Long-Term Index Fund Investing
Do you believe that the global economy will continue to grow and progress? And do you have 10+ years to invest money and build eventual passive income streams? If so, index investing might be for you.
An index fund is a mutual fund that owns a wide assortment of assets. Some index funds are fairly focused (e.g., an automotive index fund might own all automotive stocks). Other index funds are broad (e.g., a total market index fund might own every single stock on the stock market.
Either way, the idea of index funds is that they lower risk by diversifying their assets, and they lower their costs by enacting simple asset ownership rules. Index funds don’t look for the needle in the haystack. They just buy the whole haystack.
Over the long run, index investing has proven to be a very successful method of portfolio growth. And if your portfolio is growing, you can skim off some of the profits as passive income.
Pro: Proven method of long-term monetary growth and successful retirement planning.
Con: Not a short-term passive income solution.
7. Become an “Angel”
Angel investing is a high-risk, high-reward proposition. It gets its name because it answers the question, “Who would invest in a startup company with no track record, no customer base, and no surefire path to revenue growth?” Answer: only an angel.
Of course, angel investing also provides a path to equity ownership in an eventual global company's infantile stages. Could you imagine buying into companies like Shopify or Uber when they only had a handful of employees? Small angel investment can grow by 1000x! But, of course, that same investment can just as easily disappear within 6 months to a year.
Angel investing is a feast-or-famine proposition.
Pro: Immense upside. A hands-off way to help entrepreneurs trying to change the world.
Con: As high risk as anything mentioned in this article.
8. Earn Cashback
Did you know that you can earn money from your everyday regular spending? For example, if you shop with Cashback Credit Cards or Cash Back Rewards Cards, you get a rebate applied to your credit card bill. So if you're spending money anyway, you might as well get some cash back for it.
Pro: After opening the card, earning cashback is automatic and requires no additional effort.
Con: If having a cashback card entices you to purchase unnecessary items, you’ll erase any credits received. Even worse, if you overspend, you might find yourself unable to pay the bill each month and incur hefty financing charges.
11 Semi-Passive Income Ideas
If you’re motivated to create additional income outside of your day job, these ideas that require a bit more effort can help you generate cash to put towards your short and long-term financial goals.
1. Rent Your Apartment or House
Utilizing your real estate is a great way to turn your property into rental income. You don't have to buy a rental property. Use what you already own! Airbnb and similar services have revolutionized where we stay when we travel. And it has opened up serious passive income doors for you and me. Unsure how much money you can make? Simply log on to a site and check out what your market looks like.
Granted, you’ve still got to ask yourself: is this money worth the effort? Being an Airbnb host isn’t truly passive. Sure, you already have the house (and that’s most important). But you still have to act as part landlord, part maid, and maybe even cook your guest some meals. That’s work. But if you are excited by the idea of meeting new people and making some solid side cash, then Airbnb hosting might be perfect for you!
Pro: Meet new people every week while getting paid to do so.
Con: You have to become part landlord, part cook, part maid, etc.
2. Rent Out an Extra Bedroom
If you own a home, there's a decent chance you have an extra room that hardly gets used. Consider renting it out for extra income. Of course, having a roommate isn't for everyone.
The most obvious trade-off is a few hundred bucks in monthly rent compared to the inconvenience of having a guest in your home. But if you don't mind the company, it may be a no-brainer!
It's easy to see how this could lead to a few thousand dollars a year in extra income. Just make sure you both sign a formal rental agreement so that everyone is on the same page.
Pro: Turn an unused resource in your home into an income source. And hey, maybe you’ll make a new friend!
Con: Another person is living in your house…your kitchen…your bathroom. Even if they’re a saint, having a housemate can be tough.
3. Rent Extra Land
Perhaps the idea of hosting someone inside your house isn't for you. But how about hosting someone on your property by renting your extra land? There is a tiny home bonanza sweeping the country right now. People are choosing to live in tiny homes and embrace a minimalist lifestyle. But, unfortunately, for a lot of those people, the only downside is where to place their tiny house.
If they want to live in a tiny home to save money, it likely doesn't make sense to spend hundreds of thousands of dollars to buy a land lot. If you have some land, this creates an opportunity for you to rent out space on your lot. You'll want to make sure you don't violate any laws or codes in your city or state.
But if you're not using the land, why not get paid a few hundred bucks to let someone place their tiny home there? You're making the most of a resource you aren't using and giving someone else a place to live. Win-win.
Real estate income and rental properties are often considered passive or at least partially passive. So it might feel risky if we face another Big Short real estate bubble, but doesn't it feel like rentals will always be needed?
Pro: Compared to other ways you can share your real estate, this is pretty hands-off.
Con: Adding new buildings to your property can be a significant headache due to local laws and zoning codes. Do your homework!
4. Renting Your Car
Companies like Turo and GetAround make it easier than ever to rent out your car when you aren't using it. Of course, you'll want to keep in mind that renting out your car will mean additional wear and tear on your vehicle, so your repair bills might increase. But users have said it's well worth it for the passive income checks coming in the mail.
If you have a second car sitting around or have begun to bike to work and no longer need the vehicle daily due to working remotely, this might be the perfect way to start generating some passive income.
Pro: A car is one of the worst investments you can make. But renting your car out makes that investment less bad.
Con: More miles = more repairs. And what if the car renter spills their burrito all over your nice clean seats?
5. Refer Friends to Great Products You Already Use
Companies like Rakuten.com (formerly eBates) have existing referral programs that pay out cash for every friend you sign up. So if you have many friends or social media followers, this can be an effortless way to earn money.
All you have to do is set up an account by clicking the join now tab at the homepage's top. Once the account is up, go to your account settings and click where it says refer and earn to get a link to send your friends.
To find other programs like this, it's super simple. Nearly any company that delivers food or other products has similar programs. It takes a little effort up front and then some consistent effort to keep your friends or followers using the service.
Pro: Many people buy many things, and most people would like to save money if they can.
Con: You don’t want to be known as the “let me sign you up with my referral code” guy. There’s a fine line between passive income and alienating the people in your life.
6. Make Money Playing Video Games
Did you know you can earn money playing games? If you’re already playing games in your free time, you can earn some extra cash while having fun. For example, Mistplay is an awesome app that allows you to make money playing video games.
Pro: You’ll be making money for something you’re already doing
Con: You might be tempted to spend more hours playing video games than usual
7. Try Affiliate Marketing
Affiliate marketing is where you get paid a fee for referring new customers to brands.
For example, if you own a website that compares prices (e.g., something like Kayak.com), you can show price comparisons to your customer and then earn commissions for referring those customers to eventual purchases. If you have a large social media following, you could earn a percentage of the purchases made by your followers. This type of investment can be genuinely passive if it's already generating revenue with very little hands-on involvement.
Pro: Once the ball is rolling, you can make a lot of money very quickly.
Con: Creating a website or gaining a large social media following can be tough.
8. Run a Site with Display Ads
Affiliate marketing isn't the only way to make money online. Some websites sell digital products. But some rely on advertising revenue as their primary source of building a passive income. If you've spent any amount of time on significant sites like ESPN, The Weather Channel, or People, then you've seen online advertisements.
The key to generating income in this way is to have a website with a lot of users. There is a strong correlation between the number of eyeballs on your website and the amount of income you'll make. Easy enough to understand.
Pro: It’s the oldest and most consistent business model on the Internet.
Con: You’ve got to find the balance between earning money and driving away readers due to too many spammy ads.
9. Start a YouTube Channel
Do you have a message to share with the world? Something unique to teach people? A bent for videography? A personality that people want to watch? If you gather a following on YouTube, you can earn a significant passive income from advertising revenue.
Pro: It’s a proven way to make real money
Con: You’ll have to build a following and be willing to develop videos without immediate results
10. Create a Print-on-Demand Online Store
Do you have a graphic design touch? If so, you could create iconic designs and sell them in an online store. Then, your customers can simply download the designs they enjoy and print them on their own. Alternatively, you could outsource the printing to a third party—e.g., a customer orders one of your t-shirts, and a third-party print shop makes the t-shirt and sends it to the customer.
You’ve got to do some work upfront. What does popular culture enjoy, and how can you make graphic designs to meet that desire? This takes time, skill, and some open-minded knowledge about what the world wants.
But if you’re up for it, you can create a steady passive income stream from print-on-demand graphic designs.
Pro: A creative outlet that can lead to long-lasting passive income. Possible to outsource nearly all of the sustaining work.
Con: It’s possible to create a whole portfolio of graphic design that nobody actually wants. You’ve got to create something desirable.
11. Create an App
Are you a programmer? If you have a decent understanding of math and logic, you can quickly teach yourself various app coding languages and start creating your very own smartphone apps.
Do you remember Flappy Bird? In 2013, this simple single-player smartphone game seemingly took the world by storm, garnering millions of downloads. The app developer claimed to be making $50,000 a day from in-app advertising. And that game itself is straightforward.
Now, Flappy Bird struck gold, but if you took a month to create an app and then made $20 per day for the next five years, that’d be close to $30,000 in passive income.
Pro: App development is an industry that will only grow as smartphones become more ubiquitous worldwide.
Con: Requires specific domain knowledge, which can be a high barrier to entry.
5 Passive Side Hustles
These passive side hustles require a steady but low amount of effort to execute. If you need money now, these options are easy to get off the ground. They aren't fully passive but still can provide an additional income without requiring you to work all weekend.
1. Learn to Flip Products on eBay
There's a chance that you know a certain product better than anyone else. Maybe it's game consoles or cell phones. For others, it's makeup, shoes, or handbags. The point is: you might be an expert and not even realize it.
You could earn a significant side income by learning to buy and sell that product for a profit on eBay. This is frequently called “flipping.” The learning curve may be a little steep at first. However, once you get the hang of selling on eBay, you can regularly churn out additional income.
Pro: There’s a lot of pure profit to be made, as long as you know what you’re doing.
Con: Dealing with anonymous parties can be tough, and eBay typically sides with the buyer over the seller. So if you’re selling for profit, it can be easy to get burned.
2. Use Your Washing Machine
If you have a washing machine and dryer, you can make money. Sound crazy? Several companies bill themselves as the Uber for Laundry, and they are pretty simple. You sign up, pick up clothes from people who live near you, and wash them. Once you deliver their laundry, you'll get paid. It's that simple.
If you are enterprising, you could always pick up several different loads and head to a laundromat to wash them simultaneously.
Pro: Turn an unused resource in your home into an income source. You don’t need incredible skills to wash people’s clothes.
Con: Everyone has a different definition of “dirty laundry.” Are you sure you want to test yours?
3. Become a Tutor
Getting into top schools is as challenging as ever. Getting a high-demand job is just as tricky. That means that there's a lot of people looking for expert information. It might be how to pass a certification test or how to write a resume. So if you can tutor them, you could earn top dollar.
With all of the new technology available, you can even tutor kids in China and make money while in your apartment in Texas. Check out companies like VIPKid for online tutoring jobs.
You can make a lot more than minimum wage by working around your regular work schedule before or after work, during the summer break, or on weekends.
Pro: You have a lifetime of knowledge. Someone out there is probably looking to learn what you already know.
Con: Teaching can be tough, and your students will expect results. How are you going to react when you’ve explained something ten times, and they say, “I still don’t get it.”
4. Become a Collectibles Expert
What do stamps, Beanie Babies, and Pokémon cards have in common? First, they are all niche collectibles with small but thriving markets. Second, you can do a few hours of homework on a particular collectible and immediately become more knowledgeable than 99% of the population. And that knowledge is power.
People are selling their old “junk” every day for pennies on the dollar. If you develop the skills to recognize treasure from trash, you can turn their pennies into your dollars.
The world of collectibles is incredibly diverse, ranging from old arrowheads to Christmas ornaments to classic books. But where there’s a paying customer, there’s an opportunity to earn passive income. If you do the homework upfront, you could earn a serious side hustle passive income.
Pro: Niche markets where large differences in knowledge can lead to significant profit margins.
Con: An incredibly diverse range of products and a real risk of getting fooled by counterfeits (a.k.a. losing money).
5. Give Lessons
Are you a highly-trained athlete or artist? Do you have demonstrable skills, competitive experience, or professional licensure? Then you could make significant side hustle income by giving lessons.
The biggest customers? Parents and their kids. There’s a huge demand from parents who want their children to have good golf swings, nice singing voices, and the ability to speak in public.
And you don’t need to be a professional opera singer or a world-traveling tennis player. All you need is enough skill so that the parents and their children respect your expertise. Plenty of former DIII athletes and local art teachers make $50-$100 per hour by giving lessons in their expertise fields.
Pro: Lots of potential clients, high demand for your skills.
Con: While the effort to acquire your skills is a passive sunk cost, the effort to give the lessons is quite active.
5 Residual Income Ideas
Passive income, semi-passive income, side hustles, and now residual income?! It may seem like splitting hairs, but there is a difference between passive income and residual income. One type of residual income is a payment to an actor or writer for each rerun after an initial TV season. Don’t worry. You don’t have to be a celebrity to take advantage of this type of income stream.
Let's say you wrote a book. It could be an eBook (e.g., via Amazon's kindle direct publishing) or a traditional book published in print. The publisher pays you an upfront fee for the work. Once they recover that fee from sales, any additional income you receive (net the publisher's cut) is residual income. Meaning you did the work once, yet all sales proceeds going forward provide you residual income.
Pro: A steady income stream from now until you die.
Con: You’ve got to write an excellent book (or make a good movie, show, etc.). It takes skill and hard work.
2. Product Sales
Not the writing type? That's fine. Let's say you're a widget salesperson.
You sell the widget for a set price. Part of the sale is for ongoing service. The purchaser pays a monthly (or other) ongoing fee for your company to service the widget. The company receives the money, the service department handles the continuing service, and you get a piece of the ongoing fee from the service contract—that's residual income.
In the insurance world, salespeople get an upfront commission for the initial product sale. For example, the sale might be life insurance, property and casualty, or health coverage. After the original commission gets paid, the salesperson receives an ongoing residual income from the initial sale as long as the customer continues to pay the premiums. Service usually comes from the client services team, not the selling agent.
Pro: There’s a very high ceiling. Sales commissions and residual income frequently have no upper limits.
Con: Sales is a tough job. Your failures are very apparent and right in your face.
3. Stock Photos
Do you love photography and have an eye for capturing beautiful shots? Did you know there are numerous ways to sell your photos online? While you could launch a site to sell your photos directly, you can also sell your shots to large established stock photo sites like Shutterstock and iStockphoto with a built-in customer base.
Pro: After the initial time spent taking and uploading photos, you can receive regular royalty payments for years to come.
Con: There’s a lot of competition in the space from both amateur and professional photographers.
4. Online Course
Do you have a particular skill? Have you mastered a piece of your profession that you can teach others? If you’re a media relations professional, you could teach others how to write a press release that drives editorial coverage, for example. With over a dozen places to sell an online course, it’s never been easier to make residual income from the knowledge you already have.
Pro: Large, existing marketplace for online courses
Con: Standing out among all the other existing course offerings can be difficult
5. MLM Marketing
For those not familiar with it, MLM is a multi-level marketing program with residual income aspects.
In MLM programs, participants are encouraged to sell a company's products. Of course, the participants get paid for that. But big money typically comes from recruiting others to sell those products under your account. So you encourage those folks to recruit others, etc. The idea is to build a sales empire—sometimes shaped like a pyramid where many people are at the bottom and fewer people at the top.
People at the top of this food chain earn residual income via the people underneath them in their “line.” This is because the folks at the top aren't selling themselves yet are making income from those underneath them.
Pro: Turn your entrepreneurial spirit into passive income.
Con: MLMs are very controversial. Don’t get trapped by purchasing a lot of products upfront, and don’t alienate your friends and family.
6 Small Businesses
Small business owners will tell you that being an entrepreneur is hard work, and there’s always something to do. Very few business owners would classify their income as passive. In fact, it’s probably the opposite of passive. It’s very, very active!
But some small businesses can, essentially, operate on their own, with enough systems set in place.
1. Car Wash
Most modern car washes fall into two camps: they are either self-serve or fully automated. The car owner either gets out and washes the car themselves or drives up to a conveyor belt that sucks them through a tunnel of bubbles.
In either case, there are likely very few employees and a small amount of upkeep. All you have to do is make sure the soap is fully stocked, and the water is running.
Sounds like the perfect job for a teenage part-time worker.
Pro: car washes provide steady income with almost no real effort from the owner. And that owner could be you.
Con: Good help is hard to find, and you’ll be relying on employees to run your business
2. Storage Rentals
People love stuff. And the more stuff they collect, the more likely they will pay a third party to store that stuff. And that third party could be you!
A storage rental facility requires some significant overhead upfront, but then it requires less over time. All you need is one employee to oversee the lot and handle the customer sign-ups.
You collect regular monthly rental fees, just like a landlord. But unlike a landlord, you’ll never get midnight phone calls because the furnace stopped running. The storage facility—and all the stuff within it—just sits there. And hopefully, you just collect your cash.
Pro: Fewer maintenance issues than an apartment or home rental
Con: Like any small business, you’ll need to oversee it and the employees
Last but not least, the laundromat is another great “hands-off” small business that could earn you passive income. Perhaps you’re underwhelmed since you’ll only be collecting profits of $2.25 at a time. But it’s one of the few businesses where the customers do all the work themselves! Dozens, if not hundreds, of customers might use your laundromat on a typical day.
Pro: Very high potential for long-term passive income, with a small amount of active work as a business owner.
Con: You’ll need to rent a physical space and spend capital upfront to buy the necessary machines.
4. Become a Franchisee
What if you could open a business that had worldwide recognition from Day 1? That’s what you can do by becoming a franchisee. The most common example of this occurs with popular fast-food chains like McDonald’s or Burger King.
Most individual fast-food restaurants are not owned and operated by the main corporation but are owned and operated by a local small business owner, a.k.a. the franchisee. This person might pay rent or licensing fees to the main corporation, but they keep most of the restaurant’s profits for themselves.
If you want to turn this idea passive, hire good employees to manage the franchise for you. They deal with the day-to-day operation; they deal with the headaches. You collect the profits.
Pro: An established business model with a very high ceiling (e.g., multiple locations at high-profit margins)
Con: Requires high initial cost and can easily become non-passive if you have a difficult time “letting go” of your involvement
5. Buy ATMs
Where do those fees go when you use an ATM? Answer: straight to the ATM owner’s pockets. And those pockets could be yours.
If you find a good location for an ATM, you can make significant amounts of passive income. The key is finding an under-utilized area with a high density of people needing cash.
Much like the laundromat or car wash, it might feel like earning 2 dollar ATM fees is a slow path to wealth. But it’s incredibly hands-off, and the customers do all of the “work” themselves.
Pro: Very hands-off. Good business model as long as people need money (and they always do).
Con: Requires a great location. And your business involves an unguarded box full of cash. That’s risky.
6. Vending Machines
Did you know that individuals can own vending machines? So if you have an idea for a high-traffic area in need of convenient food and drinks options, you can start your own business. There are machines available on the resale market as well as whole small vending businesses from those looking to retire.
Pro: Requires minimal time each week for restocking
Con: Location, Location Location is key, and you might have some duds.
The Bottom Line
Remember, generating passive income requires creativity and some initial work to set things up. If you're already busy, that's even more true for you. You've got to consider the value of time!
But if you can take some time to learn something you think you'd be good at, you can start to make money outside a traditional day job. So take an intriguing idea, do your homework and give it a try. You’ll be on your way to building an income stream for yourself in no time.