Passive income is generally income or earnings that are derived from a source in which the person is not actively involved in. It’s an income strategy that requires little to no effort to earn and maintain. Expending little effort and earning passive income means creating more time to venture in other business efforts.
Simply put, the venture is set up and the model is capable of running itself and generating cash flow. The creator can then scale it further or seek other passive incomes methods, creating even multiple income streams. In other words, passive income means the entrepreneur can set the business up and then earn money while they sleep.
Many are drawn to the idea of passive income because they imagine a revenue stream they can manage from their smartphone and don’t want have to actively trade their time for money any longer. Lawyers are always asking for ideas to generate passive income, so this article describes 13 ways to earn passive income to bring you closer to financial independence and financial freedom.
Types of Passive Income
Passive income can be online or offline. Semi-passive Income includes income derived from blogging, affiliate marketing, YouTube channels, online investments, online lending, etc. You are mostly involved in some capacity – it is not totally hands-off.
True passive Income is where you derive a steady regular income with literally no further involvement from you after an initial effort to get the ball rolling. Real passive income is what everybody is looking to achieve. Find out how both can be done in the next section!
Related: You Want to Be A Capitalist
To begin, start devoting just a short amount of time on the weekends to one of the passive income types. Some passive income ideas take a degree of upfront work to earn, like writing a book, but others can be built slowly over time.
For that reason, if you’re going to smart a small business, you should choose something that you are passionate about and, most importantly, which is manageable for you given your other commitments.
Dedicate a few hours to set it up, then after a profit is earned, use the extra income to fund other business plans or projects. With multiple income sources, the entrepreneur will have steady and multiple sources of income coming in. After setting up the passive income source, the entrepreneur can then sit back and watch income being generated, with little to no maintenance needed on your end.
Here are the 13 ways to earn passive income I promised you. Hopefully I’ll be able to build this over time (much like you’re about to get started building a passive income source!).
Use What You Already Own
Use assets and things you already own to earn income. By renting your assets out, you can earn money without investing in anything. By taking advantage of the things you already own, you can start to earn a passive income by doing very little.
1. List Your Place On Airbnb
Airbnb is an online website that connects people who want to rent out their homes with people who are looking for accommodations in a particular location. For hosts, it’s a great way to list your house, apartment, room, or rental properties to earn some extra income. There’s a small amount of work upfront initially, to set up your listing. After your place is listed, it usually requires little maintenance, besides cleaning up after guests and listing which dates your place is open for guests. There are also websites to rent out unused office spaces as well, like LiquidSpace, DropDesk, and PivotDesk.
I know from interacting with many lawyers, that using Airbnb while you are in law school or during the early part of your career is a completely viable plan for reducing your living expensive, padding your savings account and giving you a little extra money to either invest in mutual funds or set aside for a rainy day.
2. Rent your Personal Items
Just like renting homes or rooms, renting out personal property is a way to increase your passive income stream. There are several peer-to-peer rental marketplace websites to join. Some websites require that you purchase insurance for the items first, for some sites it’s included. You can list your equipment that is lying around the house for people in your community to rent. Websites like Ruckify lets you list your items for free.
Plus, if you have a certain skill like photography you can also create an online training to earn even more. In today’s world, people are willing to pay for your skills. If you have something to teach them, they’ll be glad to pay you for it. While that might not be passive income, if you can create a few videos hosted through a site like Teachable, it’s pretty close to a passive income side hustle.
3. Rent out your Car & Assets
Rent out your car with websites and apps like Turo and Getaround, To be eligible for these peer to peer sharing apps, most users must have newer vehicles with relatively low mileage and no major mechanical defects.
Earnings can vary based on location, vehicle type, and vehicle condition. Most of these apps aren’t as hands-on or time-intensive as short-term home rental apps. Hosts must keep their listings active and communicate with and approve prospective users. Other sites like RVShare and Boatsetter, let you rent out assets you don’t use like RV’s and Boats.
Go Online to Create Passive Income
4. Sell your Photos
For avid photographers, consider selling stock photos online. Stock photography websites like will let you upload your photos so users can purchase them. Stock photos are pictures that can be licensed and arranged for specific purposes. These photos are typically used by people who need them for magazines, websites, print designs, web designs, and other purposes
If you have a collection of beautiful photos, you can also sell them on websites such as Getty Images and Shutterstock. Even photos of everyday objects arranged in an aesthetically- pleasing flatlay can make a profit. Selling your photos as stock photos allows you to earn an income without any marketing needed. Your photos can stay there for years and get downloaded by thousands of online users.
You can earn a passive income even when you are not active on the sites, allowing you to earn a passive income. However, some photos might not sell. Stock photo sites only accept photos that are in high-quality and heavily demanded. So if you want to earn an income, you should submit photos that match their criteria. Other stock photography marketplaces include 500px Prime, Flickr, Snapwire, and Foap. There are many other marketplaces out there that will sell your photos so carefully read their terms and conditions carefully to see which platforms match with your business needs the most.
5. Online Course Platforms
If you hold certain skills or are knowledgeable about a certain subject, consider making a course online to sell. Think about something that your friends and family ask you for advice on and develop your course out of the skills you excel in. Use your expertise in about any subject and teach a class online. Some of the most popular courses include those related to language, science, technology, and business. Most courses found online are priced anywhere between $10 and $150. You can earn the majority of tuition revenues depending on the strategies you use for marketing.
The time you spend creating a course can be a tad bit time-consuming to set up, depending on your experience. At first, it may take longer to create the course but once you get used to the platform, it will get easier and faster with time. Your courses might need video and written content depending on the subject matter. There are tons of courses out there, so try to find a subject matter that stands out and make your content unique to set apart the course you created from the other courses.
The time you spend developing an online course depends on your skills and experience. At first, it may take longer for you to finish it because you are just starting to figure things out. As time passes, however, you will find it easier to finish creating a course. If you have already created a book regarding the topic, you may find it easier to turn it into an online course. After creating the course, there is not much maintenance needed besides marketing your course and updating your course routinely. Popular platforms to create online courses are websites like Udemy, Thinkific, and Skillshare, among many others.
6. Start a Dropshipping Store
When people think of passive income, most immediately think of dropshipping. It is one of the most profitable ways to earn a passive income online. There are few different types of drop shipping companies. Some require more work on your end than others. With platforms like AliExpress or Fulfillment by Amazon, the user doesn’t have to set up a seperate website. There is no need to process payments or refunds. With this kind of platform, you pay a commission for the convenience. With other platforms, there is a bit more work involved with creating a website. However, you will need to process payments.
You will never likely see the products you are selling because they are handled by the company after you receive the order. This method can require a lot of work on your end and this model can be more time-consuming over other methods. Also, remember that you’re not trying to create a $100,000 business (unless that’s your goal). With these ideas, we’re talking about building small online businesses that function more like dividend-paying stocks where you’re generating monthly income with minimum investment on your part.
7. Start a Blog and Earn Income through Affiliate Links
One of the most popular passive income methods comes from affiliate links found in blogs and websites. If you enjoy writing, consider starting a blog. Through your blog, your can generate several streams of income at once, including affiliate links, products, courses, selling your e-books, and many other ways. Once you build your website and develop a following, it’s one of the easiest and most sustainable ways to earn income passively.
In short, affiliate marketing happens when you endorse an online merchant’s products or services. The way it works is pretty simple. In the blog, you can set up links in the body of your text by sharing an URL that is unique to you. When a reader follows that link and purchases it, you will earn a profit after the sale it traced back to you. After you build a following, you can then take advantage of the traffic you generate to make money and even convert your readers into customers. The earnings are usually a fixed amount or based on a certain percentage.
By using search engine optimization, you can help generate more traffic to your site. Users typically use search engines to find what they need. If your blog appears at the top of the search results, you have a better chance of getting good traffic than other websites. To make the most of search engine optimization, you must use keywords and key phrases that online users use.
It’s recommended to perform keyword research to see what the most popular keywords are and incorporate these into your blog. Creating quality content is key. The blog will gain more and more readers if your blog posts are shared.
8. Write a Book
If you enjoy writing content, write an electronic book, or ebook for short. While this can be time-consuming at the beginning, this can be a great source of consistent income. Non-fiction books with educational content such as finance, marketing, and business are usually top sellers. Like course creation, consider a topic or niche that you specialize in and start writing.
Writing an ebook requires a bit of time investment up front, but it can be an amazing source of passive income month after month. With the improvement of digital technology, it has never been easier to become an author!
Sell your ebook on Amazon by using the Amazon Kindle Direct Publishing platform. Authors have the potential to earn a decent amount of income through Amazon. Offer your reader a bonus or gift at the end of your book to provide further added value beyond what is discussed in your ebook. Furthermore, you can add affiliate links to your products in your books. Alternatively, sell your ebook on your blog to direct your audience to purchase it.
9. Create a Print on Demand Online Store
Print on Demand is another great way to earn passive income, without having to invest in substantial amounts of stock. If you are creative and have an eye for graphic design, this might be a great option for you. No inventory is needed. With print on demand products, the products are created once a sale is made. The supplier takes care of the shipping and packaging. This method is also beneficial since there is little maintenance after the design is created.
After the design is done, you might need to create mockups of the products and might have to do marketing. When a customer buys your product, it’s a pretty easy and fast process to send details to your suppliers. The key here is creating unique designs that set your products apart from what is already out there.
You can literally put your design on a wide array of products including clothing, notebooks, phone covers, bags, accessories, and home decor. There are many print on demand companies for you to choose from including Printful, Zazzle, Redbubble, and Society6.
10. Sell Digital Products
If you have an eye for design, consider selling digital products. Digital Products, also known as downloadables, are low maintenance. These products are available to download online, so no shipping and handling is necessary. Instead, once your customer purchases them, they receive a link instead of a physical product.
Out of all the passive income sources, this is one of the most creative methods. If you are a great designer, create goods like greeting cards, stationary, decor, art, invitations, and other products to sell on sites like Etsy. Etsy is a popular e-commerce website that focuses on handmade, vintage items and craft items. Once a product is listed, there isn’t much work involved after that which makes this a great way to earn passive income.
The key here is designing high-quality printables that appeal to website users that will sell!
Invest your Finances Wisely to generate Passive Income
11. Invest in Low-Cost Mutual Funds
One of the easiest forms of passive income is investing the money that you already have available into low-cost mutual finds.
Most people don’t think of this as passive income, but I routinely look at the annual increases in my investment accounts as passive income, whether it’s in the form of dividends (which I try to minimize for tax reasons) or in capital appreciation.
When you own a sliver of the entire world economy thanks to the stock market, those companies and the people that work for them are going to work for you ever day, even if they are only generating you a few nickels a year. Those nickels add up over time.
12. Invest in Property
If you have the capital, real estate investing can be another form of passive income. If you don’t have the capital upfront, you might want toexplore crowdfunded real estate. This type of investing is somewhat similar to peer-to-peer lending, with the actual house to back up the investment. It’s great for those that don’t have a lot of money to put upfront, but still want to invest in real estate. Crowdfunded real estate basically pools together small amounts of money from multiple investors in order to finance a property ora portfolio of properties
However, this type of investment also comes with risks that should be carefully considered before jumping into. Use sites like PeerStreet to see if this kind of investment fits with your investment plans.
13. Peer-to-Peer Lending
Peer-to-peer lending is becoming one of the most popular alternatives to loans from banks and lending agencies. It refers to the practice of lending money to people directly from other individuals, cutting out the financial institutions like banks. As a Peer-to-Peer lending prospector, you can make a small investment in a loan profile. Then, you get to choose the people whom you lend your money to as well as the interest rate of your loans. The main benefit for lenders is the interest rate is often higher than conventional bank accounts, so you’d get a better return on your cash savings.
Carefully review the loan profiles and do your homework in order to yield high returns, since it can be more risky than conventional banking methods. If you have the money to invest, and are business savvy, peer-to-peer lending can be a lucrative way to earn a passive income. The most popular platforms are Prosper, Lending Club, and Peerform.
Try a Few Methods to Find a Match
Before you make up your mind about what method to use, determine your strengths and abilities. Once you have determined your level of expertise, the next important step is to research and use this list to find the most suitable options for you and your business needs.
You might have to try a few passive income sources out to see which is the most successful source. Don’t stick with what you know now, but explore ways to earn a passive income that go beyond your comfort zone. You might find that you enjoy one method over another. No matter what method you choose, you have the potential to earn a great amount of income with little to no effort.
There are so many ways to earn a passive income so you can start growing your bank account in your sleep. As with any business endeavor, there is no way to guarantee or predict the level of success that can be achieved. Your success will depend on many factors including your personal efforts, your dedication, and your motivation and drive to earn passive income. With so many options, the sky’s the limit.
Joshua Holt is a practicing private equity M&A lawyer and the creator of Biglaw Investor. Josh couldn’t find a place where lawyers were talking about money, so he created it himself. He spends 10 minutes a month on Personal Capital keeping track of his money and is currently fascinated by the JD Mortgage service connecting lawyers with lenders offering no to low down payment options.