Most people won’t say no to having a little extra cash in their pockets. And many people, especially those in the online entrepreneurial world, turn to passive income to make money. \r\nIf you have free time and, in most cases, a computer, you’re most likely able to make extra money here and there if you’re willing to put the work into it. \r\nThere are plenty of opportunities these days with a little time, money, or both that can lead to a solid stream of income coming your way in your future. How much you make is really up to you and how you spend your time and money. \r\nIf you’re considering spending a little time or money to earn more, it might be worth it to consider a passive income strategy. \r\nWhat is passive income?\r\n \r\n \r\nPassive income often refers to a source of income that’s not earned by direct employment or contracts. A lot of people associate it with doing nothing and earning money, but that’s not really the case. \r\nPassive income streams can come in all shapes and sizes. Each of which requires something different to start and maintain. There are four main types of passive income: \r\nBuying cash-flow assetsBuilding assetsRenting or selling assetsReverse passive income\r\n \r\n \r\nTruthfully, the term passive is used loosely. What’s active to some people might be more passive to someone else. In some cases that we’ll talk about, earning passive income requires active involvement in other parts of the business. \r\nPassive income types\r\n \r\n \r\nBuying cash-flow assets\r\n \r\n \r\nCash-flow assets are probably the most traditional way to generate passive income. This requires you to have money already set aside that you can invest in something that will ultimately give you a return. It's the true "make money while you sleep" mantra. \r\nExamples of cash-flow assets include investing, business lending, and real estate. The benefit of using this method is that, in a lot of cases, it can truly be a passive income. The downside is that you need to already have some money you can use. \r\nBuilding assets\r\n \r\n \r\nBuilding assets is becoming more and more popular with online entrepreneurs. Assets are typically things you build once they continue to bring you money. It’s usually a one-and-done kind of situation. \r\nAssets can be things like online courses, digital downloads, and even affiliate blogs. These are all things that you set up, and they continue to bring in money down the line. \r\nThe real benefit to building assets to earn passive income is that you’ll need to invest time in the first place and will likely need to continue to market the asset for it to bring in revenue. However, you can build an asset for free if you don’t have the extra cash to spend. \r\nRent or sell assets\r\n \r\n \r\nWhen you rent or sell assets, you’re using something you already own and aren’t using to make money. It can be a somewhat passive income, though in a lot of cases you’ll likely have to do some work because there will be tenants and guests involved. \r\nYou can rent out property or sell a condo you own to make an income this way. The downside to this method is that you need an asset to be able to rent or sell. But if you happen to have something, why shouldn’t it make you money? \r\nReverse passive income\r\n \r\n \r\nReverse passive income really isn’t earning money. It’s usually saving or spending strategically so you can save money. The benefit is that anyone can start doing this right away. \r\nExamples of a reverse passive income include using cash back apps and credit cards. In both cases, you do technically earn money, but you need to spend to get it. The downside to this is that there is usually a limit to what you can earn—it’s not really scalable. \r\nBest passive income ideas\r\n \r\n \r\nNot every passive income idea is for every budding entrepreneur. This is not a one-size-fits-all scenario. To make things easier, this list is broken down by the type of passive income that’s involved. \r\nCash flow assets\r\n \r\n \r\nSetting up cash flow assets as passive income is best for those with a chunk of cash that they can part with all at once. If you have a large savings account that’s burning a hole in your figurative pocket or got a little inheritance recently, it might be the way to go. \r\nIf you’re unfamiliar with the investing and lending world, you might want to work with a professional to work out what’s best for you. That will likely give you the best chance for success. \r\nInvest in real estate\r\n \r\n \r\nInvesting in real estate is a popular passive income strategy for many folks with a lot of extra cash that they’re able to use flexibly. \r\nOne of the easiest ways to invest in real estate passively is to purchase property that can be rented out. Whether that property is commercial or residential, you’ll fill it with tenants and collect rent money as income. \r\nYou manage your real estate properties as an active participant where you manage your properties, screen tenants, and collect rent yourself. Or you can do this passively where you hire a management team or company to take care of the day-to-day operations for you. \r\nA benefit of real estate investing is that you can not only collect an income from the rentals, but you can improve and update the properties and build equity. \r\nHigh-yield dividend stocks\r\n \r\n \r\nFor a truly passive experience, you can purchase high-yield dividend stocks to create an additional passive investment income for yourself. While this (like many other cash-flow options) comes with a certain amount of risk, the gains can be much higher. \r\nHigh-yielding sectors like banks, insurers, and utilities can make you a hefty return on your investment portfolio if you play your cards right. This is especially the case if you start investing when the stocks are low, like in economic downturns. \r\nWhen it comes to investing in stock of any kind, if you’re not familiar with the market (and oftentimes even when you are), it’s a good idea to connect with a financial manager or advisor who can help you make an investment strategy that works for you. \r\nWhile you can do this on your own, there are professionals with expertise in the area that have a better understanding of what to do. Which also means your chances of success are higher. \r\nInvest in real estate investment trusts (REITs)\r\n \r\n \r\nA real estate investment trust or a REIT is a company that manages, owns, or funds income-producing real estate. This includes things like an apartment or office buildings that are rented out. \r\nAs an investor, you own a small cut of the property and therefore are entitled to receive dividends as you would as a stockholder of a publicly-traded company. There tends to be a higher upfront investment when you work with a REIT, but your payout is usually higher. \r\nBecause of the higher initial investment, not everyone can afford to earn passive income this way. But there are companies like Fundrise that let you try out eREIT investments for a smaller amount of money. \r\nBecome a business silent partner\r\n \r\n \r\nIf your ideal passive income situation involves supporting a budding company, then becoming a silent partner might be a great opportunity for you. Silent partners provide financial support for a business and, if all goes well, make a financial return on their investment. \r\nBeing a silent partner differs from being an investor. While investors provide financial support, they also play a role in the company's day-to-day operations and growth. A silent partner simply provides money and cashes the cheque when it comes in. \r\nThis is a truly passive option because once you part with the money, you have little-to-no involvement with it. You’ll simply get a cut in the future, within the confines of whatever arrangement you’ve made with the business. \r\nPeer-to-peer lending\r\n \r\n \r\nPeer-to-peer lending lets borrowers avoid dealing with big financial institutions when it comes to getting a loan. Instead, they borrow money from individuals or groups of people privately. \r\nLike borrowing from anywhere else, there is interest involved. That means that when you provide money, you’ll most likely make a return. It’s a win-win scenario because the lender gets paid for lending, and the borrower, who might not be able to (or want to) through traditional means, can borrow money. \r\nTo start peer-to-peer lending, you’ll want to find a platform that you’re comfortable with (like Bondora or Mintos) and work out how much money you’re willing to part with for your first-time loan. It’s never a bad idea to talk to your financial advisor about the best route and platform to reach your financial goals. \r\nBuilding assets\r\n \r\n \r\nNot everyone has a large chunk of pocket money that can be given to someone else for a return down-the-road. But just because you can’t invest in anything doesn’t mean that you can’t start to set yourself up to earn passive income. \r\nFor those with little-to-no upfront money to invest, building assets can be a great way to jump on the passive train. While many of these options don’t require a ton of upfront investment financially, you will have to trade time. But if you do it right, you’ll be paid handsomely for it. \r\nSell your own products on the internet\r\n \r\n \r\nThousands of creators use Etsy to sell their products on the internet. From candles and clothes to digital assets, if you can create it chances are you can sell it there. Starting a home-based business and selling your own products is a great way to dip your toe into entrepreneurship. \r\nBut Etsy isn’t the only place you can do this. Self-housed stores through SquareSpace or collectives like Society6 are also great places to sell your own products. \r\nIf you want a more hands-off, passive experience, then a collective like Society6 is ideal. Here you can design your own imagery, and so long as it fits the size requirements, you can put it on anything you want, from a bath towel to a bar stool. As they use a print-on-demand method, there’s no need for you to house inventory—items will be created as they’re ordered. \r\nLicensing music\r\n \r\n \r\nMusic is an often overlooked asset that can be sold. It’s used in everything from film and television to YouTube videos and podcasts. Not only is it used, but it’s an incredibly important piece of the end products made by these creators. \r\nPodcasts have theme music, television uses music to guide viewers on a journey—it’s used by a lot of people for a lot of reasons. So, if you can make original pieces of music, you can start earning passive income. \r\nCreators use music marketplaces like AudioJungle and PremiumBeat to purchase assets from composers and are always looking for something unique to use. If audio is your game, you can create and sell the licenses for your masterpieces. Or you can build your own platform and market it to your audience. \r\nThe best part about licensing music is that you can sell multiple licences for one track. There should probably be a bit of marketing on your part (or at least SEO research), but it definitely takes on a more passive approach. \r\nStart a dropshipping store\r\n \r\n \r\nRetail ecommerce sales have gone up in recent years, but opening a traditional-style store can be a bit pricey. Beyond purchasing the items you want to sell, you need to pay to house them until they are sold and ship them to their new owners. \r\nBut dropshipping helps eliminate a few of those problems. Instead of purchasing and selling products that you own, you build a storefront to sell someone else’s products to your audience. When a product is purchased, it’s sent on your behalf to the purchaser. \r\nYour big job in dropshipping is to pick the items you want to sell and market your storefront. A popular platform to do this on is Shopify. They have a bunch of dropshipping plugins that make your job easier that you can install right in the platform. \r\nThe big downside to dropshipping is that it’s not a truly passive income. You’ll need to continue to market your products to increase sales. You’ll also want to update your product inventory to ensure that previous customers have more to buy. That said, it’s a pretty low-cost game to get into. \r\nStart a blog\r\n \r\n \r\nBlogs are great passive income ideas, but they do require some work. You need to continue to create and market content. But with high-quality posts and a good traffic channel set-up, blog posts that you created months or years ago can continue to earn you money while you sleep. \r\nFor a great passive income earning blog, you’ll need to set up monetization channels through advertising (like Google AdSense), affiliate marketing commissions, or even selling your own digital products. If you want to go big, you can use a combination of the three. \r\nMuch like a podcast or an online store, there is a lot of upfront time investment to get yourself to the stage where you generate passive income. But for those who love to build and grow, it can be a truly rewarding experience. \r\nBuy a blog\r\n \r\n \r\nIf blogging sounds like your ideal entrepreneurial adventure, but you’re not so keen on starting one of your own, you can purchase one instead. Online brokers, like Blogs for Sale or Flippa, have listings for already established blogs that are packaged up and ready to go. \r\nWhy would you buy a blog instead of building one? Building a blog from scratch can be a hefty undertaking. From setting up the logistics to getting the first few people, there’s a lot to think about. But with an already established blog, you’re ahead of the game. \r\nYou can purchase a starter blog for as little as $500 or go big with something that’s already generating revenue for $10,000 or more. It’s a great opportunity if you have a little extra cash to play with and want to hit the ground running. \r\nFlip websites\r\n \r\n \r\nIf growth is your specialty, then flipping websites might be the best game in town for you. You can buy a small website or a business that needs some work, put some TLC into it and get it up and running. \r\nFlipping websites is kind of like flipping houses. You buy something cheap that needs a little work, and you put in the elbow grease to get it off the ground. When that business is making a profit, you can turn around and sell it to someone who can take it from there. \r\nThis could be a great gig for someone skilled at marketing, optimization, and who loves to make a masterpiece out of something status quo. The great news is that you can purchase a website for as little as a few hundred dollars and sell it for a lot more. \r\nSell websites\r\n \r\n \r\nIn the same vein as flipping websites, starting and selling them can be a fun little side hustle. It’s a great opportunity for those who love to build and get things off the ground. \r\nThe idea behind it is that you build a brand, create a website, and build an audience. You’ll also want to make sure it’s possible to monetize or, better yet, is already monetized. Then you sell it. \r\nSelling websites can get you anywhere from a few hundred dollars to thousands of dollars, depending on what state you have them in when you’re ready to sell. \r\nCreate a podcast\r\n \r\n \r\nPodcasts have been around longer than most realize, but it wasn’t until recently that they were seen as the business assets they really are. Nowadays, you can make money podcasting by partnering with affiliate marketing companies or providing ad spots in your show. \r\nThis is one of those great passive income ideas that can scale. The more episodes you put out, the more opportunity you have to earn money, and old episodes can continue to generate money, especially if you're using commissions or affiliates. \r\nHowever, there is a hefty learning curve and time investment that you’ll need to make to get your podcast off the ground. Plus, there is a lot of work that needs to be done, so hiring help if you can afford it is a great way around that. \r\nBuild an app\r\n \r\n \r\nIf apps are more your style, you could establish a passive income stream by building one and setting it free. How passive this income lies in what you create and how often (or if) it needs to be updated. \r\nWhat’s great about building an app is that there are a ton of app builders like Appy Pie out there that are easy to use. That means that even if you don’t have coding-level tech skills, you can still build something great. \r\nCreate an online course\r\n \r\n \r\nOnline courses are a passive income stream that many online entrepreneurs use. It’s a great way to package up the information you know and share it with your audience for a fee. \r\nWhen you create an online course, you only have to create it once. From there, you can set-it-and-forget-it. You can make a single course and sell it to thousands of people. The best part is that you can use a program like Teachable that makes this process easy. \r\nIt’s possible you might want to update your course as technology or best practices change (depending on what you’re teaching). But the bulk of the work is done upfront. Once you build it, you market it, and you might just start seeing the cash. \r\nCreate online guides\r\n \r\n \r\nThe term “online guide” is pretty open-ended when it comes to creating a digital product, which means there’s lots of room to play. \r\nYou can create a PDF magazine-style guide to your favourite tourist hotspots or build a local guide to your city for travellers. However, there are more business approaches like guides for opening a retail store or some other area of expertise you have. \r\nIf you prefer an audio format, you could create a guided audio tour for someone to take themselves or create a private podcast-style how-to guide for business owners. Likewise, video can also be used. \r\nOnline guides have initial time and creative investment, but once they're created you can sell them to multiple people. Some guides, like travel or technical guides, might need to be revisited for updates later. But once they’re done, your big contribution is marketing. \r\nSelf publish an ebook\r\n \r\n \r\nYou can self-publish an ebook through a marketplace like Amazon’s Kindle Direct Publishing or package it up as a PDF and sell it through your own website. Which method you choose will depend on who your audience is and what you want to get out of it. \r\nFor example, if you’re publishing a short, 30-page guide on how to create a podcast that you want to sell directly to the audience you already have, then publishing on your own site is probably the most cost-effective solution. But if you’re self-publishing a romance novel series, you might be looking to expand to a wider readership. In that case, the Amazon marketplace could open doors. \r\nIn either case, as a self-publishing author, you get to set the price, and you receive the profit from it. There is a fee for publishing on a marketplace, so you’ll definitely want to look into it when you’re deciding. \r\nIt should be noted that you can self-publish paperbacks or hardcovers too. But when it comes to cost-versus-reward, it’s usually more trouble than it’s worth. \r\nCollect book royalties\r\n \r\n \r\nThere’s one other way you can earn money from publishing books. That’s to sell one to a publishing house like Penguin or Random and generate passive income called royalties. \r\nRoyalties are dependent on sales and are calculated by percentage. Let’s say you wrote a killer sci-fi book, and your payout is 7.5 per cent on all paperback sales. If your book makes $250,000 in a year, you could find yourself with a royalty cheque of $18,750. \r\nThe catch is that the process for traditional publishing is more challenging and takes longer. Whereas in self-publishing, you call the shots, with a publishing house, there’s the added time of finding an agent and selling your book and editing and marketing with the publisher before the book hits the market. \r\nThe trade-off for the additional time and work is that usually, authors make more money. \r\nSell other digital products\r\n \r\n \r\nThe thing about the online business world is that there is an opportunity to sell pretty much anything you can package up into a digital asset. If writing, course creating, or app designing isn’t your forte, there’s no reason why you can’t still build towards a passive income. \r\nFor example, a graphic designer might sell modifiable Canva social media templates to business owners that struggle with design themselves. Likewise, a cinematographer or photographer could sell stock images or videos for companies or individuals to use in their own products. Or a social media strategist might sell a package of pre-vetted hashtags for Instagram or Twitter. \r\nChances are if it’s something you can build online, it’s something you can sell. Your goal with a passive income is to build one thing that you can sell to multiple buyers for their own use. Whether that thing is an asset, tool, or knowledge is completely up to you! \r\nRent or sell assets\r\n \r\n \r\nWhen it comes to renting or selling assets, you need to have assets that can be sold or rented. So, this passive income option definitely isn’t for everyone. But if you have a space available that you’re not using and want to make money from it, there’s definitely an opportunity. \r\nTurn property into a vacation rental with Airbnb\r\n \r\n \r\nAirbnb can help you turn pretty much any unused property into a vacation or long-term rental that can earn you extra income. In fact, they’ve recently added experiences as part of their offerings, which is something you could also consider. \r\nThere are always people looking to stay somewhere that’s either cheaper than or simply not a hotel when they go to a new place—especially if they’re staying for a little longer than usual. Airbnb allows you to offer them your space and get paid. \r\nBeing an Airbnb host is not completely passive. You could hire someone to do it for you and cut yourself out of the equation. Most people choose to manage their own listings. That means that you will have to take time to approve listings and occasionally attend to guests. \r\nRent out a room in your house\r\n \r\n \r\nHosting a vacation rental through Airbnb isn’t the only option you have when it comes to unused space. There are plenty of uses for empty rooms in your house, extra garages and storage spaces. \r\nChances are, there is a lot that you have sitting around that someone else can use. You can rent a basement suite to a monthly tenant, an empty garage can be used as storage space for a price, or even an empty room (preferably with an external door) could be rented out to a small business. \r\nThere are, of course, considerations to be made for all of these options. Legalities that have to be looked into and insurance that has to be purchased, but there’s no reason why you can’t make your empty space work for you. \r\nRent out a parking spot\r\n \r\n \r\nIn larger cities, parking is a true commodity. If you happen to own a house, condo, or even commercial property with unused parking, especially if it’s in a highly-trafficked area like a city centre, renting it could be an income maker. \r\nYou can rent out a parking space to a tenant privately, or you can use an app like JustPark that can help you manage the rental. If you want to take it a step further, CurbFlip lets you rent out parking spaces to cars, bicycles, RVs, and even boats (specifically if you have a boat dock). \r\nIf your parking space is truly unused, there is no reason it can’t be making you a little extra side cash. Some parking space renters can make a few thousand dollars extra a year, letting others park in their empty space. The bigger the city and the smaller the parking options are, the better. \r\nReverse passive income\r\n \r\n \r\nReverse passive income is something that everyone can do. It’s essentially cutting bills, paying off debt, and using other creative means to spend less and save more. \r\nThey say that a penny saved is a penny earned, and they might be right since you won’t have to pay additional taxes on that incoming cash—or, more accurately, cash that isn’t going out. This isn’t exactly passive income, but it’s a great option for those who are comfortable cutting back and want more money. \r\nCash back credit cards\r\n \r\n \r\nCash back rewards on credit cards can be a great way to make a little extra money, especially considering you’ll be using them whether they’re cash back or not. If you’ll be spending money regardless, it makes sense to spend it in a way that benefits you. \r\nFor many of the best cash back cards, you’ll need a good credit score. You’ll also want to dig into which card fits you best because many provide cash back on qualifying purchases, not everything. Finally, you’ll want to understand the cash back terms—how and when you’ll be paid. \r\nIt’s important to point out that just because you get money back doesn’t mean you should spend for the sake of spending. A $50 cash back reward on a $5,000 unnecessary spend really isn’t passive income. \r\nCash back apps\r\n \r\n \r\nIf credit cards aren’t your forte, there are still options to earn as you spend. Apps like Ampli, Rakuten, and Drop give you a chance to make money while you buy things you were already going to buy. \r\nMany of these apps essentially use affiliate marketing, but you get the cut. That means when you do your regular shopping, you make money. \r\nHow to get started building a passive income\r\n \r\n \r\nDecide how you’re going to build passive income\r\n \r\n \r\nHow to get started with passive income is highly dependent on what kind you are going to pursue. Cash-flow assets require different preparation than asset building does. So, the first step is to decide what you’re going to do. \r\nDo some research and decide what style of income-earning is best for you. Then really dig into the type and figure out what exactly you want to do and how much you can earn. \r\nIf you want to build an online course, what are you going to teach? If you’re going to invest, what are you investing in? Put a plan together, so you know where you want to go. \r\nArrange any logistics you’ll need before you start\r\n \r\n \r\nEarning money often comes with some sort of government requirement. Whether you open a legal business or simply need to add something to your taxes next year, you need to know what that is. \r\nChecking with an accounting or legal professional is a good way to ensure that you have everything in place before you start earning money. Otherwise, you might end up having to pay more later. \r\nStart earning more money\r\n \r\n \r\nWhen you have everything in place, it’s time to start making money. Not every passive income route will bring in the cash right away. Most will take a while to see an actual return on your investment, whether it’s time or money. \r\nIf you’re building an asset, you’ll need to spend time creating it and marketing it. If you’re using apps, your money will accumulate over time. But sooner or later, you should start to see that passive income come in.