Passive income … sounds nice, huh? Rather than working overtime, passive income keeps flowing in — even when you're off the clock. In this post, we’ll list 16 passive income ideas you can try to bring in a little extra money.
A term deposit with the bank is a classic example of passive income.
You earn money without you needing to lift a finger.
Of course with interest rates so low these days, term deposits don't offer a lot of bang for your buck. There are other investment strategies such as stocks and real estate, but let's put them aside for now because these options obviously require you to already have spare cash at your disposal.
Thankfully there are plenty of passive income strategies that don't require you to put down a lot of money up-front. Instead, they tend to require you to invest some time to set things in motion — perhaps as a side hustle. Once it hits its stride, you'll be making money for less effort.
16 ideas for the rest of us
Check out this list of ideas for ways to make extra money. While they may take some time up-front, most don’t require much money. And once they’re rolling, you’re in clover.
- Sell ads alongside your content.
- Sign up for affiliate marketing.
- Write an eBook.
- Create online courses.
- Sell digital files.
- Make an app or smart skill.
- Sell merch.
- Get into drop-shipping.
- Rent out your stuff.
- Sell your photos.
- Rent out your passenger seat.
- Start collecting loyalty points.
- Cash back apps.
- Turn your car into a mobile billboard.
- Invest in reverse passive income.
- Make the most of your mortgage offset account.
Let’s dive into our list of passive income ideas — you’re sure to find something you like.
1. Sell ads alongside your content
First on our list of passive income ideas is to create a website, blog, podcast or YouTube channel that draws a few hundred visitors regularly.
The goal is to attract an audience that advertisers want to get in front of.
This obviously requires some up-front work and you’ll need to keep creating new content over time — people need a reason to keep coming back. But after a year or so, the advertising income from your Google ads can turn into a passive revenue stream.
The idea is to create evergreen content, meaning that it will still be relevant in the months and years to come. How-to guides, tutorials and product reviews can be good examples of evergreen content.
While you’ll earn pennies for each click over time, this will add up as more and more people discover your useful or entertaining articles and videos via search results.
2. Sign up for affiliate marketing
Affiliate marketing can tie nicely into your evergreen content strategy. With affiliate marketing, you embed links to purchase goods or services from providers like Amazon or GoDaddy (if your topic is tech-related) in your guides and product reviews. You earn a commission for every sale that comes via you.
3. Write an eBook
eBooks are a great way to make money from your expertise, with a much lower barrier to entry than traditional books when it comes to self-publishing.
They say everyone has a great novel brewing within them, but most people are more likely to find success with how-to guides. Depending on the content and style, your eBook might also work well as an audio book.
4. Create online courses
Selling courses online is another great way to monetise your expertise and, depending on the topic and your skill level, you might be able to charge more than for an eBook.
Thankfully you don't need to go to the trouble of building a digital classroom online, as there are sites like Teachable and Udemy to take care of the logistics.
5. Sell digital files
Websites like Etsy are great for selling crafts to people who appreciate quality — it’s far preferable to flogging your wares on eBay. Of course, it takes a long time to knit a jumper, so it can be difficult to make decent money this way.
Rather than selling finished products, think about creating your own craft patterns and selling them online. Remember, you create a pattern only once but can sell it over and over.
6. Make an app or smart skill
There's good money to be made in the Apple and Android app stores if you have a great idea for an app and know how to bring it to life.
Smart speakers are opening up new frontiers, with the ability to make money via developing skills for Amazon's Alexa smart assistant or Google Assistant.
7. Sell merch
If you've got great design concepts for merchandise like T-shirts, sites like TeeFury are designed to bring your ideas to life. It's easy to get up and running online without the need to actually print the T-shirts yourself or worry about fulfilling orders.
Related: How to set up a clothing business
8. Get into drop-shipping
Drop shipping lets you set up an online store without the need to store inventory or fulfil and ship orders. Instead, you pay a middle man to do that, taking orders and passing them along to the manufacturer, wholesaler or other retailers who then ship the goods directly to the customer.
9. Rent out your stuff
Rather than sell stuff, you can also make a passive income from renting out your stuff while you're not using it. You've obviously got services like Airbnb which make it easy to rent out your home, but you'll also find sites that let you rent out your:
- Car
- Parking space
- Storage space
- Other valuable commodity
Why not make your stuff work for you when you’re not using it?
10. Sell your photos
If you have an eye for taking a great shot then you might look to making money from licensing stock photos online (find a list of options here). It's not just an opportunity for photographers to start a passive income stream, there's also money to be made from video, music and other audio clips.
11. Rent out your passenger seat
You might not want to dedicate your days to being an Uber driver, but if you're already commuting into town every day, you can make money by renting out your passenger seat. Check out UberPool or dedicated carpooling services like CoSeats.
12. Start collecting loyalty points
It might not be the first passive income idea that comes to mind, but you can actually do quite well out of loyalty programs like frequent flyer and credit card points.
The key is to shop around for the best deals and then make sure you spend your points wisely. Apart from paying for flights and upgrades, you can also cash in your points for gift cards to spend in a wide range of stores.
13. Cash back apps
There's been a boom of cash back apps in Australia that offer discounts if you make purchases via their apps.
While it's obviously a ploy to get you to spend more money, cash back apps like ShopBack can work to your advantage when you were going to spend the money anyway with major retailers or supermarket chains.
14. Turn your car into a mobile billboard
If you drive into town every day, Wrapify lets you make money behind the wheel by simply slapping advertising on the side of your car.
15. Invest in reverse passive income
Got some cash to invest? Consider putting it into something like solar panels for your roof. Solar panels save you money every day.
Depending on your household energy usage, they can pay for themselves within a few years.
The great thing about reverse passive income is that, unlike other income, you don't pay tax on it. The taxman wants a slice of what you make each month, not what you save each month.
16. Make the most of your mortgage offset account
If you run your own business then you probably only pay tax and GST quarterly. Parking that money in your offset account until the tax office needs it helps reduce your monthly interest payments and pay off your home faster.
Once again, it's tax-free because you're not making more — you’re spending less.
Earn more with these passive income ideas
Remember, anything that seems too good to be true probably is, so watch out for scams. The best ways to make extra money tend to be a slow burn rather than a get rich quick scheme.
Passive income is a great way to make extra money and gain more financial security without racking up extra hours of overtime at your main job.
If you play your cards right then you can kick back at the end of the day, knowing that there's still money flowing into your pocket.
