36 BEST PASSIVE INCOME IDEAS TO MAKE YOU MONEY IN 2022

It takes time to build assets that generate passive income but it’s a crucial factor to achieve financial freedom and wealth. Here are 36 of our best passive income ideas to help you earn money while you sleep.

One of my favorite money quotes is from Warren Buffett, the Oracle of Omaha himself. He says, “If you don’t find a way to make money while you sleep, you will work until you die.”

WHAT IS PASSIVE INCOME?

Before we jump into the passive income ideas, it’s important to remember the purpose of making money passively.

Passive income is money that just shows up in your bank account month after month while you’re sleeping. It’s reoccurring income that takes little or no effort on your part to earn and maintain.

If you’re constantly trading your time to earn money, there will always be a maximum amount you can personally make. But setting up passive income streams means you can spend your time on other activities, and your earning potential is unlimited.

Earning passive income can provide you a nest egg to help in case of sudden unemployment or a healthcare deductible. It could also allow you to upgrade your next vacation spot, pay for a house project, and get caught up with your retirement goals.

Best of all, the extra financial security can give you some peace of mind, knowing that even when you’re relaxing or taking a break, you’re still making money with these new streams of income!

HOW TO MAKE A PASSIVE INCOME

So, how do you earn passive income while you sleep? The good news is that you don’t need to reinvent the wheel with passive income ideas, and you have plenty of free educational resources to help you learn how to create it.

But let’s get something straight: earning passive income takes a lot of work to set up. There are very few ways to make serious money with no effort. But there are a ton of ways to make a lot of money over time by putting in the upfront effort.

Yes, it takes initial effort and money to start building passive income. Investment of money, investment of time, and for most passive income streams… both! Over time though, as you stack up multiple passive streams, your income will start snowballing. With each new investment, you’ll see more money coming in every month.

Eventually, your passive income streams will bring in enough money to cover your expenses. At that point, you’ve reached financial independence: you are no longer dependent on your 9-5 job to live. You can retire in your 30s if you want, or wait until your 80s.

HOW TO START MAKING A PASSIVE INCOME

So, how do you get started investing all that money you’re saving? What are your options for passive income investments?

The following passive income ideas run the gamut from easy to difficult, low-return to high, high-risk to low. Consider what your financial goals are when factoring in which options to choose and be sure they match.

There are a couple primary ways to make a passive income stream. One way is through a monetary investment. Many only require an initial investment as low as $500. The other way is through an investment of your time, such as starting a side hustle.

HOW MANY PASSIVE INCOME STREAMS SHOULD YOU HAVE?

There is no “on size fits all” approach, but for beginners I recommend you pick two or three from the list below that jump out at you. Don’t try to invest in more than that for now—each passive income idea has a learning curve, and if you bite off more than two or three, you’ll find yourself with too much to chew. As you mature in these areas, slowly branch off into others.

36 PASSIVE INCOME IDEAS FOR 2022

Here are the best passive income ideas to help you earn money while you sleep:

1.Crowdfunded Real Estate

Investment real estate is near and dear to my heart.

In an extremely long-term study measuring returns over the last 145 years, guess which investment beat out even stocks for the best returns. That’s right: rental properties.

Best of all, rents and real estate values combine the low volatility of bonds with the high returns of stocks. And like stocks, investors benefit from both ongoing residual income as well as value appreciation.

Crowdfunding real estate companies like CrowdStreet let you invest in rental properties in a completely hands-off procedure. If you’re an accredited investor with a higher net worth, they might be right for you. They require a $10,000 minimum upfront investment but allow you to invest directly into the commercial real estate of your choosing (versus the “beginner” or “long term growth” portfolios that competitors offer), and better yet, CrowdStreet charges nothing in fees.

If you want to ease into the waters with a much lower initial investment, consider Fundrise. With a relatively small investment of $500, your return will be paid as a purely passive stream of income. I make about $500 a month through my own Fundrise investments. The low minimum makes this accessible to most and provides plenty of options for property investment.

Roofstock takes it a step further by giving you the option to buy and sell existing rental properties in whole. You get a complete profile of each investment property and can see how much they currently earn. They offer crowdfunded portfolio and individual units as well for passive income.

2. High-Yield Dividend Stocks & Funds

While most dividend-yielding stocks pay only 1.5-3.5% in dividends at best, a minority pay high yields in the 6-8% range. You don’t have to be an expert though—take the opportunity to learn.

Granted, a dividend yield is not written in stone. If the company has a bad quarter, it may not pay a dividend at all. Or the company may go out of business entirely, for that matter. That’s the risk you run with equities.

Instead of trying to pick an individual dividend stock, another option is investing in mutual funds and ETFs that specialize in high dividend yields. Try researching funds on either your investment bank’s stock screener, or use a free service like Yahoo’s stock screener if you haven’t opened an account yet with an investment bank.

Watch out for high fund management fees. Actively managed funds often charge high fees, which can eat up much of the fund’s returns.

When in doubt, invest in a passively managed, low-cost index fund. According to Matthew Frankel from The Motley Fool, 92% of actively-managed funds have underperformed the market over the last 15 years.

3. Micro Investing

Acorns lets you invest your spare change—literally—by rounding up your debit or credit card purchases to the nearest dollar. This means you can start an investment account with no money!

Just link your credit or debit card to the app, and once your spare change balance has reached $5, you can start investing with Acorns’ algorithm that buys into exchange-traded funds, also known individually as an ETF.

With Acorns, you can choose your own risk tolerance. The app will invest your money conservatively or aggressively in an exchange-traded fund based on your preferences.

It will even round up to the nearest $10 instead of the nearest $1 to increase your investment funds more rapidly if you so choose.

Best Side Hustles for 2022

4. Rent Out Storage Space

Did you know one in 11 Americans pays for extra storage space?

The self-storage industry is booming and has been for years. As passive income ideas go, this business model is a pretty simple one.

While you could buy or build a full-scale commercial self-storage complex, that’s not the only option. My friend Deni used to rent out space in her garage! And no, it wasn’t enough to make her rich, but the passive income covered about half of her mortgage payment and required no work or headaches on her part.

It’s also far less regulated than the residential rental industry, making evictions far cheaper and faster if the worst happens and your renters default.

A company called Neighbor proclaims itself to be the AirBnB of storage. And we highly recommend them!

It’s easy to turn your basement, garage, spare room, even closet, into passive income and a great side hustle, earning up to several hundred dollars a month. In New York City, they estimate a spare basement rental to generate almost $10,000 in extra cash per year!

5. Start a Blog

Whatever you’re passionate and knowledgeable about, share it with the world!

No matter how small the niche, other people in the world share your enthusiasm. Did you know there are blogs dedicated to sun gazing, the practice of staring at the sun and consuming your energy that way instead of eating? Seriously: you can start a blog about anything.

As your blog builds traffic, you can monetize it by mentioning affiliate products or services, publishing ads on the blog, or by selling your own products or services.

Starting a blog might be the perfect side hustle: you can do it on your own time, build multiple passive income streams, meet new people, and unlock tons of new opportunities.

It also only takes a low initial investment, but offers tons of income potential.

Just remember: like traditional investing, a blog is a long-term play. You won’t generate income on the first post you publish. But keep sharing good content and solid advice, and the returns will find momentum.

The important part is to just get started.

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6. Real Estate Investment Trusts (REITs)

A real estate investment trust, or REIT, tends to pay generous dividends.

Why? Because a REIT typically invests in income-producing real estate or high-interest debt service, so they’re inherently more passive income-oriented investments.

REITs tend to do well when real estate markets are performing well, and their dividends and values suffer when real estate markets suffer. But one advantage with a REIT is that investors can buy and sell just as quickly and easily as mutual funds, on the same exchanges, yet still benefit from the diversification of entirely different markets.

Just because equity markets may crash, it doesn’t mean real estate markets will, and vice versa. If you’re looking to diversify your portfolio into real estate but don’t want to invest directly, REITs can be a high-yield option.

7. Peer to Peer (P2P) Lending

One not-so-dissimilar passive income option is lending money to individuals through P2P lending websites like Lending Club and Prosper.

You can pick and choose the borrowers and loans that you like, browsing through the loan requests on these websites. If the loans interest you, start with a small amount of money for your first loan. An amount that wouldn’t cripple you financially if you never saw it again.

The returns typically range in the 6-10% spectrum—nothing to scoff at. Of course, at the higher end of that spectrum, expect the risk to be significantly higher too.

As you get more comfortable with evaluating loans on these platforms, you can gradually scale up your investments. While I have not invested in P2P website loans myself, I’ve known other passive income investors who have seen great success with them.

Note that peer lending websites tend to make personal loans, rather than real estate investment loans.

8. Private Equity Funds

Speaking of accredited investors, typically private equity funds are only available to these wealthier investors.

A private equity fund is a pooled fund that invests in a large-scale project, whether it be a large real estate investment project, a startup company, or some other investing venture. The fund is managed by an individual or management group that oversees the fund’s investments, and pays dividend income to investors.

Often private equity funds require medium to long-term investment, measured in years.

While private equity is not a passive income opportunity available to most of us, they can make excellent passive income streams for the wealthy, and are worth mentioning as a possibility after you make your first million or two.

9. Rent Your Car or Parking Space

Familiar with Turo? It’s a simple enough concept: “Airbnb for cars.” Individuals can rent their cars out short-term to other individuals. Yet another example of the sharing economy at its best!

Turo does provide state-minimum insurance with all bookings, and several options for car owners to add more protection if desired. Still, make sure you do your homework to fully understand all risks and liability for your car before renting it out on Turo.

While I’ve never rented out my car on Turo, I have used it many times as a renter. My experiences have been mostly positive, and it saves me hundreds of dollars every time I rent a car on vacation.

I’ve known some car owners to build up a fleet of cars that they rent on Turo, generating considerable passive income. It also makes for a great way to generate ongoing cash from your old cars rather than trading them in to the dealer for pennies on the dollar! Get started with Turo today.

Did you know that the average vehicle is parked 96% of the time? Parking spaces are highly valuable. Especially if you live in a city. Individual parking spots can go for as much as $375/month in San Francisco. Let’s say you live in a less expensive city; I bet you could get $100/month, or $1,200/year! Draft up a contract and rent it out!

10. Private Notes

Like the idea of investing in real estate, but don’t want the hassles of ownership and property management?

One option is to lend other real estate investors money for their deals. You can lend directly to investors in the form of a private note and negotiate whatever interest rate is acceptable to both you and your borrower.

For example, I have a loan out right now with a real estate investing couple in Ohio that I know and trust. They have an excellent track record of success. For a nine-month note, I’m earning 1% per month, or 12% annually.

The risk? If the borrower defaults, you may have little recourse, unless your note is attached to the property’s deed as a lien.

A word to the wise: This passive income stream is not for beginners. Private notes can be incredibly lucrative and even safe, but only to the extent that you know and trust the investors involved.

11. Rent Out Rooms on Airbnb

Don’t want a full-time housemate?

Consider renting your spare bedroom(s) to short-term guests with a service like Airbnb. You can set your own schedule and only rent out your space when you feel like it.

That means if your in-laws are coming next month, you can block off those dates on Airbnb.

But the possibilities don’t end with renting out spare bedrooms. If you’re going on a two-week trip yourself, why not rent your entire home on Airbnb?

Or, for that matter, buy rental properties specifically to rent on Airbnb, rather than screening and leasing to long-term tenants?

My friend Joe just converted his rental property (also in Fells Point, incidentally) to a short-term vacation rental. And it took some work: he had to furnish the property, turn on utilities in his name, and create a system for guests to access the property without him being physically present.

But when the work was finished, he booked several months’ worth of mortgage payments within the first day of listing the property on Airbnb.

12. Buy Royalties

Never heard of the Rule of Thirds or an arpeggio? No sweat. You can buy other artists’ royalties, already pumping along as passive income streams.

There are entire websites dedicated to buying and selling royalties. Try Royalty Exchange to get a sense of what kinds of royalties are available for sale.

Just make sure the royalty rights you buy are just as likely to continue generating sales in the future. Some art forms have a limited lifespan, as anyone who danced the Macarena can attest.

13. Build an Affiliate Marketing Niche Site

A niche website is a site built to attract visitors online with much focused interests. The goal is to become the authority on a specific topic. Content is exceptionally high quality and addresses specific questions related to that topic. The niche site targets a precise keyword, with high search volume, and provides solutions. Typically, search engines boost these sites to the top of the results page.

An affiliate niche website is one that monetizes the site using affiliate marketing and affiliate programs.

With affiliate marketing, you can earn commissions each time someone clicks on an advertiser’s link posted to your page. When you sign up for an affiliate marketing program, you’ll usually be given a personalized affiliate link. These links take users to the official signup page for the software/service but reward you with credit for each new customer you bring in.

These programs are usually free to join, but you may need to be a current customer to participate.

When you sign-up for an affiliate program with recurring commissions, you’ll often be given access to a member dashboard where you can generate affiliate links, track signups, and choose your payment method.

Most of the time, affiliate programs will pay you affiliate income every 30 to 60 days via PayPal or bank transfer. Each company is different, though, so make sure that you clarify payment times with the software company.

14. Start a Podcast

No John Steinbeck with the written word? No problem. Writing is a skill, and not everyone is interested in developing it. Another medium for generating useful, educational, or entertaining content is by, well… talking!

If you have a touch of charisma and don’t mind a microphone, try starting a podcast rather than a blog. Just like with a blog, you can earn money from affiliates, or advertisers, or by selling your products and services.

And no, you don’t need a $500 microphone or fancy home studio to get started. Start with a quick Amazon search for the best podcasting headsets under $50 to keep your initial investment low.

15. Create an Online Course

Online courses have skyrocketed in popularity over the last five years. Once again, what are you passionate and knowledgeable about? Try making an online course.

If you love it, someone else does too. An online course can be the perfect complement to your blog or podcast: you provide free content to attract the right prospects, then offer a full-service, comprehensive, step-by-step digital course for the ones who are ready to take the next step.

I’ve built several online courses myself. Our blog and landlord software serve mom-and-pop investors looking for how to make passive income from rentals. But for our users who want to go a step further, we have courses on how to retire within five years on rental income, and on how to automate their property management.

Online courses are a tricky way to start if you don’t already have a website. But if you’ve been building good content and attracting an audience through your blog or podcast, consider an online course as a way to “level up” your business from affiliate products and advertisers.

16. Sublease to Housemates

After the highfalutin options available only to accredited investors, ready to come back down to middle-class reality?

If you’re just beginning your search for passive income ideas, this is an easy place to start. The first home I bought was a townhouse in a happening, historic neighborhood in Baltimore called Fells Point. I wasn’t ready to invite my then-girlfriend (now-wife) to move in with me, but I didn’t need this entire house to myself, either.

So I advertised on Craigslist and Zillow, and showed the property, and collected and screened rental applications. I ended up leasing to a woman named Erika, who later became a close friend, and whose rent covered nearly three-quarters of my mortgage payment.

As an added benefit, she paid for half the utility bills, and sometimes we even shared (or more often took turns with) cooking responsibilities.

Eventually, she met her future husband and moved out, and my future wife moved in, but the four of us have remained incredibly close over the years. We even traveled to northern Italy together a few years back—and shared those expenses, too.

17. Start an E-commerce Business

Yes, digital products help you avoid the logistics of shipping. But we all still live in the physical world, and we all still need physical products.

What physical products do your online users want or need?

While I don’t sell physical products in my business, if I were to expand into them, I could offer products like lockboxes for vacant rental properties, or smart locks that can be opened by anyone to whom the landlord grants access. No matter what your website’s niche, there’s almost certainly a set of physical products your users want or need.

And no, you don’t need to ship the products yourself. Use a drop shipping company to handle all the logistics for you. One more way to add passive income streams to your online business!

18. Buy an Existing Business

Starting a business is a lot of work. Trust me, I know. It’s been the hardest thing I’ve ever done, not just financially or strategically, but emotionally.

If you like the idea of owning a business, but don’t want to go through the hurdles of starting your own, you can skip all the early startup headaches and buy an already-profitable and functioning business.

Brick-and-mortar, e-commerce, online application, or software—you name it, you can buy it. Browse a few businesses for sale on BizBuySell to whet your appetite and see what passive income source best suits you.

But if you’re serious about the idea, do in-depth research into the industry, and don’t stop at a single business listing website. Buying a business is an enormous commitment, not just of your funds, but as a business owner, you hold the employees’ careers in your hand. It’s a responsibility that you can’t take lightly.

Do your homework on the business and industry in question. When you think you’ve done all the due diligence, go back and do even more. Remember, the goal is passive income, not active income. If you buy a business that you have to run personally, it’s not truly passive and you’ll have to continue to work for money.

19. Outsourcing Your Business

Although businesses profit from the hands-on activity of the owners, it’s sometimes more prudent to connect your service or product with outsourced labor.

Outsourcing labor can deliver quality results while you spend time working on other areas of your life. It can be a way to increase productivity for your firm, but it’s mostly about transitioning away from active income and giving you more time to live your best life.

Several services exist to connect your business to outsourced talents, like Cloudpeeps, Fiverr, Guru, PeoplePerHour, and Upwork. You can also create your own platform for outsourcing talent through social media or networking sites.

This requires a knowledge of highly technical programming skills, but automating online services like advertising or content creation can be a passive income booster.

For a truly passive income generation, automating modern services is an effective way to trawl the net and gain income. Such services are in very high demand and can be used in any other side hustle or passive income business you may create.

20 Laundromats

Sure, you can hire a manager to oversee any business. But some businesses are designed from start-to-finish with only one goal: stacking up passive income streams.

The classic example is buying a laundromat. Every washing machine, at every location, is a little automated worker, ready and willing to generate passive income every hour of every day.

21. Vending Machines

A lot of brick and mortar businesses have spaces that can be utilized by entrepreneurs to deliver small goods at a cheap price.

While vending machines require inventory supply lines and maintenance, they are a good way to increase passive income streams and develop business relationships at the same time. You can start small with just a few machines with minimal initial investment, then grow residual income slowly by putting the extra income you earn back into more machines and locations.

Other passive income ideas for automated machine services include arcade games, pinball machines, ATMs, and batting cages.

22. Start a YouTube Channel

Whether you review products, give your opinion on local events, or perform entertaining work, there are many ways to earn income passively through a YouTube channel.

While YouTube rewards channels that have higher viewer counts with built-in ad revenue, the easiest way to make money on YouTube is through product endorsements. These can be your other passive revenue products like ebooks or secondhand sales, or you can use affiliate marketing to create on-click revenue.

One video product review could net you several hundred thousand views depending on the item, and a site that perpetually draws in thousands of viewers per video can net a clean passive income.

23 .Stock Photos

If you’re a photographer or have access to an extensive portfolio, monetizing your photos through the internet is possible on Dreamstime.com. You can sell the rights to your photographs to businesses and brands that would like to use them.

It’s also possible to start a small business photo exchange if you’re a passionate photographer. There are a lot of local art shows and exhibitions where you can display your work and create new consumers.

24. Inventory Investment for Small Businesses

A lot of companies need money to get off the ground, but what about businesses that need help supplying customers with their products?

A website, kickfurther.com, gives you the ability to invest in companies meeting their inventory needs. You’ll see a return on your investment when the business turns a profit.

This is a way of investing in a different part of the business cycle than usual.

25. Publish an Ebook

Similarly, publishing an ebook for Kindle is one of the best ways to make passive income as a writer.

Self-publishing on Amazon is easier now than ever. There are no startup costs, and you don’t have to convince a publisher to take a chance on your book. Whenever someone buys and downloads your book, you receive author royalties. If you’re serious about it, you can make thousands of dollars in passive income by self-publishing on Amazon!

26. Create Software

Technically inclined? If you have the skill to write software, you can create code that other people pay to use on an ongoing basis.

Or not—if you see a need that’s not being met, you can hire someone else to create the software, and then you can sell it as a passive income stream.

Many of us think of software as having a short shelf life, as becoming obsolete quickly. But that’s not always the case, especially for niche software in specific industries. Even when the software does need frequent updating, you can hire a software engineer once a year to modernize and improve it.

And “software” is a broad term. It can include mobile apps, WordPress plugins, online applications, and countless other types of digital property.

If you’re wondering how to make passive income as a software creator, the options don’t end with a one-time sale. You could offer the freemium model of “free with in-app purchases,” or the subscription model of a SaaS (software as a service) website, or annual subscriptions, or a reseller licensing fee.

The options are only as limited as your vision with any residual income idea!

27. Invest in a Food Truck

Food trucks are not only delicious, but they are an excellent source of revenue! If you know someone who wants to start a food truck but needs a little backing, investing in them can be a good financial decision.

Because they are low maintenance and can go right to the customer, food trucks have become a popular startup idea. People are always looking for delicious food, and food trucks are an excellent low-risk start-up idea to invest in.

When you invest in a food truck, you will receive a payout when they turn a profit. Or, you can structure the investment as a loan that is paid back in installments with interest, generating passive income for you monthly.

28. Rent Personal Items

Just like renting homes or rooms, renting out personal property is a way to increase your passive income stream.

Sites like FatLlama can help you advertise your things to people who may be interested in renting it. Although you might need to purchase insurance and perform maintenance to keep your stuff up to snuff, the benefits of renting out personal items means regenerating your cash flow and recuperating expenditures.

29. Rent out Old Baby Gear

Baby equipment is a frustrating expense. Babies need cribs and highchairs, but they ultimately grow up, and that equipment becomes useless.

If you have any baby equipment, you can rent it to new parents on sites like BabyQuip.com. This can turn into a passive side hustle and put old baby gear to use again.

30 Lease Equipment

Own some equipment you’re not using? It could be anything: farm equipment, industrial equipment, office equipment, even your lawnmower. Someone could use it.

For that matter, you could lease furniture to Realtors looking to stage homes, or lease party tents, or those bouncy houses that kids jump around in at the county fair.

Again, there’s a niche for everything. And an opportunity for anyone brainstorming how to make passive income.

31. Sell Retargeting Advertisements

One way that marketers increase their reach is through a process known as retargeting.

In retargeting, personal information scripts are taken from websites to recalibrate advertising in future page clicks for consumers. This means that consumer information from your website can be used by marketers to help them guide consumers to their own internal advertising processes.

If you choose this kind of advertising, this should be reflected in your terms of service for your site. If not, you could find yourself facing backlash for data use violations.

32. Start an Etsy Store

Crafty? Turn your crafts into cash with an Etsy store.

Etsy is one of the easiest ways to start an online business. Etsy is a platform that lets users buy and sell homemade arts and crafts. Many hobbyists sell their creations online and gain popularity through the site. They also make it easy to get paid and to ship through their site. Depending on what you sell and how popular it is, you can create a legitimate revenue stream through Etsy.

Selling physical products is great, but supply and logistics can take time to create and manage. If you’re personally hand-making each item, this would be considered active income.

However, if you create digital products like digital downloads, designs, or something that can be printed by the purchaser, orders can be fulfilled without your constant involvement. This is passive income!

33. Raw Land Flipping

This one sounds strange, but it can be an alternative to rental properties.

Raw land flipping is when you buy vacant land and clean it up so that it sells for a profit. The premise behind raw land flipping is that people are willing to pay more for land that they can envision a home on. By cleaning up weeds or brush and marking up rough property lines, you can turn an easy profit without dealing with tenants.

Buying raw land can be quite cheap, some land parcels are as low as a few thousand dollars. When reselling the land, you can choose to accept payment over time, with interest, which turns your capital into passive income.

34. Advertise on Your Car

If you don’t mind putting advertising on your car, you can make a nice chunk of change just by driving around.

By letting companies use your car as a mobile billboard, you can make a few hundred dollars a month. Sites like Wrapify can connect you with companies interested in placing advertisements on personal vehicles. This can be a good alternative if you aren’t into the idea of ridesharing.

35 Lose Weight

HealthyWage is a site that works like a bet. You make a wager on how much weight you will lose in a period of time. If you achieve your goal, HealthyWage pays you.

This can be a good incentive if you need to lose a few pounds. However, avoid this if you struggle with your relationship with food. This list is 62 items long for a reason.

36. Create an Audiobook

Creating an audiobook increases the reach of your potential audience.

There are tools out there available to help you, which can partner you with producers or allow you to sell your already created audiobook, such as ACX. The more channels you employ for your product, the broader your scope of sales increase.

The best thing about digital products is that you create them once, but resell them over and over again with no ongoing effort. Audiobooks are a great passive income source.