How to Make Passive Income: 29 Passive Income Ideas For 2023

Passive income is different from active income in that you can generate it without active, daily participation. 

It could be money you make by owning an apartment and collecting rent from your tenants. It could also be earnings or dividends from your investments in the stock market. Or it could even include royalties you make from selling a book or acting in a commercial. 

Sounds pretty hands-off, right? That’s why people strive for passive income, whether they’re at the beginning of their career or working toward retirement. 

With countless passive income ideas to consider, we’ve rounded up 29 of the lowest-effort, highest-impact ways to make passive income: 

• 1. Open a high-yield savings account 
• 2. Invest in certificates of deposit (CDs)
• 3. Invest in dividend stocks
• 4. Invest in index funds 
• 5. Invest with a robo-advisor 
• 6. Invest in bonds
• 7. Invest in rental properties
• 8. Invest in REITs
• 9. Invest in royalties
• 10. Build an app  
• 11. Create and sell software 
• 12. Own a vending machine business 
• 13. Own an ATM machine
• 14. Dropshipping 
• 15. Affiliate marketing
• 16. Sell digital designs online
• 17. Publish ebooks
• 18. Start a blog 
• 19. Start a YouTube channel 
• 20. Create an online course 
• 21. Sell stock photos 
• 22. Create and sell resume templates
• 23. Do voice-over work
• 24. Rent your car
• 25. Rent your parking space 
• 26. Rent your bike 
• 27. Rent out your room 
• 28. Advertise on your car
• 29. Open a cash-back rewards card 

Now, ready to learn how to make passive income?

1. Open a high-yield savings account 

Upfront time commitment: 45 minutes

If you’re looking for a set-it-and-forget-it approach, a high yield savings account (HYSA) is one of the simplest ways to make passive income that doesn’t require a ton of money upfront. With this type of account, your earnings come from the interest they generate. Unlike a traditional savings account, a high-yield savings account can provide returns around 20–25 times the national average in interest. 

While a high yield savings account likely won’t yield as high a return as other passive income ideas, it will always earn more than if you held your money in a typical checking account (which yields no returns, as is the case for simply holding cash). HYSAs are better suited for short-term savings goals like building up an emergency fund, as opposed to meeting your long-term wealth goals. 

Be sure to do your research to find the best rates. You can open this type of account at a traditional bank and online banking platforms. 

2. Invest in certificates of deposit (CDs)

Upfront time commitment: 1–2 hours

A simple path to passive income investing as a beginner is to invest in certificates of deposit (CDs). They operate similarly to a traditional savings account, but they can earn more in interest over time—no effort on your part. 

How much you can earn with a CD depends largely on the term length you choose—a few months or up to ten years—and the institution with which you choose to get a CD. Consider opting for an online bank over your local brick-and-mortar branch so you can shop around for the best interest rates. With longer terms, your money has to grow. 

While interest rates constantly change, most CDs can earn between 0.25% and 2% in interest. While this method will earn you more than a regular savings or checking account, don’t expect it to yield mass amounts of wealth. It’s best for shorter-term income goals, like saving for an upcoming purchase in the next year or two. 

Investor tip: When choosing a CD term length, know that your money must remain untouched until the term expires. Otherwise, you’ll pay a penalty for the early withdrawal. Only invest cash you won’t need in the near term.

3. Invest in dividend stocks 

Upfront time commitment: 2 hours

A dividend is the portion of profits that a company regularly pays out to investors—often quarterly. While dividend stocks won’t yield returns as high as more volatile growth stocks, they’re generally more stable and can be a great source of dependable cash payouts. 

There are thousands of companies you can buy dividend stocks from. The key is researching potential companies before you buy. Instead of looking for companies with the highest returns, seek out companies with a strong track record of consistent growth. High-performing companies may also increase their dividend payouts as time goes on. 

4. Invest in index funds 

Upfront time commitment: 1 hour 

For passive income investments that carry less risk, consider index funds. Contrary to an individual stock, an index fund is a basket of many stocks and other securities that tracks a certain index (like the S&P 500) that aims to yield returns equal to that index’s performance. 

Index funds are an appealing passive income option for new investors. Since they contain hundreds of companies within a single fund, the success of one company in the fund can offset the poor performance of another. As a result, it’s a low-maintenance, hands-off way to generate income and diversify your portfolio—a win-win! 

5. Invest with a robo-advisor 

Upfront time commitment: 30 minutes

New investors who are also keen on creating a passive income can benefit greatly from investing with a robo-advisor. Robo-advisors take the guesswork out of building a portfolio, and they automatically manage it for you once it’s set up. 

Once you share your risk preferences and financial goals, a robo-advisor selects and oversees the ideal asset allocation for your portfolio. You can invest as much or as little as you want and let your robo-advisor do the work for you. To get started on Stash’s automated investing platform, for example, all you need to do is set your preferences and add funds—then sit back and relax.  

Investor tip: If you’re hoping to learn how to make passive income with no money, most robo-advisors charge fewer and lower fees. They also often have lower minimum balance requirements, meaning you can start investing with a lot less upfront money.

6. Invest in bonds

Upfront time commitment: 45 minutes

Bonds can offer low-maintenance sources of income, often for very little risk depending on the type of bond you choose. 

Bonds are essentially a form of debt owed to you by the government, a corporation, or whatever entity sold them to you. They all come with a price, a maturity date, and an interest rate. When the maturity date arrives, you’re paid the price of the bond plus interest earned. 

You can choose from bonds with different time frames, from a few months to ten years. If you’re looking for immediate forms of passive income, you may opt for short-term bonds. While they’re less risky with faster turnaround keep in mind that they have lower interest rates and overall returns than longer maturity bonds. 

7. Invest in rental properties

Upfront time commitment: Ongoing

Investing in rental properties is one of many the ways to make passive income. Traditionally, this involves buying property—whether it’s your first or second home—and renting it out to tenants. At first, the extra income can help pay down the mortgage. Once that’s paid off, everything else is pure supplemental income, save for eventual repairs (or property management fees, if you’d rather hire someone else to actively manage the property). 

Investor tip: Avoid going into debt just to buy a rental property—prioritize paying off your own home first to dramatically reduce risk and set yourself up for success.

8. Invest in REITs

Upfront time commitment: 3–4 hours; ongoing 

If you want a more hands-off approach to capitalizing on real estate that doesn’t require you to buy your own property, consider real estate investment trusts (REITs). A REIT is a company that owns and manages real estate—which you can purchase in shares just like with dividend stocks. 

Since the law requires REITs to deliver at least 90% of taxable income back to shareholders, they typically yield higher returns. Though not all are created equal, and you’ll need to do some research to pick a solid REIT. They’re available for a variety of different sectors, from healthcare buildings to commercial apartments, all of which perform differently in the economy. 

What’s more, if a REIT doesn’t perform well, dividends can be cut or even halted entirely, making your research all the more imperative. Factors to analyze before buying into a REIT include tenants’ rent payment history (if they’re not paying their rent, dividend cuts are likely), a manageable debt rate, and the overall state of the economy. 

9. Invest in royalties

Upfront time commitment: 1 day; ongoing

Investing in royalties means earning returns for the ongoing use or ownership of a type of asset, whether physical or digital (such as a product or a song). Owners of such assets often choose to sell royalties to get funding, allowing investors to capitalize on the product’s success. 

There are many types of royalties to invest in, from copyrighted works like books and music to natural resources like oil and gas. You can start earning royalty income through royalty auction sites or buying shares of royalty income trusts (similar to how one can buy shares of a REIT). 

When choosing a royalty to invest in, it’s best to stick with something you understand. If you happen to have expertise in, say, operating franchise businesses, you may opt for earning royalties that way. Whatever you choose, royalties can be a great avenue for creating passive income as long as the asset itself is profitable. 

10. Build an app  

Upfront time commitment: 3–6 months depending on experience; ongoing maintenance 

If you have existing programming experience or have an idea for an app you’ve been wanting to try, building an app is another way to make passive income. You may also only have an idea for an app but lack the expertise to build it. In this case, you could hire a developer or programmer to build it for you. 

While this method can certainly be lucrative if it succeeds, it requires a great deal of research—not only for the app itself but also for how you’ll market it once it’s built. Without a thoughtful marketing plan in place, it’s unlikely that your app will gain much traction. Knowing your intended audience and having a strategy for marketing and distributing your app is key to success. 

A smart way to combat this dilemma is to consider building an app for someone else. Simply search for opportunities on sites like Upwork or relevant job boards to find individuals or businesses looking to hire an app developer. 

11. Create and sell software 

Upfront time commitment: 2–6 months

If you have a background in programming, you can monetize your skills by creating and selling software. Developing software products may include creating your own mobile game, business software, or educational software. 

Alternatively, you could build one-off programming projects for individuals and businesses if you’d rather not come up with a new software idea yourself. Remember that your software doesn’t need to be overly complex. If you can create easy, useful software that serves a specific need for a specific audience (like B2B companies, for example), you can make a hefty side income.  

12. Own a vending machine business 

Upfront time commitment: 1 month; ongoing 

Owning a vending machine business is a low-maintenance way to create passive income streams without needing specialized skills— save for a little business savvy. The main requirement is the funds to purchase the vending machine, which can be upwards of $2,000. You’ll also need to account for the ongoing costs of stocking your machine. 

Once these costs are covered, a successful vending machine business comes down to understanding profitable locations and how to best serve the market needs of that specific location. This will include choosing what products you’ll stock, the type of vending machine you’ll buy, and finding a high-traffic area for your machine. 

While a vending machine business is highly passive once everything is in place, keep in mind the up-front time investment required to be successful. In addition to sourcing locations and ongoing machine maintenance, you’ll also need to handle legalities like proper tax filing and obtaining licensing permits for potential locations. 

13. Own an ATM machine

Upfront time commitment: 1 month; ongoing

ATMs are everywhere, from convenience stores and gas stations to bars and hotels, and many are owned by everyday individuals. Not including ATMs that clearly belong to a bank branch or financial institution, anyone can own an ATM as a source of passive income. They generate revenue through the fees charged to customers who use your ATM to withdraw money. 

While the fees you earn from your ATM are relatively small (usually around $3.00), the daily transactions add up quickly: the average ATM processes around 180 transactions a month. If you earn $3.00 for each transaction, that’s $580 a month. The key to success here is finding high-traffic locations where your machine will attract more customers, earning you more money. 

Keep in mind that, similar to owning a vending machine, you’ll need to have enough funds to purchase your machine, which can cost anywhere from $2,000 to $3,000. 

14. Dropshipping 

Upfront time commitment: 1 month; ongoing 

If you’re wondering how to make passive income with no money, dropshipping can be one of the best ways to make passive income. Dropshipping is an online business model that doesn’t require store owners to manage an inventory. Instead of sourcing, storing, and shipping a huge inventory of products, dropshippers use a third-party vendor to handle those jobs. 

The main task of successful dropshipping is finding the right products and having an advertising strategy to get them in front of your target customers. Dropshipping is an appealing beginner passive income idea since it doesn’t require a large investment to begin—you don’t need to purchase any inventory, rent a storage space or worry about handling shipments. 

With these costs out of the way, the main focus is making your online store appealing and executing strategies to drive traffic. 

15. Affiliate marketing

Upfront time commitment: 3–6 months to build an audience

Affiliate marketing involves earning commissions by promoting someone else’s (or another business’) product or service. It’s akin to a salesperson making a sale and earning a commission, except you don’t work for the owner of the product you’re promoting. Instead, you act as a link between your audience and the third-party product. If someone from your audience uses your affiliate link to purchase from a third-party company, you earn a commission. 

Successful affiliate marketing requires an audience—whether that’s from your podcast, your blog, social media, or your website—making this avenue well-suited for online content creators. While you can start with affiliate marketing as soon as you have that home base established, you won’t see much monetary traction until you amass a decent amount of followers, readers, or listeners. 

While affiliate marketing is a passive income strategy, you won’t begin to earn money passively until you’ve invested time in creating content and growing your traffic. The amount of time this could take depends on your niche and your platform, but it can take significantly longer than you might think. However, once you’ve built up some momentum, it can be quite lucrative. 

16. Sell digital designs online

Upfront time commitment: Ongoing

If you have graphic design skills, put them to work to create an alternative income stream. Sites like Creative Market or 99designs allow you to quickly connect with potential customers who are looking for design products, from logos and branding assets to website themes, fonts, and illustrations. 

17. Publish ebooks

Upfront time commitment: 6 months

If you enjoy writing and have expertise in a particular subject, writing and self-publishing ebooks can be a lucrative passive income stream. They don’t require a lot of money to get started, either—as a digital product that you buy and sell online, there are no printing or shipping costs to cover. And, most platforms allow you to self-publish your book for free. 

Successfully publishing an ebook requires some time and effort upfront. You’ll need to decide on a publishing platform, research the market demand for your idea, and of course, spend time actually writing your book. Costs to consider include hiring a proofreader and editor, hiring a designer (it turns out people do judge books by the cover!), and any commissions and taxes you have to pay  from your earnings.

Even with those bases covered, your efforts could fall flat if you don’t also consider how you’ll market your ebook. Creating a marketing strategy or campaign is crucial to ensuring your ebook finds your target audience. For this reason, you can start generating income faster if you already have an established audience. 

18. Start a blog 

Upfront time commitment: Ongoing

Online content creation has quickly become one of the most popular ways to make passive income, and those with a penchant for writing can do so by starting a blog. You can set up a blog website in less than an hour—the hardest part is committing to creating quality content and building a sizable enough audience to start generating income. 

There are a variety of ways to monetize a blog, including becoming an affiliate marketer, publishing sponsored posts, running ads, or even selling your own products. You may want to determine your monetization strategy first so it can inform the type of content you create and where you’ll promote it. 

Starting a blog is a winning beginner passive income strategy because you don’t need any special coding or design skills—plus there are countless web hosting platforms available for little to no cost. The main thing to keep in mind is how much effort it takes to create and promote your content. With patience and persistence, however, it’s possible to make upwards of thousands of dollars a month with a blog. 

19. Start a YouTube channel 

Upfront time commitment: 3–6 months to start building an audience; ongoing 

Just about anyone can become a successful content creator on YouTube and generate a sizable passive income, so long as you’re willing to invest time in building an audience and consistently creating content. 

Ads, such as the advertisements you see before a video plays, are the main way YouTube creators make money. Different channels can earn varying income levels depending on their particular niche and number of subscribers. 

That said, to earn money through ads, you’ll need at least 1,000 subscribers, which is why this passive income stream requires an upfront time investment and commitment to creating genuinely useful content. The more content you share and views you receive, the more you can earn. 

20. Create an online course 

Upfront time commitment: 3–6 months

Creating and selling online courses can be a highly lucrative form of passive income, and once you gain some momentum, you can truly start earning money in your sleep. 

If you’re knowledgeable about a topic and want to educate others, an online course is a great way to monetize that expertise. Once you have one or multiple courses up and running, you can continue to sell them without having to tend to things like stocking and shipping inventory since it’s all online. 

To successfully create online courses as a form of passive income, you’ll need to invest some time upfront outlining your course, recording it, and creating additional elements like bonus downloads or templates for your students. 

21. Sell stock photos 

Upfront time commitment: 2 hours; ongoing 

If you like photography, consider using your photos as a passive income source.   While earning money from photography used to require expensive equipment and tedious time spent uploading and editing photos, there are plenty of alternatives to monetizing your photography skills nowadays—like selling stock photos using nothing more than your smartphone. 

Sites like Shutterstock and DepositPhotos offer platforms where creators can sell photos, typically with a commission or flat fee for every photo you sell. In theory, just one photo could become a recurring passive income stream since you can sell it over and over again with no extra work on your part. You’ll just need to create your portfolio, add your images, and collect your monthly earnings. 

With the large demand for stock photography, focusing on a certain niche or style can help differentiate your photos and allow you to cater to (and be found by) a more specific audience. You’ll need to submit a portfolio for approval on most platforms to get started, and it’s quick and easy to get up and running from there. 

22. Create and sell resume templates

Upfront time commitment: 2 hours

For individuals with a keen eye for impactful resume design, creating and selling resume templates could be a fantastic passive income opportunity. In a competitive job market, job seekers are always on the lookout for ways to make their applications stand out, and a well-designed resume to highlight their experience and wins is a crucial component.

These resume templates can be tailored to various industries, job roles, and design preferences. Sellers can craft visually appealing, professionally designed templates with the right balance of style and readability. Sites like Etsy provide a platform to showcase and sell these templates, allowing creators to reach a broad audience of job seekers.

One of the great advantages of this passive income idea is that you can sell the same templates over and over again. Once a template is designed and uploaded to a platform like Etsy, it continues to generate additional income as long as there is demand. Furthermore, updating and adding new templates to your store can help keep your offering fresh and appealing to a wide range of customers.

So, not only can you generate extra cash from your design skills and expertise in information hierarchy, but you can also feel good about helping job seekers improve their chances in a competitive job market. This passive income stream combines creativity and business acumen in a way that benefits both you and your customers.

23. Voice Act for Real-World Narrations

Upfront time commitment: +2 hours; ongoing

Voice acting can be a highly rewarding passive income option for those with a memorable voice and a desire to diversify their income streams. While the world of anime and video game character voice-overs may be enticing, there’s a wide range of real-world opportunities waiting to be explored.

Many industries require voice narration for various purposes, including company training videos, phone system recordings, radio ads, and audiobooks. The demand for professional voice talent is ever-present, making it an ideal avenue for generating passive income.

To get started, you’ll need some upfront investments in essential equipment, such as a good microphone and a quiet room setup to ensure high-quality recordings. Patience and practice are key as you hone your craft and develop a professional portfolio. Once established, you can leverage platforms like Upwork, Fiverr, or specialized voice-acting websites to connect with clients and secure ongoing narration work. This passive income stream allows you to turn your distinctive voice into a lucrative asset while contributing your talents to various industries.

24. Rent your car

Upfront time commitment: 30 minutes

Similar to renting out your home on Airbnb, you can rent out your car as a way to earn passive income. This is truly a passive income idea since owning a vehicle is the only requirement to start earning money. 

You can rent your car on platforms like Turo, which makes it easy to sign up and get started. If you’re renting out a car you already own, be sure it’s not the one you use for everyday transportation—this passive income idea works best if you have an extra car or two that you don’t typically drive. 

Other popular online rental platforms include Getaround, Avail, and HyreCar.  Most of them manage all the logistics—like screening potential renters and processing payments—for you, making it surprisingly easy to start earning. Your earning potential depends on your location, type of car, and how often you list your car for rent each month. 

You can also earn more by listing more than one car. According to Turo, the average annual income is $10,516 for those with at least two active vehicles valued between $25,000 and $34,999 and who rented at least seven trip days per month. 

25. Rent your parking space 

Upfront time commitment: 20 minutes

If you live in a large city or densely populated area (even better if it’s near an airport), renting out a parking space you don’t use might be one of the easiest passive income ideas out there. If you’re centrally located near popular concert venues, sports arenas, or convention centers, renting your parking spot can earn you some serious cash during those events. 

With online parking marketplaces like Neighbor, Spacer, and SpotHero, you can sign up and get started in just a few minutes. While city dwellers may have an easier time cashing in on this idea, other opportunities include renting to local office workers, commuters, or students in need of a parking spot. 

Ultimately, your location will determine your earning potential, but beginners can expect to earn around $50–$300+ a month, according to Neighbor. And other sites like Parklet even have handy price guide tools to help you find a rough estimate of what you might be able to earn.  

26. Rent your bike 

Upfront time commitment: 30 minutes

You might not have an unused vehicle lying around, but what about a bike? Much like renting your car or parking space, creating a passive income is also possible with a bicycle. 

Rental sites like Spinlister can connect bike owners with people actively searching for a rental bike. In addition to insuring your bike against theft on your behalf, most platforms will also handle verifying potential renters and processing payments. If you’ve been wondering how to make passive income with no money, this could be the idea for you! 

Similar to renting out your car, your earning potential depends greatly on your location, local demand, and how often your bike is available to rent. Need an alternative to bike rentals? Spinlister also lets you rent out surfboards, snowboards, and skis! 

27. Rent out your room 

Upfront time commitment: 2 hours; ongoing

There’s no denying the wildly popular world of renting out your home on Airbnb. But for a more approachable beginner passive income idea, consider renting out a single spare room or other underutilized space. If it has a roof, people will rent it—be it a treehouse, a shipping container, or the aforementioned spare room you don’t use. 

Of course, some thought and planning are necessary when listing your spare space for rent. You’ll need to research local demand and the going rate for room prices to determine a fair price. You should also consider safety precautions, like interviewing potential renters before having them stay in your home. And, you’ll want to put some effort into your listing photos to make it appealing to prospective renters. 

Depending on what you want, there are many ways to make this idea work for you. If you’ll be traveling for an extended period, that could be a good opportunity to earn some extra cash by letting someone else stay while you’re away. Or you may choose to set a specific cadence based on how much you want to earn, like renting out at least two weekends a month. 

How often you make your space available is entirely up to you, but building a consistent flow of renters adds up faster than you’d think. 

28. Advertise on your car

Upfront time commitment: Varies

What if you could make a passive income just by driving your car? We’re not talking about Ubering, either—instead, consider getting paid to put advertisements on your car, or “wrapping” your car. 

You’ll first need to find an advertising agency that offers this service, then apply and go through their screening process. To qualify, they’ll assess things like your driving record, the age of you and your car, and whether you meet the minimum requirement for daily miles driven. Once approved, they’ll wrap your car with the ads for free. The type of car you drive does matter—approval is more likely if you drive a newer car. 

This can be a truly passive income opportunity since you don’t have to change anything about your day-to-day driving habits—you’ll just be driving around with the advertisements, potentially pocketing hundreds in extra cash each month. Read the application thoroughly for a rough estimate of what you’ll earn—it should include your compensation rates and how long a given campaign will last (that is, how long you’ll need to drive to be compensated). 

While this passive income idea requires little to no effort, do your due diligence in finding a reputable agency. Legitimate operations will never charge drivers a fee to have their car wrapped, so if an agency requests payment, take it as a red flag and look elsewhere. 

29. Open a cash-back rewards card 

Upfront time commitment: 30–45 minutes 

If you’re a responsible credit card user who pays your bills in full each month, consider opening a credit card with a cash-back rewards program. Such programs offer a percentage of cash back on qualifying purchases, which you can redeem for card credits or online purchases. 

Cash-back rewards programs vary depending on the credit card you choose, with some offering a fixed cash-back rate and others offering higher rewards for certain categories, like groceries or gas, or on websites like Amazon and eBay. Regardless of the one you choose, it can be a great passive income idea if you already use a credit card for everyday purchases. 

Investor tip: The main thing to be aware of with this passive income idea is high annual fees or high-interest rates. If an annual fee is too high, your cash back might not be worth what you pay each year just to maintain the account. Always read the terms of any potential credit card carefully to ensure you’re getting a good deal.

Pros and cons of passive income

When it comes to learning how to make passive income, there are countless avenues available depending on your skills, interests, and how much time you’re willing to devote. While there are plenty of truly passive income ideas, like advertising on your car or renting out your parking space, the most lucrative ideas typically require a bit of time and effort. 

That said, increasing your monthly income by even the smallest percentage can help you reach both short-term and long-term savings goals, especially saving for retirement. 

FAQs about how to make passive income

Still have questions about how to make passive income? Find the answers below. 

How can I make passive income with little money?

A low-cost, hands-off way to make a sizable passive income is by investing in index funds. Even if you’re brand-new to investing, index funds are approachable and don’t cost much money to start. If you want to earn significant returns over time, index funds are a low-cost way to do so—the S&P 500 index, for example, has seen average annual returns of nearly 12%. 

How many income streams should I have?

There’s no right or wrong answer—the number of income streams you should have depends on your personal goals. If you’re interested in earning passive income as a way to pocket some extra cash each month, a single passive income stream can do that for you. 

On the other hand, individuals looking to break from their 9-5 job and fully support themselves with passive income alone will likely need multiple passive income streams to do so comfortably. 

How can a beginner earn passive income?

One of the best beginner passive income ideas may be investing in index funds or ETFs. Compared to picking individual stocks, which requires time, knowledge, and effort, funds are a low-cost way to own many different stocks at once without having to keep tabs on the performance of individual companies. 

Not only are these funds an easy way to start building a passive income, but they can also have significant long-term payoff potential.