How to Start Generating Passive Income

Passive income is derived from non-active or non-direct activities. The idea of passive income is to make money work for you.

You can build passive income in a variety of ways. In the past, investing in a portfolio and letting compound interest grow the money has been the most popular, as well as buying and renting out properties.

However, the popularity of social media and platforms like YouTube has led to many content creators learning how to earn passive income. Some people make money by selling prerecorded classes online, others earn money through ad revenue on their podcasts or YouTube videos, and others earn money through affiliate marketing.

These creators’ passive income can sometimes be enough to enable them to quit their day jobs.

Here are some Passive Income Ideas


The most significant opportunities for generating passive income come from investing, but it may take a lot of money to see meaningful returns.

Dividend Stocks

A dividend stock pays regular dividends to investors based on the company’s profits. In order to earn significant income from dividend stocks, you will likely have to invest thousands, if not hundreds of thousands, of dollars. Investing in dividends comes with some risks, and dividends can be reduced or canceled by companies when times are hard. 

Real Estate

Among the oldest methods of generating passive income is by owning real estate. The process isn’t as simple as buying a house or land. If you own a rental property, repairs and maintenance requirements can drain a lot of time and money unless you hire a property manager. Additionally, buying real estate can require a significant upfront investment.

Alternative sources of real estate investing, such as real estate investment trusts (REITs) or platforms like RealtyMogul that offer real estate crowdfunding.

Produce Digital Products

Anything digital can be a digital product, from eBooks to lesson plans to mobile apps to NFTs. You build them once, and then you can sell them online again and again. Invest your time and money into marketing the digital products you create, or you can take a passive approach.

Licensing of Music and Photographs

Took a fantastic photo; you can turn your photographs stream of passive income by licensing it into a stock image (adobe stock, Shutterstock). The same goes with music, create a song and upload it to places like Sound Cloud, Tik Tok, and other music sites; as your song gains popularity, offers can come in. Musicians can also sell their songs on sites like and Pond5.

Creating Custom Designed Products

Create original designs and upload them to printing websites like Teespring, Redbubble, CafePress, and Zazzle to make money when someone buys a t-shirt, coffee mug, or other product that bears your design. Moreover, you don’t have to worry about printing, storing, or shipping, reducing the frustration of selling physical goods.

Home Rental

If you’re out of town, you can rent a spare bedroom or list your house on Airbnb or Vrbo to earn passive income.

Land Rental

Your garage, carport, or backyard may have extra space that you could rent out for money. Land can be leased by travelers looking to pitch a tent in your area through sites like HomeCamper, and parking spaces can be rented through JustPark.

Transportation Rental

Uber isn’t the only way to make money from your car. Turo and Getaround are both good sites for renting out your car. It is common for transportation rental companies to provide insurance policies to protect you and your renters. You should be aware of any potential liabilities. 

Put an Advertisement on Your Car

Making your car a rolling billboard can earn you passive income, and your car will earn a passive income stream by placing a vinyl decal on it for an agreed-upon period of time. Consider your driving habits when choosing a platform and campaign.