13 Passive Income Ideas That Let You Make Money While You Sleep
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Why stay up late losing sleep over how you’re going to earn more money when you could be making money in your sleep instead? This list of passive income ideas can be life-changing by making you extra money while you’re traveling, out to lunch with a friend, watching Netflix with your family or even in your bed asleep.
If you want to diversify your income and stress less about money, these legit passive income ideas are a perfect place to start.
Setting Up a System for your passive income ideas
Before you start thinking about how great it will feel to wake up to payment notifications and money in your bank account, you must understand that these passive income ideas take time and effort to build.
This is why most people resort to earning only an active income because it’s quick and convenient. In order to earn passive income each month, you need to set up a system. This could be a website, sales funnel, online tool or just materials you’d need to start generating passive income.
Sometimes, you may need to make an upfront investment with a specific strategy in mind. It all depends on what your goals are but as you fall in love with these passive income ideas, realize that they all require work setting up a system and getting them going.
Here’s our list of 13 passive income ideas that will help you make money while you sleep.
1. Investing in dividend paying Stocks
When you invest in dividend paying stocks, you become a stakeholder and receive a share of the profits. This is a popular way to earn passive income because many dividend paying stocks pay out on a quarterly basis.
This can be a great strategy to earn passive income during your retirement years. You don’t have to wait until retirement though if you have enough funds to build a dividend-based portfolio. You will need to use an online broker to create a stream of dividend income.
Ally Invest is a great option as they have many tools to help with your investing and have the lowest trade price in the industry – as low as $3.95 per trade.
If you’d rather have the investing managed for you, Betterment is a great option. Betterment is a robo-advisor, so they manage your investments for you and have no minimum balance requirement.
When was the last time you checked in on your 401(k)? Building your 401(k) plan is another great way to create a passive income stream for the future but many ignore them or are paying high fees.
Blooom is a great resource to check up on the investments in your 401(k) to make sure it’s in top shape. Blooom analyzes the investments in your 401(k) and looks for lower cost alternatives so you’re not wasting money that otherwise could be working for you.
Blooom offers a free 30-day trial, then is $10 per month after that.
2. Peer-to-Peer Lending
Peer-to-peer lending sites like LendingClub allow you to loan money to others and collect interest as they pay back the loan. In fact, many P2P lenders allow you to earn 6-10 percent return on your investment.
This awesome passive income idea works by letting you take on the role of a bank through a secure peer lending platform and can earn a higher return on your money than you would through a traditional savings account.
3. Crowdfunded Real Estate
When you hear the word ‘crowdfunding,’ you may think of your friend’s Kickstarter campaign, but it can also help you generate passive income through real estate investing.
Real estate crowdfunding allows you to invest in real estate by putting your money into a pool with other investors. To do this, you can make equity investments in commercial or residential properties.
Investors receive an equity stake in the property and returns are provided in the form of shares of the rental income that is generated.
Fundrise offers a great way to take advantage of this passive income idea. You can start investing for as little as $500 with Fundrise and you can invest in residential or commercial properties.
Fundrise also allows you to invest money in either a retirement or non-retirement account so you can better match investments to your goals and needs.
4. Affiliate Marketing
Affiliate marketing is a great way to earn passive income if you have a blog or online influence. If there’s a product or service you like, you can refer your audience to try it with your own custom trackable affiliate link. If someone clicks on your link and signs up, you can earn a commission.
There are many different types of affiliate programs and they all have different rules and payment structures. Once you find a few affiliate programs that you like, you can set up systems to promote them so you can start earning passive income.
The key to making this great passive income idea work for you is having a blog.
You can start a blog with Bluehost for $2.95 per month and they install your site in one-click, letting you start your passive income strategy right away.
5. Rent Out a Room In Your Home
This great passive income idea is something I’ve been considering. Thanks to sites like Airbnb, you can rent out their home or a spare bedroom to travelers in order to make extra money.
All you need to do is fix up the space and list it on Airbnb. You may need to do some light cleaning and maintenance after each guest departs, but you can also hire a cleaner to take care of that for you.
Just make sure your homeowners association or landlord allows for renting before taking the leap.
6. Paying Off Debt
One of the most unexpected passive income ideas is to pay off your debt faster. Yes, you’ll be spending money to do this but you’ll actually be saving money as well, especially when you consider how much money you have to pay in interest each month.
For example, I made my last student loan payment last month. Technically, I’m supposed to be paying on my student loans for another seven years if I were to stick with minimum payments but I started increasing my payments to get rid of the debt quickly.
Now that I no longer have that debt, I’ve saved myself thousands of dollars over the next seven years. That’s money that can go back into my pocket or be used for other things.
You can accomplish the same thing by lowering your interest rate so more of your payment pays down your debt balance. Lenders like Avant help you slash your rates by half, or more, letting you pay off debt quicker.
If you have student loans, you can do the same thing by refinancing your student loans with Credible. Credible is a great option to refinance student loans as they have rates as low as 2.54 percent and save the average person almost $19,000. Credible also allows you to compare up to seven lenders at once and provides options within two minutes.
Regardless of the kind of debt you have, the quicker you pay it off the quicker you’ll be able to pursue other income producing activities.
7. earn credit card rewards
Ok, so using credit cards isn’t exactly an income source. However, earning rewards points on purchases you make provides great value for something you’re already doing. That’s also not to mention that it’s incredibly passive as you earn rewards just for swiping your card.
We’ve personally used credit card rewards to earn free hotel stays and flights that greatly reduce the cost of going on vacation. That is a great benefit for something you’re already doing anyway.
Earning rewards for purchases is great. The biggest benefit tends to come in the form of a sign-up bonus. There are many cards available that offer rewards that provide hundreds of dollars in rewards. You typically need to meet a minimum spending requirement to earn such rewards.
Travel isn’t the only rewards you can earn from credit cards. You can also get cards that allow you to earn cash back, statement credits or redeem for gift cards. Regardless of the option you choose that results in earning money for something you already do.
8. Make Money Doing Something You’re Already Doing
Next to passive income is getting paid for something you already do. Take searching the internet for example.
You can use Inbox Dollars as a search engine and get paid for your searches. They also pay you for surveys or playing games.
Swagbucks is another search engine alternative that pays you for your searches. They also pay you for surveys, playing games, or using their shopping portal. They also pay you a $10 bonus for signing up.
You can also get cash back when buying groceries with Ibotta. Ibotta pays in cash, not points you need to convert.
Ibotta works at over 300 major retailers, online stores and most grocery stores. They even give you $10 when you download the app and use it once.
You can get money back using other money saving apps as well.
I hate overpaying for items that I buy. What’s even worse is when I buy an item online and find out it goes in price soon after I made the purchase. Not every online store allows you to get a refund of the difference and it can be a hassle to figure out which ones do.
The Paribus app practically eliminates this unfortunate situation. This is how they do it. Paribus scans your emails for receipts and order confirmations. If they find discrepancies they request a refund of the difference – if the online store allows it. Assuming they do and your refund is granted, it goes back to the card you used.
Paribus works with 30 different retailers, such as Target, Best Buy, Walmart, Amazon (with your login credentials and only monitors for late deliveries) and more. You can check the Paribus site for an up-to-date list.
9. Put Money in a high yield Savings Account
Okay, a savings account doesn’t sound like one of the best passive income ideas but it does work. The cash in your savings account earns interest, building your savings while you sleep.
You start with as little as you want. The trick is to find a bank that pays a decent interest rate on the money in your savings account.
CIT Bank pays 1.55 percent, (currently 22x the national average) when you start with a minimum balance of $100.
If you prefer a money market, CIT Bank pays 1.85 percent with the same minimum balance. You can use the savings and interest for an emergency fund or some other need.
10. E-commerce Store
Are there any products you can sell online? Consider selling wholesale items on ecommerce sites like Shopify. You can also try creating something.
If you make printables, try selling them on Etsy or sell T-shirts on TeeSpring or Amazon. Once you get the general concept down and create a few items, you can sell them consistently with little effort on your end.
Do you have an eye for a deal? You can sell those items through Amazon FBA and make money while you sleep with this passive income idea.
The Selling Family offers free online courses to help you get started launching your own Amazon FBA store.
11. Earn passive income Pet Sitting
Looking for a great passive income idea? Look no further than pet sitting. Yes, it does require some activity in caring for the pet, however much of it is passive, while you sleep or doing something else around the house – especially if you’re watching the person’s house while they’re on vacation.
You can set up a profile on Care.com allowing prospective clients to view your profile, read your reviews and decide whether or not they’d like to hire you.
12. create a course
Creating a course doesn’t sound very passive. That’s because it isn’t. However, once you’re done creating a course it can sell any time, day or night – thus allowing you to make passive income from it.
The online course space is a big business with tens of thousands of courses available. A course can be on anything – from basic coding to teaching a language. If you have an advanced skill this is a great way to make passive income from your efforts.
You will need a platform to host the course. That’s where Teachable comes into play. Teachable hosts, markets, and supports your course through their platform. When a student buys the course Teachable takes care of everything through automation.
It’s nothing to see a course sell for $100+. If you have a skill, this can be a great passive income idea to make money while you sleep.
13. sell designs
Are you a graphic artist? Do you like to design items in your spare time? Like #12 above, design isn’t entirely passive. You do need to spend time creating designs. Again, once created those designs can sell at any point and require little work from you.
Designs can be put on many things, from coffee mugs, to T-shirts, to phone cases and more. You can sell your designs and products in a number of ways but most of those require active work on your part.
CafePress is a great solution to this problem. CafePress will market and sell your designs or products so you don’t have to bother with any of that work, making it a legit passive income idea if you have the talent.
What are your passive income ideas? Are there any good ones we missed? Have you ever tried any of these things in order to earn money in your sleep?
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