13 Passive Income Ideas That Let You Make Money While You Sleep

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Need great passive income ideas? Here's a list of 13 legit ideas that will help you make money while you sleep and make extra money to reach your goals.

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.

RealtyMogul is another good option to invest in real estate. You need to have $1,000 to start, but has lower fees than Fundrise.

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.

Make Extra Money by Taking Short Surveys
Taking short surveys in your free time can be an awesome way to earn extra money fast! The instant you finish a survey, Survey Junkie pays you in cash via PayPal. 6 Million users and an 8.9/10 Trust Pilot rating prove you can trust them.

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. cut the cord


What does cutting the cord have to do with our list of passive income ideas? If you have a cable or satellite contract you’re likely paying at or near the average of nearly $110 per month.

Cutting the cord and slashing those costs instantly frees up additional money you can use to pursue investment opportunities. Instead of needlessly spending money each month you free up cash to grow your wealth – just by axing your cable contract.

The best part is you can cut the cord and not miss out on any of your favorite shows by using a streaming provider.

Hulu with Live TV is one of the best streaming providers in the space. You get 60+ channels for just $39.99 per month. That’s $70 less than the average monthly cable bill you can instantly use to create wealth producing streams of income.

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.

Don’t have credit card debt but still paying on your mortgage? If your mortgage is more than five years old you may be missing out on a significantly lower rate. Refinancing your mortgage to a lower rate frees up money you can use to invest, or you can use it to pay off your mortgage quicker.

Compare rates at LendingTree to see how much money you can save each month to put towards other income producing goals.

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.

Compare our favorite credit cards here!

8. 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. If you’re considering listing your property on Airbnb, check out our Airbnb host checklist to earn more money.

9. 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.

10. 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.

11. E-commerce Store


Are there any products you can sell online? Consider selling wholesale items on ecommerce sites like Shopify. Shopify helps you create an online storefront you can use to sell products.

When you run an e-commerce site through Shopify they manage all the inventory for you so you don’t have to deal with inventory. They also help you manage many other administrative features of running an online store so you can focus on growing your business.

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.

12. 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 allowing prospective clients to view your profile, read your reviews and decide whether or not they’d like to hire you.

Need great passive income ideas? Here's a list of 13 legit ideas that will help you make money while you sleep and make extra money to reach your goals.

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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Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey with balancing motherhood, work, and finances on her blog, MyDebt


  • I love dividend investing. Over time you can really accumulate good money. My goal is to make at least $1500/month in dividends.

  • Dividend paying stocks will always be the ultimate passive income source. It takes a long time to get the equity necessary to have a material income from dividends, but there is nothing quite like it.

  • Jason Butler says:

    Passive income is something that I will be working on a lot in the new year. There are some things on this list that I haven’t heard of. I will do my research.

  • Daniel says:

    There seems to be a common agreement in the comments around dividend paying stocks! I like how the focus is on dividends and not share value. For example in Australia between September 1987 and September 1988 share valuations were down across-the-board 30% to 40%. However dividend payouts maintained or even increased over that time. Good companies tend to survive and profit through the tough times.

  • Matt says:

    Great list, Chonce. Dividend paying stocks are the most accessible way for the average person to benefit from passive income investments. I also like rental properties, but they take a lot more capital and time investment with research.

    It’s also a great way to think in terms of opportunity cost. Should I buy that new TV I don’t need to buy some more dividend paying stocks?

  • Mama Bear says:

    It may seem obvious, but I feel you should mention that rewards cards are only rewards if you pay the balance in full every month and never pay interest. Otherwise, your interest payment is more than you will receive in rewards. For example – if you get 4% back, but pay 10, 12, 16% in interest, you’re paying more in interest than the rewards. And THAT is how they get you!

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