16 Best Passive Income Ideas For 2024 (Make Money While You Sleep)

Last Updated July 18, 2024 by Davina Kelly

Looking for the best passive income ideas?

Whether you want to supplement your income or create financial independence these smart passive income ideas will help you reach your goals. 

Passive income – money earned with minimal ongoing effort is a dream for many people, but it can become a reality.

It won’t be easy but it is possible to create passive income streams that can ultimately lead to financial freedom. 

After hearing Warren Buffet talk about making money while you sleep, I was so inspired.

It really motivated me to explore ways to make money outside of my 9-5 and build wealth. 

I used to be in payday loan debt but I managed to pay it off, build an investment portfolio and save my first $50,000.

This changed my life so I am passionate about helping others change their financial circumstances. 

In this post, you’re going to learn the best passive income ideas along with passive income ideas for young adults.

After reading this post, you’ll know many smart passive income ideas online to help you secure financial stability and enjoy more freedom in your life. 

This post is all about passive income ideas.

This post may contain affiliate links, which means we will receive a commission if you purchase through our links, at no extra cost to you. Please read full disclosure for more information.

16 Best Passive Income Ideas Online:

1. Rental Properties

Rental properties are one of the most popular investments for generating passive income. Property is one of the best assets to invest in and can provide a steady income stream as tenants pay rent regularly. 

Not only can you generate income from a rental property, but you can also build wealth as the property value increases over time. 

If you’re interested in being a landlord you can manage the property yourself. This will require a lot of time and effort so it won’t be 100% passive.

You’ll need to manage any problems that arise with the property including repairs and maintenance. And also be on call to resolve any issues your tenants may have. 

However, if you want your rental property to be completely passive you can hire a property manager. The property manager will handle any tenant issues and maintenance that needs to be done. They will also collect the rent and pay you every month.

When it comes to rental properties the most important factors are the age of your property, the location and the quality of your tenants. So ensure you research thoroughly before purchasing your property. 

Pros: You can make consistent passive income and build wealth through asset appreciation. 

Cons: There are a lot of other additional costs to consider such as maintenance fees. But you can research and mitigate any risks.

2. Start a Blog To Make Passive Income

Starting a blog can be a powerful way to generate passive income. You can make money online by sharing your thoughts and knowledge with others and you can build a community. 

You can start a blog about anything you want, for example, if you love crafting you can start a crafting blog, trust me the possibilities are endless when it comes to blog niches.

There are many ways to make money with a blog, but the most passive strategies are display advertising and affiliate marketing. Once your blog has consistent traffic these methods can generate passive income. 

To be honest, creating a successful blog requires a lot of work upfront. However, once it’s established and monetised it can consistently generate income while you focus on other endeavours. 

You can make anywhere from $1,000 – $10,000 a month depending on your traffic so it’s one of the best lucrative passive income ideas. 

If you’re interested in starting a blog I recommend this eBook The Treasure Map To Blogging Success In 30 Days. This affordable eBook will show you how to set up your blog the right way and avoid making costly mistakes. 

It will also give you a profitable road map to understand how to make money with your blog. 

Pros: Starting a blog is a great way to make money online and can turn into a profitable business. 

Cons: It will take a while before you get traffic and monetise your blog so you’ll need to be patient while staying consistent. 

3. Online Courses

If you have expertise in a particular field or have skills and knowledge you want to share consider creating a course. Online courses can be a lucrative passive income stream and a great way to help others. 

Choose a subject you are knowledgeable and passionate about to create your course. It also needs to be something that people are interested in and can add value. 

For example, if you have had success investing in the stock market you can create a course to teach beginners how to invest and grow their money. 

The great thing about online courses is once you create one you can continuously sell it and make money. This is one of the best passive income ideas and has the potential to easily earn you six figures. 

Watch this video to learn more about how to create an online course that sells.

Pros: This is a great way to make consistent passive income. 

Cons: It will take time to create the course, but your hard work will pay off.

4. Invest In Index Funds

Investing in index funds is a smart passive income idea and one of the best ways to make money while you sleep. 

You don’t need a lot of money to get started. As long as you have a steady income you can invest what you can afford and start building wealth. 

Index funds are a type of exchange-traded fund (ETF) that replicate specific market indexes such as the S&P 500. So you’ll invest in a wide range of stocks instead of one company. 

This will allow you to gain broad market exposure, diversify your portfolio and reduce risk. 

These funds typically have low management fees because they aren’t actively managed and provide steady returns over the long term. 

You can make money from compound interest, dividends and capital gains with minimal effort. 

By investing in index funds not only can you make passive income you can also build wealth and achieve financial stability. 

I began my investing journey with index funds a few years ago and it’s one of the best financial decisions I’ve ever made. My money is now working for me with minimal effort on my part. 

If you are ready to start your investing journey you can check out my post on how to invest in index funds. It will tell you everything you need to know and walk you through the process step by step. 

Pros: This is a great way to build wealth and make passive income. 

Cons: As with any investment in the stock market your capital is at risk so ensure you do your research beforehand.  

5. Affiliate Marketing

One of the best passive income ideas is affiliate marketing. 

If you don’t know, affiliate marketing involves promoting products or services and earning a commission for each sale made through your referral link. It doesn’t require a lot of upfront investment and can be highly profitable. 

The key to making money with affiliate marketing is to promote products that you genuinely love and believe in. You want to ensure that what you promote adds value to your audience. 

This way you will build trust and your audience will likely continue to purchase the things you promote. 

To make money with affiliate marketing you’ll need to create high-quality content that attracts visitors and encourages them to click on your affiliate links. 

You can create content for social media platforms like YouTube, Tik Tok or Instagram. Or you could start a blog and create blog posts to promote your favourite products. 

For example, you’ll see that I have a blog post promoting my favourite money mindset books because I love to read and those books have had a huge impact on my life. 

There are many different products you can promote and a great way to get started is by recommending products you’ve used that have helped you. 

You can join affiliate programs from companies like Amazon, Impact, Awin or ShareAsale and earn a commission for promoting something you believe in. 

Pros: This is one of the best ways to make passive income and help other people. 

Cons: It could take a while to build and nurture your audience so you’ll need to be patient. 

6. Sell Digital Products

Selling digital products such as eBooks, printables or Excel spreadsheets is a great way to generate passive income. 

Just like online courses, once created they can be sold repeatedly with little effort. But digital products are easier to make. 

Determine which digital product you want to create based on your skills and market needs. For example, if you know how to market businesses you can create an eBook sharing practical tips to help people get results. 

You can create your digital product in Canva. It’s easy to use even if you’re a beginner and they have a free account option. So you can create your digital product for free and start making money. 

If you don’t have a following Etsy is the best place to sell your products because they have a huge marketplace full of potential buyers. 

However, if you do have a following on social media you can sell your products on your own website. This will eliminate any third-party costs and give you access to customer data which can be super helpful if you want to create more products. 

Related: 12 Best Ideas To Make Passive Income on Etsy

Pros: You can create your products for free and generate passive income.

Cons: There aren’t any cons.   

7. Invest In Dividend Stocks

Investing in dividend-paying stocks is another great passive income idea and it is easy to get started.  

Dividend stocks are shares of companies that pay dividends to their shareholders regularly. This can be paid monthly, quarterly, semi-annually or annually.

In simple terms, when a company makes money it will distribute dividends to its shareholders from their profits as a reward for investing in the company. 

For example, Verizon pays a 6.42% dividend so if you invest $5,000 your annual dividend income would be $321. (This is a simple example, but the amount will vary)

Some companies issue cash dividends and others choose to pay stock dividends. This is where the company gives the shareholder more shares instead of cash which is a great way to increase your returns. 

Investing in dividend stocks can provide a steady income stream and also help you build wealth through capital appreciation. 

Read here to find a list of the best dividend stocks to invest in. 

Pros: This strategy is completely passive and has the potential to generate high returns and build wealth. 

Cons: It can take a while to generate an income and as with all investments your capital could be at risk. 

8. Rent Out Your Space

If you have extra space in your home such as a spare room or basement you can rent it out and make passive income. This is a great way to utilise your space and make money.

Even if it’s a spare room you’ve been using for storage you can clean it up and rent it out. There will be many people willing to share your space on a short or medium-term basis. 

You can use the income to pay your mortgage, cover your monthly bills or supplement your income. 

If you do have a spare room you can rent it out on platforms like Airbnb. This will require some work such as tending to your guest’s needs and cleaning, but it’s a good way to generate income. 

If you live in a good location close to public transport you can easily make $100 – $200 per day. 

Pros: This is a good way to utilise your space and generate consistent income.

Cons: It will require some work and you’ll have to be mindful when sharing your space.

9. Invest in REIT’s (Real Estate Investment Trusts)

To invest in real estate you need to have a lot of upfront capital, but if you don’t have the capital you can still build a passive income stream through property. You can do this by investing in REITs. 

Real estate investment trusts (REITs) allow you to invest in real estate without being a property owner. 

REITs are traded on major stock exchanges just like ETFs so you can invest in them through a brokerage account. 

One of the great things about REITs is they pay a high dividend yield. They are required to pay 90% of their profits to shareholders so you can make a lot of money by investing in REITs.

There are many different types of REITs you can invest in such as retail store properties, commercial office space and industrial. 

If you want to invest in property without having to deal with tenants this is a great option for you. You can make consistent passive income without any additional effort. 

Read here to learn how to invest in REITs. 

Pros: This is an easy way to generate passive income with little effort. 

Cons: As with any investment in the stock market your capital is at risk so ensure you do your research beforehand.  

10. Peer To Peer Lending

Peer-to-peer (P2P) involves lending money to a friend or individuals through lending platforms. This is a traditional alternative to getting a loan from the bank. 

If you have some money sitting in your account you can lend it via P2P and earn interest on your investments. 

This is one of the best passive income ideas because it doesn’t require too much effort.    

To get started you can sign up to platforms like LendingClub or Funding Circle. They will collect information from borrowers, assess their risks and place them into categories such as low-risk to high-risk. 

This information will then be made available to lenders (you) to choose who you want to lend your money to. For example, if a borrower wants to borrow $5,000 you can choose to lend the full amount or as little as $500. It’s entirely your choice. 

The average reported return of P2P lending is 5% – 10%, but this is not guaranteed. P2P lending won’t make you substantial passive income, but it is a good way to earn some extra money without trading your time. 

Pros: This is an easy way to earn some extra cash. 

Cons: As with all investments there is always a risk. I recommend researching the platform before committing to lending. 

11. Invest Your Spare Change

Mobile investing has become more popular over the last few years. It’s an easy way for beginners to start investing without feeling overwhelmed. 

Getting started is super easy, all you need to do is link your debit or credit card to an app like Acorns or Moneybox. When you make purchases they will be rounded up to the nearest dollar and your spare change will be invested for you.

It may sound small but trust me it all adds up. Think about the amount of purchases you make daily, from coffee and groceries to gas. All those transactions will accumulate and start making money for you. 

This was how I initially started investing and it was a good way to build up my knowledge and confidence before building my investment portfolio. 

Pros: It’s a simple way to get started and doesn’t require any work from you. 

Cons: There aren’t any cons. 

12. Licence Your Art

If you’re an artist or photographer consider licencing your work. Companies will pay you to use your artwork for products, marketing and media. 

This is one of the best passive income ideas and a great way for artists to make a consistent income.

You can connect with licencing agencies or use platforms like Society 6, Creative Co-op and Rebubble. Shutterstock, Deposit photos and iStock are great platforms for photographers to license their photos. 

Create a portfolio of your best work to showcase your style and versatility and start connecting with these platforms to find opportunities. 

Related: How To Make Money as an Artist (11 Best Ideas)

Pros: This is a great way to make money from work you may have already done. 

Cons: There aren’t any cons. 

13. Create a YouTube Channel

If you don’t mind being in front of the camera consider starting a YouTube channel. 

YouTube is one of the best platforms to share content and earn money. If you have a message you want to share, a journey you are on or knowledge you want to teach you should create a channel. 

You can create content about art, cleaning, gardening or anything that you’re into.YouTube has over  2.7 billion users so your content will reach millions and resonate with many people. 

To make money from YouTube you need to have 1,000 subscribers or 4,000 watch hours in 12 months. Once you’ve reached this threshold you can earn money through ad revenue, brand collaborations, sponsorships and affiliate marketing. 

You can also start a Patreon and make a consistent income by creating exclusive content for your members. 

It will take a lot of work in the beginning but once you’ve built your audience you can make passive income. 

Pros: YouTube is a great platform to build an engaged audience and make passive income. 

Cons: It will take time before you build an audience and start making money.

14. Real Estate Crowd Funding

Another way to invest in real estate without being a landlord is real estate crowdfunding. This strategy allows you to invest in real estate projects with lower cash requirements. And you can make passive income without breaking a sweat. 

However, there are downsides to this approach such as limited control over the process and potential project delays which can delay your returns. Like any other investment, there will be risk so it’s important to stay informed. 

You can sign up to platforms like Fundrise, YieldStreet and Realty Mogul. Be sure to thoroughly research each project before investing and regularly monitor the performance. 

Pros: You can make money without owning a property.

Cons: As with all investments there is always a risk. 

15. Rent Out Your Stuff

Do you own items that you don’t use often? What about clothes and shoes that you don’t wear but can’t bring yourself to throw away? 

Why not rent them out and make some extra cash? 

Yes, this really exists through platforms like Fat Lama and Rent Not Buy. You can rent out things like luxury clothes and handbags, DIY equipment, cameras, and more on these platforms. 

There are many people looking for things to use without paying full price. You can help them out and put your unused items to use and make passive income. 

Pros: This is a great way to get a return on items you have purchased. 

Cons: Your items could get damaged, but these platforms come with insurance so you’ll be covered. 

16. High Yield Savings Accounts

High-yield savings accounts won’t make you rich, but they’re one of the best places to put your savings. These accounts offer higher interest rates than traditional savings accounts and are a safe place to stash your savings.

High-street banks typically have low interest rates, but now you can find savings accounts with interest rates ranging from 4% – 5%. Online banks generally provide higher interest rates compared to traditional high-street banks so keep that in mind when researching. 

Use price comparison sites to compare interest rates and find the account that works best for you and your needs. You can utilise these accounts to make passive income and maximise your savings. 

Pros: This is an easy low-risk way to boost your savings. 

Cons: You won’t make a lot of money, but you can make consistent passive income.

Final Thoughts About The Best Passive Income Ideas

Building passive income streams is a strategic way to achieve financial independence. You can use this money to supplement your income, save or invest in other opportunities. 

By diversifying your efforts across different methods you can create a diverse portfolio of passive income streams.  

You can start small, stay consistent and over time you can enjoy the benefits of financial freedom and a more flexible lifestyle. 

I hope you have found this post helpful and now know the best passive income ideas. Which idea will you try? Let me know in the comments below.

This post was all about the best passive income ideas.

Other Posts You May Like:

10 Smart Income Generating Assets You Need To Build Wealth

How To Invest Money For Beginners – The Ultimate Guide