How to Make Passive Income: 10 Ideas to Earn More Money in 2024

Searching for ways to make passive income while balancing your full-time job? There are plenty of effective alternatives out there. You just need to find the one that best suits your routine and lifestyle—and steer clear of those tempting get-rich-quick schemes promising little to no effort, because, well, they're typically scams. 

Below, you'll find some passive income ideas worth trying. Think about how much money and time you're willing to invest, and pick the one that best aligns with your goals.

What is passive income?

Passive income is income you earn regularly without actively working for it. Meaning you earn money without providing a service for an employer, contractor, or client. Typically, the work happens upfront, either through an initial investment or by creating a business. Once you're established, you just need to maintain what you've built.

Some passive income examples include real estate property and dividend stocks. With real estate, you make money through renting, while with dividend stocks, you invest in a company and receive a portion of the profits.

What passive income is not

If you're just starting out, it's common to be a bit confused about what qualifies as passive income. So, here are some things that definitely don't fall into this category:

• A second job: Whether it's a side hustle or a part-time job, it doesn't count as passive income. These rely on you actively showing up to work, and you'd earn income through wages paid by an employer or contractor.

• Freelance work: Freelancing also relies on you attracting clients, advertising your services, and actively working to get paid. This is the complete opposite of passive income.

• Assets that don't generate income: Some investments don't yield regular income and, as a result, cannot be considered a passive income stream. One example is cryptocurrencies, which may or may not generate profit in the long run.

How to create passive income: 10 business ideas

Here are 10 smart passive income ideas for different types of people and budgets. Most can be started and managed from the comfort of your own home, while others might need you to step out once in a while.

1. Create a digital product

If you're someone who's tech-savvy and creative, you could make passive income by crafting digital products like budget spreadsheets, resume templates, e-books, business cards, and party invitations.

You can create these using tools like Photoshop, Canva, Google Spreadsheets, Excel, or similar softwares and websites. Then, simply set up an account on a suitable marketplace, such as Etsy and Gumroad, and follow their guidelines for sellers.

Selling digital products is seen as passive income because it doesn't involve shipping, packaging, or managing inventory stock. People buy them to use online or print. Once you've built enough variety in your store, there's no need to keep producing new products actively.

2. Create an online course

Chances are you've already come across some of the Udemy and Teachable online courses. Creating a course like the ones you've seen is another smart way to make passive income. Once the course is fully filmed, you upload it on the platform and are paid every time someone buys it.

To get into this business, you don't necessarily need to be a teacher; you just need to be capable of teaching something. Think about a topic you have in-depth knowledge of and that others may be interested in learning. Perhaps, you're an expert at Excel and could create a tutorial, or maybe you know everything about copywriting or digital marketing.

It doesn't really matter what the topic is, as long as it's something people are curious about or need to learn for work or school. This way, you boost the chances that all the effort you put into creating and filming the course will lead to regular profits.

3. Rent your parking space

If you've never had a business before and want to start without a big investment, try renting your parking space. Let's say you have a parking spot that you don't use: You can rent it out to commuters or neighbors who need dedicated parking space. It's an easy way to earn passive income with minimal effort or upfront investment.

4. Become a marketing affiliate

Seeking passive income ideas for young adults? Think about affiliate marketing. You're part of a generation that's always connected and likely has a solid social media presence. That's pretty much all you need to dive into affiliate marketing.

Affiliate marketing revolves around product recommendations. Companies give you links for specific items to share with your followers, and when someone makes a purchase through those links, you get a percentage. 

5. Sell stock photography

Another way to generate passive income online is by selling photography on stock websites. Some of the most reputable platforms include iStock and Shutterstock, where people pay to download photos for use in their businesses, banners, websites, or social media posts.

This is probably one of the best passive income ideas with little money involved because you can begin with just your smartphone camera—as long as it's high quality. Then, as you start making some money, you can think about investing in a better camera to take even higher-quality photos.

6. Sell stock music

Were you a band kid in high school who now finds yourself with one or two instruments at home that you can play really well? If you're creative enough to compose some original music, you can earn money by selling it on stock websites. 

Stock music operates much like stock photography: People pay to download it for use in their videos, TV shows, documentaries, or even as ambient music in stores.

7. Rent stuff you don't use

Do you own a lawnmower or power tools? How about a tent that you only use once or twice a year? Renting out these items to your neighbors and others in your community is also a simple way to make passive income with little to no effort. The only catch is trusting people to return your stuff on time and in good condition. 

8. Rent a room or your house

If you have a spare room in your house, consider renting it out. College students and young adults are often on the lookout for roommates and shared apartments. If living with another person isn't really your thing, but you're away from home at certain times of the year, you could list it on Airbnb or Vrbo for those periods.

9. Invest in a high-yield account

If you already have a regular savings account, think about moving your money to a high-yielding savings account. With a higher interest rate, you'll generate more passive income. Just keep in mind, depending on your financial goals, other investments might be a better fit. Before you decide, it's a good idea to chat with your finance advisor.

10. Invest in real estate

Real estate investments can be a good source of passive income, but they require a solid strategy—and money—to get started. You'll need to take into account factors such as the condition and maintenance of the property, cash flow, and potential tenants. (It might not sound very passive, but once everything is established, the passive income should flow in.)

Calculate the effects on expenses, profits, and expected income—high returns often come with increased risk. Remember, smaller monthly profits aren't necessarily a bad thing if the property sits in an established neighborhood—it offers higher appreciation as the years pass.

You have several options for real estate investment, including residential or commercial properties, Private or Public REITs, and peer-to-peer lending, to name a few. Each option has its own risks and considerations, so make sure to do your research and consult with financial experts before investing.

How to generate passive income FAQs

Still wondering about your options? Check these answers to some frequently asked questions about passive income, and you might get there. 

What are the best passive income investments?

Methods of generating passive income depend on personal preference, financial goals, and circumstance. There is no one-size-fits-all strategy. The key is to research thoroughly before making any decision, especially if you're thinking about entering a business like real estate, which demands a significant initial investment of money, resources, and time.

How to generate passive income with no initial funds?

If you lack initial funds, it might be better to go with those online, creative passive income ideas, such as selling digital products, creating online courses, or becoming a marketing affiliate, for instance. These options require mostly internet access, creativity, and familiarity with image and video editing tools.