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Most content out there related to passive income is drawn out with entirely too much information. I'm even guilty of that with a video I did a few years back on 18 passive income ideas that came in at over an hour long!
Today, we will be covering my favorite passive income ideas updated for 2022.
1. Niche YouTube Reviews
Believe it or not, this Audible review I did on YouTube 2 years ago has absolutely dominated for years. It's a simple 10 minute video reviewing Audible, since I have used it for many years. Then, I linked to the free trial for Audible which is a part of the Amazon Affiliate Program.
- Every person that signs up with my Audible link gets a free 30 day trial
- In 2021, this single video referred 765 free trials
- This earned me a total of $4,029.50 just from referrals
- This is a consistent $300 to $400 every single month
Now that this video has over 100,000 views on YouTube, it will be difficult to dethrone. Eventually, someone will take it over with a better more updated video. Until then, I will sit and collect my passive income.
2. Rent Out Campsites
What if you mixed the world of Airbnb with camping? You would end up with something called Hipcamp. This is an app that offers outdoor stays and camping experiences.
- While I haven't hosted yet, I did buy some land for camping in Upstate NY
- I have used the app quite a few times when camping out of my Jeep
- Stays range from $20 to $40 a night
- Carry in, carry out policy
If you are able to create something more extravagant, you can charge more too. Decks, hot tubs and things like that all increase what you are able to charge per night.
3. Affiliate Arbitrage
So this concept combines affiliate marketing with the concept of arbitrage. Affiliate marketing is earning commissions from referrals whereas arbitrage is the process of profiting from the price difference between buying and selling something.
- You start out by creating a blog article/video with multiple affiliate offers within it
- Then, you track conversions specific to that piece of content
- After that, you start running paid ads to the content
- The goal is to earn more in commissions than spending on ads
This is a pretty advanced affiliate marketing strategy. I haven't tried it myself, but I will keep you posted on if I ever do.
4. Wrap Your Vehicle
If you live in an area that is well populated and do a lot of driving, you could sell ad space on your car.
- If you live in a major city like Boston, Chicago, NYC or others there may be companies that help you with this
- Carvertise partners with brands in the cities listed above as well as others
- Specifically, it allows Uber, Lyft and Doordash drivers to get paid for wrapping their vehicle with an ad
According to some blogs online, you could expect to make around $100 to $250 per month doing this. If you book a brand yourself, you could potentially make more.
5. Sell Covered Calls
If you are looking to generate extra income from your portfolio, one of the options you have is selling covered calls. This is where you sell a call option on shares of a stock/ETF you own.
- Let's say you owned 1,000 shares of a stock
- You could sell 10 call options, since each options contract represents 100 shares
- The premium paid by whoever purchases the call option is paid to the investor (you) who owns the shares
- This is a strategy some investors use to boost their overall returns
- Most people sell covered calls on ETFs or blue chip stocks
- You wouldn't want to do this with securities that fluctuate a lot in value
Covered calls work well when you have a price target in mind. If you owned a stock that was trading at $45, you could sell covered calls at a $50 strike price based on the corresponding number of shares you owned. However, you are obligated to sell for that strike price up until the expiration date.
If the stock jumped up to $100, the option holder would exercise and you would sell your shares for $50 each, giving you limited upside. If the stock stays below $50 until contract expiration, you keep your shares and the premium paid.
6. Online Savings Account
Most online savings accounts do not really give you much in terms of passive income. It's at best, $0.50 or so a year on $100 deposited.
There's a really cool app I actually invested in called Yotta Savings looking to shake things up a bit.
- Deposits earn a base interest rate (better than average)
- For every $25 deposited, you get 1 weekly ticket into a drawing
- Prizes range from a few cents all they way up to a $10,000,000 jackpot
- So far, over $4m has been won in addition to 2 Tesla's
- Over the last year or so, I have personally earned over $2,000 in prizes
- Visit yotta.download to learn more
Use referral code RYAN for 100 bonus tickets or this referral link.
7. Sell An Online Course
While this isn't a huge component of my business anymore, I have made $100,000+ over the last few years selling courses online. The key is to have an audience, so this is often paired with offering free information on a blog or YouTube channel.
- All you have to do is record videos, but simply upload them to Teachable instead of YouTube
- You can then offer free or paid courses
- It's basically like posting content to YouTube that you are then able to sell
8. Credit Card Rewards
If you are able to use credit cards responsibly, this can actually be a source of passive income. A lot of credit cards offer rewards in miles or something that isn't truly income. Some offer cash back, but it usually has to be spent or applied to your bill.
- Some credit cards today actually allow you to earn assets such as crypto
- You could then simply hold onto it long term
- If the price appreciates over time, you earn a secondary source of passive income
- BlockFi offers an unlimited 1.5% cash back crypto rewards visa card with no annual fee
- The average monthly debit transaction total is around $550
- Over the course of a year, that adds up to $6,600
Most debit card spending earns you nothing in the process. If you earned 1.5% cash back paid in Bitcoin, you would have earned $99 in Bitcoin in a year. Keep in mind, this is only a benefit if you pay the card off in full monthly to avoid paying interest.
9. Membership Site
Although courses can be a great source of income, they aren't usually consistent money makers. One month you might sell 2 copies and the next you sell 15. In order to smooth that out, what many do instead if offer a membership site.
- Basically, you create your own “Mini Netflix” with your own content behind a paywall
- I used to offer a membership site Stock Radar that I grew to over $6,000 MRR (monthly recurring revenue)
- The key is pricing it low enough to where people don't cancel
- Teachable is also a fantastic platform for membership sites
10. Earn Free Crypto
Coinbase has a really cool feature called Coinbase Earn where you basically get paid in crypto to learn about crypto. Now of course, the act of learning about crypto and taking short quizzes is not passive. However, any potential gains thereafter are!
- I took about 30 minutes on a Sunday, completed all of them and got around $20 worth of free crypto
- Not to mention, these are smaller altcoins with a lot of growth potential
- If you don't have a Coinbase account, use my referral link for $10 in free Bitcoin
- I recommend the strategy of learn, earn and hold for passive income
Since this is literally free money that is then invested in crypto, most people just hold onto what they get. Of course you can sell it and buy something else within the app, or cash out if you choose to.
11. Real Estate Investing
Real estate has and always will be one of the best ways to build wealth in this country. Unfortunately, it has been very difficult to get into the housing market over the last 5 years or so. Prices keep climbing higher and higher.
- If you still want to benefit from real estate growth without owning physical property, check out crowdfunded real estate
- Fundrise pools investor capital together and deploys it across portfolios of real estate
- The minimum used to be $500, but now you can start investing with as little as $10
- 2020 was a bit wild with the shutdowns and real estate was uncertain, however that led to an insane year in 2021
- Despite this, Fundrise booked positive returns in 2020 while public REITs were in the negative
- In 2021, across all client accounts the average return was 22.99%
Keep in mind, 2021 was an extraordinary year for real estate. It is unrealistic to expect that return to continue, however Fundrise has been delivering solid returns overall since they opened to investors. If you want to learn more, check out my free ebook on real estate crowdfunding for beginners here!
12. Open A Brokerage Account
If you don't have a stock trading account yet, you can get a free stock by signing up for many of them.
- You can keep the stock, or you can sell it
- If you sell it, you can withdraw the money or invest it in something else entirely
- Robinhood is a 100% commission free trading app offering users a free stock when they sign up and link a bank account
- That value is between $3 and $225 based on a random lottery system
If you wanted to turn that free stock into a mini passive income stream, you could enable fractional shares, purchase a dividend stock/ETF after selling the free share and then enable dividend reinvestment. After that, your dividends would be reinvested automatically into more fractional shares. Download Robinhood here to get your free stock!
13. Refinance Debt
How can refinancing debt lead to earning passive income?
- I was actually able to cut my mortgage down on my rental property by $600 a month through a refinance in 2020
- This is where you take out a new loan that replaces the older one
- Interest rates are still at a record low
- Loans from a few years ago were likely at a higher rate
- If you have Student Loans for example, consider refinancing them online with SoFi
Refinancing debt reduces your cash outflows. In my case, it boosted the passive income potential of my rental by $600 a month.
14. Invest In Artwork
Believe it or not, artwork is one of the oldest investments out there. Art has held value in society for thousands of years. The ultra wealthy have invested in it for years, but it's been largely out of reach for smaller investors.
- Contemporary Art has had an annual appreciation of 13.6% from 1995 to 2021
- In that same time period, the S&P 500 returned 9.5%
- While there is no guarantee this will go on forever, this is a long term trend at this point
- Masterworks is a site that allows people to buy shares of blue chip artwork in $20 increments ($500 minimum to start)
- After fees, the average return so far from Masterworks since inception has been 15.8%
I personally own 25 shares of a piece of artwork called Kosha on Masterworks. I'll be holding onto this for many years as a long term investment.
15. Crypto Staking
Most people buy and hold crypto, leaving it in their wallet or within the exchange they use. Staking is a way of earning rewards over time by putting your crypto to work.
- This requires you to lock up crypto assets for a period of time (number of cycles)
- If you choose to stake your crypto, you earn rewards for participating automatically in the proof of stake (transaction verification)
- I personally have a small amount of MiamiCoin (MIA) staked with Okcoin
- Rewards are paid out in STX
- STX can then be stacked as well to earn Bitcoin rewards
If you plan on checking this out, be sure to use my referral link for Okcoin to earn $10 in free Bitcoin.
16. Airbnb Hosting
Here's something I have tried myself. I listed my spare room on Airbnb to test it out back in 2019. While it ended up being a lot of work, I was able to make about $1,000 in a month from my spare bedroom.
- This was back in 2019, now in 2022 prices for Airbnb's have increased significantly
- Operating an Airbnb yourself is not passive, however it can be when you have multiple units being managed
- Another strategy people use is Airbnb Arbitrage
- Essentially, you rent an apartment that allows Airbnb with the intention of making more from the short term rental than the cost of the long term rental
If you are curious, check out the free Airbnb earnings calculator to see how much you could potentially make. It is different based on what city you are in. I also have a free ebook on Airbnb hosting for beginners you can grab a copy of here!
17. Invest In Farmland
Believe it or not, farmland has become a very trendy investment over the last few years. This largely happened after the news broke that Bill Gates owned the most farmland in the United States.
- Investing in farmland allows you to be paid from both the land value increasing over time as well as rent payments from farmers
- Renting out farmland yourself isn't completely passive, as there are management aspects
- Farmland has generated solid returns for decades without all the volatility of the stock market
- AcreTrader lists new farms weekly that you are able to purchase shares of as an accredited investors
The minimum investment on AcreTrader varies per deal, but it tends to be around $10,000 to $20,000. If you want to learn more about farmland investing, check out by other blog Farmland Riches.
18. Crypto Lending
If you own crypto, an alternative to staking is lending out your tokens in exchange for interest earned.
- Major cryptocurrencies like Bitcoin and Ethereum are non-yield bearing
- Lending enables investors to earn a yield on crypto being lent out
- I use the BlockFi Interest Account to earn interest on some of my crypto holdings such as PAXG
- Keep in mind, crypto deposits are not insured so you are taking on additional risks through crypto lending
If the benefit of earning interest offsets the risks involved, check out BlockFi and get up to $250 worth of free Bitcoin when you use my partner link.
19. Dividend Investing
Here's my favorite source of passive income; dividends. This is when you get paid for owning a stock, typically on a quarterly basis.
- I invested heavily into blue chip dividend stocks in 2020
- While I sold most of them off, I still have a large position in a Limited Partnership called Global Partners (GLP)
- My position in GLP is around $50,000 and when I purchased it, the yield was above 10%
- This allows me to earn quarterly dividends that are pretty big, the last two being over $1,000
- I invest with M1 Finance that way I can automatically rebalance/reinvest as well as borrow against my stocks
If you are interested in learning more about dividend investing, I have a free 30 minute training that walks you through the basics as well as getting started with M1 Finance.
20. Single Family Rentals
Single family homes were not considered to be an “investment” for a long time. However, in recent years the demand for single family homes has surged. Certain markets have gone up nearly double.
- It's difficult to capitalize on real estate markets you don't live in due to management activities
- Roofstock is a marketplace that offers buying and selling of single family rental properties
- Properties are certified and even come with a 30 day money back guarantee
With Roofstock, you are able to invest in managed single family real estate outside of your local housing market.
21. Crypto Borrowing
One of the things I took advantage of a lot this year were crypto-backed loans. This is where you put up crypto as collateral and get a USD loan against the collateral.
- I did multiple crypto-backed loans this year on BlockFi
- There are no fees or any kind of credit check and you can get your money deposited right to your BlockFi account the same business day
- The best part in my opinion is the ability to pay back the loan using your collateral
- Let's say you borrowed $10k against $20k of Bitcoin when the price of Bitcoin was $35,000
- You then get that $10,000 which you could use for other investments
- If Bitcoin jumps to $70,000 your collateral with BlockFi is now worth $40,000 since you still own it
- You can cover the loan with that $40,000 and get back $30,000
This is a creative way to cash out of crypto without selling your underlying tokens. However, keep in mind if assets go down in price, you may be required to add more collateral or risk having your assets sold.
Another source of borrowing I use is a portfolio line of credit. There is also something called a home equity line of credit that is popular as well, but it's a lot more cumbersome.
- I use M1 Borrow to borrow against the securities within my brokerage account with them
- Since I have around $100,000 invested with them and the borrow rate is up to 35%, this gives me a flexible line of credit of around $35,000
- The base interest rate is 3.5%, but M1 Plus members get a discounted borrow rate of 2%
- Keep in mind, your assets serve as collateral and could be sold off if the value declined substantially
- You can repay the loan by selling off assets from your portfolio
So how would you earn passive income from a line of credit like this? While this is risky, a lot of people use that money to purchase other assets. For example, using a HELOC to secure a down payment for another rental. Consider risks involved before doing this.
23. 1031 Exchange
When you think about making money in real estate, most people think of either rental income or house flipping. These are the two most common ways to make money with real estate.
- Rental income is collected while you own the property, assuming it is rented out
- Capital appreciation, or the value increase over time, is realized when you sell the property
- This can lead to a huge cash windfall and subsequent taxes
- A 1031 exchange can help because it allows you to delay the taxes owed by reinvesting proceeds into a “like kind” investment property
- This has to be an investment property, it doesn't apply to your primary residence
- There are specific rules you have to follow, but you can basically roll the proceeds forward tax free over and over if you wanted to
EquityMultiple is an online crowdfunded real estate platform that also offers 1031 Exchange-eligible investment offerings. The team helps you through the process, however you do need to consult with your own tax advisor regarding the specifics.
24. Precious Metals
While it is not the most common source, precious metals can also be a source of passive income. Since these are also non-yield bearing assets, the only way to make money with them is to sell them for a higher price at a later point in time.
- Metals like Gold have been effective hedges against inflation and even recessions in the past
- Since there is a finite supply, many people prefer it compared to the endless money printing of government currencies
- With inflation currently at a multi-decade high, many investors are fleeing to Gold, Silver and other precious metals
Check out the app OneGold if you are looking to purchase vaulted gold, silver or platinum. You can also redeem for physical metal at any time right within the app.
25. Niche Blogging
I actually own multiple blogs here on the internet. Aside from my personal site here, I started these other two blogs as well:
- Farmland Riches – Guides, reviews and comparisons related to Farmland investing.
- Investing Simple – “Catch All” personal finance blog with a focus on free trading apps.
While I can't share exact figures due to different partners involved in both, Farmland Riches makes a few grand a month while Investing Simple makes tens of thousands monthly.
26. Storage Rental
My multi-family property that I have also has a large barn on the property. While I have never actually rented it out, I was told I could earn around $250 a month doing so.
- In a similar situation, I rented a garage to store my car for the Winter at a cost of $75 a month
- If you currently have any unused space, consider renting it out (just check to see what insurance you need)
- You could also add storage units to an existing rental property to create an additional revenue stream
27. Get A Roommate
Here's a simple one. If you find the right roommate, this can actually be a source of passive income. I actually had one of my business partners as a roommate for about a year a while back.
- As long as they clean up after themselves, you hopefully won't even know they are there
- Can earn you an extra $400 to $700 a month per roommate
- Another strategy is to rent a 3 bedroom apartment, get 2 roommates and ideally live for free
28. Sell Online Leads
Here's another simple concept that is largely overlooked. You can earn money selling leads generated online. You can also generate leads automatically, meaning this could become a passive source of income.
- Imagine a landscaping company that was looking for customers but was clueless about social media
- You could potentially run ads on social media for free landscaping estimates, specifically targeted to your area
- The idea here would be to make more money per lead than you are paying for ads
- Or, you could follow the SEO approach for free traffic
29. Sell Stock Photos
If you are interested in photography, there are sites that will pay you to purchase the rights to your photos. This is often for stock photo websites such as Shutterstock.
- If you want to earn passive income, you would need to be able to collect a royalty from some of your works
- This would mean you would be paid every time someone licensed the image for use
- However, most stock photo websites are looking for “microstock”
- This is a royalty-free sale where you are usually paid around $0.10 to $10 per photo
30. ATM Machines
If you have money to invest and good relationships with business owners, you might consider getting into the ATM business. Once you have enough machines, you can hire someone to maintain them or contract it out to another company.
- ATM machines come with a wide price range from $1,000 all the way up to $25,000+
- Your typical freestanding machine is around $4,000 new
- Used models, however, can be as cheap as $1,400
- In an ideal situation, you are giving the business owner an incentive for more cash spending by supplying the ATM, however they might also ask for a percentage of fees collected
- The goal is usually to recoup your initial investment within 6 months of operation
The current average surcharge is around $3. If you average 10 transactions a day, that is $30 per day profit. However, there are many factors to consider such as foot traffic, how many days the business is open and more.
31. Sell An Ebook
Back in 2016, I created an ebook about stock market investing that I sold for $14 per copy. On the best day I had, I sold 3 copies and ended up earning $42 in passive income.
- While I no longer sell ebooks, this is a way that people earn money passively
- Typically, the goal is to have a portfolio of different ebooks for sale
- Most people use Amazon Kindle Direct Publishing for this
- It's free to upload your book and you can earn a royalty ranging from 35% to 70% of the sale price
Most ebooks that sell well are actually nonfiction topics, such as guides or tutorials.
32. Upsell A Service
Back to the topic of arbitrage. It's mentioned a lot because upselling something is really one of the best sources of passive income out there.
- Let's say you offered a Zoom/Google meeting caption service
- You would listen to the recording and type out a transcript at a cost of $2.50/minute
- Instead of doing it yourself, you could pay someone overseas $1.25/minute and pocket the difference
A lot of people think this is exploiting low wage workers. However in countries like the Philippines, these are actually significantly higher rates than local jobs would pay. So, it generally creates a win-win situation.
33. WordPress Website Management
Another word people love in the passive income word is “retainer.” We aren't talking about dental equipment. Instead, we are talking about a monthly retainer. This is where you pay a business a set rate per month in case you need to utilize their services.
- Let's say you build WordPress sites for clients for a fee
- You should then offer ongoing maintenance/update packages
- For example, $49/month for updates as needed to the site
- They might only need to make changes a few times a year, but they pay you monthly to have the ability to use your service as needed
In addition to this, a lot of the ongoing maintenance for a site can be fully automated. You can charge a monthly fee for WordPress maintenance, then automate most of the recurring tasks.
34. Sell SVG Designs
With the rise of Etsy, Cricut and other DIY craft companies, more and more people are looking for designs to use. While there are sites that offer free SVG designs, you often have to pay a little money to get specific ones you might be looking for.
- SVG's can provide passive income because you make them once and can sell them forever
- Since it is a fully digital product, there is no order fulfillment
- You can use sites to list and sell SVG's such as Etsy
- Typically, an SVG is sold for between $1 and $5 per file
- You can also sell bundles for more
35. Buy A Car Wash
There are around 286 million cars in the United States. Believe it or not, it is recommended to wash your car every 2 weeks. Not all of us do this, but many do.
- Many car washes are fully automated, meaning there is no person there operating it
- Machines out front take card payments, and people drive in for self service
- If you are looking to buy a car wash, expect to pay in the range of $1M to $5M+
An automatic car wash should bring in around $150,000 of annual revenue. After paying for maintenance, repairs, supplies, water and electricity, your profit should be around $90,000.
36. Crypto Mining
The prospects associated with crypto mining aren't what they were a few years ago, but it is still possible to make passive income from this source.
- Mining for mainstream coins like Bitcoin isn't likely to be profitable for smaller investors
- Large scale Bitcoin mining operations have really cornered the market, not to mention we had a blockchain reward halving recently
- You are better off mining for smaller altcoins, with the hope of getting in early on the next big token
- Equipment required is different based on the token, but the mining rigs tend to cost around $3,000 to $10,000
If you have the insight, you could do well with this assuming you end up mining the right crypto. However, if you make the wrong decision you could be running up your electricity bill mining something that eventually becomes near worthless.