What Is Passive Income?  

Passive income is when you earn money without having to exchange hours or time for revenue.  It is the goal of many people with online businesses, to be able to create something, promote it, and then enjoy the revenue as it rolls in.

When you hear people say they get paid while they sleep, they’re talking about making passive income. 

I want to say right up front that the idea of passive income is sometimes misconstrued. There are certainly passive income ideas that work for newbies, but they all require work in the beginning.

Work hard now so you can have passive income later. If you’re cool with that, let’s go.

Active Income vs Passive Income

With passive income, you make money with little to no effort but with active income, you get paid only when you perform a service that involves wages, commissions, tips, etc. It is an exchange of time for money.

If you work for someone and receive a paycheck, you are receiving active income. 

 10 Passive Income Ideas That Work For Newbies

Many people seek passive income because passive income allows you to scale your income more easily. If you work in exchange for time, there is only so much you can make. After all, there are only 24 hours in a day.

If your income is passive you can grow your income by increasing the number of sales you make, as opposed to putting in more work.

There are many passive income ideas. Some require a lot of work upfront, some less. Either way, let me be clear. Passive income does not usually equate to making money quickly.

Sure, you can invest in the stock market and achieve gains that way, but for more sources of passive income, some amount of work is required in the beginning. Even with the stock market example, you probably put in the time to research which stock to buy. 

Some passive income ideas require you to have some type of asset, like home rentals. I focused on the sources of passive income that do not require any assets and require very little cash upfront.

For each source, we will examine what each type is, how to get started with it, what tools are needed, and how best to grow the business. 

If you are interested in making passive income, chances are there is something here for you. If you want to start a business but still don’t know which business is best for you, try the PINPOINT YOUR PASSION WORKSHOP. 

Small Business Ideas From Home

1. Start a Blog

What is a Blog?

A blog is a written article that is usually found on a website. The website could be one that only contains blog posts or it can be a website with a page of blog posts. A blog can be written by one author or several authors.

I’m starting with this one because I wanted to address it with a disclaimer. A blog can be a source of residual income but it is not really passive. They require a lot of time and work, especially upfront. Still, it’s a great small business idea if you want to work from home.

Sure, a blog can produce income should you choose to monetize it with ads or sell products or services through the blog but it is not likely to earn money on its own.

How to Start a New Blog That Will Bring in Passive Income

This could be a standalone post all by itself because there are so many things that go into starting a new blog. There actually is a post on this site that talks about starting a blog as a beginner but let’s talk a little about how to start a blog. 

The first step to starting a blog is to determine what the blog will be about. This is called a niche and the term will come up a lot in this blog. It’s when you focus your content and marketing on a specific audience. 

For example, if you chose to create a blog all about coffee, your niche may be coffee lovers, baristas, or anyone who may be drawn to merchandise, content, or services from a coffee-related business. That customer avatar would be your niche.

Creating a niche will make it much easier for you to focus your business and will prevent you from having to market to the entire population.

What Tools Are Needed to Start a New Blog

In order to start a blog the most important thing you will need is content. And lots of it!

There is no magic number as to how many blog posts are needed for a successful blog but people who visit your site will undoubtedly want enough content to help them get through something or help them gain something.

A blog with only a few posts may cause them to leave if there isn’t enough content to hold their attention. 

Content is important but you will need a domain name, web hosting, and a platform for your blog.

If you want to set up a blog for free that’s an option, but if you want to monetize your blog you will almost surely need to spend a little money on services. 

Once you have chosen a platform for your blog, your domain name, and hosting, you will have to decide what in your niche you want to write about. It would be great if we could write about whatever we wanted and rise to the top of the search engine results, wouldn’t it? Unfortunately, that’s not always the case. 

 In order to be found in the search results, especially with a new blog, it’s important to find topics and keyword phrases that people are searching for but without tons of competition from older, more established websites. 

 Why SEO is So Important for a New Blog

When you first start with a new website it will have zero domain authority and zero backlinks. This means search engines don’t recognize it yet because they don’t know whether the new site can be trusted or whether it is legitimate.

This will make it very difficult for a new site to beat other websites with more authority that are covering similar content. As you create more content and more time passes, your website will gain authority and other websites will link to you, creating backlinks to your website. 

For now, look for relevant topics to cover from a unique perspective. Or cover a subtopic with less competition to give yourself a fighting chance to be discovered.

Because there is very little that hasn’t already been covered by someone, once you select your topic or keyword phrase, look at the result that comes in first in your Google search. How many words are there? How thorough is it?

Do your best to be more thorough and more comprehensive than that one. You basically want to create the best blog post possible on that particular subject so you end up in that number one spot. 

Tools like Keywords Everywhere, Keyword Surfer, both Chrome extensions, and Google Keyword Planner, and Google Trends are just a few cheap to free resources that can help you find out which topics or keyword phrases are good ones to target.

How To Succeed With My New Blog

In order to succeed with your blog, you need traffic, traffic, traffic. Now, if your blog is for personal enjoyment and not passive income, ignore that. It’s monetization that will require the traffic. 

Whether you plan to eventually run ads on the blog, promote products through affiliate marketing, or sell your own products, you will need traffic. And time!

Creating passive income with a blog is definitely not a get-rich-quick type of business. In fact, once your blog takes off you will still likely have to work on it from time to time, but if you are able to make money from digital products and affiliate marketing, passive income is possible. 

Promoting a blog is all about spreading the word to as many people in your niche as possible. Marketing to the wrong audience will not help at all but sharing a link to a relevant blog post on your social media, on forums like Quora, and on search engines like YouTube or Pinterest can get eyeballs on your website.

In all of these cases, you still have to find out where your niche hangs out and then share your content there. Be sure to share it in the spirit of adding value and providing assistance to be seen as a genuine resource. Share it in the spirit of selling merch and be seen as spammy.

 2.Start a Print on Demand Business

Why Print on Demand is a Great Passive Income Idea

Print on demand consists of a seller offering items to potential buyers without having any inventory and without any (or relatively few) upfront costs. For example, let’s say I own a print-on-demand sock shop. I can offer my customers any socks they choose from my catalog.

Once the customer pays me, I will pay the print-on-demand company their base price and shipping cost, and the print-on-demand company will then handle the printing and shipping of the socks for me. 

So I never have to have inventory and I only pay for the socks to be made when the customer pays me. Their socks don’t really exist until I place the order. This is great for anyone not wanting a spare room or basement full of inventory that may or not sell.

How to Create a Lucrative Print on Demand Business

Print on demand can be approached in two different ways. You can sell products print on demand on your own website, on Etsy, or some other platform where you have complete control over the look of your shop, product offerings, and price.

Or you can upload designs to a print-on-demand platform like Redbubble, Spreadshirt, or Teepublic. On those websites, you choose from a selection of products, upload your designs, and sell to their customer base. 

You can and should still drive traffic to your products, but you don’t have as much control over your shop. You can only sell the products they offer and you have to abide by their rules with respect to the type of products you can sell. 

Maybe more importantly you also earn a smaller profit margin with a print-on-demand platform. You may earn 15% on a sale made on those platforms but if you run your own shop on your own website or if you run an Etsy shop, once the base price of the item and the shipping is paid, the remaining revenue goes to you. You can sell whatever you want and you can create and customize your own shop.

For a print-on-demand newbie, I would suggest starting with a print-on-demand platform like Redbubble, Spreadshirt, or Teepublic.

Upload your designs, learn how to market your products, and figure out what will sell and what won’t. Once you have a good grasp on the business and are making sales, consider creating your own website.

More than a few people have had their Etsy shops closed, leaving them with no selling platform so I always recommend offering products on your own platform at some point. 

What Tools Do I Need to Create Print on Demand Designs?

If you decide to sell on a print-on-demand platform you will above all else, need designs. They take care of marketing so you will benefit from their built-in audience. Your most important job will be to create great designs that the people on each platform will want.

Take a look around the platform you’re considering to get a sense of the type of products they offer. Look for trending items to see what’s selling the most. Check websites like Google Trends, Pinterest, and Amazon to see what’s selling there as well. 

 Much of your challenge will be to upload designs and based on what sells, scale up by adding more designs of that type.

Be sure to use good descriptive terms in your listings so people can find them. If you sell throw pillows with abstract designs, using a title like “mechanics of the inner brain” is very creative but who in the world would search for that when looking for a throw pillow?

Use terms that real people will put in the search bar so people can find your products.  

 What Tools Can I Use for Print on Demand?

Tools like Canva, Affinity Designer, and Photoshop can be used to create designs.

If you aren’t a good designer start with text-based designs, hire a designer on a website like fiverr or 99designs, or consider buying a design that comes with a print on demand commercial license on websites like Creative Fabrica or Creative Market.

If you download an SVG file you can make changes to the design to customize it more. You want your designs to be as unique as possible.

Create your designs with a minimum of 300 dpi or dots per square inch so your designs are crisp and clean when printed.

How To Succeed With Print on Demand

If you are selling your designs on a print-on-demand platform you can drive traffic to your designs by promoting mock-up images on social media platforms and places like Pinterest.

Paying for ads is usually not cost-effective because of the smaller profit margins you earn with these platforms.

 If you are selling from your own platform, like a Shopify store, you will have to bring on all of the traffic yourself. Ads and good website SEO (search engine optimization) will be critically important.

Start with your niche, create a product that they will love, and get your products in front of them. This process may take a little trial and error but your earning potential is unlimited. 

 3. Build an App to Earn Passive Income

Building an app does require work in the beginning but if you can create an app that can be purchased by smartphone users via an App Store, you will receive residual income for that app for as long as it’s in the store and there is a demand for it.

If you don’t have the skills to build an app but you have a winning idea, you could have a developer create one for you.

If you are interested in selling an app you will have to find the audience for the app you’re trying to sell. The best way to find the right product is to think of an app that will either solve a problem for someone or make someone’s life better.

This formula actually works for any offer, but particularly with something like an app. There are already a million out there, so you will have to think of something with a unique twist. 

Creating the app may be the easiest part because you can simply hire someone to develop it for you. Be sure you consult with an attorney regarding your intellectual property rights to protect your new app. 

 Once you have a completed app it’s time to share it with the world. You can try to sell it to Apple, Facebook, Google, or another company that is willing to invest in your idea.

Research these companies in your niche and realize this: Lots of apps that we use today started out small and were purchased once they were recognized by the bigger players. Protect your app and see who is interested in your creation. 

 4. Write a Book/e-book

Writing and selling a book has never been easier. Paperback books can be uploaded and sold on the Kindle Direct Publishing platform with ease. If you are a writer this is a great time to pen that new bestseller.

If you are not a particularly good writer you can hire a ghostwriter for you. Less work but more money upfront. It could be worth it if the book sells.

How You Can Create A Kickass E-book

In order to sell an e-book, you will have to create two things: the interior and the cover. Whether the book is a book with text or a low content or no content book like a journal, you will have to create and format the interior.

 If you’re creating an e-book with text you would have to choose a topic that you know a lot about or are willing to learn a lot about. Depending on your goal, you may be able to write a shorter e-book that gets the reader from point A to point B.

As long as the e-book is comprehensive and includes all of the content that would make it useful, a shorter book is fine.

Software like Designrr makes it easy to format your book. You can write all of your text in a program like Google Docs and later copy and paste the text into a template in Designrr. They offer templates for the cover as well. 

If you want to create a no-content or low content book like a planner, you can create your interior using tools like Canva. If designing isn’t your thing, try websites like Creative Fabrica, Creative Market, or Gumroad.

They offer interiors that are already formatted for Amazon KDP. Also, there are websites that allow you to easily customize your interiors by putting together the types of pages you want.

For example, you can put planner pages, blank pages, and dot grid pages together to create a unique planner.

5. How To Succeed Selling E-books

It’s all about getting the right e-book in front of the right person at the right time and for the right price. Sound easy? Well, let’s take a step back. 

If you sell your e-book on Amazon KDP you will benefit from the almighty marketplace that is Amazon. You can choose to sell your book in the U.S. or other countries.

When you set up your account you will have the opportunity to assign a title, description, and tags to help readers find your book. Use the proper terms to describe your book and you will get traffic to your book. 

 Just as we had to look at keyword phrases and search terms with less competition when we were talking about writing a blog post, the same is true here. A journal titled “Lined Journal for 2021” is way too broad.

Try longer tail keywords like Lined Journal for Tax Attorneys will give you a narrower audience and your journal will have less competition.

Where Can I Sell My E-Books

In addition to selling your ebooks through Amazon KDP, you can create your own website and drive traffic to your own website.

Selling on your own means marketing, marketing, marketing. Since they are electronic books you don’t have to worry about printing and shipping them, which is the good part. Having to drive traffic to your site can be a challenge.

If you do want to sell ebooks on your own website it will help you to have some content on the site. I would suggest creating a blog on the site with content related to the ebooks you sell.

You can sell e-books to a niche and create an entire website around that niche, or you can just create blog posts that include links to e-books related to that particular topic. Either way, having content on your site that you can optimize for search engines will help you get found on Google.

 Once you add content to the website you would market it like you would a blog, with pins on Pinterest and social media platforms. 

 6. Sell an Online Course

This may seem like a lofty goal but really it isn’t. We all have a skill or know something that someone else does not. If you can pinpoint that and are comfortable conveying that information to others, why not create a course?

There are so many platforms online where people are willing to pay for courses. In any subject on every level. What’s better is you can record the course and upload it so people can take the course whenever they like. A great way to earn money while you sleep!

How To Create a Winning Online Course

In order to create that winning course, you will have to first choose a topic for your class. Ideally, you will be creating a course around a subject you know something about. You don’t have to be a pro but you want to be able to deliver what you promise in your course title.

Maybe you’re just trying to help someone achieve one specific goal. As long as you have success with the method you’re teaching and you’re able to get your method across to students, you may have a course. 

Before developing a full course you may want to validate the idea with potential students. You do not want to create an entire course, only to find that nobody is interested in taking it.

If you have any following already it’s a good idea to poll them. Ask them what type of problems they are having that could serve as the foundation for your course.

If it is your first course try starting out with a course that is on the shorter side until you get the hang of the process. Short videos are usually preferred over larger blocks of content so break up and organize your lessons in a logical order.

You will need a computer and a program to record and edit your course. Be sure to use a quality mic and camera if you plan to show your face.

Depending on the type, of course, you’re creating, slides and other visual aids may be needed as well. You don’t have to spend thousands on equipment but just put your best foot forward.

How To Sell An Online Course

If you already have the same you can definitely market to them. This is where an email marketing strategy can help out a lot. Before launching your course you may want to set up an automated email sequence. 

You can create an opt-in or lead magnet with a tool like Canva to send out to followers on social media, and when they accept your freebie and give you their email addresses, you can then follow up with a sales sequence.

After sending them several messages surrounding the topic of your course, offering value, you can then hit them with the sales email, asking them to buy your course. You know, the course that will solve all of the problems you discussed in your email sequence.

In addition, you should, as always, create pins on Pinterest using images that will help you sell your course. Once people click on your pins you can lead them to your email sequence. 

If you haven’t already it’s also a good idea to join forums and Facebook groups that are relevant to the topic of your course.

Offering value to the group and by becoming a regular contributor, you can position yourself as an authority or expert on the topic and send links to your course. These people will also become a part of your email subscriber list and automated sales sequence as well.

Selling a Course on Udemy

If you decide to sell your course on a platform like Udemy, you will benefit from their built-in audience. You should still market your course but you will have a heads-up by listing your course on an e-learning website.

Before selling your site on a platform that’s not yours, be sure to read their rules of participation to be sure your course meets their guidelines and that you can sell your course on more than one platform if that’s what you want to do.

7. Affiliate Marketing

This is a commission-based model where you receive a commission for referring potential buyers to someone else’s products or services. Some companies will pay you one time while others will pay you a recurring fee.

For example, if you are an affiliate marketer for ABC Corp. and one of your referrals buys an ABC software package from ABC Corp., you could receive residual passive income each time that customer renews their license or upgrades with ABC. Corp.

This can be lucrative if you are able to drive customers to those offers.

How Can I Make Money With Affiliate Marketing as a Beginner?

The key to affiliate marketing is to get the right offer in front of the right people. You have to choose a niche for this one. Once you’ve chosen one, your next step is to choose something to promote.

What types of products or services does your niche need? What would make their lives easier and what could help them solve their problems? These are the things you want to offer. 

Where Do I Find Affiliate Marketing Partners?

There are almost as many affiliate marketing partners as there are products. There are networks that manage many different affiliate programs and some companies have their own program. It just depends. 

Some of the most popular affiliate marketing networks, especially for beginners, are Impact, Shareasale, Clickbank, and Amazon Associates. These are all open for first-time affiliate marketers.

If the product or service you want to promote is not in a network you can check the company website to see whether they offer an affiliate or partner program. Each program will have its own payment schedule and terms in its contracts, so be sure to review them carefully.

How Can I Promote My Affiliate Links With No Audience?

If you don’t yet have any traffic coming to your site or you have no followers on social media, promoting your affiliate links will take determination and trial and error.

One of the best ways for you to try and get your links in front of the right audience is to use a niche website, groups, and forums, and ads. 

Before starting with paid ads you will have to do some testing. If you have found an affiliate product to promote with branded promotional material that you can use, you can try to run an ad on Google that will drive traffic to your offer, but you have to first make sure that the cost of the ad makes sense.

Because you get paid when your affiliate partner makes a sale, you have to first determine whether the cost to obtain one new customer is less than your pay for each conversion. 

You can also create a niche website just to promote the product. You can find a keyword phrase that has search volume on Google, with little competition and make that your domain name.

You can use the promotional material that is usually available through the affiliate network for your home page and include your customized affiliate link while promoting your product. 

You may also want to add a blog to give your site a little more Google juice as well. If you’ve heard the phrase “content is king”, that’s because content on a website will help it get ranked higher in Google’s search results.

Last but not least, share your links on relevant forums and groups. If you find a home online for people who could use or need your product or service, help them by offering it, with a link to your product.

Don’t spam groups because people will ignore you immediately. Offer real assistance first, and then later, offer your product. You want to be seen as a helpful resource.

8. Printables

Selling printables is perhaps one of the best ways to earn truly passive income and is one of my favorite passive income ideas. They include products that are typically used as paper products but are sold digitally.

The buyer will either print it out themselves or send it to a printer for printing. Printables range from everything to journals to retirement invitations.

Depending on the type of printable you plan to sell, they can be relatively easy to make if you keep it simple.

What Tools Do I Need to Make Printables?

Creating cool printables is not the hardest part of this business. The hardest part is figuring out what you can sell that won’t get you lost in a sea of competition.

Sure, there are lots and lots of people buying birthday invitations on Etsy, but there are 100 times that many people selling them. You have to find a way to distinguish yourself and your products. 

If you want to sell a birthday invitation, sell one that is catered to a specific niche. Maybe you could sell invitations for people turning 100 or for babies turning one. Narrowing down your audience will help you target a smaller audience.

Software like Canva makes creating printables easy. iPiccy, Gimp, and Inkscape are all free to use and Canva has a free version as well. Try any of these to see which one might be the best fit.

Search websites like Creative Fabrica, Creative Market, Gumroad, and Etsy to get an idea of what people are selling. Don’t copy anyone’s idea, but look around to get an idea of what you can realistically make and sell.

If you get an idea for something above your skill level, consider hiring someone to create a printable for you. As long as you have the commercial license to resell it as a download, you’re good to go.

What’s the Best Way to Market a Printables Business?

If you’re just starting out and you don’t have a website you can start off with spending only .20 to list your products on Etsy. You can gauge interest in the product, gain experience writing product descriptions, and build your inventory of products. 

Whether you decide to eventually sell these products on your own website or not, you should consider using a website like Convertkit or Constant Contact to create a landing page.

You can offer a discount to products in your Etsy shop in exchange for emails and create an email list. Relying solely on other platforms puts you at risk of losing your customer base should your shop get shut down for any reason.

9. Dropshipping

Dropshipping is a business that allows you to offer a product to customers that you pay for once the order is placed.

The product is usually held in a warehouse somewhere until someone orders it. Once you receive their payment, you pay the base cost and shipping cost of that item and request that the item is shipped to your customer.

With dropshipping you pay nothing upfront and you don’t have to hold onto a bunch of inventory in your closets. 

How Do You Get Started With Dropshipping?

It’s best to start off with an amazing product that people will see and want to buy immediately. Your target market for a drop shipped product is not people who compare shop, but people who buy things on a whim because they just have to have it.

Your product should speak to your audience so finding the right product for your niche is imperative. 

You can find products on websites like Alibaba, Oberlo, and Aliexpress. When you order your products from them they will ship them, but many companies selling products for dropshipping are shipping from Asia.

If you’re shipping from the U.S., be sure to check on the shipping times for the products you are interested in selling. 

Long shipping times can lead to a really bad customer experience and since you are responsible for customer service, this can be a real headache for you.

I would suggest a company that ships from a warehouse in the U.S. if that where your costumes are. Income is not passive if you have to spend all day emailing dissatisfied customers. 

Try out the product before you sell it. Be sure the product you’re selling is of good quality before promoting it and check out the company you’re purchasing from is free of invoices and that it arrives in one piece.  

How Do I Succeed With Dropshipping?

You’re on your own with this one. No selling on someone else’s platform where you can take advantage of their traffic. 

You’ll have to decide whether you want to build a website or just a landing page. With a landing page, you have one sales page where you can drive traffic.

The landing page would include images of your product, videos if possible, and a buy button that people can use to take them to a checkout page. 

Once you have your site or page set up you can begin marketing, either using ads or social media. Again, before paying for ads, be sure you’re not spending more than you can make on each sale.

I would suggest learning a little about marketing, A/B testing, and scaling before going this route. 

Dropshipping can bring in passive income, eventually. But in the beginning, this will require lots of testing before you have an automated machine.  Even then, you will have to deal with customer service unless you decide to outsource that.

10. Sell Stock Photos

Stock photos are used by a lot of different people for different things. Bloggers use them for their posts, writers use them for articles, students use them for projects, and it goes on and on.

If you have a good camera and have an eye for beauty and style, selling stock photos may be a good hustle for you. Not all stock images have to be of things that are beautiful but you want to be sure the layout of your photo is eye-catching enough to make someone choose yours over someone else’s.

Popular websites like Shutterstock will buy your photos and you will receive between 15% and 40% on each sale. Stock images are usually between $1 and $5 so while this may not seem like a lot, you could still make money next year on photos you upload today.

Tag them properly so people can find them and you increase your chances of being found.

Because you are only selling the license to use your photos, you remain the owner. 

With iStockPhoto, contributors receive between 15% and 45% commission of each sale, depending on the number of images you upload and how popular you are on the website.

Many photographers have their own websites where they sell their photos and you could do the same. Review the terms of service for the website you’re interested in to make sure you can also sell your photos on other websites or your own platform. Exclusive stock photos can only be sold on one website.

When taking stock photos be sure to not include any trademarked information like logos or any other company’s branding. If you include a model in your photos be sure to obtain a model release from them as most stock photo companies will request one. 

This list of passive income ideas is in no way exhaustive. There are many ways to achieve this and we will continue to add to this post. 

Which passive income ideas are attractive to you? Which one would you like to start receiving? Is there one that speaks to you? If so, let us know in the comments. 

If you still don’t know which one is right for you, take our FREE Pinpoint Your Passion 3 Day Email Challenge. By the end of the challenge, you will have an idea of the type of business that is right for you.

Good luck!