Are you looking for the best passive income ideas for 2023?
Great, in this article, let me answer all your questions about what passive income is, and give you an overview of some great ideas on how to get started.
I am not going to overwhelm you with a huge list of 50 passive income ideas or the common suggestions to earn passive income. I am going to focus on the best ones I have found, which are easy to start and are proven to provide long-term residual income.
So let’s get started on our journey to discover the best passive income ideas you can start this year.
What is Passive Income?
You might be wondering what is passive income? Passive income is earned without requiring hours of labor or active participation in its creation as opposed to active income. Active income refers to income which requires you to continually put in hours to keep earning taxable income.
This means that once you’ve put in the work upfront, the money will keep coming in with minimal effort. It’s like a nice little bonus that keeps on giving!
What are the Best Ways to Earn Passive Income?
The best passive income ideas for you are going to depend on the level of effort you want to put into setting it up or the amount of money you have upfront.
You will either need to invest your time or your money in the beginning to create a portfolio income or a passive income stream.
I didn’t have a lot of money to create passive income, so I had to find opportunities that I could start with little to no money down.
These passive income ideas do require some upfront work to get them up and running. But once running, they require minimal effort to maintain a steady earned income stream.
I was able to take the earnings from my passive income ventures and invest them back into growing businesses.
Now, don’t get me wrong, having money to invest to jumpstart financial freedom passive income, would have definitely sped up the process. But with a willingness to learn and put in the work required just like I did, you can build your first passive income producing activity.
The great thing is I have found some of the best passive income streams and have provided simple steps to help you get started. These only require a little upfront effort, determination, and creativity.
Ok, I have spent enough time introducing you to the concept of passive income – it is now time to dive into the best passive income ideas. Use the following list to jump to a specific passive income idea.
Earn Passive Income Using Affiliate Marketing
This is by far my favorite way to earn money online and in my opinion, is one of the best passive income ideas on this list for beginners.
There are just so many affiliate programs and opportunities available from consumer-level products to subscription-based SaaS (Software as a Service) products. Not to mention the myriad of ways you can promote affiliate products that are free or low costs.
Before I jump into the how-to’s of affiliate marketing, let me help you understand exactly what it is. Affiliate marketing is simply promoting (recommending) products and services for other companies and then earning a commission for each sale you refer to the company.
Think of it this way, what if you could earn money anytime you recommended a product or service to someone and they followed your advice and purchased it? Wouldn’t that be great! We already do this for the things we love, might as well get paid for our recommendations.
Disclaimer: There are just too many different ways to recommend (promote) affiliate products to fully cover here. It is this flexibility that makes this one of the easiest and fastest ways to create passive income.
Step 1: Choose a Niche to Target
As you will see in most of these passive income strategies, you will need to find a niche to target. You want a niche that is narrow enough that you can successfully target it, but not too narrow to limit your options of pulling in other affiliate products.
This is where you will need to do a little keyword research to find a lower-competition niche with enough traffic that you can make money.
There are many keyword tools that can help you find your perfect niche including Google Trends, Wordstream’s free keyword tool, or UberSuggests free keyword tool that provides keyword difficulty ratings.
The next consideration when choosing your niche is to make sure that you are able to generate high-quality content within your niche, whether that is videos for YouTube or social media, articles for a blog, or sales copy for paid advertising.
When you are starting out with no money, you will be the one that has to generate all the content, so make sure you have the knowledge or resources for your niche. The good news is that later on, you can begin to outsource your content needs once you start generating money.
Step 2: Choose an Affiliate Program or Network
Once you have your niche, you can now research and choose a program with products and services that can be promoted within your chosen niche.
There are countless programs out there, from well-known companies like Amazon and eBay that have products that cover almost every niche to smaller niche sites offering products and services related to a particular industry.
You’ll want to research each program carefully before deciding which one is right for you. To help get you started you can check out our list of the best affiliate programs for beginners.
Step 3: Sign Up and Get Approved
Once you’ve chosen an affiliate program, you’ll need to sign up and get your account approved. Most programs require that you create a profile and provide some basic information about yourself and how you plan to promote their products.
Once your account is approved, you’ll be provided with links you can begin to promote.
Step 4: Generate Traffic to Your Affiliate Links
Now you are ready to start generating traffic through your affiliate links and finally start earning money from sales.
This requires a bit of work on your part, but there are many ways to do this. You can start a blog or use social media, pay-per-click advertising, and email campaigns to drive visitors to your affiliate links.
Once you have a steady stream of visitors coming in, the sales should start to come in as well.
Step 5: Leverage Your Traffic
Once you have figured out how to first generate revenue and a steady stream of traffic, it is now time to expand your offerings and add more affiliate programs to promote.
In addition, you can begin sharing the content you are creating across other channels to generate additional traffic.
With dedication and hard work, affiliate marketing can be a great way to earn passive income. It has the potential to create a steady stream of residual income, as long as you keep up with your promotional efforts and continually drive more traffic to your site.
With enough effort and consistency, you can start seeing the rewards in no time!
Design and Sell Digital Downloads
Creating and selling digital downloads is another awesome way to make some passive income that doesn’t require an initial investment!
Whether you’re in the market for eBooks, music, videos, photos, or templates – there are loads of possibilities when it comes to creating your own digital product.
With the right tools and resources in place, you can create high-quality digital downloads that people will want to purchase.
Here’s a quick guide on how to create and sell digital downloads for passive income.
Step 1: Decide on What Type of Digital Product to Create
First, you’ll need to decide what type of digital product you want to create and sell. Try to pick a niche that has an existing demand in the market so your product will stand out from the competition.
Research what types of products have been successful in the past and consider creating something similar with your own unique spin.
Step 2: Create Your New Digital Product
Once you’ve decided on your product, it’s time to create it.
If you don’t have the technical skills to create a digital product from scratch, don’t worry – there are plenty of resources out there that provide high-quality templates for you to use like Canva.
You can also use stock images and videos to make the product look more professional.
If you are still in doubt about your technical skills you can consider hiring a freelancer to help you create your digital product vision.
Step 3: Host Your Digital Downloads
Once your product is complete, you’ll need to create a website or store where people can purchase it.
Step 4: Promote Your Digital Product
Next, you’ll need to figure out how you will market and promote your digital download.
A good way to start is by creating free content related to the product such as blog posts, videos, or podcasts that provide value to your potential customers.
You can also use social media and email marketing to reach more people and get the word out about your product.
You should also consider partnering with other businesses or influencers in the same niche – this will help drive sales and keep people coming back for more.
Finally, don’t forget about building customer loyalty! Offer discounts and promotions, as well as free updates or bonuses for customers who purchase your product.
This will encourage them to come back again in the future – which is great news for you if you want to make some real passive income from digital downloads!
So what are you waiting for? Get creating and selling today!
Create Online Courses
Creating an online course is one of the best passive income ideas!
Yes, I know that developing an online course is challenging and requires a lot of time and effort upfront, but once it’s done you now own an asset that can provide significant monthly income as students buy and take your course.
If you ready, let’s jump into the steps to get you started developing and selling your first online course:
Step 1: Choose the Topic for Your Course
First you are going to need a topic for your course – it needs to be one that you know well and one that is has a large enough target audience of potential students.
Brainstorm as many ideas for topics that you have the knowledge to teach – try to generate 10 to 20 good ideas. Just write down any idea that comes into your head at this stage – you don’t want to nix any of them until you gauge the market.
Now that you have your ideas, you will need to do some research to gauge the marketability of each idea. I like to use a combination of keyword research, and competitor analysis.
With keyword research I use various tools like Ahrefs or Ubersuggest to find the search volume and then use Google Trends to see how the topic has been trending. You want to see a steady or upward trend to ensure the topic has longevity.
Next I search out to find any other courses within each topic. At this point I am looking to see if others are already selling courses and what type of course seems popular.
I like to use course platforms like Udemy for researching what courses are available and popular on a given topic/niche. I use the ratings to see what is popular and then I look at those the course outlines of those courses to see what they are covering.
With this information you now know the size of the market for each topic idea as well as what is type of course is popular within that market. Now you just need to choose one of your ideas that you feel you can create a course similar to the ones that are popular.
Step 2: Create the Course Content
Once you have your topic, it’s time to start creating the content!
You can use tools like video editing software, audio recording tools, and online course platforms to put together an organized course that is both engaging and easy to follow.
It’s important to make sure the content is engaging, informative, and easy to follow so that your students will be able to learn from it.
Step 3: Find a Host for Your Course
Now that you have your course ready, the next step is to find a course hosting platform where you can publish and offer your course for sale.
There are many great platforms available, so be sure to research them thoroughly before deciding which one is best for your needs.
Step 4: Setup the Pricing For Your Course
You are almost ready for your first students at this point. Now you’ll need to set a pricing structure for your course.
You want to charge a fair price that is both affordable for your target audience and still profitable for you.
You can also offer discounts or bundle deals to encourage customers to purchase multiple courses at once.
Step 5: Promote and Sell Your Course!
Finally, now that everything is ready, it’s time to get the word out about your course!
You can promote it through activities such a blog or youtube channel, social media marketing, email campaigns, and paid advertising.
The goal is to build an audience and make sure they know about the benefits of taking your course so they can decide if it’s right for them.
Creating online courses is an excellent way to generate passive income. With the right topic, content, and promotion strategy, you can create a profitable business that provides ongoing revenue.
By following these steps, you will be well on your way to creating your own successful course and making money!
Create Designs for Print on Demand
Print-on-demand (POD) designs are another great way to create passive income!
With POD you can sell custom-printed products such as clothing, mugs, bags, and artwork without having to own any physical inventory or deal with the complexity of shipping.
All you need is a design that people want to buy, a quality fulfillment partner, and a platform to sell your creations.
Use the following steps to start selling items with your custom print-on-demand designs.
Step 1: Choose a Quality Fulfillment Partner
The best way to start a print-on-demand business is by partnering with a quality fulfillment service.
You’ll want to make sure you align yourself with a high-quality, top-notch service, so your customers will receive their orders quickly and in great condition!
You can also try Merch on Demand by Amazon which provides the platform and fulfillment in a single platform – the earnings will be lower, but the ease of just having to upload designs makes it simple to begin earning money.
Step 2: Select a Platform to Sell Your Custom Items
Now that you have chosen a fulfillment partner, it is time to choose a platform to list and sell your custom print-on-demand products.
Step 3: Create Your Designs
Not feeling the inspiration?
You can also use stock photos and graphics in your designs if you don’t have the skills to create them from scratch.
You can do some research on Etsy or Amazon and see what types of designs are selling the most and create your designs in the same niche or topic – just don’t copy someone else’s design!
Step 4: Upload Your Designs
Once you’re happy with your designs, it’s time to upload them to your chosen fulfillment partner.
Make sure the files are in a format they accept and follow their instructions for uploading. They will then add your design to each product you choose to sell.
Many fulfillment partners also have integrations with the leading selling platforms, allowing you to push your designed products right into your store saving you time and effort.
Step 5: Promote Your Products
Last but not least – let people know about your awesome products!
Create eye-catching product images, write compelling descriptions, and take advantage of social media platforms like Instagram and Facebook to drive traffic to your store.
You can also consider running ads on these platforms or sending out email campaigns to targeted audiences.
With the right promotion strategy, you can start making money from your print-on-demand business in no time.
Create a SaaS (Software as a Service) Product
Creating a Software as a Service (SaaS) product for passive income can be an exciting and rewarding experience.
With SaaS products, you’re able to create something once and then reap the benefits over time as customers use your product.
Here are the high-level steps you will need to take to successfully launch your SaaS product
Step 1: Identify Your Target Market
The first step in creating a successful SaaS product is to identify your target market.
Knowing who you’re serving and what their needs are will help you determine the features and functionality you should include.
Once you have a clear idea of who your users are, you can start to create something that will meet their needs.
Step 2: Develop the Product
It’s time to develop your product. This process will include planning, designing, coding, and testing to ensure that everything is working as expected.
There are a lot of low or no-code tools that can help you create your product if you don’t have any coding experience, So don’t let that stop you.
Your goal at this stage is to create an easy-to-use tool with an intuitive interface. You want customers to enjoy using your product so they stick around.
Step 3: Test Your Product
You want to make sure that your product functions as expected, so you need to perform a full test to iron out any bugs.
Once you have gotten something that works reliably, it is now time to allow some of your friends and family to test it out and provide feedback – these are your beta users.
This is the one time you want your family and friends to be brutally honest! You want to know what they like and don’t like about the product so you can refine it and make it better.
The goal is to make sure everything is working correctly and that your interface meets the needs of your target market before launching.
Step 4: Setup Your Pricing Model
Once the development process is complete, you’ll want to set up a pricing model for your SaaS product.
You can offer free trials and discounts for longer-term subscriptions to encourage customers to stick around.
Additionally, you’ll need a way for customers to pay for your product. Popular options include subscription plans, one-time payments, and even pay-as-you-go models.
Step 5: Launch and Market Your Product
Finally, it’s important to market your SaaS product effectively so that you can start making passive income.
You should be active on social media, create content to educate your customers and reach out to potential customers.
Additionally, you can use search engine optimization (SEO) techniques to help people find your product online.
Creating a Software as a Service product for passive income is a great way to make money while working from home or on vacation.
As long as you identify your target market, develop a quality product, set up an effective pricing model, and execute a successful marketing strategy, you can start earning passive income with your SaaS product in no time!
Build a Network Marketing Business Online
Building an MLM business online can be an amazing way to generate beginner passive income while having fun and working on something you’re passionate about!
It can be daunting at first – there’s a learning curve involved with understanding the world of MLM. But once you get the hang of it, you’ll find out that it doesn’t have to be difficult.
With just a few simple steps and the right attitude, you can set yourself up for passive income streams that will continue to grow with your business and bring in money even as you take care of other tasks.
Step 1: Choose a Network Marketing Opportunity
To start with, it’s important to pick the right MLM opportunity for you. There are a lot of choices out there nowadays, but you just need to find one with products or services you love to use and promote.
The next step is to evaluate the compensation plan – you want to look for a plan that has good commission rates both for direct sales and for referral sales (sales of those you recruit into the business).
You want to target 20% or more for direct sales, and %10 or more for first-line referral sales.
Step 2: Promote the Product and Service
Now that you have chosen an MLM company to promote, start looking for ways to market the products and services they offer.
Platforms like Instagram, Facebook, TikTok, and YouTube are excellent places to promote your products or services through review-type content or just funny videos with the product.
This is where you can use your creativity to see what works – the goal is to start generating income quickly from direct sales.
You will need to follow all the guidelines for product promotion online, and make sure you do not violate the terms of service of the network marketing company you have selected.
Step 3: Promote the opportunity
This is where the real passive income opportunity lies in network marketing. This is why it is called network marketing – you need to network and promote the opportunity and get other people to join forces with you in your venture.
This provides the leverage that multiplies your income with no additional investment management or work from you.
The goal is to bring people in and train them to follow the same steps you did to become successful – basically, you are trying to duplicate yourself with each of your recruits.
Again, leverage the social media platforms, but this time you are focusing on promoting the opportunity.
Use fun-loving humor and humanize what you’re doing as much as possible – your target recruits have to believe they can do the same.
With the right tools and guides, you’ll quickly establish yourself as a successful entrepreneur who earns passive income through passive activity in their own MLM business.
So get started today and take your earning potential to new heights!
Systemize a Side Hustle
If you’re looking to turn your side hustle into passive income, there are a few key strategies that you can implement right away.
Whether you’re just starting or have been running your side hustle for some time, it’s important to understand the best methods of creating steady and reliable passive income streams.
With the right strategies, you can start generating passive income while still pursuing your side hustle activities and dreams.
Step 1: Research Side Hustle Ideas
Start by researching some of the best passive income ideas and side hustles found on this site.
This doesn’t mean getting actively involved in high-risk investments dividend stocks, mutual funds or schemes; instead, look for ways to build a steady stream of income that is low-risk and potentially high-yield.
Find side hustles that have worked for others by reading through our side hustle success stories.
Step 2: Choose One Side Hustle to Start
Next, you need to identify the best side hustle for your particular situation.
Every side hustle will have different levels of initial investment, skill requirements, and potential for passive income. Research carefully before you commit to one side hustle over another.
This should be something that you already have experience doing or one that you can pick up quickly.
Step 3: Systemize Everything!
Once you have identified your side hustle and how it can build passive income, it’s important to systemize the process as much as possible.
This process involves mapping out all the parts and processes of the business.
And then finding ways you can automate tasks, outsource the work to others, or create templates that can be used over and over again.
By streamlining and systemizing how you do things, you will save time and energy while still making money.
Step 4: Leverage Your Side Hustle
Finally, look to find another passive income strategy that you can leverage to maximize your side hustle’s earning potential.
This could be selling the process and automation you created to others looking to start the same side hustle, or creating a course as described above about the process and selling it.
Just documenting your journey on YouTube or in a blog could bring in enough traffic to create additional passive income.
There are many ways to utilize and blend the various strategies to increase your earnings and generate income from a simple side hustle.
With a little effort, you can turn earned income from your side hustle into cash flows or what can be considered passive income. Use these tips and tricks to start building your own passive incomes from your side hustles.
Still Have Questions About Passive Income
What is the most profitable passive Income?
The most profitable passive income idea is one you are willing to invest your time and resources to get started. We have success stories on this site for many different types of passive income sources, but we have found that for the beginner, affiliate marketing is the fastest and most profitable way to start earning passive income.
How much money can I earn from passive income?
The sky is the limit when it comes to other passive income opportunities. There are people making millions from affiliate marketing, online courses, and other sources (check out their success stories). It all depends on the amount of effort you are willing to put into learning, understanding, and actively involved in developing a passive income stream.
What is the highest-paying passive income?
Check out our passive income success stories and you will find others that started on this journey are already making hundreds of thousands per month using the same passive income strategies and passive income tools found on our site. There is no limit to the amount build passive income you can generate with any of these best passive income ideas and business ventures.
How Can a Beginner Make Passive Income?
The best way for a beginner to make passive income is by researching the passive income ideas others have used. Discovering what strategies and techniques they are using.
And then take those ideas and implement the same strategies in your own passive income business. The great thing is that this site contains many guides on a wide variety of passive income ideas along with success stories of those that have succeeded with those strategies.
Can You Turn Active Income into Passive Income?
You can turn ordinary income into passive income by systemizing the creation of that ordinary income and then outsourcing it as described above in turning a side hustle into a passive income.
Does the Internal Revenue service Tax Passive Income?
The Internal revenue service always wants a piece of any income you generate. You will need to consult a tax specialist, CPA or the Internal Revenue service website for the forms you will need to report your passive income to the Internal Revenue service.
Examples of Passive Income like Rental Income
These are some examples of other income producing activity or investment. These also require little or no effort on your part once you get them setup. Most of these involve earning investment income and some material participation to get them started or to monitor them.
The level of material participation is completely up to you
Disclaimer: I am not an financial professional and the information provided here should not be construed as investment advice and is provided for informational value only. Please seek the advice of a tax professional or financial institution before any investment.
Rental Income From Rental Property
Rental income from rental property is one of the more popular types of passive income and a way to earn extra cash flow, but this requires upfront investment and many find that it isn’t as passive as the first thought.
And many find that with rental properties, that once expenses are subtracted from the gross income, the net rental income isn’t as high as they expected. But you can definitely make money with rental properties, but it may require you to materially participate to some degree.
One aspect of real property investing is the underlying value of the property itself. Over time the value will increase and when you sell you get to pocket the increase in value minus the capital gains and recaptured depreciation.
Real Estate Investment trusts
A real estate investment trusts is a class of income producing securities on the stock market that pool investor funds and invest them in rental properties.
There are various kinds that specialize in different kinds of rental properties, from residential apartments to skyscraper office buildings.
Income derived from the stock dividends of these trusts is completely passive, since your only involvement was the initial investment.
Peer To Peer Lending
Peer to peer lending is another avenue for passive income that involves lending money on one of the peer to peer lending networks.
You will earn money from the interest payments coming in from the loans in your portfolio. The higher the risk of the loan the higher the potential interest payments. But also the higher risk of default.
This does require upfront investment and depending on the risk level of your portfolio, you have the chance to loss part of your invested monies.
Ready to Start Earning Passive Income! Passive income investments can be incredibly rewarding if done correctly.
With just a bit of planning and research, anyone can start earning extra cash with minimal effort—all while doing something they love!
The great news is that we have done the research for you and found the best passive income ideas for students that you can start with little or no money.
Just find the ones you want to start on this site and save yourself the time and effort to get started.
So, whether you start with one of the best passive income ideas for young adults described in this blog or your own personal finance idea, there are plenty of options available for creating passive income streams for yourself. And gain the life you want whether that is to travel the world or just early retirement.
So why not get started today? The possibilities are endless!