That wraps up our list of passive income ideas. But before you go, let’s take just a moment to discuss how to choose which of these ideas would be the best passive income strategy for YOU.

When deciding which option is right for you, consider your current situation and your long-term goals. But also keep in mind that some methods, like investing in a high-yield savings account, may not be the most effective way to generate passive income. If you have a lot of money to invest, there are likely other options that will yield much higher returns. And if you don't have much money to invest, it may be necessary to explore alternative options altogether.

It's important to remember that what works for one person may not work for another, and ultimately, the decision about which option to pursue is up to you. Some methods may be quick and easy to start, but require a lot of money or come with high risk. Others may require more time and effort, but little to no money.

Create a Course

Anyone can create an online course and they can be very profitable (I earned several hundred thousand dollars from a couple of mine last year), but here’s what happens to most people: they spend a LOT of time on this project and never end up earning any money from it.

There are three main reasons that courses don’t end up being profitable for most people:

• Not knowing how to find a profitable IDEA for a course — one that people actually want to buy.
• Never FINISHING creating the course.
• Not understanding how to effectively MARKET the course.

Most people get hung up on one of those three challenges, but even those who don’t still don’t generally earn passive income from their courses, because they only make sales when they’re actively launching.

To turn an online course into a source of passive income, you have to learn how to build an “automated sales funnel” that sells your course without your direct involvement.

Write an E-book

The bad: e-books are a dime-a-dozen, so often people aren’t willing to pay much for them. Most of the time, you can package the same information into an online course, which you can sell for 10X the price you’d sell the ebook version for. The e-book scene is also extremely competitive, so it can be tough to get your book to rank, get seen, and actually sell at all.

The good: writing an ebook gets you just one step away from self-publishing a paperback — a much more worth-while endeavor. While a paperback still won’t sell for a lot (and can’t make you rich directly), it tends to create a huge amount of credibility and give you instant authority in your niche, which can allow you to charge more for your services or more easily sell your online course.

Rental Income

This one’s legit! I’ve made plenty of money by owning and renting a house myself, and know plenty of other people who do as well. In fact, I’d say it’s one of the most under-rated passive income strategies out there. The truth is that rental income has made more millionaires and billionaires than any other strategy.

Affiliate Marketing

Affiliate marketing is a bit hit-and-miss… I know a few people who make great money with it, but, even with my large audience, it’s never amounted to a whole lot for me. And most people I know who have tried to make money with it haven’t been able to ever get it to work.

Flip Retail Products

In short, this idea just isn’t scalable at all. And definitely not passive! You have to spend a lot of time looking for products at garage sales, craigslist, and Goodwill, and then even MORE time listing those products on Ebay and Amazon, then pack them up and take them to the post office.

You can certainly make money flipping products, it just won’t be passive.

Sell Photography Online

Essentially, you take pictures and sell them to websites like Shutterstock or Adobe Stock. These websites then resell your photos to their subscribers or one-time buyers, and you get paid for licensing your photos.

While there is potential to make money this way, the market is highly competitive and saturated with millions of photos. It can be challenging to get your photos to rank, even if they are of exceptional quality. Therefore, making passive income through this method can be a bit of a gamble.

However, some people do make a passive income this way, but it requires consistent effort and producing high-quality photos over an extended period. Thus, while it may eventually lead to a passive income stream, it will require active work for a while.

Buy Crowdfunded Real Estate

Instead of buying a property on your own, you can invest in other people's rental or investment properties. It's an easier and lower-risk way to get into the real estate investment game.

On the bright side, you'll still enjoy the profitability of real estate investment without needing to break a sweat or invest a ton of capital. The downside, however, is that you'll have less control over the process and your profits, and your returns may be lower.

If you want to be more hands-on and earn greater returns, consider buying an investment property yourself. You can spend time finding a good deal, put in some effort to increase the property's value, and then flip it or rent it out. While it's not initially passive, renting out the property can eventually lead to passive income.

You can also hire others to do the upgrades for you and a property management company to manage the property. This will make your profits passive and increase your returns on your investment. If you have plenty of money to invest and want something completely passive, crowdfunded real estate might be a good option. But if you want to grow your wealth more actively, it's better to buy properties on your own.

Peer-to-Peer Lending

This strategy involves lending money to either a friend or someone you don't know through a third-party company. It's a great way to potentially earn some extra cash, but it's important to note that you'll need some capital to get started. So, if you're starting from zero, you may want to consider other options.

One of the upsides of peer-to-peer lending is that it is a relatively passive way to invest. However, the downside is that you won't have the ability to leverage your investment like you might with real estate, and you won't be able to scale it as easily as you would with creating and selling digital products like online courses.

When it comes to returns, they'll be limited to what the market supports, so don't expect to become a millionaire overnight. But if you're looking for a way to earn some extra cash without too much effort, peer-to-peer lending might be worth considering. Just make sure to do your research and invest wisely.

Dividend Stocks

Basically, dividend stocks are stocks that pay out a small percentage of their profits to shareholders on a regular basis. Buying dividend stocks is a popular option for passive income and doesn't require a lot of effort on your part, but it does require a significant financial investment. While the rate of return is lower than many other options, it's still a good way to grow your money if you have the funds to invest.

Create an App

This one's a little different from the others because you don't need money upfront, but you do need some serious skills or the ability to find the right people who can help you create an app.

Now, building an app is no easy feat, and many people have ended up wasting their money by hiring the wrong people or not knowing what they're doing. But that doesn't mean you shouldn't pursue this idea if you have a great idea for an app. Just know that it's a bit riskier and there's a lot of competition out there.

Personally, I wouldn't recommend this as a surefire way to create passive income unless you have the knowledge and expertise to back it up. But if you do have those things, then go for it!

Rent Out a Parking Space

A lot of people don’t have an easy option to cash-in on this idea, but if you live in a busy area and have a driveway or a parking lot, this could be a great passive income opportunity for you. It's like owning a rental property without having to worry about the upkeep of a building.

Of course, it's important to remember that you will still need to manage the parking lot and the customers who use it. This could be a simple task or something that requires a bit more attention, depending on how you choose to manage it. You also may need to install parking meters or delegate management to someone else.

Overall, this idea may require some upfront investment, but if you have the right opportunity, it could be a great way to earn passive income without too much effort.

REITs

Real Estate Investment Trusts (REITs) are similar to buying crowdfunded real estate. Basically, REITs involve buying shares of a company that owns and operates income-producing real estate such as housing, commercial buildings, hotels, shopping centers, and more.

Investing in REIT’s is a viable passive income strategy, but doing so requires upfront capital, so it's not an option if you don't have money to invest right now. It's similar to buying and owning a stock, but it's based on real estate, which is more stable and less likely to fluctuate wildly over time.

However, I'm not an expert in this area and haven’t personally invested in REITs, so this isn’t a strategy I can give a strong opinion on.

A Bond Ladder

The next idea on the Bank rate list is called a “bond ladder,” which involves buying a series of bonds that mature at different times over a period of years. The benefit of a bond ladder is that it reduces the investment risk of reinvesting your money when bonds offer low interest rates.

See, while bonds are sometimes considered a “secure” investment, there’s a problem with them. The government sells bonds to raise money, and then pays interest to the people who have bought them. The problem is that if you buy bonds when interest rates are low, then when those rates increase you’re stuck holding a bond that isn’t paying as much as other opportunities (such as the new, higher-interest bonds) would, but nobody wants to buy your low-interest bonds from you, so your money gets tied up too.

A bond ladder theoretically helps to diversify the bonds in your portfolio and reduce your risk by allowing you to buy bonds with different maturity dates. However, this might not be the best way to earn passive income because the interest rates paid by bonds are typically relatively low, and they rarely outpace inflation. In addition, since bonds are tied to the dollar… you can never outrun the government. While some people might disagree, it is difficult to outpace the economy with bonds.

Sponsored Posts on Social Media

This is when companies pay influencers or other brands to promote their products on platforms like Instagram, TikTok or YouTube. While this may seem like a way to earn passive income, it usually isn’t. It's more of an exchange of your time and effort to create content. Sometimes a brand may pay you a royalty, but in general, I’d consider sponsorships to be earned income rather than passive income.

Invest in a High-Yield CD of Savings Account

The next idea on Bankrate’s list is investing in a high-yield CD or savings account. Unfortunately, this is a pretty terrible way to try to earn passive income. The interest rates on these accounts are typically quite low, around 1% or less, which isn’t going to keep up with inflation. So, not only do you need money to invest in the first place, but you'll also end up losing money over time due to inflation.

Rent Out Your Home Short-Term

Bankrate’s next idea for passive income is to rent out your home short-term, Airbnb-style. This certainly can be a way to make some extra cash if you're going to be away from home for a while. However, this method isn't exactly passive income, since you'll have to put in some effort to get your home ready and listed for rental… and, of course, you’ll need to be living somewhere else while your home is rented out.

Advertise on Your Car

This idea could potentially earn you passive income… though it may not be the most attractive option, or one I’d personally prefer. You’d need to live in a good area and have a fairly new, nice car. In my opinion, there are much better and more lucrative ways to generate passive income — and that will allow you to keep your car looking nice.

However, if you don't mind the advertisements, it could be worth considering. Ultimately, there are many options available and it's up to you to decide which one works best for you.

Create a Blog or YouTube Channel

These two great ideas are often grouped together because they involve generating income by creating free content online. They are both a bit of a mixed bag when it comes to being passive, because while you'll be actively creating content and earning income, you can also make money passively from ads on your content.

For example, if you have ads enabled on your YouTube videos or your blog posts, you can earn a percentage of the profits that advertisers pay for those ads — typically about 50%.

While you'll need to put in work upfront to create content, the great thing about creating a blog or YouTube channel is that your content is evergreen. This means that it can continue to earn you passive income for years to come, even if you take a break from creating new content.

And the benefits don't stop there! Creating a successful blog or YouTube channel can also help grow your audience and increase your visibility, making it easier for you to sell your own products or services down the road. So, while it may take some time and effort to get started, creating a blog or YouTube channel can be a great way to create a significant source of passive income that can help you achieve your financial goals.

Rent Out Useful Household Items

I’m not really a fan of this next idea on Bankrate’s list. Renting out household items that are useful but not used frequently can earn you some extra cash. It's a simple and straightforward idea, but not one that’s likely to generate a significant amount of passive income over time.

Here are a few examples of household items that you could consider renting out:

• Camping equipment: If you have camping gear that's not getting used very often, consider renting it out to outdoor enthusiasts who might not want to invest in their own gear.
• Power tools: Power tools can be expensive, and many people only need them for a specific project. If you have a collection of power tools that you're not using regularly, consider renting them out to those who need them for a short period of time.
• Musical instruments: Do you have a musical instrument that's gathering dust in the corner of your room? Rent it out to someone who is just starting out and wants to try it before they buy it.
• Sports equipment: Sports equipment can be expensive, and many people only need it for a specific event or activity. Rent out your unused sports equipment to those who need it for a day or a weekend.

Renting out these items can be a win-win situation. You make some extra cash without having to get a second job, and the person renting from you gets access to something they need without having to make a big investment.

Of course, as with any passive income idea, there are some things to consider before you get started. You'll need to think about the logistics of renting out your items, such as how you'll keep track of rentals, how you'll get paid, and how you'll handle any damage to your items.

Sell Designs Online

This is a good option if you have design skills and enjoy creating products like t-shirts, hats, and mugs, but you’ll also need to be interested in learning how to market your products.

While there's definitely competition, if you're willing to put in some upfront work to get your products to rank and stand out, this can be a viable option for creating both active and passive income. It's also a great idea to pair with something like creating content on YouTube or a blog to get more visibility and potential sales. So if you're up for the challenge, go for it! There are lots of tools available today like Cafe Press, Zazzle, Shopify, and Etsy that make it easy to sell your products online.

As you may have noticed, the options we discussed all come with different levels of risk, financial investment, and effort/time commitment. Whatever path you choose, I wish you the best of luck in your pursuit of passive income. Remember, it's all about finding the right balance between risk, investment, and effort that fits your resources and goals.