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12 smart passive income ideas to actually start making money

How awesome would it be to make a passive income? I've got 12 easy ways you can start making a passive income today from your own home.

Maryse Dubois

Looking for a side hustle to supplement your nine to five, or just want to make the most of your free time? Setting up a passive income stream could boost your bank balance a little each month, with little effort from you.

A passive income stream is an activity that earns you money without requiring you to go out to work for it every day. Once you've set it up, it just needs a small time ongoing time commitment to bring in regular income each month.

How to generate passive income

1. Get paid to shop or for searching the web
2. Setup your own Drop Shipping business
3. Run an E-commerce brand
4. Rent out your car
5. Write your own ebooks
6. Own a Herd of Goats or Sheep
7. Create an App
8. Rent out your stuff
9. Sell digital files on Etsy
10. Sell stock photos for a passive income moneymaker
11. Make a niche or guide website and become affiliate marketer
12. Create a online course

Getting started

It's important to note that any passive income idea will require some time or cost on your behalf. Anyone who tries to sell you a way to earn a decent amount of money that will literally take you no time or money at all is straight up lying. Don’t waste your time and money on snake oil ideas!

But there are ways to be smart in your attempts to generate a passive income. Don't just jump right in: it's worth putting some thought into it to find something you enjoy, that makes you money, and doesn't take up all your free time.

How much you can earn

It's important to manage your expectations when you set your goals around how much money you can earn with a passive income. This is especially important when you’re beginning as this is going to be the most challenging time - when you are working hard and not making money (yet).

Let’s say you start with a $150 a month goal. Don’t think that sounds like much?*

$150 extra dollars a month, that’s $1800 dollars a year. To put that into context, an extra $150 a month would buy you subscriptions for Netflix, Stan and Spotify, a $5 coffee at work every day, and a couple of weekend drinks. Not a bad start!

How much passive income you can make and what you can spend $150 extra on

1. Get paid to shop or for searching the web

There are a lot of apps and programs where you can sign up and then get cashback from shopping, or earn points for watching ads.

Aside from the fact these aren’t really ever going to become truly passive incomes, since you need to engage with it to earn money, personally I think they are a bit of a waste of time. Most of them will only pay out cents when you watch ads.

As for the cashback, if you’re very specific and measured in what you purchase perhaps it will work out and you might be able to get a discount. But it’s really more of a money saving strategy - when you need to buy something you might find a good cashback deal. Don’t forget, those sites exist because they incentivise people (i.e., you and me) to buy things we don’t really need.

2. Start a drop shipping business

You’ve decided to sell metallic laptop stands because you think there is a demand for them. Normally you would have to purchase X number of laptop stands. You’d then keep the stock at your house, and then once someone orders one you ship it to them.

The biggest limitatios of this type of selling is that if you don’t sell all of your metallic laptop stands, you take the financial hit.

Unlike this strategy, drop shipping is a fulfillment method where you don’t keep any stock at all. Instead, when your store sells a product, you then purchase that item from a third party (typically a wholesaler or manufacturer) who ships it directly to the customer. As the merchant, you never see or physically interact with the product being sold.

Because you don’t have to worry about the costs storing your product, buying too much stock or even packing and shipping orders, drop shipping is a flexible and simple way to run an ecommerce. The biggest factors to consider are what product you think you could sell, and whether you want to pay a subscription to a site like Shopify or build your own site.

Of course, drop shipping isn’t without its downsides, the biggest being the lower margins. Since it is fairly simple to set up a drop shipping site, it’s also likely you’ll have a larger number of competitors for your product. As you’re purchasing on the behalf of a consumer, you also won’t have any unique branding on the product itself. But if you can find a great niche product, drop shipping is a good way to dip your toe into the e-commerce game with low risk!

If you want to see an example of a drop shipping site in action, check out this website, run by our digital marketing manager, where you can buy mannequins online. It's pretty niche - but it's often easier sell things online that people don't know where to buy elsewhere!

3. Run an e-commerce brand

If you'd prefer to create your own brand and do it the old fashioned way, setting up an ecommerce brand may be for you! This requires more time and initial investment, but once you're set up you can do it as little or as much as you like.

To sell products online, building brand awareness is key. Unless you're selling your own handmade goods, your products are likely to be very similar to your competitors.

For example, if you’re selling fitness wear your shirts with your nice logo are probably not going to be particularly different from another merchant who purchases shirts from the same manufacturer. The biggest difference is the brand and how you present yourself. Building a presence on social media is a great way to build a customer base and stand out from the crowd.

The advantage of running your own brand is that you can differentiate your product and therefore have more varied pricing and increase your profit margins. The biggest downside is the added financial risk.

4. Rent out your car

If you own a car, chances are you don’t drive it every minute of the day. However, regardless of whether you drive it once a week or once a month, a car is always going to have fixed costs like insurance and registration. These can add up to around $1500 a year on the low end. That's $125 a month you’re spending on your car before you’ve even driven it.

Why not rent out your car when you aren’t using it and start offsetting its costs? You could even make enough money to cover all your car's costs, so you essentially own it for free.

Uber Carshare is a peer-to-peer car-sharing platform that makes it easy and safe to rent out your car to others at times you don't need it yourself.

Start earning passive income from your car!

5. Write your own ebooks

Did you know you can self publish e-books on Amazon and Smashwords? Thanks to Kindle and other e-readers, e-books are becoming increasingly popular. Traditionally if you wanted to be a writer, you’d need to find a publisher and convince them to publish your book. Your publisher would need to organise a cover design, the printing and promotion.

This model still exists, but with the rise of e-books it's now easier than ever to self-publish a book. You may have a story you wish to write, but educational books also do well.

6. Own a herd of goats or sheep

This one may sound a little bizarre but would you believe me if I said a friend of friend is doing just this? There are companies who offer goat and sheep herds for rent as a way of clearing weeds, unwanted vegetation or fire hazards. You just plonk the goats on some land and let them do their thing. Of course, you’ll need to purchase the goats, but once you’ve got them there they’ll just munch away and earn their keep.

7. Create an app

If you’ve got some technical skills, building an app is a great way to use your existing knowledge to earn some passive income. If you don’t know how to build an app but have a great idea for one, team up with someone you know who can code.

Once you’ve decided on an idea and built your app, there are five ways you can generate passive income from your app.

  • Purchase price for the app. You can give the app a price so people have to pay a few dollars before they download it.
  • Freemium app. You make the app and a number of limited features available for free free, then upsell users to the full version.
  • Subscription based app. You charge users a monthly fee to access your app.
  • Selling items through your app. Offer add-ons or additional feature that users can purchase that make the app more useful or enjoyable.
  • Advertising. Make your app free, and earn money from advertisements that run when somebody downloads it.

8. Rent out your stuff

I’ve already mentioned renting out your car, but there are lots of things you can rent out for cash, including your garage, backyard or tools.

Take a look at all of the things you can rent out for cash.

9. Sell digital files on Etsy

Digital files on Etsy can be anything from cards, such as birthday or anniversary cards, to prints for people's walls, inspirational text, or digital copies of your paintings. You could also provide something educational, such as calligraphy practice sheets.

The most obvious advantage of this is once you’ve made the digital file, you can sell it over and over again.

You can outsource printing and sell a physical copy of your work, or just sell the digital file for your customers to print themselves.

10. Sell stock photos

If you're good at photography, stock image sites might be interested in buying your images. They'll need to be good quality photos, in focus and high resolution files.

Compare different stock photo sites for their terms of payment before you sign up. Some sites offer a small commission on each photo sold, while others pay a higher, flat fee.

11. Make a niche or guide website and become an affiliate marketer

Writing a blog or making a website about a topic you are passionate about is a great way to generate additional income. This isn’t entirely passive as you need to create your blog posts, but if you enjoy writing it won't feel like a chore at all.

Once you’ve got some good content and engaged audience, you can become and affiliate marketer and promote products to your followers. With affliate marketing, you earn a commission for each sale made by one of your followers.

12. Create an online course

If you have skills or knowledge in a particular area, you could create an online course and charge others to take it. This takes a large time investment upfront, but once it's established there's little more for you to do. Sites like Udemy or Skillshare allow you to create and sell online courses on nearly any topic under the sun.

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