Do I need starting capital for passive income?

While some passive income streams require an initial financial investment, others can be started with minimum investment amounts. For example, creating digital products, developing mobile apps, or sharing affiliate links can be the best low-cost passive income ideas for young adults. However, index funds and real estate typically necessitate investing money upfront.

26 Best Ways To Make Passive Income in 2024

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Recently updated on September 20th, 2024

Earning money from various sources is always beneficial, especially when the returns are passive. Given today’s technological advancements and opportunities, earning enough from a single job might seem unrealistic. Add inflation, gas prices, and different maintenance costs, and you’ll probably have little to no money left after expenses, which can be frustrating. However, there’s a way out, and it’s called passive income. If you’re looking for the best ways to generate passive income, this article provides 26 ideas to implement this year. Read along to discover them.

What is Passive Income?

Passive income is a way of making money without being actively involved. Often, people have passive income while working full-time or on top of some other income sources where they are more involved in the process. Contrary to popular belief, passive income doesn’t mean you earn a significant amount of money effortlessly. You must still invest some time into starting the activity. The amount of time required to start varies based on multiple factors. Some concepts require minimal effort to start; other ways could be more time-consuming to initiate. Still, any passive income source requires less time and bureaucracy to establish.

Importance of Passive Income in 2024

It’s impossible to overestimate the importance of passive income in 2024. With numerous industries and financial markets available for entry and business, relying solely on a full-time job might not suffice. Besides, living costs go up steadily, while fixed salaries do not. Passive income can compensate for that gap and let you create a surplus.

Best Passive Income Ideas: Overview

2024 is well underway, highlighting effective strategies for the year ahead. From affiliate programs to traditional stocks and popular dropshipping, the following are 26 best ways to make passive income.

Participating in Affiliate Programs

If you’re looking for a way to earn money without upfront investment, opting for affiliate programs is your go-to. It’s a way of leading people to a particular website or store using your link and getting a commission from their purchases.

Affiliate programs work by generating for you a custom link or coupon, which when customers use to register for a product or service, associates you with that customer. From there, you will be paid referral commissions one-time or even on going, for years to come. For example, the Sembly AI Affiliate Program offers as much as 25% of the customer revenue in commissions for up to 2 years. Refer one big customer, and you’re set with significant passive income for the next 24 months. “Set it and forget it.”

Participating in such programs is so easy that you can combine this method with other ideas and get impressive ongoing cash flow!

Selecting Programs

You cannot simply sign up for or accept any random affiliate offer. After all, you’ll advertise the product or service to people, and your reputation is at stake, so marketing the wrong product is a no-go. Therefore, learn more about the program before agreeing to advertise it. It must meet specific criteria, such as customer satisfaction, user experience, interface (if it’s software), pricing, and usefulness. Check out the Sembly Affiliate Program to see what trustworthy passive income opportunities look like and how you can profit from this concept.

Real Estate Investments

Real estate investing has never brought so much interest. With prices for commercial and residential properties skyrocketing, diving into this field can seal your long-term financial plan. Note, however, that this idea of traditional investing in property, i.e., buying and selling real estate, may require solid capital. However, if your budget allows, it’s an effective way to make your money work for you. You can then resell the property or get a steady rental income.

Dividend Stocks

Dividend stocks are one of the best ways to make passive income. While not in cash (although you might sell dividends over time and earn plenty of money, keep in mind the taxation of cash), dividends can yield a terrific profit when held for the long term. Buying dividend stocks is easy, but you must first learn the company’s ins and outs. Investing money in the stock market can be quite risky, and you may not get as much profit as you’d expect if you aren’t knowledgeable enough about a dividend fund.

Peer-to-Peer Lending

Peer-to-peer lending has been in the financial realm for many years. Its main idea is to lend money to an individual or company, bypassing the bank as an intermediary. The profit? Interests are usually lower than in banks, but there’s also a higher financial risk for a lender.

As a p2p investor, you must register on a peer-to-peer lending site and invest a specific amount, ranging from $50 to thousands of dollars. The lending platform then performs checks, approves you as a lender, and allows you to offer your resources. Once individuals or businesses find your profile, they can contact you, asking for a loan. Next, you agree on the interest rate and seal the deal.

Online Businesses

Launching a digital business is one of the best ways to make passive income online. While the procedure, tax code, and other requirements vary depending on your location, setting up a digital company is much easier and more time-efficient than doing the same with a brick-and-mortar store. If you’re considering starting an online business, you might want to explore:

E-Commerce Stores. E-commerce stores are, by default, among the most high-profile deals for those seeking passive income. You can trade anything from small accessories to furniture and tech in your online store.Note that this type of business may require more time than other options, so don’t hesitate to set up a store with a partner and outline team goals for progress.
Print-on-Demand. Printing has always been profitable, especially if you know how to keep operation costs low. The Print-on-Demand (POD) feature can assist with this, freeing up your schedule and fulfilling orders as customers place them. Study the market and learn which items to include in the POD feature for a good headstart in 2024.

Content Creation

The word content is typically associated with online media, and rightfully so! From music and pictures to short videos, there’s no shortage of the best ways of passive income. The list of lucrative options varies based on your available time for online content creation. Consider blogging and creating videos or podcasts on YouTube.

Digital Products

Selling digital products can secure risk-free earnings, making it one of the best passive income ideas for young adults. You can sell a single product or multiple items at once, either on social media, a dedicated website, or via email. The range of digital goods and services you can sell is practically limitless. If you have a knack for writing, an e-book can be an excellent sell. You can also design and sell an online course privately or use online platforms like Udemy to upload courses if you meet the requirements. Software development services, graphic design products, guides, and templates—the list of digital products you can sell can go on and on.

Affiliate Marketing

There is a core difference between an affiliate program and marketing. The first is a platform where the business manages its relationships with associates, providing data, statistics, commission structures, and various useful tools. Conversely, the second is an advertising method where a business rewards an affiliate for each client brought about through effective marketing strategies.

Affiliate marketing is advantageous, but you have to put in the initial effort to make it work. Although demanding, it is a superb way to monetize your content. Both concepts are among the best ways to make passive income with no money, provided that you already have a blogging website or are a social media influencer.

Investing in Index Funds

Even if you’re far from investing, you’ve heard the term index funds. In plain English, these are investments aimed to mimic the performance of a particular market index, such as the Dow Jones Industrial Average or the widely known S&P 500 and Vanguard. As complicated as index funds might be, they’re relatively safe and a good option for those focusing on the long-term hold. Besides being low-cost and using a passive investment approach, they’re easy to use and offer steady returns because their diversity minimizes risks associated with single stocks. In any case, talk to a financial advisor before making decisions.

Automatic Savings Plans

The automatic savings plan (ASP for short) is excellent if you have a traditional, well-paid job and want to save some of your pay. ASP deducts a certain amount of money and transfers it to your savings account on a specific date. It can help you achieve your retirement plan or accumulate resources to reinvest in something else. In turn, things like robo-advisors can help you narrow down the areas where you can invest money from savings accounts, purchase index funds, stocks, or anything with high interest rates.

Licensing and Royalties

Earning from royalties and licensing are among the best ways to make passive income, although they may first require investing resources. If you own intellectual property, you can profit from patents, music, photos, and videos. For example, if you have beautiful images, you can use stock libraries, such as Depositphotos or Unsplash, and place your visuals for sale.

Cryptocurrency and Blockchain

Trading crypto and using blockchain are two profitable ways to earn passive income. With crypto popularity going through the roof over the past decade, knowing how to handle altcoins is the best way to make a passive income stream. However, the stress is on knowing. If you don’t know much about cryptocurrencies, you can still earn money from holding and trading them, but you’ll need to invest quite some time in understanding crypto and how it works. The same goes for blockchain-based projects. If you know the topic, you can invest in the field and spend relatively little time fixating profits.

Renting Out Assets

Renting out assets could be an effective way to get extra cash. Depending on what assets you can rent, your profit margin will vary. If you own a property you don’t use, consider renting it out. Otherwise, you can rent out vehicles and various equipment. Doing so could give you steady streams of passive returns. Regarding real estate, leasing is not the only option; you could also use p2p rental platforms.

Peer-to-Peer Rental Platforms

Peer-to-peer rental marketplaces offer good opportunities to rent out your place. Platforms like Airbnb can breathe life into your rental property, helping you lease it at the best rate. The benefit of such p2p rental sites is that they can advertise the space amazingly well. Their complex algorithms set the best price based on many factors to ensure your place is booked as often as possible.

In addition to real estate, online marketplaces allow you to list tools, recreational equipment, storage space, and other valuables.

High-Yield Savings Accounts

A high-yield savings account is a relatively popular option for those looking to multiply their financial assets. HYSAs offer higher returns and interest rates than traditional accounts, so you can get extra cash faster. Another benefit of HYSAs is that they are safer than crypto, individual stocks, and corporate bonds. Usually, you don’t have withdrawal limits when using this type of savings account, but there may be a cap on how many times you can do it in a cycle.

Automated Investment Platforms

Automated investment platforms allow you to streamline your investing effort, tracking the market and selling or rebalancing the portfolio when it’s the best. As mentioned earlier in the article, things like robo-advisors and intelligent AI-powered tools can help you design a passive income strategy tailored to your plan and requirements. Such tools can diversify your portfolio, invest in stocks, help in financial planning, harvest tax loss, and provide investment choices. As of 2024, Wealthfront, Betterment, and Merrill Guided Investing are the three best robo-advisors to use.

Self-Publishing

Self-publishing can be a fantastic source of passive income, though success largely depends on the book. With a mindful marketing approach and the right platform, you can successfully publish your book. As for the platforms for self-publishing, Amazon, Barnes & Noble Press, Google Play Books, Apple Books, and Blurb are reputable marketplaces to publish and sell your written works.

Advertising is no less critical, so market your books using multiple mediums. Social platforms, digital advertising, and even flyers can attract people’s attention.

Mobile App Development

Mobile app development may not be the best way to make passive income online since you need to be involved in the process now and then. However, this idea gives you ultimate flexibility, letting you work from anywhere, anytime. Plus, you don’t even have to be well-versed in the technical aspect of this position. You could, for instance, pitch ideas and build simple prototypes for mobile apps, helping others design apps from scratch or modifying pre-built programs.

Vending Machines

With an upfront investment and low maintenance costs, a vending machine can pay off impressively quickly, especially when you place it in the best location. Shopping malls, coin laundries, and self-service car washes are excellent places to anchor a vending machine. Ensure that the best type of vending machine is in the right place. A coffee or snack vending machine would be best at the university campus, while a beverage vending machine would suit gas stations and gyms perfectly.

Renting Out Personal Items

Just as you may not have unused real estate, it doesn’t mean you can’t rent something else. You can, and it can be very profitable. Renting out personal items, such as clothing, electronics, and even furniture, is one of those passive income ideas with no money you need to consider. Renting out stuff could bring you steady earnings, especially if it is custom and high-quality. Establish strict rules and requirements for others to rent your personal belongings. Don’t hesitate to require ID and social security or even sign the temporary rental contract and have it authenticated by a notary.

Building an Online Community

Whether on Discord, Reddit, YouTube, or other social media accounts, building a community on the internet is one of the best ways to make passive income online. Besides meaningful interactions, discussions, and giggles, such communities can generate revenues. Once you shape up an online community and create value for the group, monetize the channel through different memberships like Patreon. People could access premium content or support your efforts for a specified fee. Plus, you’re free to include ads in your content. YouTube, for example, lets content creators choose whether they want ads in their videos.

Selling Digital Art

If you are keen on digital art, you can leverage your hobby and learn how to make passive income with no money. Whether vectors, illustrations, animations, or videos, you can sell them using digital marketplaces and social media platforms. Etsy, Shopify, and eBay are just a few examples of services you can use to sell art. Also, remember to advertise your digital assets using social platforms and word of mouth.

Investing in Small Businesses

Investing in a small business might not be the best option if you have limited resources and low-risk tolerance. However, it can be highly rewarding with initial effort. If you are an expert in a specific field, consider becoming an angel investor and putting resources into a company falling into your knowledge area. By taking an ownership stake and getting to know your partners better, you can sync to discuss points and goals, using Google Meet to record calls and track your overall progress over time. Doing so will give an extra boost to cash flow and reduce the risk of failure. If you prefer to play safe, opt for equity crowdfunding.

Creating a Niche Website

If creating a website is a quick task for you, you’ve found your ideal income source. Whether for commercial purposes or traffic, find an untapped yet promising niche that can bring you a steady income.

Pro tip: Publish SEO-optimized guest posts and sell ad space to enhance the page’s web positioning.

Dropshipping

Dropshipping concludes the list of the best passive income sources. It allows you to spend as little time on the business as possible, yield impressive returns, especially if you can access a manufacturer or a wholesaler. In addition to AI-powered tech solutions that can streamline your business, use social media marketing and email newsletters to ensure your offer reaches potential customers before your competitors.

To wrap up

Diversifying income sources is an excellent way to improve your financial position and put aside resources. There are many ways to get a buck, from selling items on the web to participating in affiliate programs and buying stocks. Twenty-six, to be precise. Provided are actionable, practical, and, importantly, the best ways to make passive income in 2024, whether with or without starting capital. By trying and even combining these ideas, you can find a steady inflow of money best suited to your preferences, needs, and lifestyle, setting yourself up for long-term success and financial security.

FAQs

How do I find the best passive income idea?

Identifying the best passive income source involves assessing your interests, skills, and financial situation. Sift through the list and evaluate your options and their potential returns while considering associated risks. Diversifying your efforts to mitigate risks and maximize gains is also best.

Can I have more than one income stream?

Yes, having multiple income streams is possible and advisable for financial stability. Diversifying your income streams can protect you and provide a more secure financial foundation. Remember to balance sources and avoid picking on too many revenue streams so you don’t get swamped.

What is the best passive income online strategy?

The best online passive income strategy often combines creating valuable digital content with leveraging platforms for scalability. Try combining affiliate marketing, selling courses and e-books, and generating ad revenue from blogs or YouTube channels. Prioritize quality over quantity, and understand the audience and what it expects from you.