How to Make Passive Income Online – The Top 20 Ways


How to Make Passive Income Online

Have you ever wondered how to monetize work you did once so it can continue to pay off well into the future? Then you’ve thought about shifting from active to passive income. And, with advancements in technology, making passive income online from the comforts of your home is easier than ever before.

There are many ways to earn passive income: some may need more upfront work than others, while some require a degree of capital or monetary investment.

Below, we’ll cover the top 20 ways on how to make passive income online.

Create a YouTube Channel

This one could require a bit more work than you might think. While you might not need anything but your iPhone to take a quality video, mastering your editing software can be a continuous learning process.

However, despite the upfront and ongoing work aligned with creating a YouTube channel, the potential to create meaningful income with the platform is huge. There are far fewer videos than articles about any given subject, so it’s easier to compete for market share.

In addition, the most utilized medium for consumption is video, meaning that not only are there fewer videos in any given subject, but there are also more people looking to find those videos. As your channel and videos grow in subscribers and viewers, so too will your income through things like ads and possibly affiliate links that you can add to the description of your videos.

Start Affiliate Marketing

Affiliate marketing isn’t new, but it still reigns as one of the most popular and powerful passive income strategies around.

Affiliate marketing is essentially a partnership between you and a company. Your job is to drive traffic to the business’s platform. If the traffic you sent to the company ends up becoming customers, then you get a commission, which is generally a percentage of the net sale.

The most popular affiliate program is Amazon Associates, but almost every major retailer has its own affiliate program, with its own commission strategies. You do not need to pick just one; you can select as many as you’d like.

However, the more you pick, the more dashboards you will have to keep track of. Also, most affiliate programs have a minimum payout amount, meaning you must earn a certain amount before they deposit the funds or send a check. Keep that in mind if you’re using multiple programs, as this could limit your ability to hit your minimum payouts.

Earn Cash Back Through Rakuten (Ebates)

Rakuten lets you earn extra cashback when you shop online; this obviously isn’t something that’s going to make you a replacement income, but it’s passive in the sense that you’re most likely going to be shopping anyway.

One nice perk about Rakuten is that it stacks with other cashback benefits. So if you use a credit card that gives 3% cashback on online purchases, and then you go through Rakuten to purchase from a category that has a 6% cashback offer that month, you could earn 9% cashback instead of if you were just using one or the other.

Of course, the only way this can be considered passive income is if you only buy things you were already going to buy at a price you were already considering paying. No benefit comes from purchasing products for more than what you would typically pay for them.

Take Up Peer to Peer (P2P) Lending

This is precisely what it sounds like: lending money to another individual. A third-party company like Prosper facilitates the exchange of funds so that you can lend money to anyone without the need for personal interaction.

The benefit of this is that you can make passive income by the loan payments they send you with added interest. However, these types of loans are often unsecured, and therefore have a higher risk of default. In other words, in times of financial hardship, there’s a chance you could lose your entire investment.

Write a Book & Print on Demand (POD)

Writing a book is a great way to create passive income for years to come. With the integration of print on demand (POD) technology through various platforms (including Amazon), authors and publishers can cost-effectively publish and distribute books anywhere in the world.

Companies like Kindle Direct Publishing (Amazon), IngramSpark, Barnes & Noble Press, Lulu, and more all utilize this print on demand technology, which allows them to print additional copies of your book as more orders come in. They also handle the shipping and pay royalties on a set schedule, and are generally free to set up.

Create an Audio Book

This falls in the exact same category as writing a book; however, it’s seen as a completely different revenue stream. Audio is quickly becoming the preferred medium in which books are consumed.

By adding an audio format to your titles, you’re not just creating an additional passive income stream from the same work you used to create the physical book. You also fill a growing demand that is—at the moment—less competitive than the print or eBook marketplace.

Dropship Products

This is a partnership like affiliate marketing and POD. It is like affiliate marketing in that you provide all the traffic; however, your partner company will handle the production and shipping of the product.

Printful is an example of a company that does this through custom apparel designs. After creating the initial product designs, they will determine how much it costs to produce and ship; then, you can sell the product on your site for however much you wish and pocket the difference.

Create an eBook

ebook

Again this goes in line with writing a book, but an eBook can help create additional streams of revenue. While there are multiple platforms to sell print books and audiobooks, an eBook can be distributed as a digital download, making it more versatile.

eBooks are popular “freebies” to give visitors to your website when growing your email list. They can be given away for free as the first of a series to create an audience for the rest of your series and improve your click-through rate.

eBooks will also most likely sell better than your print book through popular online retailers like Amazon. This is because the books are linked together; the eBook is generally advertised as: “Save X%! Buy the eBook.”

Sell an Online Course

Just like with writing a book, this comes with a lot of upfront work. However, there is a slew of benefits that come with creating your own online course. Depending on who you partner with to host your class, the royalties that come from your course could be phenomenal.

Popular platforms for online courses include:

Run Ads on Your Site

This is a tried and true strategy that was once the best way to monetize a website. It has since become the subject of debate on whether it’s worth sending your readers to another website.

Regardless, it still remains one of the easiest and most passive ways to earn money online. Once you’re able to generate a decent amount of traffic, you can apply to Google AdSense. Once approved, you can begin placing ads throughout your site.

You can either place ads related to your post or page, or ads that will vary depending on your visitor’s recent search history. Your received payments will vary based on things like click-through rate, views, and the category or sector the ad falls into.

Create an App

If you have some technical know-how, this is a great option. While like most items on the list, this requires a good deal of upfront work, afterward, you can reap the rewards possibly indefinitely.

There are two methods in which your app may be monetized. Once it is available on an app store, you can either price it at a fixed price or make it free and monetize it by running ads similar to the above option.

Here is a list of apps that pay you for completing various tasks. Although this might or might not be passive, it can still help you earn money from home.

Put Money into Real Estate Investment Trusts (REITs)

Now, it’s no secret that one of the most popular ways to earn wealth and build extra streams of revenue is through real estate. However, the traditional way of scouting for undervalued properties, managing tenants, and keeping up with the overall maintenance of a property is anything but passive, at least when compared to this option.

A REIT enables you to invest in real estate without doing all the continuous leg work regular property management would entail. REITs are traded as equities like standard stocks. They are required to pay out 90% of their profits to their shareholders in dividends.

This allows most REIT dividend yields to be much higher than the normal safe range of 1-3%. These dividend payments are taxed as regular income and aren’t seen as qualified dividends.

Most investing is done online these days, so this is an easy way to add real estate to your portfolio and earn passive income online at the same time.

Invest in Dividend-Paying Stocks

This falls in the same category as the one above. However, there is a possibility that the dividends you receive from these stocks will be considered Qualified Dividends. This would mean that they are taxed more favorably than nonqualified dividends. Many US-based companies that pay dividends pay qualified dividends.

Picking individual stocks comes with its own risks, especially without doing your own research. Plus, to perform this research at an adequate level takes a significant time investment.

An alternative option is to invest in Exchange Traded Funds, Mutual Funds, or an Index Fund. This will allow you to diversify your portfolio and will take the research element out of it.

Invest with a Robo-Advisor

Investing with a robo-advisor allows you to be goal-oriented with your investments and be passive with it at the same time. When you initially engage with one of these, you will enter whatever information necessary and then select from various pre-selected funding plans that best align with your goals.

One of the most popular forms of Robo Advisors out there is Acorns. This robo-advisor will link to your debit cards. Every time you make a purchase with the connected card, Acorns will invest the change (rounded up to the nearest dollar) into one of your pre-selected funding accounts.

 It’s a neat, easy way to invest just through living your day to day life.

Rent Out Your Stuff

While most people have heard of renting out your house, or maybe a room in your home to earn extra cash, many haven’t heard of renting your stuff. Through websites like Fat Llama, you can rent your belongings to many users and then collect passive income on the rental fees.

Sell Your Stuff on eBay

This may not seem like the most passive online income stream—and, depending on how you use it, it’s not. However, all of us clean house from time to time (hopefully), and during this process, we generally come across items we rarely or perhaps have never used.

Instead of simply getting rid of these items that you’re cleaning out, try selling them on eBay. If you do a bit of research, you may find those items have a bit more value than you realized.

Create Sponsored Instagram Posts

If you’re already an Instagram user, and you’ve developed a decent following, you may have already been approached by a sponsor or two. The bigger your following, the more likely you will be presented with these opportunities.

A sponsored post involves partnering up with a company (the sponsor) in which they will pay you in exchange for using your followers as an audience for their product or service. Terms will vary from sponsor to sponsor, so be careful and do your homework before agreeing to anything. However, typically, this can be a great way to earn money doing something you would be doing anyway.

Open an Online Bank Account

How to Make Passive Income Online

This one might not be exciting or obvious, but holding your money or a portion of your money in an online account will most likely offer you much higher interest rates than your typical brick and mortar bank.

The reason for this is an online bank can keep its overhead costs significantly lower, due to their lack of real estate and reduced staff.

Some of the best Online Banks are:

Sell Stock Photos

If you love taking photos and generally take them as a hobby or maybe even as a profession, you may be able to sell your photos as stock photos.

You don’t have to be a professional photographer or have a vast portfolio to make money from your pictures. Sites like Shutterstock could buy your photos to then sell to their customers.

Join a Referral Program

Most of us have seen some shape or form of this type of program. Either from an employer or perhaps a friend, it’s a way to get extra money by referring a quality candidate. However, these types of programs aren’t limited to employers.

Many websites have a referral program for their users as well. Rakuten, for example, will give you an extra $5-$15 when a friend you referred spends their first $25 through the portal. If you’re already using a site or service, see if they have a referral program you can take advantage of.

Final Thoughts on How to Make Passive Income Online

So, there are obviously a lot of ways to earn passive income online. While some may be more passive than others, and others may require money to make money in the first place, using any number of the above strategies generally works better in tandem. It is unlikely you will see a significant change in your income (at least in the beginning) by only utilizing one of these. Still, by incorporating several into your everyday lifestyle, chances are you’ll start to notice a difference relatively quickly.

Jason Patrick

Jason has been a freelancer and remote worker for years and loves to share his experiences on working from home through blog posts and articles. Jason is also a great movie buff and loves heavy metal.

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