Passive income: 20 ideas to generate new sources of income
“The key to financial freedom and great wealth is a person’s ability to convert earned income into passive and/or portfolio income.” — Robert Kiyosaki
Passive income is never really passive.
While passive income streams are often considered easy money, they are mostly the result of significant effort put in up front.
Adding passive income streams to your existing business can create a revenue stream with an entirely different underlying business model. In general, these revenue streams have higher profit margins and can scale more easily than physical services or products, giving you more flexibility for your business overall.
If you are just starting out, a high margin product can be a great way to build your business and earn money to reinvest in your development. The important thing to remember is that although this type of income is called passive, it still requires work.
In this article, discover 20 passive income options to explore in 2022.
What is passive income?
The term passive income refers to an income stream that requires little work, as opposed to earned income that is often directly related to working time. To obtain passive income, however, there may be an initial investment of time or money to establish the income stream.
1. Create a print-on-demand store
Whether you’re an artist, designer, or entrepreneur, Print On Demand (or POD) can be an exciting passive income stream that allows you to monetize your creativity. You work with suppliers to customize white-label products like t-shirts, posters, backpacks or books, and sell them on a per-order basis.
With this business model, you only pay for the product after you sell it. You don’t have to make bulk purchases or manage inventory. Here are the benefits that make a print-on-demand store a good source of passive income:
You create products quickly and have them for sale in minutes.
Processing and shipping are handled by the vendor.
Once your store is up and running, you can automate many marketing and sales processes.
By working with a print-on-demand company such as Printful, Printify or even T-Pop, you can easily create products to sell quickly in your Shopify store. Print on demand is a simple, low-risk business concept that you can quickly implement.
2. Sell digital products
Digital or digital products are multimedia resources or items that consumers cannot physically touch. These can be downloadable or streaming files, such as Kindle books, templates, software extensions, PDF files, etc.
Digital products offer attractive passive income streams because their margins are so high. You create a unique resource, which you can sell online over and over again. You don’t have to build or store inventory.
You can sell as many digital products as you want. Many creatives increase their passive income by selling kits, printables, files and other resources for professionals. Entrepreneurs can also offer guides or checklists.
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3. Delivering online courses
Selling online courses is easier than ever. Whether it’s marketing, illustration or entrepreneurship, create courses on any topic and start selling them with just a few clicks. Just like digital products, you can sell the same online courses over and over again, without inventory.
Online teaching requires an initial investment of time. You’ll need to present your course, record it, and create downloadable resources (templates, for example) that students can keep after the course.
As an online educator, you choose the length of your courses and the size of your classes. You can offer one-on-one or live training and classes if you like working with larger classes. Want to avoid face-to-face interaction? No problem. Create fully downloadable courses that students can take at their own pace.
Whichever method you choose, online teaching is a profitable passive income stream with low start-up costs that simply requires a commitment of time.
4. Become a blogger
Starting a blog is not necessarily an easy endeavor, but this business model is becoming increasingly popular as a profitable passive income stream. You no longer need to be an Internet celebrity to make money online. All you need to do is find an audience on one or two platforms, then direct them to your website.
Building a blog takes time, but if you create quality content and showcase it on your platforms, your audience will be large enough for you to monetize your site.
A blog allows you to generate passive income in a variety of ways:
Selling affiliate products,
Creating sponsored content,
Selling your own products,
Running ads through Google AdSense.
The good thing about it? You don’t need any knowledge of design or code to create your blog. With a content management system and a hosting service like Shopify, you can launch it very quickly.
You will, however, need to take the time to define an SEO marketing strategy, and to create and promote your content. But your efforts will pay off: the return on investment can be very significant if you monetize your blog well.
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5. Sell handmade products
With the rapid development of e-commerce, the opportunity to build and grow an online business is enormous.
There are hundreds of online sites and marketplaces where you can sell. Some have specific niches, such as video games or handmade items, while others allow you to sell whatever you want.
The initial investment is twofold: you have to buy the necessary supplies and spend time making and selling your handmade products, such as jewelry, pottery or clothing. You must also create an online store to offer your products or sell on marketplaces.
By selling through your online store, you pay less on each sale, and you can develop your own brand. Your brand profits increase over time as you build your audience and reach more customers.
6. Do affiliate marketing
Affiliate marketing involves recommending a product or service to an audience. It’s a great source of passive income because you earn a commission every time someone uses your referral link to buy the product or service you recommended.
It’s also a growing industry. Online entrepreneurs opt for affiliate marketing for several reasons:
Ease of execution. You only manage the marketing. The brand develops the products and processes the orders.
Low risk. Joining an affiliate program is free. You can sell well-established products with no upfront financial investment. You have to spend time building traffic sources so that more people click on your links, but once that traffic is established, you can earn relatively passive income through commissions.
Scalability. If you choose affiliate marketing, you probably won’t need to recruit to grow. You’ll be able to introduce new products to your audience and create campaigns while your past work will continue to earn money without your intervention.
Making money with affiliate marketing can be a great way to add new revenue streams to your business. The only investment needed is your time. Once you invest that time, you will be able to reap the benefits for quite some time.
7. Sell photos online
You can create an additional income stream by learning how to sell photos online. Photo illustration sites such as Pexels or Shutterstock and other news outlets are willing to pay for quality photos and videos.
You won’t have to store anything at home except your camera and computer. These are the sites that will handle the marketing and merchandising of your photos once you upload them to their platforms.
If you run your photo business on Shopify, you can easily tie in digital products or print-on-demand products like t-shirts and hats, which will provide you with even more passive income streams.
8. Become an influencer or influencer on Instagram
To become an influencer on Instagram and be able to drive your followers to make purchases, you’ll need to build a community of like-minded people.
Are you a comic book fan? Create an Instagram account and regularly post about the latest Marvel and DC news. It’s the same whether you’re a fan of sports, scuba diving, interior design, cooking or even general culture.
If you have a loyal and engaged community, there are several passive income streams you can tap into: partner with small or large companies to promote their items to your followers, or sell your own products.
9. Create a dropshipping store
Dropshipping is also a good way to start making money wherever you are, even if you don’t have a lot of cash. This business model consists in creating an e-commerce store where customers can discover and buy products. The advantage of dropshipping is that you don’t need to physically see the products you sell.
Your supplier takes care of everything, from manufacturing to packaging to order processing. And since you don’t have to send money to the supplier until your customers pay, financial risk is limited. You also avoid the risk of investing in a product that doesn’t find its market.
Depending on the product you choose and your pricing, you can earn significant passive income while learning to run an e-commerce business.
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10. Investing in a company
Many businesses are looking for funding to grow and realize their plans. By investing in a business, you could earn money while contributing to the vitality of the economic fabric and entrepreneurship.
There are several models of passive investment in a company, which also differ according to the legal status of the company. In exchange for your contribution, you may receive shares, stocks or bonds. In some cases, you will receive interest payments, which is a good source of income.
Platforms such as LITA.co connect investors and companies looking for financing.
11. Growing your cash on a term account
If you have cash available, you may also decide to invest it in term accounts. While interest rates on term accounts are relatively low, it is still a better option than having your excess cash “sleep” in your current account.
All banks offer savings solutions for businesses. Get in touch with your banker to find out what your banking institution offers to create automatic passive income for you.
12. Become a consultant
New entrepreneurs are eager for advice from seasoned entrepreneurs. As a result, some entrepreneurs also work as consultants. It’s an activity that requires little effort: you just have to make yourself available for conversations and exchanges. You can easily launch your consulting offer with a landing page and an online appointment scheduling solution like Calendly.
13. Do some mentoring
Another option for helping entrepreneurs and supplementing your income with an online income: becoming a mentor. With mentoring, you accompany a person over time with several sessions to help him or her bring their project to fruition. Each session is paid, and requires relatively little work beforehand. There are platforms specialized in mentoring such as LiveMentor and OpenClassrooms.
14. Create a YouTube channel
Another way to share your entrepreneurial experience and earn passive money on the Internet: creating a YouTube channel. Indeed, there are several ways to monetize your YouTube channel — provided you succeed in building a loyal audience with original and engaging content. One source of revenue to explore is YouTube’s partner program, which allows you to generate revenue through advertisements.
15. Launch a podcast
If you are not comfortable with the video format, you can also decide to create a podcast. In fact, the French are consuming more and more podcasts and are fond of these long formats that help them discover new worlds. Stories, successes and failures of entrepreneurs are of particular interest. Collaboration with sponsors can allow you to generate passive income with a podcast.
16. Sub-letting a part of your workspace
You have a workspace to run your business and part of it is unoccupied? This is an opportunity to set up a passive business, by subletting an office or a storage space. If you have a large area, you can even create a coworking space. In addition to providing a source of passive income, subletting your workspace can help you break the loneliness of being an entrepreneur.
17. Rent out specialized equipment
If you are in a very specialized field of activity, you may have had to purchase expensive equipment to launch your business. Other entrepreneurs may be interested in renting this equipment, for example to create a prototype. This is a good opportunity to get a return on your purchase and generate an income. You can publish an ad on specialized websites.
18. Rent your vehicle
Perhaps you have a vehicle to move around or transport your equipment and orders? You can also consider renting this vehicle to professionals or individuals. Thanks to applications like Getaround, you can rent a vehicle in a few clicks and in a secure way. A good way to pay the vehicle’s maintenance bills and get a passive income supplement.
19. Resell equipment or decorative items
If renting is an interesting source of passive income, you can also sell some stuff you no longer need. This could be obsolete computer equipment, furniture or decorative items purchased for display at a retail location. Put ads on second-hand sites like Le Bon Coin. You should quickly find buyers!
20. Investing in real estate
The final must-have source of passive income is real estate. Buying real estate can provide you with interesting short-, medium- or long-term income in the form of rent or capital gains. You can invest in several types of real estate: offices, garages, warehouses, housing for traditional or seasonal rental, etc. The challenge is to find the right property for your project and to obtain a bank loan at an attractive interest rate, which will not cost you too much.
The road to financial independence
Unfortunately, the days are not expandable. Finding ways to increase your revenue more efficiently can give you the flexibility your business needs to take it to the next level. Taking vacations, hiring employees or ordering new inventory: whatever direction you want to go, adding revenue streams based on different business models can give you the freedom to explore new avenues.
