Passive income remains the dominant way to create a financial cushion. Especially in hard times, with inflation skyrocketing and the economy being unsteady, passive income helps generate additional funds without taking too much time away from active sources of income. Better yet, there are many different ways of achieving passive income, which will be discussed in detail in this post. 

What is passive income and what counts towards it?

But first: what is passive income? What is the difference between active and passive income, and why is this secret one that most millionaires use to build wealth fast? 

Here at MetaWealth, we help users build strong passive income streams by investing in real estate starting with just $100 on our app. So we're kind of the best people to ask about passive income, and we've put together with guide to help anyone achieve it.

At its most basic level, passive income is any earnings derived from minimal effort. Some initial examples include rental properties or dividends from stocks. Both of these don’t require direct participation in order to generate cash – you simply let them run and enjoy the financial flow they bring. 

The difference between passive and active income is also quite simple: active income requires direct engagement in the work. 

Examples of active income include hourly wages, tips, and salaries. When comparing the two, passive income seems like the best route to go down, but often not where most people start. You can put some work in, and once it's up and running, enjoy steady financial gains that don’t need your direct involvement anymore. Thus, the examples put forth in this blog post will highlight the best passive income strategies in 2023.

Types of passive income that actually work

1. Rental properties

Buying rental properties is one of the best ways to earn passive income. However, there are quite a lot of things to consider before taking the leap.

Figuring out how much you want to earn from this particular investment, and doing the due diligence necessary – considering the market, the economy, etc. – are all major thinking points. Moreover, having backup plans to deal with bad tenets, damages, late fees, and the ugly sides that come from owning real estate. But once you have these figured out and are ready to invest, you will inevitably see the power of rental properties. 

2. Dividends

Investing in dividend-yielding stocks means that every quarter, those companies will pay cash out of their profits to their investors. Even better, since they pay per share owned, the more dividend stocks you buy, the more money you make. 

3. Robo-advisors

A method of trading stocks, robo-advisors are AI-powered traders. Instead of you picking the stocks to invest in (and acquire risk), robo-advisors slowly, incrementally build your wealth by investing in low-risk, steady-valued stocks that perform well. Simply put your money into a robo-advisor, let it sit and watch it grow. 

4. Renting out parking spaces

This is one of the easiest methods of generating passive income. If you have any parking space, whether it's your driveway or a space which came with an apartment, in high-traffic areas, consider renting it out. 

It’s not an inconvenience to you, considering you don’t use it anyway. Mostly, it’s a passive income machine that keeps on giving, as people will want to reserve that space as much as possible. Just make sure you aren’t in violation of any laws or regulations of your country or state of residence. 

5. High-yield savings accounts

Saving money is always a good idea. Now combine that with getting paid to save money, and it's an offer no one can refuse. 

You can search around for the savings accounts with the highest interest rates, and simply transfer your money and let it grow steadily.

6. YouTube channels

If you already have a niche that could do well online (knitting tips, video games, travel vlogs), make a YouTube channel and create engaging content. 

This idea falls under passive because, well, you are already doing it anyway, and posting it online takes a few extra steps. The reward, however, could be months and years of passive income from YouTube advertising, and even better, a faithful audience that enjoys your content.

7. Sell ad space on your website

If your website already has lots of regular traffic, you can sell some space on your site for ads. Even better if the ads are of products and services that your audience will enjoy. 

8. Participate in sleep studies

It's all in the name. Passive income is generated through literally sleeping, and allowing scientists and researchers to collect valuable data about your brain and your sleeping patterns and habits. Even cooler, you could be the study that leads to a breakthrough in sleep science.

9. Dropship

Dropshipping has increased in popularity due to recent global events. An online-based method, you set up an e-commerce store, selling whatever your heart desires – hopefully, it’s things people will actually buy. 

Here’s the savviest part: you are simply acting as the digital middleman between supplier and customer. You don’t have any actual product, the supplier handles everything (like packaging, fulfillment, etc). What’s more, there is limited risk involved since you don’t pay the supplier until the customer forks over the cash. Thus, you are earning money simply from putting up an e-commerce website. Truly passive income!

10. Refinance your mortgage

Obviously this one depends on economic circumstances, and it’s not exactly a classic source of passive income because it’s not recurring, but it can still provide financial relief when you need it. Refinancing mortgages is a timeless strategy of saving hundreds of thousands of dollars and freeing up some cash. Shop around for the best interest rates and start saving – this is a passive strategy simply because you already own the property, thus all you need to do is get the best deal.

11. Get paid to install apps

Yes, you can literally get paid to install applications on your phone. Granted, you have to be careful when doing this, as some apps harvest your data and can sell it off. Having the right precautions in place, and only doing business with companies you trust, can be of great benefit to both parties. They get feedback, you get paid.  

12. Blogs

You don’t need to be a great writer to host a blog. In fact, you don’t even need to write. 

Buying an already-established blog means you get the traffic sources, audience, momentum, and content all-in-one. Better yet, hosting ads and sponsors means income will come your way. 

13. Sell or monetize your hobbies

Sites like Etsy let you sell your hobby. Whether you enjoy knitting or painting, you can post your works online and receive thousands of orders if people find them valuable and necessary. Some people don't enjoy the idea of monetizing their hobbies, believing that if the hobby starts to feel like work, that may take the joy out of it. But if you don't mind scoring some money for something you already like doing anyway, think about how you can best monetize your passions. There are surely other people already making money out of something you do well for free. This could be one of the best ways to make passive income every!

14. Create an online course

Online courses can be very lucrative. If you have a passion or hobby, you can create an audio or video course and publish it on sites like Skillshare, Coursera, or Udemy. These platforms are designed to advertise courses, which means knowledge for others and passive income for you. 

15. Write a low-content eBook

Low-content e-books, like journals, are a surprisingly lucrative avenue. Creating and publishing them to Amazon’s KDP marketplace is easy and fast, and with the right algorithmic advertising, can accumulate tons of cash very quickly.

16. Invest in small businesses

Is there a profitable local business in your area? Consider buying it and enjoying the benefits of ownership. You can even hire a manager to keep the day-to-day operations running smoothly, while you make the executive decisions. Better yet, other investors may want a slice of the pie, giving you free reign on selling it for more than you paid for it, or sharing it with others.

17. Cash-back credit cards

Buying things is one side of the coin; getting paid for buying things is a reward too good to pass up. You can usually enroll in cash-back cards and start purchasing right away. Always make sure to read the fine print, and check if there’s an annual fee involved. 

18. Rent out unused rooms

Similar to renting out your entire home, renting out unused rooms is, when done correctly and safely, a great way to meet new people, help them out, and generate some cash doing so. 

For example, some nurses need a steady place to stay while fulfilling their duties; opening up the rooms in your home, if you aren’t using them, and renting them out to guests and workers isn’t too difficult to set up, and is another way to help society in a passive way. 

19. Stake cryptocurrencies

Yes, we must talk about crypto. Yes, there is also risk, so please research and understand the risks associated with staking, like slashing and market risks. Regardless, if you already own crypto and want to put your coins to better use, consider staking them and getting around 5-10% returns. Ethereum, Cardano, and other cryptocurrencies offer staking, with great rewards and returns.

20. REIT investments

Real Estate Investment Trusts, or REITs, are unique real estate companies that have stock you can purchase. REITs pay none or some corporate tax, because they give most of their income to shareholders – which could be you!

The top REITs increase the dividends paid out annually, so make sure to do your research on the best of the best to invest in. 

Of course, the MetaWealth™ app is a safer, better choice than REITs, that allows you to invest in fractions of real estate just like a professional real estate broker, in just 5-10 minutes and starting from $100. Here is a more in-depth comparison between MetaWealth™ and a REIT fund and why our platform is the modern and better choice. 

21. Annuities

With annuities, you pay a company – most likely an insurance company – some money, and get paid out in the future. 

This works for retirement, children’s college funds, or anything else. The point is to build an annuity contract that works for you and your life; make sure to read the fine print and fully understand what you’re getting into. This falls under passive income because you are paying a company to give you a steady stream of income in the future, without you having to lift a finger.

22. ISA investments

Income-Share Agreements are an alternative to student loans. Basically, investors and universities alike pay for a student’s tuition in exchange for a percentage of their future income. There is some risk to this, as you are putting your bets on a student’s future.

There is a $10k minimum payment, but the returns are targeted around 8-14%. Thus, you can access a stream of high-risk but high-reward passive income.

23. Affiliate Marketing

Partner with companies to receive commissions from their products. Generating affiliate links for very common items, like water bottles or accessories, and then advertising them on social media, blogs, and YouTube videos is a very effective strategy. 

24. Rent out space on AirBNB

Going away for a few weeks? Taking a summer trip abroad? Why leave your home unattended and free? Instead, put it up on AirBnB, and after going through the safety checks and overall process, you could be making thousands of dollars from people simply using your dwelling as a place to stay. 

Of course, there have been horror stories, so make sure nothing of value or significance remains in the house while you’re renting it to strangers. But this is a surefire way of making money by simply not being home.

25. Buy vending machines

Who doesn’t love chips and candy? Buying vending machines in high-traffic areas, like malls, offices, and other places is a low maintenance and easy passive income strategy. You can do the exact same thing with ATMs!

26. Flip domain names

Have a great domain name just sitting there? Why not flip it and rake in the cash? 

People are always looking for great names to build their brand with, thus advertising yours is for sale and negotiating a price can be lucrative. 

Furthermore, you can start doing research and buying popular domain names associated with trends – just think of all the “NFT” domain names that were recently registered. Getting ahead of the trend can set you up for massive deals down the road. 

Just start researching domain names that are free on registrars and get ahead of the trend by claiming the ones that are sure to be in demand soon.

27. Rent out your tools

Tools are always needed. Most people don’t have great tools lying around, and this means there is an opportunity to provide a service. 

If you have high-quality tools, consider lending them out for a fee. Of course, have contracts in place to protect you from damaged or stolen property. Also make it seasonal: in summer months, rent out camping equipment. In winter months, rent out shovels and snowblowers. 

28. License your stock photos

Putting your photos online to be used as stock photos means getting paid in royalties from your photos being used. It's also a great way to find yourself in videos and advertisements. 

29. Build an app

You don’t need to be a computer programmer to create an application. Hiring a developer to build a gaming or learning app, and then publishing it to all contemporary app stores means people can download your app and use it – this means you can host ads and subscriptions for your app. 

30. License your music

For commercials, YouTube videos, even TV shows and movies, music is used everywhere. Naturally, if you upload your music and license it for use (similar to stock photos), you can earn royalties off of this. 

31. Rent out luxury items

Cool watches, beautiful necklaces and earrings, and other luxury goods have tremendous value and social recognition. Develop the right contracts, sell to the right customers, and you can make a good chunk of change from simply lending your jewelry, car, furniture, and more. 

32. Rent out storage space

If you have lots of space in your garage, or even an entire storage unit, consider renting these out to customers with lots of stuff. They will literally pay you to keep their items in your dwelling. It can’t get any easier!

33. Advertise on your car

If you just found out you can put ads on your car, you're not alone. Depending on where you’re located and how far you drive every day, ad agencies may give you the greenlight and wrap your car with ads. Make sure to verify the ad agencies are legitimate, as some companies tend to scam their drivers out of owed funds. 

You’re usually paid by the mile, and all you need is a clean driving record and a new-ish car. 

34. Petsit

People who travel often need pet-sitters. This service can be both fun and profitable. As long as you know how to handle pets (and enjoy doing so), you can run your daily activities with some company beside you – and get paid for it.

35. Housesit

Even easier, some people simply need you to watch their house and water their plants. And they’ll pay you for doing this! Although, make sure to sign contracts alleviating you from anything that happens to their homes while they’re away.

36. Crowdfund real estate

An interesting alternative to investing in real estate on your own is investing with other people. A team picks out the best deals, and you choose how much money to put in. There’s an annual fee involved along with a minimum investment. 

This is one of the best ways of diversifying your portfolio and taking a low-risk, passive approach to real estate investing. But if you're not part of a large community of rcih investors to help fund your dream, the fractional real estate investing we offer on the MetaWealth platform is a better place to start. You can start investing in real estate and earning passive income from rent with just $100! There's no way to make passive income easier than this.

37. Get sponsored Instagram posts

If you have a following on social media, sponsors are a great passive income source. Companies will pay you big bucks to showcase their product on your feed, review it, rate it, and more. 

With major social media platforms making it super easy to go viral, like TikTok, Instagram, and even YouTube Shorts, now is the time to make the most of your existing audience and generate some income.

38. Sell unused household items

You probably have random items lying around your house which are never used. Coolers, lawnmowers, and furniture are all enticing prospects to sell off. 

You can even rent them out if you don’t want to permanently get rid of them, but make sure you have some contract in place in case your item is damaged or stolen. 

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39. Build a job board

Hiring a developer and building a job board can be financially- and socially-beneficial. Companies can pay you to host jobs on your site, you can make money from regular advertisements, and you can also help people find employment. 

Wrapping up

Using these passive income ideas can be of great financial benefit. With an unpredictable market, passive income can bring balance to an otherwise shaky modernity. Diversifying your income streams is the new normal, allowing you to ease your financial worries, take more vacations, and enjoy your time the way you want – this is known as financial freedom.

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