20 Passive Income Ideas With Little Money

1) Become an Author

If an entrepreneur has an idea for a short, practical, nonfiction e-book, they might be able to set up their first passive income stream. Regarding setup, e-books can be published and distributed through Amazon, and millions of readers will see the new title for a small fee. The low cost of publishing plus the powerful distribution force that is Amazon make this idea one consider. Of course, there are a few caveats.

First, an individual should be considered an expert on a specific topic. Of course, this can be a niche category, reflective of the entrepreneur’s unique skills, knowledge, or abilities—but the key is that there must be some reader demand for this. So, whether it is a self-help book and the writer has counseled or taught self-help for years or a quick guide to the rivers and lakes of the region by a veteran kayak guide, the point is to focus on the topic at hand.

If individuals possess a unique skill-set, love to write, and are looking for an inexpensive way to set up their first passive income stream, this could work for them. Also, e-books do not have to be very long, so as opposed to writing a 300-page novel, creative entrepreneurs can create a 30-50 page book, edit it, and begin publishing.

The Pros: E-books are popular, as more and more people are clicking “read now” than ever before. There will always be a hunger for well-written content that features good information and is available at a solid value.

The Cons: There is a reason that being an author is one of the most challenging pursuits in the entire world. However, people’s opinions are subjective, and it is difficult to predict the trends that shoot across the country. To succeed, an e-book must be masterfully written and packaged and generate a strong following.

Writing an e-book can also be daunting because sales can start slow. One book will probably not create a strong enough revenue stream unless it is a breakout hit or goes viral, but multiple books have a much better chance of making revenue.

2) Come up with an Audio or Video Course

Courses offered online have become all the rage, especially during and after the pandemic, and are praised for their portability, accessibility, and focus on exciting topics. Moreover, unlike a college curriculum, during which some students must take specific courses, the “students” can concentrate on the issues in which they are interested.

If entrepreneurs are unsure how to create an online course or have no real experience in crafting a series of classes, they will find countless tutorials on YouTube and in other spots. Also, it may be possible to contact other industry leaders via Twitter or other platforms. Most teachers and instructors are eager to share their techniques and ideas. Once the course is created—it will usually be a series of audio recordings, a series of videos, or both—individuals can decide where and how to distribute it on sites such as Coursera or Udemy. In terms of payment, viewers can pay per class or course, and the pricing is up to them.

Another option is to use a “free” model at first. It is sometimes easier to build up a following by offering free, if limited, information. Once the course is a certified hit, the “classes” will be eager for more details, and entrepreneurs can release more detailed content and charge for it. This “free content” or “freemium” idea exists in courses on learning foreign languages or picking stocks.

The Pros: Creating an online course that becomes steadily popular can help individuals establish a passive income stream that can create revenue. Also, this idea allows small business owners an easy way to continue to build since they can use one course as a foundation and go from there as demand creates. Individuals also have freedom when choosing between audio, video, or both.

The Cons: If individuals have never created an entire course, from class one to the end of the lesson, it requires a substantial amount of time and effort. The entrepreneur also must be very knowledgeable about the subject matter, personable, and comfortable on camera. Plus, this is a crowded market that is rapidly growing, so to make excellent funds, the individual must have a superior product. Marketing and advertising are essential in terms of getting the course out there. Finally, the system’s “release” must be well-orchestrated and well-planned, and the entrepreneur should have plans for future releases.

3) Take on Rental Properties

Traditionally, rental properties have been used to create income streams, and though this idea has been popular for a long time, there are a few misconceptions.

First, owning rental properties is a terrific way to earn passive income, and it is easy to see why. Short-term or long-term renters provide reliable rental payments, and these go directly to the landlord.

However, owning and maintaining rental properties involve more effort than many suggest. Cleaning, general upkeep, and home improvements all take time but are necessary. If the entrepreneur hires for these tasks, this can significantly cut their profits. Investing in these properties makes sense, but it must be done carefully. Spend time learning how to earn profits from these properties.

The Pros:

If individuals have done the research, crunched the numbers, and are prepared to invest, then they will ideally welcome some extra capital to their yearly tally. Entrepreneurs should ensure they know how much of a return they expect on their investment. They should also check on the risks of owning a house or apartment.

Once the entrepreneur crunches the numbers, they will know how much to charge for rent to offset the mortgage and the taxes paid. Doing all this early will let individuals know if this particular rental property will work for them before making a mistake.

The Cons:

Whenever an individual delves into the real estate market, there are risks. The following questions can help entrepreneurs determine if this is the right choice for them. First, if they cannot rent the property at some point, for a few months or more—will that be too damaging to their income and cash flow? Second, if the individual has a tenant who harms the home or the property, will not pay rent, or even squats on the property, how will they deal with it, and do they have the money to override these issues? Third, is there a rental market for this property, or is there a reason it sold at such a low price?

Other factors that could cause trouble may be out of the business owner’s control: a recession, for example, can quickly sink the housing market, including rentals. Many landlords find themselves suddenly dealing with tenants who cannot pay rent due to personal issues such as job loss. This issue leaves the landlord with two or more mortgages. An economic downturn also leads to lower rental prices, which can cut into the passive income stream.

This category has many risks and involves a solid amount of effort to make it work. However, when the real estate rental game is working, and the place is in good shape and full of happy, diligent tenants, they can sit back and relax—for a little while. Testing the rental waters with some Airbnb rentals may allow individuals to determine the price and see if this idea fits without locking into a year lease. In addition, many people find that using VRBO or Airbnb boosts their overall income, especially with the added cleaning fees.

4) Sell Retail Products

Selling or “flipping” retail products has become a popular and relatively effortless idea for passive income enthusiasts. Taking advantage of the online sales power of industry titans such as eBay and Amazon, entrepreneurs buy products in demand elsewhere and then simply sell them at marked-up prices. If the products sell, individuals will quickly earn a profit.

The Pros: Taking advantage of pricing discrepancies helps sell products, so a working knowledge of the market and a little research will go a long way. Awareness of what products are currently in demand—baby formula, anyone—and what products are last year’s news is one of the keys to this passive income stream’s success.

The Cons: Entrepreneurs who want to sell retail goods need a sturdy supply of cash to start since sales are supported directly by the materials they buy. If individuals go into this venture thinking it will be easy, their lack of market knowledge could lead them to purchase items on no one’s list or markup easy-to-get goods for an obscenely high price. There will be competition, and determined entrepreneurs will have to rise above the thousands of other sellers with their industry knowledge.

5) Embrace Affiliate marketing

Affiliate marketing allows bloggers, owners of websites, social media stars (influencers is the new term), and other online heavyweights to promote and sell products. For example, an influencer might sell an energy drink via Instagram by including an affiliate link to their development. The link could be in their bio, on their website, in their posts or stories, or anywhere they think their enthusiastic followers will click on the link and buy a product. Some affiliate deals reward the seller for clicks, and many focus on a commission for the individual when someone buys something.

Amazon is an affiliate partner. eBay is also one of the earliest practitioners of this type of marketing, while newcomers such as ShareASale are becoming known and used widely. Instagram and TikTok provide influential, dynamic platforms for famous individuals determined to turn fame and notoriety into profits and sales.

The Pros: Since a commission comes when the visitor purchases something from a third party (the affiliate), the focus is on finding the correct audience. Commissions have a wide range, from 4-7%, so one has to generate a high traffic rate and clicks to make money. Most individuals who succeed in this milieu find a niche that works for them, from fitness to financial advice.

The Cons: If individuals cannot attract readers or viewers, their earnings will stay at zero. Also, affiliate marketing takes time. Entrepreneurs need to build up their following and persona and establish their accounts as trusted and the products as viable.

6) Become a Professional Photographer

As with everything else, at least half of the photography trade has moved from crowded galleries full of shiny frames to websites. If entrepreneurs have a talent for taking photos of landscapes, sunsets, travel destinations, or even individual portraits, they can set up their hobbies for success in the passive income world.

Selling beautiful shots on the web can help artistic entrepreneurs to scale their offerings since many online photographers can sell the same photos over and over to buyers across the country. Also, the internet allows individuals to connect with exciting fans worldwide, driving up sales rates if they market the work successfully.

Companies like Shutterstock can help photographers solidify their online brand and image and get situated online. Choose the site, apply, and then agree to the licensing terms. Ideally, the photos will sell, and the income stream will roll right in.

Consider occupying a specific niche with the photos to make the brand more readily available. For example, focus on particular scenes or genres, browse, conduct a little research, and follow the trends by using models, focusing on local or national landscapes, or even using abstract images.

The Pros: Using a platform provides an advantage. Scaling photos allows photographers to take one great shot and sell it 1000 times if the demand is there. Though most media take a commission, their effort upfront will be less than many of the other categories we’ve examined.

The Cons: The arts are variable and unpredictable. Even talented, trained photographers sometimes upload numerous excellent photos and go months without one sale. However, once the entrepreneur finds an image that strikes a nerve, it may continue to pay dividends over and over, so things can quickly balance out.

Photography is not easy when practiced at an expert level. From maintaining light levels to developing film to attempting to please the audience, the challenges of this and all creative pursuits are plentiful. Continually thinking that “the next photo will pay off” can be draining and inhibit one’s creative aims. However, this idea can be the perfect shot for the artistic entrepreneur.

7) Invest in Crowd-Funded Real Estate

As we’ve discussed, real estate investment can provide a healthy rate of income, passive at that. Yet, it does require some arduous work, from repairs and management to dealing with sometimes unpredictable tenants. As a result, many individuals busy with their main occupations have turned to crowdfunding real estate investments. But for the uninitiated, how does this work?

First, the investor researches and selects a crowdfunding platform such as Fundraise or Groundfloor. Comparing the perks and offerings of the various sites, and matching up the type of real estate they focus on and would like to invest in, is paramount. Then, the platform’s team picks the property, and the entrepreneur decides whether or not to invest in it and how much. Of course, nothing is free: the individual must pay a yearly fee for the platform’s management, and there are the varying minimum and maximum investment amounts. However, the process is overall relatively easy.

The Pros: When opting for this passive income idea, individuals suddenly are given access to real estate deals that they would typically not see. Plus, these opportunities come with approval from seasoned real estate investors. In addition, the platforms have excellent features, such as allowing investors to check out return rates, and real estate investments can help diversify an individual’s portfolio.

When a new business person compares platforms, they should decide if they want to invest in equity or debt. Stock usually offers high returns but more risk. Debt will provide more security but lower returns. Other platforms, such as DiversyFund, ask that the individual be an accredited investor. Others will require the individual to have a minimum asset level or income. Overall, the process is relatively simple.

The Cons: While crowdfunding platforms can be beneficial, they also pressure entrepreneurs to make their investments. Depending on the business person’s knowledge of real estate, this may be acceptable or prove difficult. If the entrepreneur does not conduct the proper research for every single deal, they risk losing a substantial amount of money. If they base their buys simply on the past returns, they also might lose out.

Also, as history has shown us over the past few decades, real estate is one of those sectors that is entirely vulnerable to an economic downturn. Therefore, the entrepreneur must understand how long their cash will be locked into the investment. Also, ensure that they know how to access it in an emergency.

8) Dividend stocks

When shareholders have dividend stocks, they receive payment at routine intervals from the business. For example, suppose entrepreneurs own the stocks. In that case, the company will pay cash dividends per quarter out of the company’s profits—the more shares an individual possesses, the better since tips pay per stock share.

Pros: The stock income is solely related to the initial investment, so dividend stocks are passive. The money is directly deposited in the entrepreneur’s account, which is a convenient and accessible form of passive income.

The Cons: Choosing the correct stocks can be difficult for individuals, depending on their knowledge of the market. Businesses that issue high dividends sometimes cannot sustain it, and some novice investors leap into the market without doing enough research on the stock or the company. Experts suggest choosing exchange-traded funds, known as ETFs. ETFs are funds that hold assets, for example, bonds, commodities, or stocks. ETFs also help to diversify the entrepreneur’s holdings.

Stocks and EFTs can move up and down quickly, so individuals should be careful when investing. The pandemic, for example, changed the value of stocks and EFTs very quickly, and other causes of economic trouble can even inspire companies to cut their dividends completely.

9) Peer-to-Peer Lending

Lending classified as peer-to-peer, is based on a loan made between an individual and a borrower that is personal in nature. Third-party companies such as Lending Club or Prosper are some of the industry leaders, and other lenders offer opportunities.

The Pros: Passive income results from the interest payments made on the loans. However, since the loan is unsecured, there is the risk of default. To minimize this risk, entrepreneurs should diversify their portfolios and make informed choices regarding borrowers and the history of the loans.

The Cons: Peer-to-Peer lending takes a little time to understand and master, so there are some non-passive aspects to this category. Entrepreneurs should pay attention to the payments they receive from the loans. Individuals can also reinvest the interest they make and build a considerable income. Recessions can cause loans to default, so entrepreneurs should also pay attention to the economy’s state.

10. Come Up With an App

Coming up with an original app is another way to invest time and effort up front and then allow the passive income to stream in afterward. For example, an individual might create a game or an app that helps consumers somehow. The choice is up to the entrepreneur, and as long as the app captures peoples’ imaginations in some way or is practical and valuable, they might be in luck. Then, users can download the app, generating a passive income stream when the app goes public.

The Pros: Creating an app can have a significant upside for entrepreneurs if they can capture their audience. Individuals should have an idea of how to generate sales, too. Some entrepreneurs use advertising in their apps, and others require users to pay a download fee. Adding features will keep the app current and relevant.

The Cons: Spending time and money to start the project can be the downside if the app does not attract buyers. The market is very crowded, and to be competitive, apps must be unique, practical, valuable, and recognizable. Entrepreneurs should also ensure that their apps collect data to comply with privacy laws. These laws differ depending on location, so check on that. Lastly, app popularity is fickle, so prepare for profits and losses swings.

11. Rent a Parking Spot Out

Housing and parking spaces are in high demand across the country, and if individuals have a parking spot they are not using or can spare, this can be an easy source of passive income. In addition, some entrepreneurs find they have a space where multiple cars can fit, which can be even more advantageous. Living and parking spaces are at a premium in most areas, so it is possible to trade in a parking spot for added monthly—or weekly—income.

The Pros: If an individual lives in an urban area or near a baseball field or concert venue, there will be times when they can charge a premium for the parking spot. Commuters and tourists will pay a high rate if they do not have other options. However, if entrepreneurs can find someone who needs the location daily, this can create substantial and predictable profits.

The Cons: Anytime an individual rents out a piece of property, the risk is involved. Depending on whether the entrepreneur rents or owns, there may be restrictions on the land. It makes sense to set a contract for daily or monthly users and use a liability disclaimer.

12. Purchase REITs

Real estate investment trusts are simply companies that own and manage real estate. Known as REITs, these companies use a unique legal structure. This structure means they pay little to no corporate income tax if most of their income flows through to the shareholders.

The Pros: REITs are available in the stock market, similar to other stocks and companies. Individuals earn whatever the REIT pays as a dividend. The most popular REITs have a history of adding to their dividends by the year. REITs can provide a passive income stream that grows as time passes. REITs also provide diversification and are safer to buy than individual stocks.

The Cons: REITs come with some risk, similar to ETFs. Entrepreneurs should research the companies that they may buy, which takes time. Plus, individuals can quickly lose revenue without the proper knowledge and skills. In addition, the price of REITs can fluctuate a lot. Lastly, difficult economic times can lead to REITs that become eliminated or are forced to cut dividends.

13. Invest in a Bond Ladder

A bond ladder is a term for a series of different bonds. These bonds mature at various times over the years, diversifying an individual’s portfolio. In addition, the different maturities of the bonds allow the investor to enjoy decreased risk when reinvesting.

The Pros: When entrepreneurs invest in a ladder of bonds, they are partaking in a classic investment that has appealed to retirees for years. Passive income comes in the form of direct interest payments. “Extending the ladder” means that the individual rolls the principal amount into a set of new bonds.

The Cons: Bond investments can cause investors to lose their principal amount if the company defaults. Rising interest rates can lower bond value. Because of these issues, many individuals invest in bond ETFs, which provide diversification, allow them to set up a bond ladder, and get rid of the risk that one bond can damage returns.

14. Try Sponsored Social Media Posts

When an individual has a healthy following on a social media platform or two, they may be able to take advantage of it. This can be done by having new brands pay them to post about their products, provide links, and feature the products on their stories and feeds. The entrepreneur needs to fill their profile or profiles with engaging content. They also need to continue increasing their reach and number of followers, so some work is involved.

The Pros: These days, social media use is all the rage, impacting everyone—even non-users. By using your presence on social media platforms to create revenue, entrepreneurs tap into a new and attractive model for business. With rich and engaging content, the sponsorship offers can continue to grow in number.

The Cons: It can be challenging to start the entrepreneur’s social media career and tap into a large audience. Growing one’s audience and creating dynamic stories, videos, tweets, and photos can require many hours of work. Following the trends, too, can be tiring. The trends change daily and rely on the whims of the youth, who are primarily on TikTok and have time to burn. Plus, sponsors want more and more content, and they will drop individuals who are not “viral” enough in favor of the next best thing.

15. Invest in a Savings Account or Certificate of Deposit that is High-Yield

When individuals invest in a high-yield savings account or CD at an online bank, they can produce a passive income stream. But unfortunately, entrepreneurs may also get one of the highest interest rates in America today.

The Pros: First, interested individuals should search out the top savings account and CD rates. Online banks generally offer the best rates. If the institution has the backing of the FDIC, then the investor will still receive a guaranteed principal return of up to $250,000.

The Cons: CDs and savings accounts are seeing fewer returns these days. Inflation is also present, which damages the buying power of the investor’s money.

16. Rent Out Housing Over the Short Term

Renting housing is a simple idea that capitalizes on individuals with room in their homes. If an individual is leaving for a specific season or heading out of town for a particular time, they can rent out their space and enjoy the passive income stream that follows them on their travels.

Pros: Entrepreneurs can use Airbnb, VRBO, or other sites to list the property. They can also set rental terms. In addition, the work required is usually not too taxing since the place belongs to the individual.

The Cons: Allowing strangers to stay in one’s home can be challenging and risky. An individual’s personal property can be damaged or worse. If individuals decide to go this route, we recommend putting all-important belongings away and locking them up.

17. Use the Car to Advertise

Some individuals earn extra capital by driving around. This easy idea begins with getting in touch with an advertising agency. The agency evaluates the individual’s driving, and ads are placed on the car if it is a match. A clean driving record and some free time are all that is required.

The Pros: Many individuals enjoy driving, so this idea takes advantage of what they will be doing in their spare time. Entrepreneurs can earn money monthly with little to no extra cost or effort. Usually, individuals are paid based on their mileage.

The Cons: Gas prices are skyrocketing and not looking like they will come down anytime soon. Also, entrepreneurs should be wary of dishonest companies targeting drivers who want to run ads.

18. Come Up with a YouTube Channel, Blog, or Vlog

If an individual is a travel expert, a videogame pro, or an exemplary athlete or dancer, they may be able to create a profitable channel. One’s passion for a topic can fuel a blog, vlog, or individualized and unique track. This idea is excellent for those skilled at filming effectively on their phone and editing and posting entertaining, exciting videos. If things go well, then income will be created by sponsors or ads on the channel. Entrepreneurs must create content and engage an audience to bring in enough viewers and followers to create a passive income stream. As the channel grows in popularity, the profits will also increase.

The Pros: Creators can start with a low-cost platform and fill it with intriguing content. With a unique perspective and a wealth of specialized knowledge, the channel can distinguish itself and bring in more and more sponsors.

The Cons: All of these platforms are currently very crowded and competitive fields. It can take time to create engaging content and maintain a high level. Plus, much of the content must be created immediately to bring in initial followers. Sometimes, if there is not enough interest in the topic, the individual can spend much time on an experiment that does not pan out or pay out.

19. Rent Practical Household Items

We’ve already discussed parking spaces and apartments, but why not rent out household items? Entrepreneurs can rent out everything from power tools to coolers, mainly focusing on valuable things that people only need for a short time. For example, an individual could buy a power washer for around $100 and then rent it out for $20 per hour all spring, as people clean up their houses, decks, and garages to prepare for summer. Then, entrepreneurs only need to figure out how to do a little advertising and how customers will pay.

The Pros: Individuals can begin on the small side but then increase their rental business as demand grows. It will also become apparent where—and when—demand is highest. In addition, this idea creates an instant passive income stream based on belongings the individual already has, so the upfront costs are minimal.

The Cons: Whenever individuals rent out their equipment, the risk is involved. A contract or rental agreement will make this process easier because there is a good chance that something will become lost, broken, or stolen as the business matures. Also, the entrepreneur needs to consider essential liability issues and insurance when lending anything out that could become dangerous, such as a chainsaw or hammer.

20. Sell Printed Designs Online

For industrious entrepreneurs with design skills, this idea is appealing. Individuals can sell items with unique printed designs. Online businesses such as Zazzle allow anyone to create specialized T-shirts, mugs, and more. A passive income stream can be quickly created if the plan is a hit.

The Pros: If individuals know their prospective buyers, they can target their designs. It is also possible to set up a web store online. This idea allows for creativity and inspiration.

The Cons: Some designers invest in materials and commit much time to products that no one wants. It is challenging to design something that fits the cultural moment. However, if an individual is already doing design work and creating products, then the risk is minimized.

Which Passive Income Idea is the Most Advantageous?

The best passive income idea depends on the required investment and the entrepreneur’s interests and abilities. If an individual has an interest and talent in a particular area, they should pursue that. If they see an opportunity for a specific market, they should follow that.

How Do Entrepreneurs Create Passive Income Without Capital?

Entrepreneurs should choose areas where they are experts or sites with many opportunities. Then, once capital is created, there is more freedom of choice.

How Do Entrepreneurs Create Passive Income With Capital?

Entrepreneurs can invest in dividend stocks and REITs. They can also save money with CDs and bonds.

How Many Passive Income Streams Should Entrepreneurs Have?

The amount of passive income streams an individual should have is highly subjective and depends on how much the person wants to create or save. However, starting with a few different streams is an excellent way.