9+ Creative & Feasible Passive Income Ideas: How to Earn More in 2024

Passive income is a steady income stream you can generate from sources aside from your full-time job or freelance work.

With the prices of basic goods steadily increasing, it is smart to have an alternative source of income in case of an emergency and to help stabilize your finances.

If you are eager to learn more about passive income, we’ve compiled some highly recommended and practicable ideas to help you start boosting your earnings!

Key Takeaways

• Passive income is any additional source of earnings you have that you do not actively participate in but steadily add to your regular income.
• Some of the most common types of passive income include renting properties, selling products online, affiliate marketing, real estate investment, and creating a YouTube channel.
• Passive income is taxed in the same manner as active income, with the tax rates and eligibility for tax deductions depending greatly on the type of passive income stream the taxpayer declares.
• On average, having five to seven income streams helps set you up for long-term financial stability. However, it is important to know your limitations and explore your options to maximize the different income streams you want to pursue.

What is Passive Income?

Passive income is a money-making venture that requires little effort or work. The difference between passive and regular income is that you don’t need to exert effort to generate money with the former.

The keyword ‘passive’ means that this income consistently generates money without the need to work tirelessly, meet specific performance KPIs, or clock in like you would in a full-time or freelance job.

You can take a vacation or a holiday with the assurance that you’re still raising money.

By combining active and passive income streams, you can achieve more stable financial health and minimize instances of falling short of your budget.

It is also an excellent way to steadily increase your income in time for your future or long-term goals. For instance, you can boost your savings with passive income to purchase a car or pay your child’s educational fees.

Passive vs. Active Income

The main difference between passive vs. active income is that the latter refers to the typical earnings or income you get when you work at a regular 9 to 5 job or earn through taking on short-term projects as an independent contractor.

You can also earn active income through commissions, bonuses, and other monetary incentives your employer gives. Active income is not earned without completing a particular task, service, or responsibility in exchange.

It is important to note that while passive income requires minimal effort to generate profit, you must still lay the foundations to ensure you maximize the earning potential of your passive income idea of choice.

9+ Practicable Passive Income Ideas

Here are ten creative and practical passive income ideas to help you maximize your personal finances and reach your short and long-term goals:

#1. Get Income From Renting

Technically, generating income through renting one’s property is classified as an example of active income. This is especially true if you rent your property as a real estate broker because your income is directly due to your profession.

However, if you rent your property as a vacation spot for tourists, backpackers, and travelers while on a trip, you can count your rental earnings as passive income.

A famous example is homeowners renting their homes on Airbnb, Booking.com, or Vrbo. Leasing your property in partnership with any online rental marketplaces described above may charge service fees, which can take roughly 3 to 14% of your total earnings.

You can also rent part of your property, particularly if you own a commercial space or building, and lease some floors as office space.

#2. Do Affiliate Marketing

Affiliate marketing lets you earn passive income by promoting the products and services of other organizations. Most affiliate marketers currently engage in paid promotions through their social media pages or websites.

This type of passive earning idea best suits social media-savvy individuals. To make affiliate marketing work, you need to understand the preferences of modern-day audiences.

For instance, if your partner company wants you to promote their products on Instagram or TikTok, you must have basic photo and video editing skills to make your posts more appealing.

Moreover, you must have a solid understanding of relevant trends, jargon, and topics that you can include in your promotions to boost your posts’ audience reach.

#3. Create a YouTube Channel

Creating a YouTube channel is perhaps the most familiar and popular idea among the passive income examples in this list. Monetizing YouTube channels began after YouTube introduced the Partner Program in 2007.

The Partner Program presented a series of metrics that content creators must meet for their channel to start earning money. Some of these metrics include reaching 1,000 subscribers and running ads on their videos.

The number of views and likes on a YouTube channel’s videos also factor into how much a content creator can potentially earn. It is fairly easy to start earning passively through YouTube, as long as you know your target audience or have a specific niche in mind.

Most of the top-earning YouTubers today started by producing comedic skits, reviewing gadgets and hi-tech products, offering beauty and makeup tutorials, or recording their reactions to viral videos and societal issues.

If you are considering starting a YouTube channel to make more money on the side, think of how you can keep up with the changing demands, preferences, and trends in the online community.

#4. Sell Products Online

You can sell products online using different platforms. Some online sellers use Facebook Marketplace, Instagram, and TikTok, while others use e-commerce sites like Amazon, Etsy, eBay, and AliExpress.

You can create and sell your products or be a reseller for specific brands. Alternatively, you can also supply materials to other sellers. It would also help to use online tools such as an invoice generator to keep track of all customer payments.

Understandably, some may argue that online selling yields active income due to the direct labor required to make a living out of it. However, it still counts as a passive income source if you do it alongside a full-time job or other occupation that takes up a more significant chunk of your time and energy.

#5. Write Blog Content

Writing blog content is quite similar to creating a YouTube channel. The only difference is in the format of the content you produce. The best thing about earning through blogging is that you can focus on a broad range of topics to get started.

Travel, fashion, food, movie commentaries, series recommendations, and product reviews are some trending niches that attract several readers and subscribers.

Blogging is a great passive income option if you have a passion for writing and exploring your preferred topic. After all, you must ensure that your content is of high quality to attract new readers and continuously retain your existing audience.

A good grasp of search engine optimization and digital marketing will also help boost your blog page’s rankings and traffic, thereby increasing your potential income.

#6. Invest in Real Estate (REIT)

If renting your property seems like a more enticing potential source of passive income, try investing in real estate instead. Passive income through investment is ideal if you are quite familiar with the real estate market.

With real estate investment trusts (REITs), you don’t need to own property or finance real estate to make money. The key is to study other professional portfolios and REITs and invest in different types of properties.

You must also stay updated with any changes in the investment market to assess your potential losses beforehand.

#7. NFT Staking

NFT staking means locking up your non-fungible tokens or digital assets in a digital wallet or a staking platform within a fixed period.

During this period, your NFTs or crypto assets are not up for trading, and you are also contributing to the operation and distribution of a blockchain and other networks dedicated to NFTs.

By staking your NFT, you earn additional crypto tokens or NFTs and significantly grow your crypto investments. The more investments and NFTs you earn, the more investors and collectors you attract.

The rewards for staking your NFT may also vary. Some rewards follow a fixed-rate structure, while others depend on your NFT’s staking duration.

#8. Audiobook Recording

Suppose you love books and have a knack for doing voiceovers, storytelling, and portraying different characters or personas for entertainment. In that case, you might enjoy earning passive income through recording audiobooks.

The key to getting started with audiobook recording is to ensure you have the basic equipment and tools, such as a high-quality microphone, noise-canceling headphones, and audio recording and enhancement software.

For beginners, try listening to different audiobooks or joining a voice acting class. It is important to learn how to modulate your voice better and diversify the niches and characters you can bring to life using your voice.

#9. Build An App

You can build and monetize different types of apps, including web, desktop, legacy, hybrid, and progressive web apps. Before you start working on your app, make sure you have a specific niche and market to target.

Check out popular applications similar to the software app you plan to build and study their user demographics. Read user reviews and find common issues that users often encounter while using the app.

This can be used as a reference when developing and improving your app’s features. Some key features also worth focusing on while making your app include a user-friendly interface, a distinct value proposition, and the platform you use to build your application.

#10. Set Up Annuity

Setting up annuities entails a written contract between an insurance firm and the individual who provides the annuity. In this arrangement, you give a fixed sum to the insurance firm, and the latter secures regular disbursements or payouts.

The payouts depend on the payment options that you have chosen or agreed upon. For instance, a lifetime payout means that payments continue for as long as you live.

Meanwhile, period-certain annuity payments allow you to choose the frequency and duration for which you get paid.

How is Passive Income Taxed?

Passive income is taxed using the same tax treatment and rates the IRS levies on active income. In other words, the IRS uses your tax bracket to determine the percentage of your passive earnings that goes toward paying your taxes.

Use the following tax forms when reporting your passive income:

• Form 1040, U.S. Individual Tax Return or Form 1040 S.R., U.S. Individual Tax Return for Seniors

• Form 8582, Passive Activity Loss Limitations

• Form 8582-CR, Passive Activity Credit Limitations

On the other hand, the tax treatment will also depend on the type of passive income stream you have. Passive earnings generated through renting properties are subject to tax deductions of up to $25,000 if you report any losses from leasing real estate.

The IRS recommends grouping together similar passive income activities to help reduce the amount of taxes levied on your passive earnings. A typical example is combining real estate rental and investment income.

Make it a habit to document all transactions and payments related to your passive income. If you earn passively through selling goods or writing for different brands, creating a self-employed invoice may come in handy.

Documenting your passive income transactions helps keep track of your profits and losses and provides accurate values when filing your taxes.

How Many Income Streams Should You Have?

Ideally, the number of income streams you should have will depend on your long-term financial goals. Your range of knowledge and skills will also factor into how much you can diversify your profits.

If you have a good grasp of the cryptocurrency market and are skilled at sales, you can combine NFT staking with investing in crypto and selling products online.

Or, if you are more creative, you can try creating YouTube videos, blogging, and affiliate marketing to maximize your earning potential.

Some financial experts may claim that millionaires have at least seven income streams. In truth, this is possible for the average person, provided they know how to budget their time and resources accordingly.

Can You Make Passive Income With No Money?

Yes, you can make passive income with no money or zero capital. After all, there are several passive income streams that you can try for as long as you have the essential tools, equipment, and knowledge to help you get started.

If you love writing, all you need is your laptop or personal computer, a stable internet connection, and your creative juices to slowly but steadily unlock an alternative source of money through blogging.

Investing in high-quality video and audio recording equipment is an excellent place to start if you prefer producing enriching content or storytelling.

For crypto investments, NFT staking, or any type of investment or annuity, you may need to have saved a specific amount of assets and money to gain stable ground as you explore the passive earning potential of these activities.

Final Thoughts

Now that you know the definition of passive income, you can weigh your options accordingly and find passive earning streams that suit your lifestyle and interests and help improve your family finances.

The beauty of having passive income is the endless possibilities and opportunities that come with it. You can learn new skills and expand your knowledge to prepare for a new investment or set up more channels to maximize your profits and gain financial security.