Nearly everyone wants to know the secret of how to make passive income. Nothing sounds better than making money without devoting hours of your time to working each week.
Many are interested in earning passive income to free up the time they spend working to travel or simply enjoy life. It can also make you more financially secure and less reliant on a full-time job.
There is no one-size-fits-all secret to make passive income. But, weeding out legitimate passive income opportunities is a starting point.
Many Teachable creators have achieved financial freedom by earning a side or full-time income online.
We’ll show you how to make passive income and cover everything you need to know including:
- What is passive income?
- The difference between passive vs active income
- Passive income business ideas
What is passive income?
There’s a Warren Buffet quote that says: If you don’t make money while you sleep, you’ll work until you die.
It’s a bit grim, but it highlights the importance of passive income. Simply, it’s a way you can earn money with little to no active involvement.
For example, when you work as an employee, you’re on the clock the whole time. Since you’re working all those hours, it’s not passive income.
On the other hand, let’s say you create a digital product and a landing page for it. Since people can buy it online anytime—and you don’t need to do much besides the initial setup—it’s passive income.
Examples of passive income streams include:
- Courses
- Self-published books
- Affiliate marketing
Not every passive income stream is entirely passive. Most require upkeep, but not as much as traditional jobs. Over time, passive income sources give you consistent cash flow without trading your time for financial freedom.
For example, Teachable creator and YouTuber UK Curly Girl spent almost a month making one online course. She hasn’t done any work on it since and has already made more than $2,000. Also, she has six additional income streams, most of which are passive.
A note about passive versus active income
When talking about how to make money, it’s important to understand the differences between active and passive income sources.
According to the Internal Revenue Service (IRS), you can earn passive income from:
- Trade or business activities you don’t actively participate in, such as selling goods or services
- Rental properties, even if you do actively participate in them unless you’re a real estate professional
Passive income usually requires work upfront, but cash flow continues with little effort. Meanwhile, active income requires continual output.
Unfortunately, there’s no magic formula for setting up passive income streams that are right for your business or skills. So, it might take trial and error before you start making money.
Luckily, there are many ways to make passive income with low startup costs and little time investment.
12 passive income ideas
Below, we’ll share several passive income ideas and cover skills, investment costs, and time commitments. We’ll also discuss how to make passive income online.
Here are a few passive income ideas we’ll cover:
- Create online courses and other digital products
- Make YouTube videos
- Start a blog
- Sell stock photos or music
- Invest in real estate or the stock market
- Open a high-yield savings account
1. Sell courses
One of the best passive income ideas is selling a course. Everyone has something to teach, and you don’t have to spend much money upfront. Online courses are always available for purchase, making them passive income.
To sell an online course, think of a topic you have knowledge about and outline what you want to teach. Then, create, and record your lessons.
Teachable creators have made courses on many topics, including:
- Watercolor painting
- Triathlon training
- Nutrition
- Shoemaking
- Music production
- Coding
- Digital marketing
It’s easy and affordable to build and sell online courses with Teachable. You can get started with a free plan and move to a paid plan later.
In addition to creating your course, you’ll likely need to do some marketing to attract students.
Some ideas to market your course include:
- Posting content and building a following on social media (Pinterest, YouTube, Instagram, TikTok)
- Starting an email newsletter
- Collecting student testimonials to add to your website
- Speaking at industry events and joining Meetup groups
- Offering a free mini-course
Thousands of Teachable creators generate passive income through courses. For example, Pat Flynn, with Smart Passive Income, made $169,000 from two online courses.
2. Become a coach
Many course creators start as online coaches. The coaching industry is one of the fastest-growing ways to earn money online. In 2022, the life coaching industry was valued at $1.5 billion.
To become a coach, you’ll need to decide what kind of coaching you want to do. Examples include:
- Life
- Relationship
- Finance
- Fitness
- Career
Coaching is ideal if you’re looking for a minimal upfront investment. Most coaches start with under $1,000 to create a website and market their services.
Although coaching is not completely passive, it opens the door to other, more passive income streams. For example, many coaches distill their coaching program into an online course. Others coach larger groups to multiply their income per session while decreasing how much time they spend coaching.
3. Create and sell digital products
You can also sell digital products, intangible items that are delivered electronically. There are many profitable digital products:
- Checklists
- Workbooks
- Apps
- Digital prints
- Ebooks
- Planners
- Online courses
- Stock photos
You can create digital downloads on any topic. For example, Nutrition Academy uses Teachable to create and sell nutrition guides, courses, and checklists:
Digital products are one of the simplest ways to make money online. They are easy to create, and once you set up a landing page, people can buy and download them on their own.
Earning potential varies depending on your audience, products, and niche. That said, some people make up to six figures annually through digital products. A couple who creates and sells doll clothing patterns earns $600,000 annually.
4. Self-publish books
Self-publishing has become more common. In 2021, self-published authors put out over 2.3 million new books. However, there are some upfront costs to self-publish books.
To self-publish, expect to spend anywhere from $500-$5,000. That amount might include initial costs for:
- Hiring an editor
- Paying a designer to create a book cover
- Marketing your book
- Printing physical copies of your book
Your publishing platform may also have fees (many are budget-friendly). Types of books you can self-publish:
- Traditional books – Romance, science fiction, and fantasy books are popular.
- Low-content books – Examples include planners, journals, and coloring books.
- Ebooks – Creating educational ebooks is easier than you may think.
To self-publish at a low cost, you can design your book with Canva. Then, publish and sell it through Amazon’s Kindle Direct Publishing program or Teachable’s digital downloads product.
5. Make YouTube videos
YouTube has more than 2.6 billion active users. Once you build a large audience, it can become a lucrative passive income strategy. Most YouTube creators earn passive income through ad revenue.
Although YouTube isn’t entirely passive, the upfront effort will help you generate income over time. For example, you can spend one day a month filming and editing videos. However, once you upload the video, it can generate thousands of dollars depending on the number of views and ad revenue.
Before monetizing your YouTube channel, you need 1,000 subscribers and 4,000 watch hours. Then, you can apply to YouTube’s Partner Program. You can also make money on YouTube through affiliate marketing, products and courses, and brand sponsorships.
Even if you only have 10 videos up and never upload again, you can still get traffic to your YouTube channel and make money. However, generating passive income requires time to grow your channel and create high-quality, engaging content.
6. Start a blog
Blogging can also lead to passive income. Like most passive income ideas, starting a blog and making money takes work at first.
However, once your blog is set up, you can earn passive income by:
- Selling physical or digital products
- Creating a membership
- Sharing affiliate links and earning a commission on each sale
- Offering ad space on your blog
To start a blog, choose a profitable niche by doing keyword research and getting input from your target audience. Then, build a blog at a low cost with easy-to-use website builders.
Here are a few tips for successful blogging:
- Learn about search engine optimization (SEO)
- Share valuable, easy-to-read content
- Include videos and other visuals in your posts
Many bloggers earn up to $10,000 monthly—although blogging income varies by niche, audience, and income streams. Lauren McManus and her business partner make six figures per month from two blogs.
7. Buy a blog
Instead of starting your own blog from scratch, you can buy one. Going this route requires more money upfront, but it might be worth it if the blog has a dedicated audience and income.
Blogs sell for $1,000 to $500,000, depending on their traffic and monthly profit.
It’s not always easy to find blog owners who are ready to sell. A blog-buying platform makes this process easier. Here are a few options:
- Niche Investor – an online marketplace that helps investors and content creators by and sell niche websites
- Empire Flippers – a full-service, online brokerage that helps you with each step of the blog-buying process
- Flippa – a marketplace for buying and selling online businesses
8. Do affiliate marketing
Affiliates make money by promoting products or services to their audience using a special affiliate link. You earn a commission when someone makes a purchase using the link you share.
To find partnerships, join an affiliate marketing platform or contact brands directly. Here are some popular affiliate marketing platforms:
- Partnerstack – for creators that want to work with B2B companies
- Impact – a partnership marketplace with more than 2,500 partners
- LiketoKnow.it – best for earning commission from fashion and home brands
- ShareASale – one of the largest programs with over 270,000 affiliate partners
Examples of affiliate programs
Many companies, including course creators, have affiliate marketing programs. Here are a few examples:
9. Create UGC and social media videos for brands
Another popular passive income stream is user-generated content (UGC). Customers and micro-influencers usually create UGC.
For example, you make a video for a skincare product you love. You share it on social media, and it gets engagement. You aren’t necessarily getting paid for this piece of content. However, brands love to use UGC content for paid ads and authentic marketing, so many will pay you for the content.
Many micro-influencers start with UGC because it’s a stepping stone toward influencer marketing. To get UGC opportunities, pitch potential partners or use creator platforms like:
Although UGC content is somewhat active, it creates opportunities for passive income. UGC creators often earn money through affiliate marketing and brand sponsorships.
UGC creator Madi Coleman earns up to $10,000 monthly. Starting out, you can make anywhere from $200-$2,000 per video.
10. Sell stock photos
Selling stock photos is an easy passive income stream for photographers.
To monetize photos, you can upload and sell them on stock photo websites.
Many stock photography sites have referral programs to increase your earning potential. For example, iStock’s affiliate program pays you up to 20% commission for each new customer.
If you already have a photography business, you can earn more by selling your images to your existing audience. Many photographers scale their business over time by growing a social media or blog audience.
11. License audio and music
Musicians earn passive income by selling licensed audio and music. Every time a buyer purchases your music, you make money.
Here are tips for making significant income through stock music:
- Listen to TV, radio, podcasts, and other media to hear what’s selling
- Choose a style of music
- Create shorter pieces since most audio content is short-form
- Have a powerful and unique beginning and end to your music
- Sell on various stock music sites to reach more people
You need to copyright and license your music before selling it. This protects your audio and permits third parties to use it legally.
After you license your music, you can sell it on sites like AudioJungle and Pond5 and earn up to $400 per license.
12. Sell designs
You can create a design once and sell it for years on your website, social media, or ecommerce store.
To create and sell designs, use:
- Teachable – for any online designs or digital products
- CafePress – for physical items like clothes, accessories, and home goods
- Adobe – for icons, fonts, books, and brochures
Designs are digital products, and there are many types that you can create and sell, including:
- Stickers
- Illustrations
- Icons
- Patterns
Many designers also sell the tools they use to create their designs, from fonts to brushes.
Aurelie Maron uses Teachable to sell online courses and digital products like Procreate brushes and lettering toolkits.
To sell designs, begin by listing your skills and interests. Then, narrow down the designs on your list, focusing on the most profitable.
For example, you could sell customizable templates for up to $200 each. If you sell 25 per month, you can earn $5,000.
You don’t need a lot of money to learn how to make passive income. With Teachable, you can start your passive income business at no cost with a free plan. Then, you can create and sell online courses and other digital products.
FAQs
What is an example of passive income?
There are many examples of passive income. Some of the most popular are online courses, digital products, and blogging. If you have some money and don’t mind the risk, you can invest in real estate or stocks.
How can you make passive income with no money?
A few ways to earn passive income without upfront costs are to sell digital downloads or do affiliate marketing.
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