:Marketing / Marketing best practices

6 easy ways to make passive income with ideas and examples

how to make passive income how to make passive income

Nearly every entrepreneur wants to know the secret of how to make passive income. Nothing sounds better than putting systems into place that will continue to make money for months and years down the line without you devoting hours each week.

Books like The 4-Hour Workweek and Instagram accounts highlighting digital nomads living a near-constant vacation make the idea that much sweeter and seem that much more attainable.

How to make passive income

An example of how to generate passive income is by owning a rental property or vacation home; after the initial real estate investment, you can rent out your space and increase your cash flow without having to do much additional work. Others include investing in a high yield savings account, high yielding bonds, or dividend stocks that earn extra money over time. Of course, these investments come with some degree of risk.

Content creators, on the other hand, have a plethora of other ways to earn passive income. If you have a side hustle, perhaps selling digital products, there are steps you can take to streamline your process, so you can hustle less while still earning residual income from the work you’ve already put into it. Creating passive income sources will support you financially in the long term.

A note about personal finance

When considering passive income sources, it’s important to understand personal finance—especially because passive income is one of three categories of income, according to the IRS in the U.S. Even if you’re not ready to invest in dividends, the stock market, or real estate, financial literacy is crucial to business owners. Even choosing the right credit card, one with low interest rates, can support your business.

Unfortunately, there is no magic bullet for setting up the exact passive income streams that are going to be right for your business, so it’s often a lot of trial and error before you start making money.

Luckily, the options are plentiful, and some take no time at all to set up.

This post contains many examples of passive income and is organized by most lucrative to least lucrative. With that said that means they are largely in order from most time consuming to implement to least, too. Not all “passive income” is entirely passive. Some require upkeep every now and then. But instead of worrying about posting a blog post each week or onboarding 3 new clients, you only have to worry about your passive streams every now and then.

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Why passive income?

Besides the obvious of it being a super cool feeling to wake up to find that you’ve made money, implementing passive income into your repertoire is just a good business move.

You never know what the future holds, and if your sole source of income is one-on-one coaching with a list of eager clients, that’s great! But if you were to get into an accident or maybe a bad storm knocked your power out for a few days, you should have a backup plan for income.

We can’t foresee what’s to come, but we can prepare for the worst by not putting all of our entrepreneurial eggs into one basket. Maybe your coaching business is making 5-figures a month. You don’t have to match that with passive income, but make it your goal to be able to cover your monthly expenses with your passive streams.

Then if the worst happens, you’re still largely covered and you won’t be struggling to make ends meet.

Ways to make passive income

1. Sell evergreen goods and services

Selling evergreen products is a great way to keep making consistent income even on autopilot. What “evergreen” means is that it’s going to be relevant to your audience no matter the time of year.

For example, a course on how to plan a wedding is going to have an audience no matter the month because people are getting married every single day. On the other hand, a course on how to set up a Halloween Haunted House is only going to have a short shelf life every year until sales plummet.

If you’re looking to make passive income, evergreen products are important because they can make just as many sales in July as they can in February.

Nearly every niche has an evergreen topic within it, too. So even if Halloween is your jam and you’ve built your brand around it, you can come up with a course like sewing 101 for people who want to create their own Halloween costumes.

It’s still on brand, and within the course the sewing projects you’re making can and should be Halloween related, but the concepts you’re teaching are applicable to anyone who wants to sew. You can market it to your main audience, but with proper SEO people can passively find it on Google, too.

When it comes to selling evergreen products, I recommend online courses because they are a premium digital product that people are willing to pay more for than something like an ebook or downloadable.

Types of evergreen products

Courses are my favorite evergreen product, but there are so many different options when it comes to creating an evergreen product for passive income. Like I mentioned, for it to be evergreen it needs to be relevant everyday of the year, but how you format it is up to you.

Different types of products have different values, but if you can sell more of a product that’s easier for you to make at a lower price, you’ll end up getting a larger return. You can also consider creating a library of different resources at different price points to be sure that there is something for everyone in your audience.

  • Workbooks
  • Ebooks
  • A pre-recorded video series
  • Webinar replays
  • Digital graphics downloads
  • Stock image packs
  • An email course
  • Custom fonts
  • Photoshop templates
  • Calendar outlines
  • Lightroom Actions
  • Mini-guides
  • Resource lists
  • Shopping lists
  • Email templates

Setting up your passive evergreen funnel

If you truly want to make good, consistent income from your online course, you’re going to need a great funnel to keep it selling itself.

I already mentioned SEO optimizing your page, but I want to reiterate how important it is to rank well on Google for your topic if you want people to passively find you.

Share on social media

You can also schedule your social media in advance to automatically promote your online course once every few days with tweets and scheduled Facebook posts. Here at Teachable, we use Edgar to schedule our tweets and Facebook’s native scheduler for sharing.

You can also incentivize your audience to share your content. Let them know that by tweeting out a link to your course, they’ll get an exclusive free download they’ll be much more likely to share.

You can also create a “badge” that they get at the end of your course that shows they finished your course and now are an expert in whatever you’re teaching. You’d be surprised how many people proudly display these types of badges on their site. This is not only great for exposure, but for SEO, too.

Promote on Quora

Quora is also a great place to set up the groundwork for passive income through selling your course. Find questions that your product solves and write long, informative answers and close with, “I know there is a lot to it. If you want a more thorough answer I created an online course walking you through _______. You can check it out here.”

People use Quora as a search engine, so if you’ve written a great answer to a question you’ll get upvotes and rank highly within search. People might still be finding your answer 16 months after you originally post it.

passive income ideas passive income ideas
Quora example
Enlist affiliates

Enlisting affiliates to promote your online course for you is one of the ultimate ways to ensure you’re going to be getting new eyes on your content.

Affiliates are people who promote other people’s content and get a percentage of each sale. Depending on the program, this percentage can be anything from 2% all the way up to making the majority of each sale.

From what I’ve observed, if you’re setting up an affiliate for your online course, you’ll have the best luck offering a sizeable percentage, at least twenty.

You want to offer enough to truly incentivize the influencer while still making it worth it for you. You may also find that you’re offering different affiliates different percentages based on their influence, and that’s a great tactic as well.

2. Open an Etsy shop

I have a friend who sells on Etsy, and from what I’ve gathered it’s a lot of work. The thing is, she sells crafts that she makes to order, so I began to think what you could sell without requiring all of the upkeep and late nights at the sewing machine.

And then I turned to what I’ve bought on Etsy: WordPress themes, Photoshop Templates, and Lightroom actions galore.

If you’re selling a digital project that your customers can instantly download, Etsy can be a great medium for you.

earn passive income earn passive income

Again, by SEO optimizing your Etsy store, people are going to be able to find you and while you may be slow to grow at first, it’ll be exponential and as you get more sales and good reviews, you’ll see yourself making even more sales.

Like I said, the key here is to find a product that you can sell passively. If you go the WordPress theme route, you want to be selling templates rather than custom headers or something you will have to actively create for your customers.

Much like with online courses, you can create systems that sell your Etsy products for you like social media scheduling or using affiliates.

Etsy is also a great passive option because people can search for a product and if yours is optimized it will show up in their search results.

While this means it’s going to be easier for them to find your competitor’s content, it also means that you can have consistent eyes on your product without any extra effort on your part which is great if you’re looking for a truly passive income option.

To be competitive on Etsy, you’ll need to have top-notch imagery to really show off what you’re selling. Marketplaces are competitive, and generally, the most successful sellers are the ones who can most beautifully present their products.

If you’re looking for inspiration, Creative Market does weekly giveaways for a pack of 5-7 digital downloads, and they are all presented beautifully.

If they’re giving away a WordPress theme they’ll show the WordPress theme up close via a screenshot, but also a mockup of the theme open on a computer at a beautiful desk.

Helping people imagine how your product would work in their real life can help entice them to make the purchase.

3. Make YouTube Videos

This one is probably the most intimidating, but might end up being the most rewarding. It’s not entirely passive, but if you spend your Sunday filming and editing 4 videos to put up over the month, you can find yourself a few hundred extra dollars each month.

Even if you only have 10 videos up and never upload again, you’ll still see traffic to your videos. Again, this works the same ways as Etsy. If your content is optimized, it will show up in the search results and suggested videos.

passive income sources passive income sources
Teachable's YouTube Channel

YouTube is likely not going to make you rich unless you devote a ton of time to it, but it can make you a few extra hundred dollars a month. The more content you upload and the longer you’ve got content up, the higher that number will be.

Now, with ads you don’t make a ton of money. YouTube is pretty secretive with the exact formula for income, but it seems to vary month by month. A friend of mine who is really into YouTube told me some months he’ll make up to 80 cents per thousand views, but other months it’s closer to a quarter.

Either way, for content you just have to create and upload once, any income is good income.

Grow your audience

YouTube does something else, too, though. It helps you passively grow your audience. Maybe your videos are six months old, but people are still finding them and you’re linking to your other social media channels in your bio, people will find you. This is great if you’ve got diversified income streams and you’re trying to drive traffic to several different websites.

how to generate passive income how to generate passive income
YouTube video description

YouTube is incredible for helping forge a connection because people love video, so after watching one of your videos and feeling that you’ve helped them and they relate to you, they’re going to be more likely to click over and follow you on social media than if they just read a blog post of yours.

Embed your videos on your blog

My secret to getting consistent YouTube traffic is by embedding relevant videos into my blog posts. I might only upload twice a month, but I’m getting new traffic to my blog every day and many of those users are seeing my YouTube videos within my site.

Embedding means you’ve got 2x the potential for people to see your videos, and ads still work on embedded videos so even if they aren’t clicking over and subscribing, as long as they watch your video you’ll still make money.

4. Affiliate marketing

Setting up an affiliate site is one of the less passive ways to make income because it will require more upkeep than some of these options, but it’s still an awesome way to increase your revenue.

Like I mentioned earlier, affiliates make money by promoting other people’s products and encouraging them to buy.

Course creators utilize affiliates, but so do huge companies like Amazon and Target.

If you are interested in a specific niche that requires a lot of equipment or technology, you can set up an affiliate site writing articles for the sole purpose of using affiliate links within them.

For example, if you create an affiliate site for photography, you could write things like, “The 10 Best Lenses for New Photographers” or “10 Tools under 10 Dollars All Photographers Should Have.”

examples of passive income examples of passive income

The lists might seem a little Buzzfeed-y, but they’re effective in getting people to click, and they’re more munchable than a huge article like the one you’re reading now.

While most website owners want people to stay on their site for as long as possible, your job when you own an affiliate site is to get people to click away and buy so you can do this by making your links very obvious and having strong calls to action.

The list of affiliate sites you can join is massively long, but there is absolutely an affiliate program for any niche imaginable.

To find success as an affiliate marketer, you guessed it, you’re going to have to use SEO to make your site as easy to find as possible.

You should also publish your lists to social media and make them easy for your audience to share with easy buttons.

5. Get paid to use social media

This one also revolves around using affiliate links, but in a different capacity. There are influencers who are making thousands of dollars a month just for using social media as they normally would but adding affiliate links in.

Sites like RewardStyle make this super easy. Influencers simply upload their image to the app, tag the products they’re wearing, and then when their followers like or screenshot the image on Instagram they’ll get an email with the affiliate links.

If affiliate links aren’t your thing, there are also sites like Izea or TapInfluence that let you sign up and choose opportunities you want to share on social media. Typically these opportunities pay a flat rate, though some also pay per engagement or click through.

This is probably the least passive of options on the list, but chances are most of you are using social media anyhow and if you’re choosing targeted products to promote, this is just another way to get content for your channels.

Growing your social channels

This option works best for people who already have a somewhat sizeable social following, usually on Twitter or Instagram.

Growing your social channels is one of those things that are so easy in theory, but putting that into practice requires a little more effort.

At its roots, the “secret” to growing your social media channels is to post high-quality content consistently and engage with other high-quality accounts.

When you get into the nitty gritty, though, there is a lot of competition and it’s just not that simple. If you’re interested in reading some in depth growth tips, you can check out how to grow your social following here.

6. Set up ads on your website

If you’re already blogging or updating your website regularly, adding ads to your sidebar or header is a great way to start earning more money.

Ads are typically pay-per-view, but some networks will only pay for click throughs but I recommend avoiding programs like that.

Getting people to view an ad is easy if your content is good, but getting them to click through is a new challenge that shouldn’t have to be a goal of yours.

Most ad programs make it as easy as copying and pasting code into a sidebar widget and they will pick out and run the ads for you.

A good ad network is also going to allow you to opt out of any certain type of ad, like political ads or ones that may contain profanity.

To be successful with ads, all you need to do is continue driving traffic to your website as you normally would. Typically, the more views you have, the more income you’ll make.

One thing to consider, though, is that being successful with ads isn’t nearly the same thing as being successful with an online course or Etsy shop. With ads you might max out only making $500 dollars a month, (which is significantly more than what most bloggers with ads make), whereas with courses or Etsy you can make tens of thousands of dollars a month. 

Another thing to think about is the aesthetic of your website and whether ads are going to hinder it. Nobody likes huge, in your face ads or video ads that automatically play at full blast. Sure, those ones will make a bit more money, but at what cost? 

Your visitors are more likely to click away and never come back if they’re dodging pop-ups or jumping to silence their computer when it starts blaring after visiting your site. 

Not all ads are bad ads, but some ads make the overall experience of visiting your website a negative one, so that’s something to be careful of when choosing to use sidebar ads.  


What is passive income?

The meaning of passive income is something that is earned automatically through minimal labor or maintenance. It can be generated from an investment or an additional source of income. Passive income is one of three categories of types of income, according to the United States Internal Revenue Service (IRS). If you have a side hustle, perhaps selling digital products, there are steps you can take to streamline your process, so you can hustle less while still earning residual income from the work you’ve already put into it. Creating passive income sources will support you financially in the long term.

What is an example of passive income?

An example of how to generate passive income is by owning a rental property or vacation home; after the initial real estate investment, you can rent out your space and increase your cash flow without having to do much additional work. Others include investing in a high yield savings account, high yielding bonds, or dividend stocks that earn extra money over time. Of course, these investments come with some degree of risk.

Author: Morgan Timm, Morgan Timm is a content marketer with a background in blogging and social media. She runs Mostly Morgan, a life and style blog that reaches an audience of 40,000 people monthly.