20 Best Ways to Generate Passive Income for Beginners
In this article, we will look at the 20 best ways to generate passive income for beginners. We have also discussed the growing popularity of passive income for the new generation. If you want to skip our detailed analysis, head straight to the 5 Best Ways to Generate Passive Income For Beginners.
How Popular is Passive Income?
Passive income, once a domain of the wealthy, has gained popularity among millennials and Gen Zers, driven by a challenging job market and social media influence. Approximately 36% of millennials are estimated to earn some form of passive income, with 20% of American households engaging in it. Social media platforms like TikTok and Instagram have also been contributing to the rising interest, creating a feedback loop as influencers share success stories, inspiring others to follow suit.
With precarious job contracts in today’s day and age, it has fueled the desire for additional income streams. As Covid-induced lockdowns also prompted a quest for greater flexibility, it aligned with Gen Z's preference for alternative working models. However, the allure of easy, low-effort income portrayed online may be misleading. Establishing a passive income stream often involves more work than anticipated, challenging the notion of purely passive earnings.
In 2023, 73% of Americans engaged in a side hustle are actively contemplating leaving their traditional jobs, highlighting a paradigm shift in work preferences. The allure of side hustles has intensified due to factors such as low minimum wages and the increasing cost of living. According to a study by NicheSites, states like Utah, despite a minimum wage of $7.25, top the charts in searches related to passive income and side hustles. This suggests that the pursuit of supplementary income is more influenced by the high cost of living than by minimum wage disparities.
The impact of the COVID-19 pandemic looms large and has therefore, prompted 45% of Americans to embrace side hustles as a financial safety net. With 60% expressing a preference for leaving their jobs rather than returning to a conventional five-day office week, the data highlights a strong desire for improved work-life balance and autonomy. As businesses struggle with a workforce increasingly drawn to diverse income streams, proactive employers must recognize these trends and implement measures to enhance employee satisfaction and adapt to evolving work preferences. To read more about side hustles, see 15 Best Side Hustles From Home.
How to Generate Passive Income on Amazon?
Passive income on Amazon.com, Inc (NASDAQ:AMZN) can be achieved through different avenues, providing individuals with the opportunity to generate revenue with minimal ongoing effort. One popular method is utilizing the Amazon FBA (Fulfillment by Amazon), where 64% of sellers spend less than part-time hours once their business is established. Although not entirely hands-off, FBA handles storage, order fulfillment, and customer service, allowing sellers to focus on other aspects of their lives.
Another lucrative option is Kindle Direct Publishing (KDP) which enables aspiring authors to publish and sell ebooks on Amazon.com Inc (NASDAQ:AMZN). With little to no upfront costs, authors can earn passive income as their books gain popularity over time. For those with a creative flair, Amazon Merch on Demand allows the sale of custom-designed merchandise through print on demand. Sellers create unique designs, and when a customer places an order, Amazon.com Inc (NASDAQ:AMZN) prints and ships the product on demand. This method eliminates the need for inventory management and offers the potential for substantial passive income.
Moreover, Affiliate marketing through the Amazon.com Inc (NASDAQ:AMZN) Associates program is a third avenue for passive income. By promoting Amazon.com Inc (NASDAQ:AMZN) products through unique affiliate links on blogs or social media, individuals can earn commissions on sales generated through their links.
How to Make Passive Income Through Airbnb?
We have two inspiring examples from individuals who were able to generate a substantial income through the Airbnb Inc (NASDAQ:ABNB).
Firstly, Erika Martin, a travel blogger from Milwaukee, turned her passion for Airbnb Inc (NASDAQ:ABNB) stays into a lucrative passive income stream. Starting her Facebook page, Everywhere with Erika, in June 2020, she shared her "Airbnb pick of the day" and joined Airbnb Associates’s affiliate program. By August, her follower count increased to 27,000 after a post about a lake house Airbnb Inc (NASDAQ:ABNB) in Georgia reached over 10 million people. In six months, she earned nearly $60,000 from Airbnb Inc (NASDAQ:ABNB) affiliate income, with $28,000 in September alone. Despite having a full-time consulting job and being a parent, Martin spends 2-4 hours a week on her side hustle, showing 25 Airbnbs a week.
On the other hand, Ivan Ellis Nanney, a 34-year-old Idaho native, turned a $34,000 investment into a lucrative passive income stream with Airbnb Inc (NASDAQ:ABNB). After buying a $17,000 plot of land in 2015, he spent the next three-and-a-half years deconstructing an abandoned building and building a tiny home using second-hand materials. Listing it on Airbnb Inc (NASDAQ:ABNB) in June 2019, the property gained popularity quickly, generating $49,600 in revenue in 2022 alone. Nanney spent a couple of days annually on property maintenance, working two hours a week to organize stays, and hiring a cleaner for $150 per week.
With that said, let's move to the list of the Best Ways to Generate Passive Income for Beginners.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
Our Methodology
To list the best ways to generate passive income for beginners, we essentially tried to target methods which a) were simple b) involved minimal to no initial investment and c) were accessible to a large number of people. Thus, after identifying 30 such ways, we shortlisted 20 on the basis of consensus for their friendliness for beginners guaged through our internet research.
Here is a list of the best ways to generate passive income for beginners
20. Sell Ad Space
If one owns a car, they can simply earn extra money by putting colorful banners on their doors. Companies like Carvertise and Wrapify don't charge upfront, and one can make passive income by driving around with ads on their car. Carvertise pays between $450 and $1,500 for campaigns featuring brands like Netflix Inc (NASDAQ:NFLX), Coca-Cola Co (NYSE:KO), and Nascar. It's a simple and beginner-friendly way to make some extra cash. It is one of the top passive income ideas for young adults.
19. Create an Online Course or EBook
Creating an online course or eBook is an excellent passive income stream for beginners due to its scalability and flexibility. Once developed, the digital product can be sold repeatedly without additional time or effort. With a global audience accessible through online platforms, there's potential for continuous income.
18. Peer-to-Peer Lending
Peer-to-peer lending is a lucrative passive income option for beginners due to its relatively low barrier to entry and potential for high returns. It allows individuals to lend money directly to borrowers, earning interest on their investments. This model often provides better returns than traditional savings accounts or CDs. Two popular platforms for P2P lending are Prosper and LendingClub. Prosper allows investors to diversify their portfolios by selecting loans based on risk and return profiles. LendingClub, one of the largest P2P lending platforms, offers automated investing options, simplifying the process for beginners to start earning passive income through loan investments.
17. Invest in a High-Yield CD or Savings Account
These financial instruments offer fixed interest rates, providing a steady income stream while preserving the initial investment. Ally Bank and Discover Bank are two platforms offering competitive rates for high-yield CDs and Savings Accounts. Ally Bank offers a range of CDs with various terms, while Discover Bank provides a high-yield savings account, allowing beginners to easily grow their savings with minimal risk and effort.
16. Rent Out Useful Household Items
Renting out useful household items is an excellent passive income generator for beginners as it capitalizes on existing possessions without significant upfront costs. Platforms like Fat Llama and Loanables facilitate item rentals, allowing users to earn money from seldom-used belongings. It is one of the best sources of passive income.
15. Start a Print-On-Demand Shop
Starting a Print-On-Demand (POD) shop is an ideal passive income option for beginners due to its low startup costs and minimal risk. With POD, individuals design and sell custom merchandise without handling inventory or shipping. Printful and Teespring are two popular platforms that facilitate this process. Printful integrates with various e-commerce platforms and handles production and shipping, making it beginner-friendly. Teespring offers a user-friendly design interface and a broad range of customizable products.
14. Sell Stock Photos
Selling stock photos is an excellent passive income source for beginners, leveraging their photography skills to earn money over time. It requires minimal upfront investment and allows individuals to monetize their existing photo collections. Shutterstock Inc (NYSE:SSTK) and Adobe Stock are two prominent platforms for selling stock photos. It is one of the smartest passive income ideas.
13. Create an App
Apps can generate income through in-app purchases, subscriptions, and ads. Popular examples include fitness apps with subscription plans, mobile games with in-app purchases, and productivity apps with premium features. Once developed and marketed, apps can generate income while requiring minimal ongoing effort from the creator. It is also one of the easiest forms of passive income.
12. Start a Dropshipping Store
Under dropshipping, when a customer places an order, the seller purchases the product from a third-party supplier (usually a wholesaler or manufacturer) and has it shipped directly to the customer. The seller never physically handles the product. Thus, one can start an online store without holding inventory. With platforms like Shopify Inc (NYSE:SHOP), dropshippers can earn between $1000 and $5000 per month on average with minimum hours.
It is one of the best ways to generate passive income for beginners online.
11. Crypto Staking
Crypto staking involves locking and holding cryptocurrency in a wallet to support blockchain operations, earning rewards in return. For example, platforms like Tezos and Ethereum 2.0 enable users to stake their tokens and receive staking rewards for contributing to network security and consensus. Staking provides a steady income stream without active trading.
10. Sell Handmade Crafts on Ebay
Crafters can create unique products, list them on eBay Inc (NASDAQ:EBAY), and let the platform handle sales and transactions. The potential income varies based on product demand, quality, and marketing efforts. Beginners may earn anywhere from $100 to $500 per month, with the opportunity to scale as they refine their craft and establish a customer base.
9. Create a Job Board
A job board presents a rewarding opportunity for online entrepreneurs to generate passive income. These platforms serve as a bridge between employers looking to advertise job vacancies and individuals seeking employment opportunities. Entrepreneurs can monetize their job boards by charging employers for posting job listings and offering premium features such as sponsored jobs or unlimited access to the candidate database.
While building the website is a relatively straightforward task, the primary challenge lies in creating awareness for the job board. Once the momentum is established, and the job board gains repeat customers, a major portion of the income becomes passive.
8. Record Audiobooks
Recording audiobooks is a fantastic avenue for earning passive income due to the enduring demand for audio content. Once produced, audiobooks can generate ongoing royalties with minimal ongoing effort. Platforms like Audible ACX, Findaway Voices, and Voices.com offer opportunities for narrators to showcase their talent and connect with authors or publishers seeking audiobook production services.
7. Rental Income
Rental income is an excellent source of passive income as property investments can yield regular payments without active involvement. Real estate appreciates over time, offering potential for increased profits. Platforms like Airbnb Inc (NASDAQ:ABNB) and Vrbo enable property owners to effortlessly rent out their spaces to travelers, while property management services such as Buildium and Cozy streamline rental operations.
6. Create Content
Generating content is a compelling means of earning passive income as it can continually attract an audience and monetize over time. Blogs on platforms like WordPress or Medium, YouTube channels, and podcast hosting services such as Anchor provide avenues for content creators to reach a global audience. Notable examples of successful content creators include Casey Neistat, a renowned vlogger, and Neil Patel, a prolific blogger and digital marketing expert. These creators demonstrate how creating valuable, evergreen content can result in sustained income through advertising, sponsorships, and affiliate marketing, making it an enduring passive income strategy.
It is one of the way one can generate passive income with no initial funds.
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Disclosure: None. 20 Best Ways to Generate Passive Income For Beginners is originally published on Insider Monkey.
