Any income is a good income. But moguls will tell you that nothing beats passive income. With the right passive income ideas, you can open an additional source to complement your primary income. The best part? You can do it without trading your time for money.
Passive income ideas help build your savings for times when the going might get tough. They also help meet your retirement goals while improving the overall quality of life. Since you’re not working long hours, you will be able to spend more time with your loved ones.
But it does take some work
Passive income doesn’t mean that there’s no work needed. It’s not money from nothing. You will have to build something initially, maintain it, update it, and constantly add value to it. But it’s not a second job where you’re doubling your work hours.
If you’re wondering where to start, here are 21 passive income ideas you can use to start earning extra money in 2022. With a bit of preparation and commitment in the initial stages, any of these passive income ideas can significantly add to your revenue over time.
Active Income vs. Passive Income
The two main types of income are passive and active:
Passive income, also sometimes called residual income, is income from a source other than an employer or contract. Passive income sources includes, money earned from interest, dividends, rental property, investment portfolios, and online income.
Active income, also known as earned income, is income from a part-time or full-time job or from performing a task or service. Active income sources includes, hourly wages, salaries, consultating and freelancing services, and commissions.
21 Passive Income Ideas for 2022
1. Rent out a property
If you don’t have a property to rent, you can explore investing in rental properties. But do it with caution after understanding the total investment needed and the returns you will get after making room for the mortgage, taxes, and other expenses. Remember that while it’s a stable passive income idea, the larger economic trends can affect it.
2. Rent out a spare room
You don’t need a whole property to rent out. If you have an extra room, you can rent it out through a rental firm like Airbnb. This doesn’t require any large initial investment but you would be expected to maintain it and ensure that the guests have a pleasant experience. Among passive income ideas, this is an easily doable one for those starting out.
3. Rent out your car
Don’t use your car that much or have an extra vehicle? How about renting it out? You can do it through platforms like Turo or directly offer it for weekend drives. With services like Wrapify, you can let advertisers use your car and get paid. Another way to make money from your car is by letting someone use it for Uber or Lyft.
4. Rent out unused space
Got a garage or an empty room? Both individuals and businesses are looking for space to store everything from business inventory to RVs. All you have to do is sign up on platforms like Neighbor or StoreAtMyHouse. These services will take care of liability issues and manage payments for you.
5. Start an online course
The pandemic has accelerated the growth of online courses. There are several platforms where you can offer your course. It could be carpentry or cryptocurrencies but if you can add value, you will find an audience. The good thing about building a community through your course is that you can sell other things to them.
6. Offer digital products
Can you write a digital book on a specific topic that customers would be interested in? You can sell them as PDFs, digital books, or templates. You only have to write them once and if people find value, there will be a market for it. From wireframes to flowcharts, there’s a lot you can offer online.
7. Sell digital guides
Do you have expertise in a particular field? Maybe it’s related to your career or something that you picked up along the way. Start by researching available options and then write a how-to digital guide targeting a specific group. There are several seller platforms like Gumroad that you can use to sell them.
8. Start a blog
Yes, blogging is overcrowded but if you have something unique to share with your audience, you can be successful. Find your niche, start writing regularly, and be active on social media to drive visitors to your blog. You can monetize your blog by placing ads, selling digital products, or through affiliate marketing.
9. Start affiliate marketing
Affiliate marketing is another popular passive income idea used by those with online audiences. Once you have a sizable group of followers on your blog, you can mention products or services and direct users to those sellers. Once they make a purchase, you stand to get a commission from the sales.
10. Sell photos online
Why post your photos to social media platforms when you can earn money from them? Websites like Shutterstock or Pexels will pay you for your photos if they look professional and if there’s interest in them.
11. Sell designs online
If you’re good at designing, you can sell them online to create a source of passive income. It could be a logo, website, template, font, or even illustration. Upload them on websites like ThemeForest and 99designs and you can put your designs in front of digital agencies and businesses.
12. Earn from online shopping
E-commerce platforms like MyPoints, Swagbucks, and Rakuten give you cash back for your online shopping. With every purchase, you get cashback points that will help you earn money.
13. Become a social media influencer
This may not happen overnight but if you work at it, you will be able to make money from your social media channels. The key is to regularly deliver exciting content and engage with your followers. Once you have thousands of followers, you can tie up with brands to recommend their products in your posts and earn money from them.
14. Buy and sell websites
Many people are unaware of this highly lucrative passive income idea. There are several marketplaces where you can buy underperforming websites. If you can work on them and resell them for a higher margin, you will earn high profits. Maybe you won’t have to resell a website if you find ways to generate revenue from it.
15. Start a YouTube channel
The trick here is to find an area that doesn’t have too many competitors and then churn out videos on it. Remember that you don’t have to be an expert but only provide interesting views or easy-to-understand tutorials on a topic. And forget high-quality edits or professional shoots. You can start as an amateur and that’s what people mostly expect. Once you build your audience, you can make money from ads, affiliate marketing, and products.
16. Start a podcast
Contrary to popular belief, podcasting still has a lot to offer for those starting out. The key, like with everything else in content creation, is to differentiate yourself through domain, tone, and manner. Building a sizable audience will take time but it will prove to be beneficial since you can sell several things to this community. From sponsorships to online products, the potential market is huge for successful podcasters.
17. Sell audiobooks
There’s a growing segment of consumers who prefer audiobooks to other forms. Why not start catering to this set of users? Start small with a tutorial on a subject with lots of searches. Once you find those keywords, record audiobooks answering those questions.
18. Invest in businesses
Investing isn’t just for millionaire venture capitalists or financial institutions. Several platforms like Mainvest offer investment opportunities where you can search for startups and small businesses to invest in. You can start small with as little as $100 and become an investor in a business. If it takes off, you will earn profits without having to manage the business. It will also allow you to diversify your portfolio.
19. Lend to your peers
Funding Circle, LendingClub, and Prosper are some of the platforms through which you can lend to both individuals and small businesses. You get interest on your loan but the process does come with a certain risk. To minimize that, make sure that you check the data on prospective borrowers and spread your investments across multiple small loans. Track your payments and once you’re sure about the credibility of the borrower, you can increase the loan amount.
20. Build an app
No, you don’t need any extensive coding background since there are no-code platforms that will make it easy for you to develop an app. You can also partner with developers to roll out apps. But it’s highly competitive and you will have to spend a lot of time and effort in the initial days.
21. Invest in stocks
There will be a learning curve when you understand how the stock market works. But if you can devote some time to understanding it and discover undervalued companies with great potential, you stand to earn passive income for years. You can either make money through dividends or sell the stocks when they rise in value.
In short
If you have the right strategy, understand your market, and offer something different from your competitors, you can easily build a passive income stream that will serve you for years