How to Create Passive Income: 9 Strategies That’ll Make You Money 24/7

Spread the love

Who wouldn’t want to earn passive income and make money while sleeping, on a holiday or chilling on the beach? I know I do!

Now if you have read my previous post covering ten awesome side hustle ideas to make money, you know various projects can become fantastic sources of passive income in the long run. However, if you don’t have much time but have some money or assets available already, the passive income ideas in this post are for you. Here I will cover nine truly passive income ideas that require a minimal time investment.

What is passive income?

Did you know that millionaires have an average of seven different income streams? That doesn’t of course mean that they have seven different jobs. Instead, most of their money comes from passive income sources. So what do we actually mean by passive income and how does it differ from normal job income?

If you have read Rich Dad Poor Dad, I’m sure you are already well aware of the term passive income. (NOTE: This book is an absolute must-read classic on financial literacy and freedom, and building wealth. If you haven’t read it yet, I’d highly recommend reading it).

In any traditional job, you’re most likely getting paid by the hours you are putting to work. This means that your earnings are capped based on how many hours you can actually work. Passive income however is quite the contrary.

Passive income is money you earn in a way that requires little to no maintenance to keep the money flowing. Although this doesn’t mean it can be completely ignored or forgotten, passive income doesn’t depend on the time and effort you put into it. And why is this great? Firstly, for most of us, time is more valuable than money (after we have all the basic needs met, of course). While money can be earned and spent, time can only be spent once. Then it’s gone forever. Therefore, being able to freely choose what you want to do with your life is something most of us dream about. Secondly, since time is not a barrier to your earnings, technically, there’s no limit on how much you can earn.

Let’s dive into the list of 9 passive income ideas to help you build up your personal wealth and get you closer to financial freedom.

1. Invest in property

Let’s start with my own favourite passive income source: property income. This money-making strategy is tried and true and has surely been around long before passive income was even a hot buzzword. But when it comes to property investing, many people just think about normal rental income, i.e. buying a property and renting it to long-term tenants. This type of rental income can of course be a great passive source of income and is also one of my own income sources. However, my point here is that there are also various other strategies to make passive income in property, including:

Serviced accommodation (Airbnb, Booking.com etc.): Renting out a property short term, often generating higher income than normal rental income.

HMO (house in multiple occupation): Renting out a property room by room instead of renting it for one household, also tends to provide higher income.
Real estate investment trusts (REITs): This allows you to invest in property without having to buy and own physical property assets directly. Any profits are shared with investors as dividend payments.

Property crowdfunding: A form of equity crowdfunding that allows you to own a share of a property.

There are also plenty of other creative ways to invest in property. If you are interested in exploring different strategies read my guides on How to make money from property and How to make money on Airbnb without owning property.

Finally, property investing is not only a fantastic source of passive income but also has the potential for significant capital gain over time. Did you know that house prices in the UK are expected to jump by 50% in the next 10 years?! Time to get investing, I say!

2. Rent your spare room or a parking space

Renting your spare room, parking space or driveway can be a very easy and lucrative way to earn passive income. In addition to property investing, this is one of the strategies that I’ve personally found successful. In fact, it took me less than two years to save enough money to purchase my second property thanks to renting out my spare room on Airbnb! Because the income was so good, I didn’t mind spending a little bit of time here and there cleaning and communicating with guests. If you don’t fancy being an Airbnb host or don’t necessarily live in an area where there’s a demand for this, don’t worry. There are plenty of other ways to monetise your spare space. Let’s cover a couple of different options below:

Rent out your spare room for a lodger: If you are happy to share your home with others, this can be a great source of passive income.

Host foreign students: If you like the idea of some extra cash short-term, you can rent out your spare room for a foreign student. These are usually language or exchange students that need accommodation from a couple of weeks to a few months. Contact your local language schools for further information.
Rent out your spare space as storage: This can be a suitable alternative for those who might not want to share their home with others but want to make passive income on their spare space (a room, garage etc.). Platforms such as Stashbee can help you to become a storage host and start earning passive income.
Rent out your parking space or driveway: If you have a parking spot you don’t use daily, you could be making money with it through platforms such as JustPark (JustPark also gives you a £10 Amazon gift card for listing your parking space!)

3. Peer-to-peer lending (P2P)

Peer-to-peer lending platforms such as Zopa and Funding Circle are financial matchmakers, bringing together people who have the cash to lend and are looking for a good return, with individuals or businesses wanting to borrow. These platforms can make it simple to invest in people and companies to generate a passive income stream from interest payments. Peer-to-peer sites typically offer you up to a 6% return. To compare, normal savings accounts usually provide a maximum interest of 2-3%.

Many peer-to-peer platforms also have advanced algorithms that will predict risk. Some of them also automatically divide your money between lots of borrowers, whereas others let you choose who you’d like to lend your money.

If you have some cash laying aside, peer-to-peer lending might be a good avenue for investment. This is a strategy where you don’t need to rely on low-interest accounts or high-risk stocks. However, like with any type of investing, it’s always important that you understand the potential risks. Start by doing the research and judge for yourself whether this passive income idea is suitable for you.

4. Invest in high-dividend stocks

Dividend investing is a passive income strategy that can give investors two sources of potential profit. Firstly, income from regular dividend payments. And secondly, capital appreciation of the stock over time. The theory sounds pretty similar to property investing, doesn’t it?

In short, dividend stocks work by distributing a portion of a company’s earnings to investors regularly. The vast majority of companies pay dividends twice a year or quarterly but there can be some exceptions. With this in mind, as opposed to normal stock trading, you won’t need to sell the stock to generate income. However, you will often need to buy a significant amount of shares to see a healthy stream of revenue. If you are a beginner, start small and build up from there while keeping an eye out for high-income-producing dividend stocks regularly.

Although buying dividend stocks is specifically appealing to investors looking for lower-risk investments, it still has its pitfalls. Dividend stocks can be risky if you don’t know what to avoid. Again, get started by doing proper due diligence to find the right dividend stocks.

5. Invest in index funds

An index fund is a type of mutual fund or exchange-traded fund (ETF). It tracks a market index and is typically made up of stocks or bonds. Investing in index funds is one of the easiest and most effective ways for investors to build wealth. By simply matching the strong performance of the financial markets, in the long run, index funds can turn your investment into a healthy nest egg over time. The other good news is that you don’t have to become a stock market expert to do it. But as always, research and understanding any potential risk are important.

Most indexes include various (even hundreds) of different stocks and other investments. This means that index fund diversification leaves you less likely to suffer significant losses if something happens to one or two companies in the index. Index funds are not an answer for short-term passive income but they can be the best bet if you are looking for a low-risk investment that can grow steadily over time.

6. Sell your photos or videos

Another avenue for passive income is to leverage photo-selling websites such as ShutterStock. Although you don’t necessarily need to be a professional photographer, a good understanding of photography and photo editing are important to succeed in this.

Once you become a ShutterStock contributor, you begin earning money every time someone downloads your content. As a contributor, you can make around 20%-30% of whatever your image sells for. However, it’s good to note that stock photography can be a grind, especially in the beginning. Prices can be low so you need a lot of content to earn decent money. But in many cases, you can easily repurpose content you’ve already shot rather than actively produce photos for stock purposes only.

7. Buy an established blog or website

In my article 10 Best Side Hustles to Make Money, I covered how you can make money by blogging. As mentioned in the article, starting a blog can require a significant time investment and consistency over time before you see any money coming in. If you don’t have the time, another option is to buy a blog or online business that is profitable already. This way you can start making passive income from day one.

Online marketplaces, such as Flippa, can be a great place to start. They have lots of different types of websites listed for sale – you can find anything from blogs to online shops with physical stock. It’s important to note, however, that buying a website can cost serious money and can come with potential risks for inexperienced buyers. Having built and run our own website or blog in the past can also be a great advantage to be able to optimise an existing site further. With this in mind, it’s essential to do proper research before putting money into this.

8. Affiliate marketing

Affiliate marketing is one of the most powerful strategies to make passive income streams with minimal effort. In practice, this means partnering with a company or signing up for their affiliate scheme. You will then promote their products or services and receive a commission on the sales. Affiliate marketing is often the main source of income for many influencers like Instagrammers and YouTubers.

Although you don’t necessarily need to be an influencer as such, you will need a large online audience to create a healthy passive income stream through affiliate marketing. This can, of course, be one of the cons as it can take time to generate enough traffic or build a follower base. Once you do have the audience though, the barrier to entry for affiliate marketing is very low. In fact, most affiliate programs are free to join. Also, since you’re not the product owner, there’s nothing to lose if a customer doesn’t buy.

9. Register your house as a filming/photo shoot location

Did you know that around 60% of sets we see on TV in the UK are filmed in regular homes?

If you don’t fancy the idea of renting or Airbnb’ing your spare room but are interested in making money from your home, you can rent it to film crews and photographers. You can earn anything from £300 for a few hours of photoshoots to up to £2,500 a day for bigger film shoots. For an average home, the fee is usually around £1,000 a day.

To hire out your property for film and photoshoots, you can sign up for a location agency such as Shootfactory, Location Works or Lavish Locations. Agencies typically take between 10%-25% commission, so you can also contact TV channels or your local film commission directly.

Although you can sign up to location agencies wherever you live, the more extraordinary or unique your property is, the better chance you tend to stand of getting picked.

Start creating passive income and make money while you sleep

Passive income can help you level up your earnings and build wealth which can be difficult to do with a regular job only. If you’re looking to become financially free to be able to quit your job, the passive income ideas on this list can help you to get started. And even if you wanted to keep your full-time job, it’s always good to have multiple sources of income. Because all the ideas in this list require minimum time investment after initial research, they are fully compatible with a full-time job too.

Whether you’re looking to invest in property, rent out your spare space or invest in dividend stocks, you’ll find that there’s money to be made in all these areas. Now all you need to do is get started.