How to generate passive income – 10 Ideas

Building wealth using passive income has positive appeal, especially if you are troubled about being able to save enough from your day work to fulfill your goals.

How to define passive income?

Passive income includes regular earnings from a source different than an employer or contractor. The passive income can be generated from two sources: rental income or a business which a person doesn’t actively participate. Examples include book royalties and dividend-paying stocks.

How to generate passive incomeYou can define passive income as earnings an individual derives from a rental property, limited partnership or other enterprises in that he or she isn’t actively involved. Popular culture defines it as “any money you earn while doing nothing.”

Truth falls somewhere between the two, defining passive income as the money you earn from a project or investment once you’ve created an initial contribution of your time or cash. In the end, it still involves work. You just provide the work beforehand.

Thousands of individuals have tried to form passive income streams solely to be stunned by the quantity of labor, cash or time it takes.

1. Car rental business

To make successful rental car business, one should first look at what kind of vehicles have demand for rental business. Usually, there is demand for vans, trucks and also for caravans. These are vehicles used for moving and caravans for holiday trips.

Insurance is an important part of the business. The vehicle must be insured for a case of an accident. Usually, a rental vehicle is defined as a profit-making tool and normal car insurance does not cover enough if there are problems. Best thing is to visit at a local insurance office and ask for options.

Rental price should be competitive and one should see what is the price range of other rental cars in the neighborhood. At this point, it’s good to make calculations and estimates if the business is enough profitable to begin.

Business could work like this: You make an ad on the Internet, like locally visible Google Adwords campaign and ad for a local magazine. People needing moving van contact you by phone or email and makes the reservation. Customers pick up the vehicle and return it in time.

2. Flea market business

A flea market is a place or bazaar where people rent a table or shelf and sell merchandise, usually old, used things. Our local flea market is like a shop where you can rent a table and sell your things. You don’t have to sell things yourself, there is staff that makes the trading on behalf of the vendor. The vendor only arranges merchandise to the shelf and collects the share of the income.

The way to make money in the flea market is to go for shopping in the morning when the bazaar opens. As one of the first the customers, vendor scours the place looking for pricing errors. Idea is to buy everything interesting that has reselling value and resell them again with a profit.

3. Drop shipping eCommerce

Dropshipping could be a way to run an internet store where you don’t need to store inventory and you don’t need to ship the products. The method is that you set up your shopfront and collect money similar to a regular store.

Rather than having to pack and ship the merchandise once you receive an order, you just place a regular order with the distributor and the distributor takes care of shipping the merchandise to the end customer.

The main advantage of drop shipping is that you simply don’t have to manage inventory or product fulfillment. However, since you’re marketing the merchandise under your own store, you’re still responsible for the customer support.

4. Affiliate marketing

Affiliate marketing means that you sign up with a company or entrepreneur and sell their products. For example, if you start a tech website, you could become an affiliate of an online hosting or anti-virus software company. You can earn passive income every month if your website receives a good quantity of traffic and you’ve got a lot of email subscribers. Being an affiliate vendor takes dedication and time. You need to create traffic via your website, email marketing, and social media.

5. Freelance business

You can start a side business while you’re employed a full-time or part-time job. For example, if you’re a graphic or web designer, you could begin your own graphic or internet design business on the side. If you like to create jewelry, you could sell at craft fairs and on-line. Starting a business might be daunting, but if you believe in yourself and your work, you could earn a good living, maybe even quit your day job. Search out people who are doing what you wish to do and interview them. Find out the mistakes they made and ask for guidance.

6. Dividend income

Income through dividend stocks is mean of building a passive income. Dividends are usually paid quarterly and time it takes to see income is way short and there’s little ongoing work to be done after the initial investment. There are still risks concerning dividend investment. Investments like stocks have volatility and the value of investments may vary, also the dividend may be reduced if the dividend policy changes.

While income investment through dividend-paying stocks is the most well liked among investors, there are different investments that provide sensible passive income potentials like master limited partnerships (MLPs) and real estate investment trusts (REITs). A good source for dividend investment options is and Nasdaq.

7. Real estate

Realty investment includes fixing and flipping homes. this needs capital in the form of money or credit. If you’ll be able to partner with somebody, better. Attend on housing auctions and bid on the houses, idea is to be able to get them for a decent price. Hire a contractor to repair up the inside and outside, have the house appraised, sell it, make a profit.

Real estateYou could purchase properties and become a property owner. Another alternative is to become a real broker. Consult seasoned real estate investors and brokers. Ask if this passive income strategy is true for you.

8. Royalties

Earn royalties from writing books, songs or developing products. You can even purchase someone else’s share of a song via a writer’s auction. You bid on a song, and if it’s accepted, you own a piece of it and receive a royalty check monthly, which can be deposited into your bank account.

One option is to make a franchise business like subway or another similar concept. If your business has potential and “brand power” you can license the concept and the brand to collect franchisor fees from other businesses.

9. Online Income

There are numerous ways to monetize your website or blog online. you’ll be able to generate profits from private advertising, public ads like Google Adsense, sales of digital merchandise like e-books, lead generation and referrals, affiliate commissions and others. The success of websites or blog can also lead to coaching and consult type of work opportunities.

10. Sell Designs

I hope I could be a graphical designer. High-quality visuals are important and used everywhere. If you have the skills as graphical designer options are almost limitless. You can design graphics, websites templates, T-shirts, sell photos, 3D-designs and so on.

t-shirt photoMany sites like CafePressSpreadshirt let you design your own products and sell them through their site, you get to profit from every product they sell with your design on it. You can also design your own shop front-end for the products.

You can also sell 3D-desings and models with the same logic than with the T-shirts. If you design a phone holder or a keychain. You can sell the model through services like TurbosquidShapeways or CGTrader. If you a designer this gives you also a great way to make a portfolio with designs that are actually on sale.


These are ten passive income avenues, which came to my mind first. I wound may other ways to make passive income and I will write about those later. Passive income almost always includes initial work or investment. There are also risks involved, and things to consider before starting a side business that might become a source of passive income. One important thing to consider is the tax rate. It maybe that passive income increases the tax rate, making some business opportunities less interesting. Taxation depends on the location and the type of business or investment.

What about you? What are your favorite passive income avenues?


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