8 Legit Ideas for Making Passive Income

I feel like passive income has become a bad word over the last several years. A seven-letter word worse than so many four-letter words you only dared to whisper as a kid.

The problem is that people think passive income means no work…ever.

While it’s true that the definition of passive income is money you receive regularly from no effort on your part, that doesn’t mean all passive income ideas start that way.

In fact, legit passive income sources usually start with more work than a 9-to-5 job.

Give it some time, put in the work to develop your income sources and they can become truly passive. That’s what I’ve focused on over the last five years, creating and developing income sources until they provide a reliable monthly income whether I work or not.

And it’s working. I’ve averaged over $6,500 a month so far this year, much of it from passive sources.

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Let’s take a look at some of my favorite income ideas that can lead to passive income. Are you ready for the work?

Legit Passive Income Ideas

One thing to note about passive – or any – income ideas is that multiple streams of income are ideal. You may or may not be able to survive income-wise on one of these ideas. Instead, try and utilize several of these ideas if you can.

Have income coming in from several different sources. This is an ideal way to work toward replacing full-time work income. Here are some passive income ideas for you to consider.

  1. Affiliate Marketing

Affiliate marking involves gaining income by advertising for other companies. For instance, you plant an advertisement or link on your website for a particular company.

If a visitor to your website clicks on that link and purchases a product, you get a commission. This is how some bloggers are making thousands of dollars each month.

Affiliate marking opportunities are many. You’ll want to make sure and choose one of the hottest affiliate marketing niches for maximum income-earning potential.

The niche you choose will depend on many things, such as what your website focuses on. As an example, let’s say your website focuses on how to get out of debt.

You’ll want to gain affiliates that correlate with that subject, such as Personal Capital. The more related your affiliates are, the better chance you have at gaining income from them.

  1. Dividend Income

Dividend Income can be another great way to earn passive income. You earn dividend income by investing money in dividend-paying stocks.

For example, let’s say you bought 100 shares of ABC Company. Each share cost $100. If the company pays $2.00 in dividends annually, you’ll earn 50 cents per quarter from each share.

Since you bought 100 shares, you’d earn $50 per quarter on the dividends for this particular stock. Most companies give you a choice: you can reinvest your dividend earnings or you can take them as income.

Dividend-paying stocks are often used by larger companies. Some examples are:

  • Walmart
  • Coca-Cola
  • General Motors
  • Wells Fargo

Blue-chip stocks such as these tend to be popular choices due to the longevity of the companies.

  1. Real Estate Investing

Real estate investing isn’t always passive income. For example, if you own rental properties your income from them is only passive if you hire a management company to care for the properties and deal with tenants.

However, there are true ways to make passive income with real estate. Consider crowdfunded real estate investing, for example.

Crowdfunded real estate investing allows for multiple people to invest with a company that buys and manages real estate. When you buy shares with a crowdfunding company, you (ideally) earn returns on those shares.

Once you invest your money your work is done. This can be a much easier way of investing in real estate if you aren’t interested in owning or managing rental property. Bonus: you can invest with some crowdfunded real estate companies for as little as $500.

  1. Peer-to-Peer Lending

Peer-to-Peer (P2P) lending can be another great source of passive income. When you invest with a P2P lending company, you act as a bank for borrowers.

You choose to invest a certain amount of cash each month (or as a lump sum) with the P2P lender. That money is loaned to borrowers who pay it back with interest.

The profit is divided amongst the company and the investors. So, for each loan payment a borrower makes you get a slice of the profit.

  1. Design Products with a Partner Site

Are you good at graphic design? Companies such as Redbubble and CafePress allow designers to create designs for products. You can create a picture or a saying to put on products such as:

  • T-shirts
  • pillows
  • mugs
  • laptop covers

and more. When a client goes to the site and buys an item with your design on it, you make money. The partner site handles production, shipping and customer service.

If you have an eye for graphic design this could be a source of passive income for you. Note that you may have to do some advertising to get word out about your designs.

  1. Using Your Car for Advertisements

Have you ever seen a car with a wrap on it that advertises a business? Companies such as Wrapify will pay you for driving around with company ads on your car. For each month the ad is on your car you’ll get a check or direct deposit.

Depending on the company you may have to have a newer car in order to do this. Most companies insist your car is free of rust as well. As a participant, you get to choose which ads you will or won’t accept for your car.

  1. Photo Licensing

Are you skilled at photography? Sites such as Shutterstock will pay you for letting people download your photos.

All you have to do is upload photos onto the site. When a buyer visits the site and pays to download one of your photos you make a commission.

Note that most of these companies do require specific photo details when you submit.

  1. Online Course Creation

Another great idea for passive income lies in online course creation. If you can come up with a course idea that fills a need or want for people, you’re on the right path.

Simply create the course using automated emails, videos and e-books. As your client uses the course, they’ll automatically get access to each step in the course.

Not sure how to create an online course? Try using a site such as Teachable to help you.

What are Your Passive Income Ideas?

This is just a sampling of legit passive income ideas you can use to make regular cash. With some research and effort, it is very possible to create enough passive income for you to live on.

Have you ever used passive income routes to supplement your income? What is your favorite passive income idea on this list? Leave us a comment and let us know.


Joseph Hogue worked as an equity analyst and an economist before realizing being rich is no substitute for being happy. He now runs five websites and a YouTube channel on beating debt, making more money and making your money work for you. A veteran of the Marine Corps, he now makes more money than he ever did at a 9-to-5 job and loves building his work from home business.

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