10 Surefire Ways to Earn Passive Income

Everyone wants to make more money, but very few want to work more hours. The best way to work less and make more money is to learn how to generate passive income. Passive income can be described as income that is received at regular intervals that does not require a lot of work to sustain it — money that you automatically make whether you work any more or not.

Photo by ErRbBbiiIE via Flickr

We have covered some wealth building tips in the past, like the list of alternative ways to make money. If you want to earn more money, the following are 10 ways to make money passively in no particular order for income potential:

1. Dividend Investing

Becoming a stockholder in a company is a great way of earning income with very little time involved. Buying shares in the business, you can then decide whether you wish to receive quarterly dividend checks (money earned from your investment) or to reinvest the money back into more shares. Dividend investing is easily one of the most popular sources of passive income.

2. Rental Property

When you buy rental property, you can start receiving monthly income almost immediately. The work involved requires buying the property one time only. After your mortgage on the property is paid, anything left over is considered passive income.

3. Peer-to-Peer Lending, e.g., Lending Club

Online you will find a wide variety of peer lending groups. When you become an investor, you are simply lending a certain amount to other members of the group who need to borrow money. With Lending Club, you can expect to earn a 9% interest on average.

4. Building Websites

If you have a knack for building websites that can generate a high amount of traffic, you have a great opportunity to earn passive income. Many people find that by simply creating an information site about a topic they are passionate about, they can get high traffic and earn income by either selling the advertising space on the site or by joining an ad revenue sharing program. Website building is hands-down the most reliable way to make money online.

5. Bank Accounts

If you like money, you will like seeing it grow. Instead of putting your money in low-interest earning accounts, shop around and find the banks and accounts that will pay you the most money. The money earned on interest may seem small, but the longer you keep it in the bank, the more money you will make.

6. Bonds

Many individuals are earning a lot of passive income by investing in bonds. These treasury bonds, also known as T-bills or T-bonds, are long-term investments. When the bonds mature or come due, you earn money on them. For example, you could purchase a $100 U.S. Savings Bond for $50, but when it comes due, you get the $100.

7. Writing a Book

If you write a book, you can earn royalties for as long as people keep purchasing it. Many great authors receive monthly royalty checks on books they wrote twenty years prior. All you have to do is look at authors like Stephen King and Danielle Steele to know this is quite possible. Even if your book in not on the best seller’s list, you still have a great chance of earning a passive income from it.

8. Writing for the Web

Another way to earn passive income from your writing is to join some of the online article sites, or become a freelance writer. Many of them pay you for the views your articles get each month or when someone clicks on ad that has been placed on your article’s page. Many writers are earning as much as $300 or more each month in passive income from these sites. SquidooYahoo Contributor Network, and Triond are just a few examples.

9. Residual Affiliate Marketing

When you become an affiliate or network marketer, your goal is not just to sell the products; you will also work to recruit other people to become an affiliate, as well. When they sell anything, you earn a percentage of the commission. With enough recruits in your downline, you could earn several thousand dollars a month in passive income. This is extremely rare, of course — and watch out for scams and hype.

10. Selling Insurance

When you sell insurance, every time one of your customer’s renews their insurance, you will earn another commission. Signing up several customers each week ensures your future income, as the majority of your customers will renew their policy each year. Note that you will need a license to sell insurance; unless you do it as an affiliate.

As most people already work forty to fifty hours each week, the last thing they want to do is put more time in to make more money. Instead, they could be earning passive income. By investing some time into learning the different methods of passive income generation. With passive income, you could stop working so many hours and still make more money than you were before. It is all a matter of understanding how wealth building works and how to make it work for you.

About the Author

By , on Jun 10, 2013
Shaun Connell
Shaun Connell is a full-time personal finance blogger and student living in rural Arkansas. He runs several blogs on investing and finance, including a daily blog on gold, and a weekly blog on wealth management. Shaun firmly believes in dividend investing, debt-free living, and long-term financial planning.

Leave Your Comment (16 Comments)

  1. warrenTeitelbaum says:

    If I invest in overseas banks by purchasing CD’s is this money earned Pasive or Earned ?

  2. Jenny @ Frugal Guru Guide says:

    Writing books is NOT passive income, and advances have been flat since the 1970s. Authors today joke that their books have the shelf life of a ripe banana–and it’s true. Recommending that people write books to make money is like recommending that they act to make money since Tom Cruise gets a portion of profits of the movies he’s in and gets money for decades after he’s in a movie. Only it might be quite a bit easier to make a living as an actor than as an author–and they’re about the same level of passivity.

    Book royalties are not passive income. Sure, the word “royalties” is on your tax forms for declaring passive income, but book royalties are not included in that category. Mineral royalties are.

    I’m a national bestseller in the US, so I’ve got quite a bit of experience in the area. My books are in 7 languages, too. 🙂

  3. Jonathan says:

    Excellent ideas. Content writing is an excellent way and one which I’ve done myself. I love creating new content and posting it to my own website which I promote heavily. I’ve also written on Triond but it’s not such a good source of passive income as your own blog or website.

  4. chademe says:

    Half of these ideas require having money to start with.

    The other half aren’t passive.

    Only 3, 5, and 6 are surefire.

    • Shaun says:

      Just because you need money to start with doesn’t mean it’s not passive. There’s no reason for that at all. It’s not like you can just go from 0-100% of your income being passive without having to acquire money in some other way first — passive income is great, but it’s not necessarily free or easy.

  5. SKirk says:

    Another great way to earn passive income is from investing in tax lien/deed certificates. While some money is required upfront you will earn a decent amount from the interest on these tax liens.

  6. Joe says:

    “After your mortgage on the property is paid, anything left over is considered passive income.”

    Once the mortgage is paid, and the insurance, and repairs, and collecting the rent when not on time, and finding tenants, and…

    Renting house is NOT passive income. I have never known a single landlord that did not spend at least a few hours each month on the property they were renting.

    Now if you pay a management company to handle the day-to-day issues and keep what is left, THAT would be passive income.

    • Shaun says:

      Hey Joe,
      Actually, I completely agree. I’m actually writing an article that goes into the details of owning rental property, and include a section on outsourcing to a property management company. Stay tuned!


  7. There’s only one real source of passive income, and that’s interest income.

  8. Be very careful of the residual affiliate marketing. There are sooo many scams out there with MLM and nonsense. Might help to check any potential affiliate company with the Better Business Bureau in your area. It can also help to Google “name of company”+ the word scam. You might be surprised by what you find.

  9. Good article.

    I have used the rental house route to make passive income, and I can testify that the additional income stream is a great safety cushion in tough economic times.

  10. Jenna says:

    Seems like you would need to have a lot of money to buy property to rent out…

    • Shaun says:

      Jenna, it really depends on the property. I know a friend of mine is renting a 50k property out for $750 a month, which isn’t bad at all. But I live in an area that has extremely cheap property and living expenses.

      James, I completely agree. The only companies I use for affiliate marketing with are just a small number of newsletters and membership websites. Almost all the others are pretty twisted.

      • Jenna says:

        @Shaun – How did they afford the $50,000 home in the first place?

      • Shaun says:

        Savings, a mortgage, investments — all of these are potential methods of purchasing the house. I’d prefer cash though. Obviously, renting out rental properties isn’t for everyone.

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