10 Best Ways to Earn Passive Income (while you sleep)

We used to think that passive income was a myth or at least a pipe dream. And yet, all the financial gurus shout from the rooftops about the importance of passive income streams for achieving financial freedom.

To be honest, it felt impossible to us!

But today, half of our income is from passive income. Well, actually, it’s from pseudo-passive income.

Fully passive income streams aren’t really feasible unless you already have a decent amount of money sitting around with nothing to do.

However, pseudo-passive income streams are realistic and can be incredibly profitable if you have more time than money. They’re capable of earning you hundreds or even thousands of dollars every month with minimal ongoing effort – maybe just a couple of hours per week.

So, let’s discuss passive income and talk about some strategies that you can implement to create a strong passive income flow.

Disclaimer: The information provided is for informational purposes only. It’s essential to conduct your own research and seek professional advice before engaging in any investment or business activity.

Watch Our Video About How To Earn Passive Income

Truly Passive Income: Investments and Lending

Let’s start with truly passive income streams that require almost no work once you set them up.

Investing Money You Already Have

Investments in dividend stocks and high-yield CDs or savings accounts generate passive income. You put your money in, sit back, and watch as the money compounds.

The drawback here is that it takes a significant amount of capital to generate any substantial income.

However, high-yield CDs in Ecuador are a great option because they offer rates between 8% and 10% for long-term CDs of a year or more. You can invest in CoOps, or what we commonly know as credit unions, without being a citizen or resident, you’ll just need your passport. Investing about $32,000 (the amount that’s insured) can generate approximately $2,500 per year.

Peer-to-Peer Lending With Money You Already Have

Next is peer-to-peer lending, another fully passive income stream. Platforms like Prosper and Upstart allow you to lend money to individuals or businesses and earn interest on your investment.

According to Prosper, the average interest lenders make is 5.8% on their platform. Though the cash balance is FDIC insured, the loaned amount is not so if the borrower defaults on the loan, you could lose your money. However, the risk is manageable since these platforms provide ample details to help you choose low-risk loans.

Pseudo-passive Income Streams

Now, let’s shift our focus to more attainable pseudo-passive income streams that require some effort to set up but then largely function on autopilot and continue generating income each month.

Renting Your House or a Room

Online platforms like AirBnB, VRBO, and Booking.com make it easy for you to rent out a house or a room to travelers.

This isn’t completely passive since there’s some management and upkeep involved, but it’s a viable source of income if you have a place to rent and don’t mind other people living there or sharing it with you.

If you’re already renting a place that’s bigger than you need, you might be able to rent out a room. Just make sure your lease allows it, first.

Blogging

Blogging is another great pseudo-passive income stream. With some effort and consistency in producing valuable and engaging content, you can earn income from affiliate marketing, display ads, sponsored content, or by selling products or services.

The key to success here is to consistently post valuable and engaging content in a niche that search engines can index.

Even though you continue to make money from past articles that don’t require any ongoing work, you still need to create new content if you want to keep people coming back to your website.

Fresh content also helps with your search ranking so it’s easier for people to find your blog. If you don’t keep publishing new content, your blog will slowly fade into oblivion and your income will dry up.

See Also: How to Start a Blog TODAY!

Podcasting

If you have a voice for radio and a topic you’re passionate about, you can easily start a podcast. Monetizing your podcast can be done through affiliates, sponsorships, ads, or by creating premium content for subscribers using a platform like Patreon.

There are a lot of different podcasting platforms and many offer free plans, like Podbean and Buzzsprout, so it’s really easy to get started.

The downside is that it can take some time to build a following, and you need lots of listens to make money.

I started an interview podcast back in 2012 to showcase inspirational entrepreneurs. I published over 50 podcasts during the course of a year, but it never got more than a few hundred listens per episode so I canceled it.

In retrospect, there are several things I did wrong and would do differently now. We’ve learned a lot of painful lessons by sticking with YouTube even when no one watched our videos, and many of them could be applied to a new podcast.

It’s a good idea to combine a podcast with a blog so you can more easily do affiliate marketing. That’s the best way to earn income early on in your podcasting career before you have enough listens to attract sponsors or earn meaningful ad revenue. 

YouTube

We can’t talk about pseudo-passive income without mentioning YouTube since that is our primary source of income.

We make money on past videos with no additional effort (the passive part), but we have to keep creating new videos to stay in the Partner Program and continue to get views (the active part).

If we stop posting videos, eventually, YouTube will kick us out of the Partner Program and we’ll stop getting paid for the ads shown on our videos.

At least half of our monthly income from YouTube ad revenue comes from the videos we publish during the month. That means if we stop publishing new videos, our ad revenue would drop by half immediately so it can’t be considered truly passive.

You want to start a channel focused on a specific niche or topic, and consistently upload high-quality videos to build your viewer base, but you don’t need millions of subscribers to earn hundreds or thousands of dollars per month in income.

You can earn money through affiliate marketing, ad revenue, brand partnerships, memberships, and even merchandise sales. 

We go into a LOT more detail about how to YouTube in our Online Income eCourse, including best ways to monetize your channel with a small audience.

See Also: How To Start a Successful YouTube Channel: A Step-by-Step Guide

Affiliate Marketing

With affiliate marketing, you promote other products or services using a special link that’s unique to you. If someone clicks the link and makes a purchase, you’ll get a commission from the sale.

This is an excellent option if you’re a content creator or an influencer (blogger, podcaster, YouTuber, Instagrammer, TikTok-er, etc.).

A big mistake we made was not doing affiliate marketing during the early days of our channel. We’re just getting started and it’s already earning us several hundred dollars per month.

A lot of affiliates offer very low payouts: a few dollars per sale. These work well if you have millions of followers and views, but they don’t work if you’re just starting out and you don’t have much of an audience yet.

Instead, you want to focus on high-dollar commissions of $50 or more. Some vendors pay several hundred dollars per sale so you only need a few per month to make good money.

You can also create your own product (eCourse, eBook, etc.) and provide affiliate links for other people to promote so you can earn income from both sides of the affiliate relationship.

You’ll continue to earn commissions for past content that won’t require any additional work, but you’ll need to continue creating new content if you want your reach to grow and keep people coming back for more.

eCourses

If you’re an expert in a specific field or possess unique skills, an eCourse can be a fantastic way to share your knowledge while generating pseudo-passive income. There are numerous eCourse platforms available like Udemy, Skillshare, or Thinkific (our personal favorite).

Currently, we have two eCourses that generate about 25% of our monthly income. One is the Online Income eCourse, which is about how to earn WiFi income from home or anywhere else, and the other is the Ecuador Relocation eCourse, which is a step-by-step guide to help make your move to Ecuador easier, faster, and cheaper.

But remember, an eCourse can be about anything! Just ensure there’s an audience for your course before diving into its creation. Yes, there is significant upfront work in creating the course, but once launched, the upkeep is minimal.

However, don’t mistake this for being completely passive – you’ll still need to engage with your students, answer questions, and regularly update your content to keep it relevant.

Plus, to drive more sales, you’ll need to keep creating fresh content to build your audience and increase awareness about your courses. If we don’t promote our courses every week on YouTube and our other social media outlets, no one buys them. 

Low Content Books

Low content books like planners, journals, and logbooks are relatively easy to create and can offer a nice pseudo-passive income stream.

These books typically contain pages with simple, repeated layouts and require minimal content creation, which can be easily reproduced.

The beauty of low content books lies in their evergreen appeal – once created, they can generate income for years without needing any update.

However, keep in mind that there’s stiff competition due to the low barrier of entry, and these books are usually priced quite low, meaning you’ll need high volume sales to make significant income.

But if you have a unique concept tailored for a very specific niche, you can stand out from the crowd and enjoy a steady income with little ongoing effort.

See Also: Low Content Book Creation by Jessica at The Selling Family

Sell Your Photos and Videos

If you have a knack for photography or videography, selling your work on stock photo and video websites can be an excellent source of pseudo-passive income.

Platforms like Shutterstock, Adobe Stock, and Pond5 allow you to sell your high-quality photos and videos. We personally use images and videos from Storyblocks and Dreamstime for our content.

This market is competitive, and the payout per sale is low, so aim to upload high-quality content, and a LOT of it.

Also, consider shooting your videos in 4K to future-proof your content, and consider drone footage, as both are in high demand and lack supply, particularly for Latin American countries.

Conclusion

These are just some potential strategies to start building your passive income streams.

Passive income isn’t a myth, but it’s also not entirely passive (except for investing and lending). It requires upfront work, a smart strategy, and a continuous commitment to maintaining and growing these income streams.

For those looking to earn online and gain location freedom, our Online Income eCourse is the perfect next step for you. We delve into more detail about finding online jobs, side hustles, the gig economy, the influencer economy, and more. You’ll get access to a wealth of in-depth information based on our years of experience working online, and the quick-start checklists will help keep you focused and start earning WiFi income more quickly.

Let us know in the comments below if you have any questions or if we missed any viable passive or pseudo-passive income streams. We would love to hear your thoughts!

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JP Stonestreet

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Hola todos! Welcome to my author bio page! Let's see. Where to begin... I grew up in the country on a lake outside a small Kansas farm town. As soon as I could, I got the hell outta there! Since then, I've lived and/or worked in Kansas City, Washington D.C., Denver, San Francisco, and Ecuador. I started and sold a dotcom, wrote a book about it, started a YouTube channel, and now I write a lot. Amelia and I have embraced the Unconventional Life and we want to help you do it, too!