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21 Passive Income Ideas to Achieve Financial Independence

Passive income is the key to achieving financial independence.  Earning Passive income requires you to create some form of asset that can generate income. You might still need some effort to maintain the asset, but it would be significantly less than effort required to build the asset. If you are looking for ideas to generate passive income, than below list of options can help you generate it.

  1. Dividend income – Dividend income is the most commonly used income. All you need to do is invest money in high yield stocks and receive dividend money.
  2. Bonds – Bond is another financial asset you can buy to receive interest income. There are several options available for you to choose from. Interest will mostly depend on the risk you are willing to take.
  3. CD/FD – These are bank deposits for fixed maturity that pays interest income. The income will usually be lower than bonds. Good thing is that these are insured by government to a certain amount. So even if your bank fails, government will pay you back.
  4. Annuities – Annuities pay you money periodically for life if you are willing to pay lump sum money upfront. The main difference between bond and annuity is that, in Annuity, principal amount is not paid back at the end. You get monthly (or quarterly, or annually) payments that include everything principal and interest component.
  5. P2P Lending – P2P lending is gaining popularly recently. This is same as bond. The only difference is here you don’t loan your money to government or corporates, but to individuals. This is more risky than bond investment, but pay-out is also higher.
  6. Rental properties – You can own residential or office properties, and rent it for rental payments. This requires some ongoing work.
  7. REIT – If you like rental income but do not like the work required for maintaining rental properties, you can invest in REIT. REIT will do all the work, and pay you monthly income for your investment.
  8. Blogging – Blogging has gained popularity in last few years. If you have good knowledge and passion for a particular topic, then share it using a blog. Once you have built good traffic to your blog, you can monetize it. Most popular way is using advertising, but there are many ways. Blogging will require some ongoing work to sustain and grow your income.
  9. Authority website - If you can create a website that becomes go to website for a particular topic, you can earn money from website.
  10. Shared revenue Content sites – Setting up blog require a lot of research and work. If you just want to write and earn money, then you can use content writing platforms such as Hubpages. These sites will take a portion of your revenue.
  11. Aggregate/Curate content – If you can come up with niche area and curate or show content from web (like Google News or TechMeme)in a way that offer value to readers, you can earn money from advertising or sponsored content.
  12. Creating videos – If you can create videos that people would like to watch, you can monetize them using advertising. These could be entertaining videos or video tutorials. Key thing is to make your videos interesting, so they can quickly gain popularity and viewers.
  13. Podcasts – Podcasts are audio broadcasts. If you have some ideas that people will like to listen, you can create podcasts and earn advertising revenue.
  14. Affiliate marketing – There are many affiliate programs that pay you money to get them customers. You can use this along with blog/website. You can also use other strategies like social media or buying traffic from adwords.
  15. Email marketing – Email marketing requires you to collect emails and then send email newsletter with sponsored links/ads. The most common methods used are blog subscription or providing free material (e.g. eBook) in exchange of email id.
  16. Niche websites – You can choose a small less competitive niche and write articles (can range anywhere from 5 to 100 based on niche). You can then earn money using advertising or affiliate income.
  17. Run an online forum – If you run a popular online forum, you can earn money from advertising. You will have to put lot of work initially. Once the forum is popular, it will require very little involvement from you.
  18. Licensing photos – There are many platforms (e.g. Shutterstock) that allow you to sell photos. If you love taking photos, this could be one way for you to generate income as people use your photos.
  19. Book royalty income – This is one of the oldest ways to earn passive income. Write a best-seller book, and earn royalty income.
  20. eBooks – eBooks are books in digital form. Good part about eBooks is you can publish the book yourself; you do not need a publisher. You can sell your books, and keep all the revenue.
  21. Software/Web apps/Mobile apps – If you can create an app that people will like to use, you can earn money by charging users directly or selling advertisement.
  22. On-line Course -If you have expertise in an area, you can create on-line course. The course will generate income, as people pay to use your course.
  23. Website templates – If you have expertise in any website building tool (e.g. WordPress), you can create premium templates (e.g. premium WordPress themes) and sell them online.
So, don't wait. Pick up your passive income idea today, and put yourself on the path to achieve financial independence.


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