Top 15 Passive Income Ideas for 2023

The daily grind can be hectic. Deep down you know that you are meant for more. But how do you take control of your financial destiny? Two words: Passive income.

In this article, I am going to cover what passive income is, the best passive income ideas (with pros and cons for each), and my thoughts on these passive income ideas in 2023. As an active seeker of passive income, I have often found that many articles talking about passive income tend to be misleading or are written by inexperienced authors. This article will also give you a deep understanding of passive income and how to build income streams from it.

Table of Contents

What is passive income?

Passive income is a term that has been tossed around many times. But what really is it? Passive income refers to earnings or cash flow generated with minimal effort or active involvement. Unlike traditional forms of income, such as wages or salaries earned through active work, passive income allows individuals to earn money while they focus on other activities or even when they’re not actively working.

“Passive income is a way to generate income streams that require less ongoing effort and can provide financial stability and freedom. “

– Author

Passive income can come from various sources, such as investments, rental properties, royalties from creative works, affiliate marketing, online businesses, and more. The key characteristic of passive income is that it continues to generate money even when the individual is not actively working on it. While some initial effort and investment may be required to set up these income streams, once established, they can generate income on autopilot or with minimal maintenance.

Why pursue passive income?

Who doesn’t want to earn while they sleep? Passive income offers numerous benefits, including the potential for financial independence, diversification of income sources, flexibility in managing time, and the opportunity to build long-term wealth. It allows individuals to break free from the traditional 9-to-5 grind and create a lifestyle where their money works for them, rather than the other way around.

“If you can’t find a way to make money while you sleep, you are going to work until you die.”

– Warren Buffett

Before I get you super excited, let me also mention that generating passive income requires careful planning, research, and sometimes financial investment. I am going to dive into practical and attainable passive income streams that I have tried while sharing my experiences with each one.

Passive Income Ideas for 2023

1. Build and monetize a blog

Starting a blog is one of the easiest and most popular ways of generating passive income. Blogging has empowered numerous entrepreneurs (myself included) to build and diversify their income streams through affiliate marketing, selling digital products, and online advertisements. Blogging also enables entrepreneurs like me to share their expertise and make a difference in people’s lives.

Why should you start a blog today? A blog can generate income from various sources while being impactful and fulfilling. Blogging also fosters creativity and personal expression. It also goes without saying that a blog gives an entrepreneur the flexibility and freedom to work at their own convenience. A survey at Marketing AI Conference denoted that 85.7% of the respondents made money from blogging.

Passive income earning blogs- a survey
Source: Heidi Cohen

2. Create a Print On-demand Store

Start selling merchandise without the heavy lifting and operational costs involved with sourcing raw materials, branding, and managing the supply chain. Setting up a print-on-demand (POD) store is a fantastic way to generate passive income. With the rise of e-commerce and the increasing demand for customized products, there has never been a better time to start a print-on-demand business.

Why should you start a POD business? It requires minimal upfront investment since you don’t create the merchandise, it offers automated order fulfillment where shipped directly to customers hence saving you the hustle. You can have a wide range of products and have global reach and 24/7 Sales.

With a print-on-demand store, your products can be sold while you sleep, providing a true passive income stream.

– Author

A print-on-demand store is an excellent passive income opportunity that leverages e-commerce and customization trends. By focusing on quality designs, effective marketing, and selecting the right POD provider, you can create a successful and profitable passive income business that aligns with your creative passion and financial goals.

3. Invest in stocks

Have some spare savings somewhere? Invest in dividend-paying stocks. Make that money work for you and generate a steady stream of cash while you focus on what truly matters. I am invested in dividend stocks and can attest to the benefits of receiving passive income, especially in these inflationary times.

How can you begin investing in high dividend-yield stocks? You have two options. One, buy an ETF such as the S&P 500 Dividend Aristocrats ETF which is made up of companies in the S&P 500 that have increased dividends consecutively for the past 25 years. Alternatively, you can invest in individual high-dividend yield stocks. I recommend going with the ETF since stock picking can expose your portfolio to concentration risk and requires a lot of effort, specialized knowledge, and monitoring. However, if you opt for individual stocks, here are some that can you can look at.

StockDividend Yield
Verizon Communications (VZ)7.26%
Walgreens Boots Alliance (WBA)6.14%
3M Company (MMM)5.90%
Dow Inc. (DOW)5.40%
International Business Machines (IBM)5.21%
Source: Company Fillings and Bank Rate

Why should you invest in stocks? Investing in stocks that pay dividends gives you an additional stream of income, provides long-term capital growth, and can diversify and stabilize your cash flows. Besides, in some jurisdictions, you might have some tax advantages. In the United States, depending on your income and other conditions set by the IRS; you might qualify for a 0%, 15%, or 20% tax on dividends which is lower than the 2023 income tax rate of 37%. It is also worth noting that ordinary dividends are taxed as ordinary income at 37% in the US.

See also: Rule of 72: How to grow your money

4. Create and Sell Online Courses

Everyone has something they can share with the world. With online courses, anyone can monetize their expertise. Most people suffer from imposter syndrome which makes them think that they do not know enough or that no one will buy their materials. If you are facing this challenge, you need to rise up to the fear and understand that each venture is a learning process and you lose nothing by trying.

Why should you create that online course? Online courses are excellent sources of passive income because are scalable, can be monetized easily, give the author freedom and flexibility, and can be reused over long periods of time. With new technologies and platforms such as Udemy, the creator can automate everything from enrollment, billing, and content delivery making the process seamless for both the creator and the learner.

To succeed in creating online courses, you need to focus on creating high-quality content and target a global audience. Leverage your knowledge, experience, and expertise to create a passive income stream that can lead you to financial freedom.

Author

5. Real Estate: Tangible Passive Income

Ever wondered how successful investors leverage real estate to generate massive passive income? They attain this through smart investment decisions. While many people are scared of debt, billionaires like Li Ka Shing leverage debt to make money. Don’t get me wrong, I’m not advocating for pilling up debt in the name of investing; rather I’m talking about using debt to secure cashflow positive properties where the income exceeds the total operating expenses, taxes, and interest payments. Mastering how to manage your risk can make you a very successful investor.

“Real Estate has created more millionaires than any other industry. ”

– Robert Kiyosaki

You can gain exposure to real estate in four ways: buying rental properties, flipping properties, crowdfunded real estate, and investing in REITs. I recommend investing with an exit in mind and being aware of the risks associated with real estate. Therefore, I only advise people to buy rental properties and invest in REITs if they need exposure to real estate.

Why should you consider investing in real estate? Property has the ability to increase your net worth if you leverage debt and manage your risks. Real estate investment through REITs is not as capital-intensive as traditional real estate investment and can offer returns of up to 15% per year. Property also tends to increase in value over time hence it is a good creator and store of wealth.

Passive income real estate - house prices

House Prices Increasing Over Time. Source: St. Louis Federal Reserve

See also: 7 Best Assets to Own to Build Wealth

6. Your Digital Products: The best kind of Passive Income

Have you spotted a problem you can solve? This could be a service that is overpriced or underserved or even a knowledge gap. You can leverage your knowledge and experience to create a solution and the market will reward you.

In this age of AI, you can easily create digital products such as ebooks, plugins, software, stock photos, audiobooks, and templates among other things. The list is endless.

Thinking about a product you can start? Here’s some inspiration:

A friend of mine created the platform OurBabyAI. An AI algorithm that generates near-perfect baby photos from the pictures of the mother and the father. Why? He struggled with the available online tools as most of them (literally 99% of them) are pure garbage. He went on to launch the product and made over $3,000 in the first two days.

– Author

Why should you create your own products? The best passive income flex is creating your own products. There is limitless revenue and maximum return on investment. It is also a significant milestone that is fulfilling. In addition, it locks your creativity and gives you the platform to express yourself, your knowledge, experiences, and expertise.

Other Passive Income Ideas for 2023

Under “Your Digital Products” above I have bundled more than 10 passive income streams to make this article precise and straightforward. Other passive income streams you can look at include:

7. Rent out space and tools – This can be a spare room that you can rent out on Airbnb, a parking space on Stow It, or a storage facility on Stashii that you are not using. You can also rent out your tools on SpareToolz.

8. Investing in royalties – With platforms like Royalty Exchange, you can buy royalties and earn from them for a period of time. For example, Jay-Z and Alicia Keys’ “Empire State of Mind” earned $32,733 in royalties over the past 12 months. This song’s royalties on RoyaltyExchange recently sold for $190,500. Assuming the song keeps on earning $32,733 per annum, the investor will earn $327,330 over the next 10 years or a return of 11.2% per year for the next decade.

9. License your creative works – Are you in the creative industry? If so, you can license your music, art, videos, photos, and any other creative items to licensing companies.

10. Start a YouTube channel – YouTube is one of the most desired and lucrative platforms for creators. To start a YouTube channel, identify your niche, and your target audience, and leverage your skills and know-how to create entertaining, educational, and inspiring videos. YouTube requires consistency, effort, and patience to grow. When it does, it provides you with a number of passive income streams such as ads, affiliate links, and sponsorships. It also gives you the ability to build a brand and a community.

See also: How to Live Your Best Life

Niche passive income ideas

11. Sell blank books – Not able to create an ebook? Don’t worry. You can also create blank books such as journals, drawing books, and diaries. You can use AI tools such as MidJourney to create amazing and attractive designs that will help you sell.

12. Creating an app – The best way to earn passive income is to create something that is of value to someone else. You can create an application easily with the aid of AI and monetize it with ads, a subscription, or a one-time fee.

13. Affiliate marketing – You can leverage your online presence on social media platforms to become an affiliate for brands and earn. Use platforms such as ClickBank and individual company affiliate programs to secure affiliate deals. Companies such as Shopify pay up to $58 for each referral which is a decent amount.

14. Buy and sell domains – Do you foresee the next tech boom? Right now .ai domains are selling off the shelves. Buying cheap domains and retaining them is one way to earn passive income. Note that it is very speculative and returns are not guaranteed. To improve your odds of success, you can build each domain and then flip the domains for a profit.

15. Use passive income apps – Apps such as FundRise, InboxDollars, and Dosh enable you to earn passive income while doing little to nothing.

Conclusion

Passive income takes time and effort to build. In some cases, it also requires skills, experience, and money. The best approach to making passive income is by leveraging what you already know and what you have to get what you want. With determination, education, and the willingness to take calculated risks, the possibilities for generating passive income are endless. I highly recommend creating your own digital products since the earning potential on your own products is limitless. The power to create a life of abundance and security is in your hands.

I hope the above passive income ideas help you on your journey to financial freedom. If you loved this article, consider subscribing to my FREE weekly newsletter here. The newsletter contains one tip to make you better, one tip to make you wealthier, and a FREE Wealthy Guide that shares the habits of high achievers.

See also: How to Live Your Best Life

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