Passive income is money you continue to make even when you’re not actively working or investing time. It may not seem like much, but every bit helps. Instead of spending countless hours working your job and investing more time into your business, this income allows you to make money without expending more time or energy. 

Passive income is a great way to monetize something that’s not directly related to your main career or business. What exactly is passive income? It’s any earnings you receive from something other than an active job or direct investment. 

It could be from real estate, stocks, bonds, mutual funds, trusts, annuities, and many other things. There are numerous ways to earn passive income. Let’s take a look at some of the most common ones below:

Receiving Income from Investments

Investments are a prime example of passive income. Investing your money in stocks, bonds, or funds is a great way to make money without expending tons of time or energy. There are no set hours for a stock to go up, and you don’t have to be there to make it happen.

 Investing in any sort of fund or stock market is the easiest way to passively make money on a regular basis. You won’t be getting rich with this method, but you’ll be able to make a steady income. 

Remember, active income is what you get from working a job, and passive income is anything you get from investing. The ideal situation is to have both types of income coming in.

Receiving Income from Businesses You Own

Income from Businesses

Another prime example of passive income is when you own a business. If you’re the owner, you will be taking the majority of the profits. The goal of a business should be to make money while you sleep. This is an example of passive income because even when you aren’t actively managing the business, you’re still making money from it.

 Investing in a franchise business is a great way to get started with passive income. Franchises tend to have a low upfront cost (often less than $50,000) and a low ongoing cost. You’ll make money from the initial investment and from the profits of the business. 

This is a great example of passive income because you don’t have to be there to make money from it. You can hire employees to manage the business for you while you go about your life.

Earning Income from Real Estate

Another great example is real estate investing. If you’re an investor who buys and sells houses, this is a prime example of passive income. You don’t have to be actively managing the properties or tenants, but you will be taking the profits from each sale. 

And they can be pretty lucrative. If you want to make money from real estate, you can either buy a property or become a real estate investor. As an investor, you don’t have to worry about the day-to-day details of owning a property. Instead, you’ll buy a property and hire a property manager to oversee it for you.

 You will then get a percentage of each rent payment. This is a great example of passive income because you don’t have to be actively managing the property. You can simply receive a cut from each rent payment.

Earning Income from Involving Other People

Earning Income


One more passive income idea is to involve other people in your business. This could include creating an app that pays people to use it or creating a product that other people sell for you.

 You don’t have to be actively involved in the day-to-day operations of these ventures, but you will be earning a percentage of each sale. The easiest way to do this is to create a membership site or online course. You teach people your knowledge, and they pay you a percentage of each sale. 

This is also a great example of passive income because you don’t have to be actively involved in the process. You can simply collect a percentage of each sale.

Tips for Earning Passive Income

  • Get educated. Before you jump into any of the above-mentioned methods, make sure you understand how they work. Many of these methods require extensive knowledge and research before you jump in.
  • Choose your methods wisely. Just because a method is passive doesn’t mean it’s the best option for you. You’ll have to take into account the upfront and ongoing costs of everything.
  • Diversify your income. The more methods you have for passive income, the less your overall earnings will be affected if one or two methods fail. You don’t want to put all your eggs in one basket.
  • Be patient. Earning passive income isn’t something that happens overnight. It takes time to build up a business and make profits. Don’t expect to make a ton of money right away.
  • Be willing to take risks. Earning passive income often requires taking some risks. This could include investing in something volatile or hiring people to help you run a business.


Passive income is a great way to make money in your free time. You don’t need to spend a ton of time and energy managing your business or working a 9-to-5 job. The most important thing is to find a business that you can really grow into the future. 

With this type of income, you can make money while you sleep without having to be there to manage the business. Or you can take a break from your day job, invest your time, and make money. It’s up to you to find the right business and implement it correctly. 

The goal of this article is to provide a brief overview and explanation of passive income and help clarify some of the terms associated with it. Now that you know what passive income is, you can figure out how to earn it and make more money without having to work.

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.