Earning money while you sleep sounds like a dream come true. Who wouldn’t want to wake up to find extra cash in their bank account, with little to no effort required?
The good news is that building passive income streams is entirely doable if you’re strategic and willing to put in some upfront work. With the right passive money-making ideas, you can set up various channels to make money 24/7.
In this in-depth guide, we’ll explore 17 practical ways to make money while you sleep. Implement even a few of these strategies, and you’ll earn cash around the clock.
What is Passive Income?
Before diving into the specifics, let’s ensure we’re clear on passive income.
Passive income is money that continues to come in regularly without you having to clock in hours actively working. It’s income generated from ventures, products, or investments that earn cash even when you’re sleeping or on vacation.
For example, money earned from a rental property you own is considered passive income. You put in work upfront to buy the property and get it rental-ready. But once you have tenants moved in, rental payments roll in with little effort on your part.
Building passive income streams takes more initial effort and often money upfront. But once up and running, these cash flow channels deliver long-term hands-off income. That makes passive income appealing – it frees up your time and earns you money around the clock!
Best Ways to Make Money While You Sleep: Build Passive Income Streams and Earn Cash Around the Clock
Now, let’s get into the 17 best ways to make money while you sleep.
1. Launch an Online Business
One of the best ways to earn passive income is to start an online business. When set up correctly, online companies can earn money with little maintenance. Here are some online companies you can start to make money:
- Start a blog – Choose a topic you’re passionate about and start a blog. Build traffic through SEO, social media, and consistency. Monetize through advertising, affiliates, and digital products.
- Create an online course – Record video lessons and bundle them into an online system that students pay for. Host and sell your system on platforms like Teachable or Podia.
- Sell ebooks or guides – Write an ebook, guide, or checklist around your expertise and list it for sale on your website. Promote it on social media once created.
- Launch an ecommerce site – Create an online store selling products in a niche you know well. This takes more upfront effort but leads to passive income.
- Build a membership site – Offer exclusive content, tools, courses, or other benefits to which members pay for monthly/yearly access. You earn recurring passive income.
Starting an online business takes consistent work upfront but eventually generates passive primary income with minimal maintenance needed. The key is building an audience and assets that increase sales and earnings over time.
2. Invest in Dividend Stocks
Investing in dividend stocks is a more hands-off way to earn passive income.
Dividend stocks are companies that pay shareholders a portion of profits quarterly or monthly. You buy shares, become a part-owner in the company, and earn passive dividend payments over time.
The key is choosing established, financially stable companies that steadily pay dividends. Build a diversified portfolio across market sectors so you have a steady stream of dividends coming from different sources.
With dividend reinvesting over decades, even modest investments can snowball into a sizable source of passive income. Just invest money you won’t need access to anytime soon.
3. Rent Out a Spare Room, Car, or Parking Spot
Renting out your assets and space is an easy way to generate passive income with minimal effort. Here are some options:
- Rent out a spare room – List extra bedrooms in your house on Airbnb or as a long-term rental. You earn rental income from guests staying in your home.
- Rent out parking spaces – If you live in a high-demand area, rent out parking spots in your driveway or property.
- Rent out your car – List your car on sites like Turo whenever you’re not using it. You can make up to $800/month!
- Rent out storage space – If you have extra lockers, attics, basements, or garages, rent them out as storage units.
The key is ensuring you follow local laws and regulations around these rentals. But once up and running, collecting rental payments each month takes minimal effort. Easy passive income!
4. Create Information Products
One of the most popular ways to make passive income online is by creating informational products like:
- Online courses
- Ebooks
- Video training guides
- Checklists or templates
- Mobile apps
These make great passive income sources because they’re digital products. Once you create them, you can sell them repeatedly without any extra work per sale.
For example, an online course takes many hours to create. But after students enroll, you earn passive income each time it’s purchased since no added effort is required.
Focus on providing high-quality content and solving people’s problems, and your information products will earn you money 24/7.
5. Invest in Real Estate
Investing in real estate can be a great way to generate mostly passive income. There are a few different options:
- Buy rental properties – This does require ongoing property management. But if done right, rental income can be pretty passive.
- Invest in real estate trusts (REITs) – You invest in commercial real estate without buying property. REITs pay dividends.
- Try real estate crowdfunding – You pool money with others to invest in properties managed by a company. More passive than buying directly.
Real estate investing does require significant upfront capital. But over the long run, rental payments lead to mostly passive, diversified income.
6. License Your Creative Work
If you have creative skills, you can earn royalties by licensing your work to others. This includes:
- Photos
- Videos
- Music
- Website templates
- Graphic designs
- Fonts
- Apps/software code
Upload your creative work to a licensing site like Getty Images or Envato. Set your rates and license terms. Then, earn passive royalties each time someone purchases the rights to use your work!
It takes consistency to build a portfolio of licensing assets, but over time, this can result in a nice stream of global passive earnings.
7. Build an Audience on YouTube, Instagram or TikTok
Growing an engaged audience on major social platforms can unlock multiple passive income streams:
- YouTube ad revenue – Earn a slice of the ad revenue from your YouTube videos. This scales up the more views and subscribers you have.
- Sponsored posts – Get paid by brands to post about or feature their products. Aim for $100-500+ per sponsored post.
- Affiliate marketing – Promote relevant products and take a commission on sales you drive. Great with product unboxings or reviews.
- Sell merchandise – Design shirts, mugs, or other merchandise and sell to your audience. No inventory or shipping to manage when you use print-on-demand.
Social media does require consistently creating content. However, monetizing an audience generates passive primarily earnings. And these platforms already have billions of built-in users!
8. Invest in High-Yield Savings Accounts
This passive income strategy couldn’t be more straightforward: Put your money in a high-yield savings account and watch it grow!
Look for established banks and credit unions offering higher interest rates than the national average. I use CIT Bank (rates vary from 2.15-2.75% APY) and Ally Bank (over 2% APY).
You won’t get rich with a high-yield savings account. But it takes zero effort to earn some interest on your money that adds up. Easy, hands-off passive income.
9. Rent Out Your Car When Not In Use
Apps like Turo and HyreCar make turning your car into a passive income source easy when you’re not driving it.
You list your car details and availability on the app. Interested renters book your car via the app and pay you. Many hosts easily earn $500-800/month!
Of course, you’ll want to prepare your car to handle the wear and tear of renting. But then it takes minimal effort to earn rental income from a major asset you own.
10. Invest in Passive Income Apps
If you have some money to invest but limited time, consider passive income apps that generate returns with no work from you:
- DiversyFund – Invest in rental properties managed completely by DiversyFund. Historically, 15-20%+ returns.
- Fundraise – Invest as little as $10 in commercial real estate projects. Historical returns are around 8-12%.
- Lending Club – Invest in loans issued to vetted borrowers. Earn interest payments each month.
- Groundfloor – Crowdfunded real estate lending. Typical returns of 6-14% per year.
- Acorns – Automated micro-investing app. Just link cards and let your spare change be invested.
These apps handle all the work, like property management, loan underwriting, and portfolio maintenance. You invest and collect returns!
11. Monetize a Blog Through Affiliate Marketing
Affiliate marketing is a great way to earn passive income from a blog.
You share relevant products, services, or resources on your blog. Have your readers click special tracking links and make purchases. Then, you earn a commission on those sales, typically 5-30%.
Top affiliate platforms include Amazon Associates, Impact, ShareASale, FlexOffers, and Rakuten. Focus on recommending products you genuinely like and solve people’s problems through your content.
Over time, affiliate earnings from even one blog can become a meaningful stream of monthly passive revenue.
12. Earn Royalties from Books, Music, and More
Royalties allow creatives to earn passive income from their work being purchased and consumed:
- Books – Publish your book on Amazon through Kindle Direct Publishing and earn royalties per copy sold.
- Music – Distribute your songs through Spotify and Apple Music. You earn tiny fractions of a penny per stream.
- Inventions – Patent your invention ideas and license the patents to manufacturers. Earn royalties on sales without production.
- Scripts/screenplays – When your scripts get used in movies or TV shows, you earn production royalties.
Royalties require immense success before generating sizable passive income. But every stream helps, and over time, royalties can add up.
13. Launch a Podcast
Podcasting continues to grow in popularity, and while it does require consistent publishing of episodes, multiple income streams stem from building an audience:
- Sponsorships – Match your podcast topic to relevant brands. Charge for sponsor mentions.
- Affiliate marketing – Recommend products/services and earn commissions.
- Paid subscriptions – Offer exclusive bonus content or ad-free episodes for a monthly fee.
- Merchandise – Sell branded shirts, mugs, and other swag.
Regular podcasting is rewarding if you pick a niche you’re passionate about. And there are lots of ways to monetize your listeners!
14. Invest in Real Estate Notes
Real estate notes allow you to invest in the mortgage of a property rather than buying the property itself.
This means you earn interest on the note over time as the borrower pays off the mortgage. There’s no need to own or manage the property physically.
You can buy existing notes from sellers through platforms like NoteInvestor. Or provide financing for real estate transactions in return for earning interest on the note.
Investing in real estate notes generates mostly passive income from the interest, with far less work than owning rental properties directly.
15. Invest in Apps or Websites That Pay Dividends
You can invest in apps and websites similarly to stocks. When the company profits, you earn a share through dividends. A few examples:
- Slice – Invest in delivery apps and marketplaces. Historical 15%+ dividends.
- MainVest – Invest in small local businesses. Earn monthly dividends as they grow.
- BuyShares – Invest in websites and internet companies. Earn dividends from their profits.
- Republic – Invest in startups and private companies before they go public.
This does come with risk as the companies could fold. But dividends flow in regularly when you pick winners, mainly providing passive income. Worth considering if you don’t mind some risk.
16. Sell Informational Products on Amazon
Amazon’s Kindle self-publishing platform allows you to earn royalties passively from informational products like:
- Kindle ebooks
- Print books published through KDP Paperback
- Audiobooks through ACX
- Courses and videos
The key is targeting popular search topics and keywords so your products surface high in Amazon’s massive market of buyers. This does involve some marketing and optimization. But once your products gain traction, residual sales add up.
You collect monthly royalties from Amazon handles all the publishing, printing, and distribution. Pretty passive!
17. Start Dropshipping or Print-on-Demand
Dropshipping or print-on-demand allows you to sell products online without dealing with inventory and shipping yourself. You take orders and have a supplier fulfill the orders from their warehouse.
This takes consistent work to find trending products, create listings, and market your store. But once operational, you earn commissions on each sale with minimal effort.
Dropshipping or selling print-on-demand products like shirts, mugs, and phone cases is a popular hands-off model that can earn passive income.
Let’s Get Serious About Passive Income
Earning substantial passive income requires focus, consistency, money to fund ideas, and patience to let your streams grow.
But with time and commitment, you can build income channels that make money while you sleep. Start with a few ideas that fit your interests and assets, do your research, and begin creating passive income sources steadily.
The satisfaction of persistently building up passive earnings is so rewarding. And soon, you’ll be making serious money around the clock!
What’s your favorite passive income strategy from this list? Are there any suitable methods I’m missing? Let me know in the comments below!