9 Best Passive Investment Ideas to Make Money

Passive income allows an investor to make monthly or quarterly with little ongoing asset management. Passive income is what a lot of people strive for because it makes making money easy. That said, passive investment ideas that work are few and far between. Many investments like this require some micro-managing but far less than the average investment portfolio and far less than someone engaging in day trading trying to make a quick buck.

Here are some passive investment ideas that may be your way in.

Idea #1: High-Yield Savings Account

A high-yield savings account with a good interest rate is a smart passive investment. You can set up your bank account to automatically move a certain amount to your savings account with every paycheque. This is a way to save and earn interest without thinking about it.

There’s no risk of losing your money, either. It sits there until you need it. It’s arguably the ultimate passive investment strategy if you’re purely looking at saving money.

Idea #2: Pursue Real Estate Investing

Mortgage investments offer many benefits. It works like real estate investing. Having monthly rental income means you can pay off your mortgage for free while earning income. Short-term renting is available through platforms like Airbnb.

Long-term renting is easier and provides predictable returns. You can even hire a property management firm to manage the property if you want it to be a purely passive investment.

Idea #3: Buy a Local Small Business

Buy a business and pay a manager to manage it. Total hands-off passive investing can generate cash flow for you if it’s already an established company. That said, the wrong business can mean losing money and requiring much time and energy to manage.

As a bonus, and something to keep in mind, is that you may be able to gain a bank loan to purchase a business which uses less of your own money.

Idea #4: Buy a Website or Blog

A subcategory of buying a small business is buying a blog or website generating strong clicks. When you buy a website, you can opt to actively manage it or pay someone else. You earn income off advertising and sponsorships and don’t even need to get up from your seat.

This may also be a way to engage a passion or hobby and, for the right person, can be a lot of fun while also earning passive income so long as the investment is properly managed.

Idea #5: Invest In Dividend Stocks

Dividend stocks provide regular payments quarterly to you. The more shares you own, the more you’re issued in the form of a dividend. There are dividend-yielding individual stocks, exchange-traded or ETFs, and mutual funds.

You earn passive income when your investment makes money. This will not make you rich, but it is a way to earn income with a long-term investing strategy.

Idea #6: Offer Peer-To-Peer Lending

Like banks and financial institutions can lend money to borrowers, so can you. Offering personal loans to borrowers, you earn on the interest paid back.

While there’s always a risk of borrower default, one can start by offering micro-loans or conducting background checks on borrowers. There are also online platforms wherein peer-to-peer lenders can congregate and receive guidance on best practices.

Idea #7: Invest In Index Funds & ETFs

There is no hands-off way to invest in individual stocks with minimal risk. However, index funds and ETFs offer a way to invest in collections of individual stocks at low-risk long-term. You invest once and don’t have to actively manage anything. For example, index funds are tied to a specific index, i.e. the S&P 500.

A financial advisor can aid in selecting the right type of index fund and ETFs that will maintain your investment and net you a strong return in the years to come.

Idea #8: Sell an Online Product

Another passive investment idea is to sell an online product. This is something you make once and can sell repeatedly to buyers. Think of online courses, ebooks, workshops, or stationery. Look online at shops like Etsy or Amazon for possible ideas on products you may be able to make, create a website around, and sell without having to do much.

While this takes a little more time to get going, once ready, this is a strong passive income idea that can be interpreted as an investment.

Idea #9: Turn a Hobby Into a Business

If there is a hobby you enjoy doing and would normally do on your own without the ambition of targeting a financial profit, think about putting it out there and see if you can sell it in a way that nets revenues.

Activities like starting a YouTube channel, making an app, learning how to code a website, woodworking, music-making, and other hobbies and activities may allow you to do something you deeply enjoy while earning passive income from what you’d be doing anyway.