Times are tough—rising inflation, stagnating wages, and the increasing cost of living are stretching bank accounts thin. If you’ve found yourself thinking, I need to make more money, you’re not alone. Fortunately, passive income offers a way to boost your wealth outside your nine-to-five job. But before we dive into the ideas, it’s important to understand what passive income really means.
What is passive income?
The focus here is on the word passive, or having things happen to you. So, in the context of passive income, you’re receiving money without doing anything. However, this is a bit of a stretch, as getting started usually involves an investment of money, time, or both.
This investment can vary greatly depending on your passive income idea. For instance, while some ideas require upfront capital, it is possible to generate passive income with no initial funds. The catch being that this path often requires you to have experience, a skillset, or be willing to learn something new. Ultimately, while the start can be tough, it’s about earning money, with little day-to-day involvement or management. With that basic understanding, let’s get into the top passive income ideas for 2024.
10 passive income ideas in 2024:
1. ETFs
2. Fractional Bonds
3. High-yield savings accounts
4. Dividend stocks
5. Online real estate
6. Private equity
7. Affiliate marketing
8. Invest in loans
9. Crypto staking
10. Money market funds
11. Selling stock photography
12. Renting out items you own
13. Create and sell digital courses
14. Cashback and rewards apps
15. Budgeting for passive income
1. Exchange-traded funds (ETFs)
ETFs are a popular option for those looking to generate passive income. They provide an easy way to invest in a diversified portfolio of assets, such as stocks, bonds, or commodities. Unlike actively managed funds, ETFs usually track an index (passive management), resulting in lower management fees, which can lead to higher net returns for investors.
What makes ETFs particularly effective for passive income is that they allow you to invest in a fund that already contains a broad selection of stocks. For example, if you’re interested in tech companies like Apple, Meta, and Nvidia, rather than choosing individual stocks, you can invest in a tech ETF. This not only simplifies the process of diversifying your investments across multiple companies, reducing risk, but also makes managing your portfolio easier and more cost-effective.
ETFs are typically purchased through a broker, acting as an intermediary between you and the funds. A brokerage account is essential for accessing ETF investments, whether through online platforms or traditional in-person services. Many platforms offer easy access to ETF investments, and when deciding which one to pick, it’s best to choose an easy-to-use platform that gives you a hands off approach. With Mintos Core ETFs, you can diversify your portfolio into pre-selected funds that align with your risk tolerance, all while benefiting from zero commission fees. If you’re interested in learning more about ETFs, check out our “What are ETFs?” article.
2. Fractional Bonds
Fractional bonds are bond-backed securities. They are called “fractional” because they offer access to small parts of a larger underlying asset that an investor might otherwise not be able to afford. Investors can simply allocate funds to fractional bonds, which are typically managed passively by tracking an index or a predefined selection of bonds. This hands-off approach eliminates the need for constant monitoring and trading, aligning with the passive investing philosophy of minimizing active involvement in investment decisions.
Fractional bonds are an attractive choice for people looking to increase their passive income due to bonds typically paying regular interest, known as coupon payments, which can provide a reliable income stream. This type of asset can be a simpler path to investing for beginners, as they are typically less volatile, offering a predictable income flow. There are also platforms that provide a convenient and affordable way to get exposure to specific bonds and build a well-diversified investment portfolio. Platforms like Mintos make it easy to invest in fractional bonds, helping investors build a well-diversified portfolio tailored to their risk tolerance and passive income goals. You can get a better understanding of bonds here.
3. High-yield savings accounts
If you have money sitting idle, whether in an emergency fund or a regular bank account, it’s worth considering a high-yield savings account. Instead of letting your funds do nothing, or worse lose value due to inflation, you can keep them in an account that earns more interest over time. High-yield savings accounts often offer higher interest rates compared to traditional savings accounts, providing a steady stream of passive income without the need for active management or exposure to high risk.
Many of these accounts compound interest daily or monthly, which can accelerate the growth of your savings. For those looking to earn passive income with immediate access to their funds, high-yield savings accounts are an excellent option. However, it’s important to shop around for the best interest rates, as they can vary between accounts and change over time. Additionally, some accounts allow flexible withdrawals and deposits, while others may lock in your funds for a fixed period. It’s a good idea to do some research and choose the one that fits your financial needs and goals. Our ultimate guide to cash investments is a good place to start!
4. Dividend stocks
Dividend stocks are shares in companies that distribute a portion of their profits to shareholders as dividends. This is a popular strategy for generating passive income because these payments provide a regular income stream, often on a quarterly basis. The key benefit is that simply owning the stock qualifies you for dividend payouts.
You can either take the dividend payouts as income or reinvest them to purchase additional shares, which compounds your returns over time and can further boost your passive income. However, purchasing stocks requires understanding the companies you’re investing in by analyzing their financial performance, statements, and market standing. Once you understand how stocks work and do your research, you can open a brokerage account, fund it, and start buying shares.
5. Online real estate
Passive real estate investing has become a hands-off way to generate income without the hassle of managing properties, maintenance, or dealing with tenants. Surprisingly, there are options for entering real estate investing that don’t require a large upfront financial commitment, like a mortgage or loan. Vehicles such as real estate investment trusts (REITs), crowdfunding platforms, and fractional property ownership provide access to real estate markets without many of the traditional barriers, all managed by experienced professionals. A convenient way to take part in real estate investments is with Mintos real estate.
The main appeal of passive real estate investing is its simplicity and efficiency. Investors supply the capital, gaining exposure to real estate opportunities, while professionals manage the day-to-day operations.
Many online real estate investments are structured to deliver regular income distributions, such as rental income or interest payments from real estate debt. This creates a steady stream of passive income without needing to manage properties directly. Additionally, these investments offer the potential for capital appreciation if the value of the property increases, meaning investors can achieve higher returns when they exit.
6. Private equity
Private equity investments are typically reserved for experienced investors with substantial liquidity. These investments involve funds that directly invest in private companies or buy out public companies, often leading to their delisting from stock exchanges. Private equity is generally a long-term investment, illiquid, and higher risk, making it accessible mostly to accredited or institutional investors. The goal is to generate significant value and foster growth before achieving a profitable exit.
While private equity may not be the most accessible option for passive income or regular payouts due to its illiquid and high-risk nature, it can offer substantial returns. In some cases, periodic income distributions also contribute to an investor’s passive income stream. The success of the investment depends on the performance of the business, making private equity attractive for high-risk, high-reward investors.
7. Affiliate marketing
While affiliate marketing is often seen as one of the least passive income streams, it can still be a valuable way to earn money, especially if you already have a large following or are actively building one. Success requires growing and maintaining your audience, but if you have social media skills and a dedicated following, securing brand sponsorships or sharing affiliate links can provide an additional income stream.
Affiliate links allow you to share promotions or discounts with your audience, earning commissions when they make purchases through your referral. It’s an excellent way to generate passive income with no initial funds, as you’re essentially promoting other companies’ products and earning a share of the sales. This can be done through a blog, social media, or a website focused on product reviews and recommendations.
Although it takes initial effort to create content and build partnerships with brands, over time, affiliate marketing can become
8. Loans
Investing in loans can be a great way to diversify your portfolio and earn passive income. Individuals and businesses seek financing from lending companies, which issue loans and partner with platforms to offer loan-backed investments to investors. As long as borrowers make timely repayments, investors can generate passive income while providing borrowers access to needed financing.
Loan investing has gained popularity as an alternative to traditional stocks and bonds, offering potentially higher returns. However, with higher returns comes increased risk, so it’s crucial to choose a platform that aligns with your risk tolerance and goals. Diversifying across different loan types, like personal, business, secured, and unsecured, can help reduce risk and enhance returns. Platforms like Mintos offer tools to spread investments across multiple loans and provide auto-invest features for a hands-off management way to generate income. Find out more about investing in loans with Mintos here.
9. Crypto staking
Crypto staking is a way to earn passive income by participating in the operation and security of a blockchain network. It involves holding and locking a certain amount of cryptocurrency in a wallet to support the network’s activities, such as validating transactions. Staking allows you to earn regular rewards, somewhat like earning interest from a savings account or receiving dividends from stocks.
These rewards are distributed at intervals set by the network, providing a potential steady stream of passive income. Beyond staking rewards, there is also the possibility that the underlying cryptocurrency appreciates in value, adding another layer of potential gains. This combination of income and capital appreciation makes staking an appealing option for some investors.
However, staking does come with significant risks. In many cases, you are entrusting your cryptocurrency to a validator responsible for securing the network, and if they are penalized for failing to validate transactions properly, you may also face losses. Additionally, the cryptocurrency you stake is locked up for a period, meaning it can’t be sold or traded during that time, leaving you exposed to market volatility. Therefore, it’s important to carefully assess the risk involved before staking.
10. Money market funds
Money market funds generate passive income by investing in short-term, high-quality debt securities, offering a low-risk way to earn interest on cash reserves. Investors purchase shares in the fund, which is used to buy secure debt, such as government or bank-issued securities.
These funds are designed for liquidity, capital preservation, and modest returns, making them ideal for conservative investors seeking a safer income-generating option. The interest earned from the securities is distributed to shareholders as dividends, typically on a monthly basis. Many funds also allow for automatic reinvestment of dividends, which can compound earnings over time.
While money market funds provide less income than stocks, they offer much lower risk, making them an attractive alternative for steady passive income, often yielding more than a typical savings account. With Mintos Smart cash, you can earn higher interest than most regular savings accounts, and also flexibly deposit and withdraw cash when you need to.
11. Selling stock photography
If you’re creative and have a passion for photography, illustrations, or filming, you can upload your work to platforms that provide stock photos, footage, and graphics to earn money. While not the most passive form of income as it requires equipment like a DSLR camera or high-quality smartphone, once you’ve uploaded your creations, they can be purchased repeatedly. Beyond the initial work of creating and uploading, the income becomes passive.
This option is particularly appealing for those who enjoy photography or filming as a hobby, as it allows you to potentially earn income from something you already love doing. However, it does take some research to get started, such as choosing the right stock photography platform, understanding the upload specifications for photos, graphics, or films, and learning what kinds of content perform best.
It’s important to remember that your images will be competing with thousands of others, so making sure your work is easy to find and stands out is key to success. Additionally, you’ll need to be mindful of copyright issues if you’re photographing other people’s work, and model release forms are required if people are featured in your photos or films. Once you’ve invested the time and effort into understanding the process, selling stock photography can be a great way to earn passive income while doing something you enjoy.
12. Renting out items you own
If you have useful equipment like power tools, a car you don’t use often, extra storage space, or even a parking spot in a busy area, you could be sitting on a potential source of passive income. Various platforms and apps make it easy to rent out these items to people who need them. Additionally, if you have a free parking spot in a high-demand area, or are fortunate enough to have additional storage space you aren’t using, then renting these out is also an option for more income. While there’s an initial effort required such as taking photos of the items, listing them, and being available for pickups or returns, the process becomes fairly passive once it’s set up.
There are also risks to consider, such as items not being returned, but many platforms offer insurance or protection plans to cover potential losses. It’s worth exploring these options to ensure your belongings are secure. This idea works best if you have items or spaces that people want. As a nice bonus, beyond earning money, you’re contributing to the circular economy by helping others avoid purchasing items for one-time use.
13. Create and sell digital courses
One of the main ways to make passive income online is by creating digital courses to sell on various platforms. This passive income idea requires expertise or a skill set that people are willing to pay for. While popular areas like marketing, investing, or data analytics are in demand, there’s an audience for almost anything if you find your niche. Whether you’re an expert gardener or great at upcycling and flipping furniture, the bottom line is, if you’re good at something and can learn some basic filming and editing skills, you can create a course around it. Once uploaded to a platform, the course can generate income for a long time, as it can be purchased multiple times with no extra effort from you.
However, the online course market has become competitive, so it’s important to learn how to position and market your courses effectively. The good news is, the more effort you put into creating high-quality, engaging content, the better your chances of earning more and even building a following. This is where the line between passive and active income blurs, as there’s a significant upfront investment in developing the course, filming, editing, and promoting it Additionally, acquiring these in demand skills can take years. Still, once the course is live, you can start earning passive income, and the returns can be substantial.
14. Cashback and rewards app
One of the easiest ways to earn extra cash is by using cashback apps. These platforms allow you to earn rewards on your purchases, and some store-specific apps even offer discounts. It works by cashback apps partnering with retailers to give you a percentage of your spending back as cashback, points, or vouchers. With minimal effort, you can earn passive income while shopping for things you already buy, such as clothes, groceries, or electronics.
To get started, search for legitimate cashback and rewards apps, and check reviews to ensure they’re trustworthy. Many apps also offer a referral bonus, so if a friend uses the app, you both can benefit from signing up together. After registering, simply shop as usual when these apps have deals or promotions, and start earning rewards. To maximize your cashback, it’s worth using multiple apps. While it requires a bit of research and setup at first, once that’s done, all you need to do is keep an eye on available offers and make your purchases.
15. Budgeting for passive income
financial success. By creating a solid budget, you can track your income and expenses and free up funds for investment opportunities. Whether it’s investing in dividend stocks, peer-to-peer lending, or setting aside money for real estate, a good budget ensures your money works efficiently for you.
If you’re not sure where to begin, the first step is to track your spending for a month. You can do this using budgeting apps or even create your own spreadsheet. The point is to know where your money is going and where you can cut back to increase your available funds to allocate to your passive income ideas. With a well-structured budget, you can make sure your money is being used to maximize potential returns, helping you grow your wealth passively over time.
Invest and earn passive income
Establishing passive income streams is an empowering strategy for achieving financial independence and securing your future. Whether you’ve chosen to invest in real estate, loans, create digital products, or any other avenue, the key is to start small, learn continuously, and remain patient as your investments grow over time.
Mintos offers many options for generating commission free passive income. Grow your money with a unique mix of alternative and traditional assets. Invest in loans, Fractional Bonds, and ETFs within a single platform.
Disclaimer:
This is a marketing communication and in no way should be viewed as investment research, advice, or recommendation to invest. The value of your investment can go up as well as down. Past performance of financial instruments does not guarantee future returns. Investing in financial instruments involves risk; before investing, consider your knowledge, experience, financial situation, and investment objectives.
