How to Generate a Passive Income

Passive Income, a dream for everyone. Passive Income is basically when you have an incoming stream of money without working for it. Many people do not know how to generate a passive income and in this article I want to introduce you to a few ideas to create one.



Passive Income

The perfect definition of passive income is: a regular income of money without any effort to maintain it. Unfortunately achieving the zero effort is almost impossible but many ways of creating a passive income require very little maintenance.

A passive income usually requires one of the following:

  • Initial investment of money
  • Initial investment of time

The idea of passive income is based on an initial investment to generate a regular income. You plant the seed to harvest the fruits.

Many ways of achieving passive income are also ways of making money online, you can read more about it in the article How To Make Money Online.


Why having a Passive Income?

Sorry, this is a very dumb question. The reasons are different from one individual to another. Someone may want a passive income just to increase their total income, someone else may want to replace their “salary” with a passive income.

A Passive Income could be the way to, for example:

  • Have a more comfortable retirement
  • Retire young
  • Pay for extra holidays
  • Buy a car, or a better one
  • Pay your mortgage
  • Afford to have a part-time job and have more free time
  • Abandon the life of employee
  • Travel the world

The way you spend it is your business, what I want to show you is just how you could achieve it.


How to Generate a Passive Income

There are several ways to generate a passive income, some require some effort from you to start and some require money to invest. Hopefully you can find a suitable idea for you, depending on your skills and capital available.

Real Estate


One of the most popular ways of creating a passive income is invest in properties. You buy a house or any other property and you rent it out. This will generate a regular income and if the market is going well it will also increase in value.

The drawback of invest in properties is the requirement of a starting capital.


Lend Money for collect Interests

Maybe you have some investment capital, or savings, and they are not earning any interest in your bank account. You can lend some money to other people and get paid an interest. This method has become pretty easy and profitable nowadays, the internet is full of social platforms where people are looking for investors and lenders.

Be careful when lending money as some platforms does not guarantee you principal and you may have losses, diversify is the key to limit the risk.


Write a Book

knowledge-1052010_640Writing a book is an excellent way of making a passive income. You will have to put some effort to write it first but once a book is finished, bang, you will have a passive income from the sales.

To minimise the costs you can write an eBook and you won’t even need a publisher, just a platform to sell it.

YouTube Videos

If you can help or entertain people then you can publish videos on YouTube. If one of your videos goes viral you will get thousands of visits and you will earn money from advertising. Once the video is online you won’t need any more effort, hence, passive income!


Create an Online Course

Anyone can be a teacher if he/she knows about something, you included! If you are an expert in a topic/subject you can create an online course. People will pay to follow your course and you will cash in. One of the most popular online courses portal is, you can check there for some ideas.




Create a Website or Blog

Maybe the most popular way of create a passive income with no starting capital is to create a blog or a website. The thing here is that it will require some initial effort from you to setup and create everything and probably some ongoing maintenance. It won’t be a full time job if you don’t want to!

You surely have a hobby, an interest, or you are expert in something. You can earn money from your experience and hobby, you just need to know how. The basic logic is:

  • Create a website or blog
  • Drive people to your website
  • Earn from advertising

There are alternative to this and other ways of monetising a website but it would be too long to explain in this article. You can find out more about it through Wealthy Affiliate, they are professional in the field (and they helped me out as well).


Affiliate Marketing

Affiliate Marketing is also based on a website or blog but it is so huge that it deserves a separate mention. Once you setup your website or blog you can promote other products and earn commissions on the sales you drive. This requires the same time and effort required to maintain and promote your website and can become passive once the website is setup.

Wealthy Affiliate is your friend here as well.


Invest in Stocks

If you have some savings and an investing capital you could buy stocks. Stocks will pay you a dividend if the company is going well and your shares could also increase in value.  Remember that buy and hold stocks is different from trading, trading implies buy and selling in order to make a profit from the difference in value.


Invest in Index Funds

Invest in Index Funds is very similar to invest in stocks. Index Funds are baskets of stocks grouped by different categories, this could be the industry, geographical area, country and so on. The income generated by index funds is due by the increased value in the index (if the market goes in your favor).

eToro Social Platform has included Indexes in their offering, you can check it out with the following image/banner.



Automated Trading

Automated trading is one of my favourite ways, in fact I built a website about that and you are browsing it. Automated trading is when you make your computer or another service to trade for you, especially with Expert Advisors. Expert Advisors are software that will buy and sell stocks, indexes, or currencies without your intervention.

Other than Expert Advisors you can also join a Social Trading Platform or subscribe to a trading signal.

Before starting automated trading though I strongly suggest you to learn how to trade yourself, or at least how trading works. To know more read the articles How to Make Money with Forex and Your Path to Make Money Trading the Forex.


Vending Machines

This can be passive income as well, you setup the service, little maintenance and here we are, passive income! This can be with snacks/drinks vending machines, automated car wash, DVD renting machines and other automated vending machines. Not sure how profitable it could be but it is a method.


Buy a Business


Another way of creating a passive income is buying a business or become a silent partner. You will need a capital but once in the business if this goes well you can collect part of the earnings. This is similar to buying stocks but on a smaller scale.


Create a Patent

If you have good ideas, if you are an inventor, register a patent and be paid for the use of it!

Build an App

Building an app changed the lives of many of their creators, think about instagram or whatsapp for example. These are extreme cases of course, an app can also generate a more humble passive income. You just need a good idea, a way to help people, provide value, or resolve a problem, then people will buy your app!



A passive income is an income where you need to put a minimal effort to maintain it. These days there are many ways of generating a passive income and in this article you saw some of the most popular.

Remember that passive income can be reinvested to generate even more passive income, money making money!

One of my favourite ways to create a passive income is trading automation and it might be yours too if you landed on this website. If you like the idea of Forex Trading and you want to make money with that check out Your Path to Make Money Trading the Forex.

You can also see some ways of making money online in the article How to Make Money Online.


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