July 20, 2020

10 Ways to Build a Passive Income Stream


If you’re industrious and innovative, these strategies can get your money working for you.

SO YOU’VE BEEN TRYING to think of passive income ideas. And why not? It’s practically the American dream. We all want to lie in a hammock and make money without actually doing anything.

Unfortunately, unless you come into an inheritance or grow up with a trust fund, you’re probably going to have to do something to generate a regular paycheck.

Still, if you’re industrious and innovative, you may be able to come up with some strategies that allow you to make money when you aren’t actually working. To see what we mean, take a look at these ideas for creating passive income streams.

  • Rent out a room.
  • Affiliate marketing.
  • Create an online course.
  • Rent your old home.
  • Write a book.
  • Start an e-commerce business.
  • Become a business partner.
  • Design T-shirts.
  • Invest in your retirement.
  • Create YouTube videos.

Rent Out a Room

“A large percentage of Americans are finding themselves in financial straits and out of work amid the pandemic,” says Wendi Burkhardt, CEO of, a home-sharing website. “However, many own a home that they can leverage as an asset to generate passive income by renting out spare rooms to long-term housemates.”

She adds that a lot of empty nesters and retirees have “spare rooms gathering dust. Estimates show that they can earn an average of $10,000 a year to put toward mortgage payments, living expenses and retirement savings.”

Burkhardt cautions, though, that if you’re going to share your home with a boarder these days, you’ll need to do it carefully. Obviously, you wouldn’t want to bring into your home somebody who eschews mask-wearing in public and isn’t taking the virus seriously.

Affiliate Marketing

Hamna Amjad is an outreach consultant at Smith Thompson, a company based in Plano, Texas, that specializes in home security and home automation.

But in Amjad’s spare time, she has built a blog that can be found at, where she promotes products and services of other companies, “known as affiliates,” Amjad says. “When someone uses my affiliate link to purchase a product or sign up for a service, I get paid. The best thing about it is that you can have any type of website and find affiliates in your niche. You don’t even need to have a website to earn via affiliate marketing – you can do it using social media, podcasts and other platforms as well.”

Don’t expect to get rich off this, but any extra money should help. And Amjad, who currently makes around $100 to $150 a month but made much less early on, suggests not making your website, whether it’s a blog or a website that specializes in reviews and recommendations, too promotional. Because if readers sense that your website is all about making you rich, that isn’t much incentive for people to stick around for long.

Create an Online Course

This is Amjad’s next goal.

“It takes a lot of effort to develop a valuable course, but once you have done it, you’ll earn money whenever there is a sale,” she says. “Besides an online course, you can work on e-books, online instruction guides or any other digital products. Whatever product you choose, it should solve a problem or provide a service. Once you create it, you can sell it over and over and build a continuous revenue stream.”

Rent Your Old Home

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Yes, buying an apartment or rental home requires a significant down payment, but if you can buy a property – or move into a new house and rent your old one instead of selling it – that can be a very solid passive income.

Alex Willen is an entrepreneur in San Diego, though for many years he was a product manager for several companies. But now he has a lot of passive income streams. He owns a few apartments in the San Francisco area, and he says that because he employs a full-time property manager, “those are almost entirely passive. … I only get involved if there’s a major expense or issue, and thankfully those are rare. The income fluctuates a bit depending on when recurring expenses come in, but the revenue is reliable every month.”

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He says that he has taken a slight hit in that passive income, though, due to a tenant not being able to pay in full lately due to the coronavirus.

And, of course, the great thing about having some passive income streams is that the money allows you to make money in other passive ways.

Write a Book

Willen has written a couple of short books and self-published them on Amazon. One of those books, for instance, is called “Buying Small Apartment Buildings: Become a Successful Real Estate Investor by Owning Duplexes, Triplexes and Quads.”

Obviously, that’s a topic he knows something about.

“In total they bring in about $150 to 200 a month, and I spend $20 to $30 in Amazon ads,” Willen says of the two books. “They’re truly passive; I do nothing whatsoever with either.”

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Create a Product

Again, like buying an apartment or writing a book, this isn’t a simple task that you’ll want to attempt tonight after dinner. But it is a classic example of a passive income stream. In fact, Willen recently started a frozen dog treat business called Cooper’s Treats.

“I’m currently in the early phase of doing all the production and logistics myself because sales numbers are still relatively small, but they’re ramping up quickly,” Willen says. “Soon I should be able to move production and logistics to a third-party manufacturer and a third-party logistics company. Once those are taken care of, I’ll hire a (virtual assistant) to handle customer support and basic marketing – mostly updating social media – and from there it should be almost entirely passive.”

Become a Business Partner

If you have money to invest, you could invest it in a business. This really only works if things happen to line up well, but just to put the idea in your head – do you have any friends or family members who you believe are extremely competent and ambitious and who happen to be looking to start a business? And maybe they don’t have much money, but you do?

You could consider going into business with them – but you’d be the one with the deep pockets, and your partner would be the one exerting all or most of the energy and time to run the business.

You could come up with an equitable and fair way to split the profits, and as long as the business is a success, you’d have a passive income.

Design T-shirts

If art is your thing, there are a lot of companies out there that will help you sell your T-shirt designs. Spreadshirt, Designhill, Zazzle and Cafepress are a handful. Some websites charge fees to sell your designs; most don’t. Generally, these companies take care of the marketing and shipping of T-shirts; if your design is bought, you’ll receive a commission, usually around 10% to 15%. It may not make you a fortune, but once you’ve uploaded your design, anything you make from a sale is a passive income stream.

Invest in Your Retirement

If you’re starting to get discouraged because you don’t have any great ideas for frozen dog treats and don’t exactly have the money to start a business or buy an apartment, keep in mind that every time you put money into your retirement portfolio, you’re hopefully passively making money.

A lot of investors will tell you to put your money into dividend-producing stocks versus, say, a certificate of deposit or an interest-bearing savings account, since the interest is likely to be so low. But you may want to stick with an IRA or a 401(k). The point is, while investing in your retirement accounts may not help you pay the bills right now, it will help you pay the bills in the future.

Create YouTube Videos

The nice thing about this idea is that even if you make next to nothing, you’ll probably have fun doing it. Meanwhile, your friends and family will probably enjoy watching them.

Ryan Scribner, a resident of Saratoga Springs, New York, is a good example of what you could become – but probably not representative of what most YouTubers make.

He started a YouTube channel in 2017 and between that and a personal finance blog, “Investing Simple,” that he co-owns, he says he makes around $50,000 a month. He now has writers who create content for the blog, and he uploads a video a week. He estimates he works 15 hours a week, and in 2019, he made a little over half a million dollars.

All of that said, Scribner says, “It took a lot of work to get this up and running. In the first few months of operating this channel, I earned less than $40. In fact, I actually calculated my hourly rate and it was around 17 cents per hour.”

So, these aren’t get-rich-quick ideas, but more along the lines of get-rich-slowly ideas. But better slow than never, and so now might be as good a time as any to buy a hammock and start thinking of passive income ideas and ways to get rich while (mostly) not working.

By Geoff Williams

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