Passive Income Ideas for Extra Earnings

Have you ever imagined raking in money without needing to trade your time for money? Enter passive income. In today's economy, where the cost of everything, from gas to milk, is going up (thanks, inflation!) and we might be having a tough time keeping up with our day-to-day expenses, passive income could be more important than ever.

Passive income, which is money earned without one's active participation, may be more common—and doable—than you think. According to FNBO's 2024 Financial Wellness Survey, over half (53%) of Americans surveyed say they have at least one source of passive income.

Let's look at why passive income could be more relevant and important than ever, some ideas for you to potentially explore, how to get started in the new year, and ways to tie in your potential passive income with your financial goals.

What Is Passive Income?

Passive income is an income stream that is generated with minimal effort. Instead of putting in hours and labor to make money, it doesn't require you to actively work to generate income. It's different from side hustles, which are gigs that you do outside of your day job to bring in additional money.

While passive income is a bit of a misnomer, it takes a bit of work and upfront costs to get it going before it launches into "minimal effort" mode. You can make money without needing to lift a finger.

Why Passive Income Ideas Are Essential

Feeling the sting of everything costing more and not having your dollar stretch as far? You can chalk that up to inflation, which, as of November 2024, has gone up 2.7% over the last 12 months.

With a tighter financial situation due to inflation, slow economic growth, and overall economic uncertainties, any boost to income is more than welcome. Passive income streams can add a bit of financial padding should your income from your day job or side hustles take a hit or if you aren't making as much as you'd like–or need to–to cover your living expenses and save for money goals.

Top Passive Income Ideas for 2025

To get your creative juices flowing, here are some popular passive income ideas for 2025:

Low-Investment Passive Income Ideas for Beginners

If you're already stretched thin and need more time, money, or energy to go full-throttle on a passive income stream idea, consider starting with something that doesn't require a lot of upfront costs and minimal effort.

For example:

Cashback apps. Why not earn money on stuff you already spend money on? Popular cashback apps like Fetch Rewards, Ibotta, and Dosh let you scoop up some rewards on certain purchases.

Depending on the app, you'll need to scan receipts. From there, you'll receive cashback that you can redeem via a gift card or rebate deposited to your PayPal or Venmo account.

The amount you earn depends on the platform, retailer, and how much you spend, but you can earn anywhere from 1% to 10% through these easy-to-use apps.

Sell stock photos. If you're a shutterbug, why not post some photos for use on a stock photo site? Note that you'll want to offer photos that really stand out or are not of common locations or subjects.

If you're just starting out, you can expect to make $0.02 per photo per month. If you're a professional, you expect to earn a little more—$0.05 to $0.25 per photo each month. It's not a ton of money, so volume is key here. The more high-quality or rare photos you post, the higher your odds of generating some passive income.

Sell templates on Etsy. If you have some know-how you'd like to impart to others and have a flair for design, you can create some templates to sell on Etsy. With design templates and tools out there, this is easier than ever.

Popular Etsy templates include meal planning, budgeting, fitness, workout, travel itinerary, and wedding planning templates. A well-designed template with a product description and high-search keywords can mean sales.

Rent household items, yard or parking space. Have useful items in your home that are collecting dust? Items you can rent out are bikes, sports equipment, items for events and parties (i.e., tables, chairs, tablecloths, carafes), tools and equipment, and AV equipment.

These items should be in good condition. You can search rent-my-stuff platforms to see what types of items are popular and what rental prices are competitive.

From there, create a compelling product description that clearly describes, in detail, what you're renting. You'll also want to take clear photos of everything. You'll also need a rental agreement for both parties to sign.

Rent your storage or parking space. If you have an extra parking or storage space, you can rent out on a platform like Neighbor. The easy-to-use platform lets you list the space and earn a bit of money on the side. The amount you earn depends on the location, time of year, the size of your space, and the demand.

AI-powered course creation. Are you the person in your friend circle who knows all there is to know about drone photography? Or maybe you're terrific at pool maintenance, running a Dungeons and Dragons game, have mastered meal prepping for those with pre-diabetes, or can detail a car like nobody else.

Wherever your expertise lies, there are people out there who are yearning to learn and would pay for a course. To help create your course, you can make the most of AI tools, which can help you craft copy and create graphics and videos to create courses.

Then, you can sell them on platforms like Udemy, Skillshare, Coursera, or Teachable. Courses on online teaching platforms like Udemy vary in price, ranging from $9.99 to $199.99.

Creative Passive Income Opportunities for 2025

Other ideas to generate passive income include writing e-books, creating a YouTube channel, or designing digital products.

One thing to note is that creating these products and offerings takes time. For them to be successful, you'll need to build out a following or subscriber base through a newsletter, social media following, or word-of-mouth.

Print-on-demand services. Do you have a great idea for a sticker or maybe a saying on a mug that you know will catch fire? Partner with platforms like Printful or Redbubble to create and sell custom merchandise without holding inventory or doling out tons of cash to bring these concepts to life.

How to Start Earning Passive Income in 2025

Are the ideas flowing on generating passive income but need help figuring out where to start? Here's how to decide which income stream is best for you:

Figure out the level of investment. The key is to be realistic about how much time, money, focus, and energy you can afford to put toward a passive income stream. While it would be nice to rake in cash through real estate investing, do you have thousands of dollars to get started?

If you're short on time and money, start with a low-investment idea, such as renting out a parking space or renting items you own. You can also rake in a bit of dough from cashback apps.
If you have some money and time to invest in a passive income stream, consider offering a course or templates.

Define your resources, skills, and passions. What are you well-versed in that you'd like to share with others? What can you spend hours researching and love talking about? What gives you a break from the tediousness of your day job?

These are great starter questions to determine what kind of passive income streams you'd be most passionate about. When you have a natural interest and desire to pursue something, you'll have an easier time staying focused and motivated to put in the work necessary to launch a passive income stream.

Figure out what the market wants. Sure, you love to juggle, or you'd like to teach others how to be a great clown. But currently, those skills are low in demand. You might need help getting people to purchase that online course and turn it into a passive income stream.

Do a bit of market research to see what's in demand. From there, you can determine where you want to focus your efforts. These considerations can help you land on the passive income stream that's best for you.

Passive Income and Your Financial Goals

While passive income streams can be lucrative and provide a financial cushion, they take time, energy, focus, and upfront costs. When you invest time into a new endeavor, that's time and money you could be putting into something else—so be mindful of the trade-offs.

It's also important to remember that creating a passive income stream takes patience and time—it usually won't blow up overnight. There's a chance it might not be as big of a money-making endeavor as you had hoped.

Plus, if they take off, those passive income streams are prone to high and low periods. So you should be careful not to quit your day job right away. Not to be a downer, but it's important to be realistic about your expectations.

The key thing? Beyond making money, you're gaining something else out of pursuing these passive income streams. For example, learning new skills, making new connections, or simply enjoying the process.

Assign a financial goal to that extra money. Here's the fun part: If you reach a point where a passive income stream starts to make money (congrats, by the way!), have a plan for what you'd like to do with that money. For instance, it could go toward living expenses, an emergency fund, or paying off debt. Linking your passive income to clear financial goals can help you establish positive money habits.

Build on Your Possibilities

Maybe part of it is used for other financial goals or to build a new passive income stream. You can create a plan and divide that money so that it aligns with your values, vision, and goals.
While there are no guarantees with passive income streams, the key is to start with building one that's a good fit.

Over time, you might be generating money in your sleep–which can be used to provide you security and help you with your financial goals. Who knows, the growth you'll experience–financially, personally, and professionally–may go beyond your expectations and attract abundance.

FAQ: Passive Income Questions Answered

Can passive income replace my full-time job?
It is possible passive income could replace your full-time job. However, it takes a lot of work to get to that point. You'll want to be realistic and think about how much you'll need to be raking in and what you'd like to have in savings before making passive income your sole source of revenue.

Are there any risks associated with passive income streams?
Passive income streams do come with risks. They require upfront costs and an investment of time and energy—which may or may not bear profitable results. Once you've established a passive income stream, your cash flow is prone to ebbs and flows.

About the author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes, Salon.com, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

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