7 Simple Passive Income Streams for Beginners to Boost Your Earnings

Have you been wondering how to start generating passive income? Here are some proven passive income streams for beginners to help you begin your journey to financial freedom.

If you are anything like me, you are bombarded with reels and tiktoks about passive income and its importance on the road to wealth, but you never get someone going deep enough to know what to do next.

By the time you finish this Blog post, you will have an in-depth understanding of passive income and which stream to start with.

This blog post is all about passive income streams for beginners that you can start with minimal effort OR cost to help you increase your income. 

What is Passive Income?

Passive income is income that requires minimal upkeep work to continue generating revenue. In a theoretical world, you set up an income stream and have to do nothing to earn money continuously. Thus bringing in income passively.

Interestingly, Passive income has changed a lot in the past few years, mainly due to the pandemic.

Pre-2020

Before 2020, when one mentioned passive income, most people meant some investment with dividend return, a traditional form of passive income that heavily revolved around generating income on assets.

For instance:

1. Dividend Paying Stocks
2. Rental Income
3. Royalties
4. Interest Income

Passive Income in 2024

After the pandemic, the definition of passive income evolved, bringing forward more diverse opportunities fueled by tech and the changing work environment. Instead of buying something already with value and leveraging it to create income, it now also involves creating value. Things like:

1. Digital Assets:
2. Content Creation:
3. Online Marketplace & Subscriptions:
4. Automated Business Models:

While both definitions still hold, the pandemic and the associated tech boom added a branch of passive income that wasn’t as prevalent.

How I Picked the Passive Streams on this List

While we will cover passive income streams from both the pre-2020 world and post-pandemic, I focused on three main criteria when picking the passive income streams for beginners on this list.

Beginner Friendly

I mean, duh…I picked options that don’t involve high technical knowledge or experience. While I stand by all the streams on this list, it’s important to remember that there might be better passive income streams out there than I ruled out because they are not for beginners.

Building Skills

I also heavily considered beginner passive income streams that will help you acquire the skills essential for your overall journey to financial freedom.

This covers hard skills and some knowledge about essential topics like exponential returns.

Proven Success

All of the streams below have a proven record of success, with real people generating income. While some are guaranteed more than others, I wanted to avoid obscure ideas.

Disclaimer: This blog is for informational purposes only and does not offer financial or legal advice. Consult a licensed professional before making financial decisions. Opinions are personal and may not reflect the latest terms from institutions.

7 Passive Income Streams For Beginners

Let’s get started, shall we? One thing to note: these are in no specific order. Focus on the ones that play to your strengths.

Create an Online Course

Creating a course is one of the most rewarding passive income streams for beginners, allowing you to share your knowledge on a global stage. The best part is that it doesn’t matter what you create a course about. Whatever you are passionate about, pick that. And as a matter of fact, for this precisely, the more niche, the better.

This can also be a great way to learn about topics you want to explore further. If you are…, it’s likely that many others are also interested.

Average Earnings

There are a lot of factors in how much you make as a course creator (demand of skill, price of course, etc.), but with some success, you can make somewhere between $1000 – $10,000 per month. With high-end courses in niche topics, the potential to earn $20,000 a month is high.

What You Need to Get Started

1. Expertise in a subject: As discussed above, it doesn’t matter what the topic is; as long as you have in-depth knowledge of it, you are set. And if you think you don’t have any expertise, you are wrong. For instance, something as simple as using Excel effectively can make a great course.
2. Course Platform: Here is an article from Mighty comparing the top two in the market: Udemy and Teachable.
3. Video Recording Equipment: You need a screen recorder to record a lecture or class at the bare minimum.
4. Marketing Strategy: It doesn’t matter which one; pick the platform that best suits your course’s subject and run low-cost ads to promote it.

Protip: Don’t jump in and create an entire course; while it’s true that the topic doesn’t matter as much, how you cover it does. It would be best if you started by creating a quiz, template, or guide to give to people who may be interested and see their responses.

For instance, if I were creating a time management course, I would make a free productivity template or a quick quiz to help identify people’s most significant time-wasting habits. Based on my engagement and feedback, I can create an outline of the course’s material that will be in more demand and better address my potential customers’ pain points.

Check out this excellent article from Thinkific that explores affordable software and tools to help you get started!

Time Commitment

The time it takes to create a course varies depending on the topic and the research needed to fill any gaps. Generally, it takes one to three months to develop the course and then a few hours per week for maintenance and responding to students.

Best Suited For

While I believe everyone has at least one subject with expert-level knowledge, confidence in that knowledge is essential, especially when teaching. You both need expert-level knowledge and project to others that you do. If not, why would anyone want to learn from you?

Examples of Success

Ali Abdaal started creating online courses in productivity and note-taking and is now making over $100,000 a month on platforms like Skillshare and his site.

Ali began his YouTube journey seven years ago while studying medicine at Cambridge University. He turned his passion for learning and productivity into a successful YouTube channel.

Mind you, a big part of his success was fueled by his YouTube channel. He spent years finding out what his audience wanted before launching the course. While this approach is unrealistic for most, it plays a big part in why his course is as successful as it is.

Real Estate Crowdfunding

Real estate crowdfunding is just as it sounds: multiple people/ investors pool their money to purchase real estate by combining funds from various investors to buy a property or a portion of a property.

While this can have many roles, I mean explicitly being an investor in this blog.

Average Earnings

With solid research, you can expect between 12-16% annual returns on your investment.

The picture above represents the amount of money you would make if you invested $1000 a month for 20 years at 12%. While that still requires you to contribute $240,000 over that period, passively, you make $671,211.06 or $33,560 a year on average.

Extending from 20 to 30 years brings that total to $3,052,013.29, thanks to compounding interest.

What You Need to Get Started

1. A crowdfunding platform like Fundrise or Arrived Homes.
2. An Initial Investment: some places like Fundrise have a minimum investment of $10.

Check out this article by Bezinga, which covers the most popular platforms, average returns, and minimum investments.

Time Commitment

I would say that you should initially spend 40 hours researching general real estate market trends and risks. Always ensure you are informed about where your money is going.

But after that, you will have minimal time—let’s call it 10 hours a year—to check in occasionally.

Best Suited For

This is best for people looking for exposure to the real estate market without owning a physical property.

It is also better suited to people with disposable income who want to invest with low-effort management.

Affiliate Marketing

Ohh the 2024 buzzword, we are getting serious huh.

Affiliate marketing is when you make a deal with a product or service provider to help them sell their product or service in exchange for a fee per sale.

An influencer, YouTuber, or blogger usually promotes a product to their viewers and gets paid for each sale. While it can be done with no following, having a following who cares about the products in your niche as much as you do helps significantly Increase your potential earnings.

Average Earnings

The earnings ranges here are infinite on both sides; an affiliate marketer can make anywhere from $100 to $10,000 and onwards.

That said, after 6-12 months of dedicated effort, a beginner affiliate marketer can make from $300 to $1000 a month.

What You Need to Get Started

1. A platform to promote products
2. Affiliate Partnership Program (Amazon, Clickbank, etc)
3. Knowledge of SEO and content creation

Time Commitment

It will take approximately 80 weeks to get started. I highly recommend taking a course from a trusted creator. The rest of the time will be spent setting up a website and other related tasks.

After that, it will take approximately 10 hours a week to create and update content and optimize SEO,

This one is tricky because it is passive…after a long time with much effort…But this skill set is worth learning and will be invaluable in your financial future.

Best Suited For

Mainly someone passionate about a topic translates to a desire to create content surrounding the niche.

Examples of Success

Michelle’s blog, Making Sence of Cents (so jealous of the name), generated $100,000+ monthly in affiliate marketing income in 2021.

She also has some great stuff; go check her out!

Blog and Content Creation

Dun Dun Dun…we knew we would end up here, didn’t we?

I highly recommend this. While it takes a lot of effort and time, it does help set a strong foundation for many other income streams on this list.

I believe this helps in 2 main ways:

1. It helps you become an expert in the topic you are passionate about and establishes you as a knowledgeable person in that field.
2. Slowly grow an audience as you learn.

While it’s hard to get there, some other streams, such as creating a course and affiliate marketing, become much easier once you do.

Average Earnings

According to Google, In the US, the blogger makes around $200-$2500 a month after 1-2 years of consistent work, with top earners making over $10,000 monthly through ads, sponsorships, and affiliate links.

What You Need to Get Started

What you need will vary depending on which route you take (YouTube vs. blogging vs. Instagram, and so on); as someone who has done them all, here is a quick list.

Blogging

1. A blogging platform
   • I recommend you start on medium.com and then transition to a WordPress website through a domain host when you are 100% ready.
2. A course
   • I strongly believe in taking classes from people more knowledgeable than you on a topic, especially if you are consistently seeking to increase your income. Instead of figuring out everything, tweak a proven strategy to match your needs.
3. Ad network

Youtube

1. Recording Devices/ Software: Depending on the content, this usually means a camera, mic, or screen recorder.
2. A Video Editing Software: I recommend you start with a free one like DaVinci resolve

Time Commitment

Oh boy, the time for this is no joke. I would estimate at least 10-20 hours weekly for your first six to twelve months.

Once everything is set up for success and you have figured out all the small things in your niche, you can devote five to ten hours to content creation/updates.

Best Suited For

Writers and creators who want to express their ideals and build an audience.

Also, patient people; trust me…this will test your patience.

Examples of Success

Sophia Lee is a blogger who started writing about dorm room decorations and interior design in college. Now, she makes $100,000+ monthly from multiple income streams connected to her blog.

She utilized affiliate marketing in her blog posts when she made recommendations.

She has a “perfecting blogging” course series showing aspiring bloggers how to do what she did. Side note: I took the course and can not recommend it enough. Check it out.

She also created multiple companies in her niche, leveraging the expertise she gained during the blogging phase.

High Yield Saving Accounts

A high-yield savings account earns a higher interest on deposits than other, more average options.

From my understanding, Banks can offer this by lending the money you deposit at a slightly higher interest than what they are paying you.

This is the most passive income stream on this list; consequently, it has the lowest returns.

Average Earnings

When writing (September 2024), the average high-yield savings account return is ~5%.

If you invest $10,000, you can expect to earn ~$500 a year.

What You Need to Get Started

All you need to do is open an account with your selected bank and deposit capital into said account.

Here is an excellent article from Bankrate that covers the best high-yield saving accounts.

Time Commitment

The few hours it takes to read Bankrate’s article, pick an account, set it up, and deposit money. Maybe 2 hours?

Best Suited For

Since many of these accounts have a lower interest rate than other simple ways to invest (index funds and real estate crowdfunding), they are for someone who is either intentionally liquid at the moment or extremely risk averse.

Rental Income – Short Term

Honestly, I wasn’t sure whether to include this in this blog post. We all know what is happening with the Airbnb market now; it doesn’t seem beginner-friendly.

That said, after research, I decided to include it but recommend it only to beginners with extra space in their homes. For instance an office that can be turned into an office/bedroom or a garage that can be remodeled to be a small studio.

Average Earnings

Depending on location and property, short-term rentals can bring in $500 to $5000 a month. Given the nature of this recommendation, though, I would assume you would be in the range of $300 to $1000.

Please please make sure to do your research about your area’s demands and laws and your own lease / rental agreement.

What You Need to Get Started

1. Extra Space to rent out
2. Small capital to remodel the space in a budget-friendly way (Ikea and Wayfair, babyyyyyyy)
3. A cleaning service isn’t necessary if you are comfortable cleaning the room, but if not, and your margins allow it – a cleaning service.

Time Commitment

10-20 hours initially to remodel, take and edit pictures, and create a posting on a platform like Airbnb or Verbo.

2-5 hours weekly on guest communication and cleaning/ cleaning coordination.

Best Suited For

While anyone can use this, as a beginner, it is best for someone with extra space in their home who can utilize it.

Also, someone is comfortable having a stranger in their living area.

Examples of Success

Selma Hepp remodeled her garage in her backyard into a studio; now, it earns her about $3000/month, covering her mortgage.

Check out more about her story in this article from Entrepreneur.com.

Dividend Paying Stocks

No, don’t even say it. There is no day trading here…unless it’s a game stop.

Dividend stocks are shared in companies that pay back their investors a portion of the company’s earnings.

Average Earnings

Dividend yields typically range from 3-7%, with the average growth rate at 9%.

Honestly, my only problem with this is that real estate crowdfunding exists, which has very similar returns but is much simpler.

But on the other hand, you should still consider dividend-paying stocks as their potential for long-term growth and stability. Unlike real estate crowdfunding, which usually involves specific projects or funds, dividend stocks allow you to invest in well-established companies with a steady income and performance history.

I would use stocks in general (other than index funds) to diversify.

What You Need to Get Started

1. A brokerage account
2. An initial investment
3. Basic Understanding of the Stock Market

Time Commitment

Initially, this will take 20-40 hours, depending on the level of research you intend to do and set up a brokerage account.

To maintain, I would say approximately 1-2 hours per month

Best Suited For

Investors are looking for relatively safe, long-term investments to diversify their portfolios.

Each of these passive income streams is a great place to start your passive income journey. Choose the one that aligns with your strengths and passions, but more importantly, consider your comfort level and risk.

 This blog post was about excellent passive income streams for beginners to explore and start today!