The Ultimate Guide To Passive Income [2021]

So you’re looking to bring in some extra money each month, but you don’t know where to start? We know the sheer amount of information out there can get overwhelming. This guide aims to cover everything in one place so you can get all the answers you need AND find out the passive income source that’s best for you.

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QUIZ: What Passive Income Stream Is Best For You?

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Table of Contents

What Is Passive Income?

Passive Income is essentially a stream of income that usually takes initial work to get set up, but over time requires less and less effort from you to maintain. For example, if you plant a tree it might take some time, money and effort at the start to select and buy the seeds, dig the hole and then water the sapling daily. But as the tree grows, the ‘active’ effort you need to put into it decreases and you get the sweet rewards of your hard work (whether it be apples, oranges or dollar signs)!

What Is Active Income?

Active income is usually defined as the exchange of money for performing a service. For example, you turning up to your 9 to 5 every day is active income. A waitress makes two different types of active income through her wage and the tips she receives. With passive income it’s possible to make money without being actively involved, whereas this isn’t the case for active income.

What is the difference between Passive Income and a Side Hustle?

While both passive income and side hustles are great ways to make extra money, the main difference is that side hustles lack the ‘passive’ factor. The amount of money you can make off them is usually directly connected to the amount of time you can put in. For example, let’s say you decide to use some of your nights after work to become an Uber driver to help you build up your income. There are still only 24 hours in a day, and the amount of money you can earn from this is going to be capped by the amount of time you have available. This type of side hustle is a type of active income, as you have to actually be physically there to earn money.

Having said this, sometimes these terms are used interchangeably. For example, many people might consider starting up a small online store or an app as their side hustle. This is a great example of both a side hustle and a passive income stream. While it might take them some serious time upfront to get these projects running, ultimately it’s possible for these to make them money with little to no continuing effort. 

Passive and active income streams compared graph (3)

How Should I Get Started With Passive Income?

Before you get started, it’s important to ask yourself two big questions.

1) How much time am I able to dedicate to my chosen passive income stream?

While you can go all guns blazing, and try out every passive income idea under the sun at once, in my experience I found it can quickly get overwhelming. The best approach is often to weigh up the different passive income possibilities and choose just one or two that you think would be the best fit based on your skills, interests and financial goals. Focus on these as you get started, and once you feel comfortable with them you can always venture into trying out even more passive income options. The amount of time you have available will likely be a big factor in your chosen passive income stream, as some definitely require more upfront work than others.

2) What does my financial situation look like at the moment?

Before starting on your passive income journey is a great time to have a quick review of your current financial standing. In general, these are a few questions we’d recommend knowing the answers to before you get started investing in any passive income streams:

Am I bringing in more income each week than I am spending?
Many passive income streams will take a good little while to actually begin bringing in money. If you are in need of money short term to help bridge the gap between what you’re currently earning and spending, then an active side hustle such as picking up some extra hours at work, freelancing or delivery driving might be a better idea in the short term. If you realise your expenses currently outweigh what you’re bringing in each week it also might be a good time to look at where you’re spending your money and if there are any areas you can cut back on. 

Do I have any high-interest debt that will be more helpful for me to pay off first?

This one isn’t relevant for everyone, but with some quick maths you can work out if it’s applicable for you. Let’s say that I’m looking to invest some of my savings, to the tune of $1000, in a high-interest savings account or the stock market. As a rough ball-park figure, let’s say I would be bringing in 7% interest per year. Now, if I currently have outstanding credit card debt or other personal loans that are charging me 15% interest per year it quickly becomes clear why it would be important to pay these off first. 

Paying off debt vs investing money first

So, before we go any further, have a think if there is any high-interest debt looming over you that is more beneficial to pay off first.


Related: How To Save Money From The Sharing Economy

Most Popular Ways To Generate Passive Income

There is so much content out there on passive income, it can become near impossible to figure out the best place to start. I kept seeing the same ideas come up time and time again, so to make it easier for you, I’ve ranked the ideas that came up most frequently in the top 20 passive income articles currently featured on Google. Despite there being more than 40 passive income ideas that came up in these articles, almost 60% of these were just reiterations of these same eight ideas.

1. Selling Digital Products

4. Invest in Real Estate

7. Affiliate Marketing

2. Invest in the Stock Market

5. Use Cashback Sites

8. Create an App

3. Start A Blog Or Youtube Channel

6. Rent Out Your Things

More Passive Income Ideas

Below we’ll deep dive a bit further into what these eight streams actually are and the best ways to get started with each.

1. Selling Digital Products

This idea without a doubt seems to be splattered all over the internet. Including everything from starting online courses, to writing e-books, to selling t-shirt designs, the concept behind all of these iterations are the same. Harness the skills you already have and monetize them using popular platforms. Whether it be graphic design, or other hard skills that you use in your day job, if there is a niche you feel you have a lot of specific knowledge about then this passive income idea could be a great match for you. Let’s dig a little deeper into what each of these ideas could entail.

Selling Designs on Print On Demand Stores

Print on Demand essentially requires you to provide custom graphics and then you’re able to print and sell your designs on t-shirts, mugs, calendars and almost any other physical product you could imagine. While the margins you make usually aren’t particularly high, most of the common platforms take care of the bulk of the logistics for you so it can be very easy to get started.

The most popular Print On Demand platforms are:


Creating an Online Course

When thinking about online courses there’s probably a few standard ideas that come to mind, whether it’s excel skills, learning another language or learning how to start a small business. However, the internet has allowed for the exchange of every kind of skill. I’ve seen people get really creative with the kinds of courses they’re creating and you can too! Think of everything from ‘How To Make Your Cat Instagram Famous’ to ‘Hypnosis 101’.

The most popular platforms to distribute your online course are:


Writing an eBook or Audiobook

You’re probably not a stranger to your favourite influencers or authors coming out with an eBook or Audiobook. The great thing about this option is the flexibility. Just because it’s called an eBook doesn’t mean you have to follow a traditional format. Many eBooks are short, or written as a step by step guide. If you already have the knowledge and passion for a topic you’re interested in, there’s no harm jotting it down and giving it a go. 

Once you have your eBook or Audiobook all ready to go, you could set up a website of your own or you can always distribute it through: 

2. Invest in The Stock Market

It shouldn’t be a surprise that this is one of the most suggested ways to make passive income. In fact, investing in the stock market is often synonymous with making money passively. There does seem to be two very distinct tactics from those investing, with some choosing to invest in dividend stocks and others opting to invest more passively and hold a more diversified portfolio. 


Investing in Dividend Stocks
This first approach largely centres around the idea of purchasing stocks that have a history of paying out shareholders a high dividend each quarter. Investors will actually specifically pick out companies that focus on paying out high returns to their investors, and by doing this at a large scale they’re able to essentially build another income stream. They then have the option to reinvest this money back into the stock market, or keep it to spend. 


Investing in Index Funds or ETFs

This strategy is usually more long term focused and theoretically “set and forget.” For those that don’t feel confident picking out individual stocks to invest in, Exchange Traded Funds (ETFs) or Index Funds can be a great option. ETFs are essentially a mixed goodie bag of different assets and can be traded like regular stocks. Index funds are a fund meant to mirror the performance of a particular market index, for example the S&P 500. They both essentially have the same investing goal, to diversify everything you’re investing in, but have different approaches to doing so.


How To Invest In The Stock Market? 

While there are many ways to begin investing in the stock market, such as investing in your employer’s 401K or getting someone to manage your finances for you, many people are also opting to manage it for themselves online. If you decide that is the best approach for you, there are many online brokerages around that give you access to the stock market. For example, some low fee options include: 

3. Start A Blog or Youtube Channel

There were three distinct options mentioned here that we’ll have a bit of deeper look into. The first being starting a blog yourself, the second being buying an existing blog and the third being starting a Youtube channel.


Starting A Blog

I was honestly a little shocked at how common a suggestion this was. However, with 570 million blogs across the internet, and some serious money to be made in the industry I guess it makes a lot of sense. While you can start a blog for free, many sites will require a small fee to cover your hosting costs and domain fee, so it’s good to ensure you have $100 – $200 set aside for this before you get started. The next step is to start brainstorming your brand and blog name. What are the topics that you’ll write about? Is this something that a lot of people are already covering? What are unique angles you can add to your content to make it stand out from the crowd? 


After you’ve decided upon a niche or category you feel comfortable writing about, it’s time to choose a platform. If you already have an existing audience on a site such as LinkedIn you can often create your articles straight from the platform. This will help you to continue to grow your reach and build a dedicated following. Otherwise, the most common sites to get started on are:


Medium is a little different to the other options, as it’s an open platform – almost like a content marketplace. This might be a perfect choice for you if you’re just starting out and looking to build a name for yourself, as there’s not the pressure to bring people to your site yourself.


Buying A Blog

This approach is a little less common, but definitely on the rise. Online ‘real estate’ is only going up in value and more people are becoming conscious of how lucrative a good performing website can be. Thus, leading to the practice of ‘flipping’ blogs.  A handful of veteran bloggers realised that buying undervalued blogs with an existing community was a great opportunity. They can then continue to create content for the blog and reap the rewards in the form of display ads, affiliate links, sponsored posts and more. They can then sell this blog onto somebody else when they feel they’ve capped out its potential. This strategy can definitely be intimidating if you’re a first timer, but with so much quality information out there it can be a great way to enter the world of blogging without having to build anything from the ground up.


Starting A Youtube Channel

It seems the cat is out of the bag when it comes to the high-flying lifestyles of some top Youtubers. In fact, 75% of kids aged 6-17 now list ‘Youtuber’ as their dream career. So, has the boat sailed? Or is this still a potential option for earning passive income?  


The platform is certainly more saturated then it was a decade ago, but that doesn’t mean there isn’t opportunity. The amount of people consuming Youtube content continues to steadily increase as well,  with more than a billion hours of content consumed each day. There are a few things to consider first before making the call if this is the right path for you. 


1) Do you have access to quality recording equipment?
Gone are the days when a pixelated webcam could do the job. Without a decent production quality to your videos it will be near impossible to see success on the platform. If you do have access to a decent camera, microphone, lights and editing software then you should have everything you need to get started.


2) Do you feel comfortable in front of a camera?
This is a big one! For most people, being in front of the camera does not come naturally and while you can definitely improve over time it helps if you naturally have a knack for it. If Youtube is something you’re seriously thinking about, consider recording some practice videos and getting your friends and families opinions before you invest a significant amount of time and money. 



3) Is there a niche you can break into? 
Like most of the other passive income ideas, the main problem you’ll likely face is attracting an audience. With so much content being uploaded to the platform every day it’s important to feel confident that you have something unique. Whether it be the editing style of your videos, or the topics you touch on there’s no harm in thinking out of the box. There’s so much content to be inspired by so don’t forget to take time to do some research first!

4. Invest in Real Estate

For most, owning multiple properties might seem like nothing more than a distant dream, but there’s more ways to get into the property market than often meets the eye. When people talk about investing in real estate we usually jump straight to owning a rental property, but there’s now many more accessible ways to invest in real estate if that’s not within your budget. Two of these ways include Real Estate Investment Trusts (REITs) and Crowdfunded Real Estate.


You’re probably asking, what is a REIT anyway? A Real Estate Investment Trust is essentially a company that owns real estate designed to generate revenue. This could include anything from apartment complexes to office buildings to warehouses. They allow lots of investors to buy into their company, and disperse some of their profits in the form of dividends. This makes it possible to invest in real estate without having to purchase a whole property, and functions similarly to the stock market, allowing for buying and selling. There are several different types of REITs and you are able to purchase most of them through an ordinary brokerage account. We would suggest doing some substantial research first as COVID has not been kind to the construction sector. 

Crowdfunded Real Estate

The idea behind crowdfunded real estate is simple. These platforms enable investors to pool their money together to invest in development projects that otherwise might not have been accessible for them. The concept has exploded over the last years, with many different options popping up. Many of these platforms also offer their own private REIT option for investment as well. 

The most common platforms currently seem to be:

One thing to note is that the minimum investments between platforms seem to vary greatly, with some sites like Fundrise and PeerStreet starting at $1,000 and other, such as CrowdStreet, starting at $25,000.

5. Use Cashback Sites

The appeal behind this particular passive income stream is that you can make money doing things you’re already doing. From your groceries to online shopping, many apps have a wide range of partners who offer different deals and cashback offers on your purchases.  Many sites offer rewards not just for shopping, but for other online activity, such as taking surveys and watching video ads. The tricks to these seems to be to just select one program that you want to be loyal to and stick to that, as it can be time consuming trying to keep track of many different offers across different sites. Other shoppers choose to hunt for the best offers based on large purchases they’re making, and worrying less about tracking smaller purchases. 

The most common cashback sites to use are: 

To help you when selecting the site you want to go with, don’t forget to look into a few things. Firstly, what number of points do you have to reach to actually get paid out? Most sites won’t let you see your first deposit or gift card until you’ve racked up enough points. It’s always worth checking what that limit is before you sign up. The other thing to keep in mind is how often you’ll get paid and how easy the process is to actually apply for your cashback. Some sites do it automatically, but with others there seem to be a lot of hoops to jump through and it’s easy to miss out on the cashback for an item you’ve purchased if you aren’t aware of every step.

If cashback sites are too labor intensive for you, there are often many ways to earn cashback automatically, through you bank or credit card. For example, with OnJuno, you can enjoy 5% cashback at 5 brands of your choice, including Amazon, Netflix, Walmart and many more. 

6. Rent Out Your Things

The majority of the population are probably familiar with the idea of the sharing economy and for most using apps like Uber, AirBnb and Postmates are part of their weekly routine. What is less talked about when it comes to the sharing economy is the untapped earning potential many people have from things they already have at home. There are so many examples of different ways you can rent out your belongings, but here are a few of our favourites to get you started: 

Make Money Off Your Car

This was by far the most common idea I saw across other articles. The ideas of how to do so varied, but the concept was the same. Our cars spend the majority of their life parked and yet make up a huge expense for most people, so if you can get your car to make money for you it’s a win-win.

  1. Rent out your car when you’re not using it with sites like Turo or Getaround
  2. Make money by allowing advertisers to display their ads on your car through platforms like Carvertise and Wrapify

Make Money Off Your House

This was another really popular suggestion for those who already own a property, or even for those who are currently renting. Here’s a few ways you can consider making extra money off of your house:

  1. If you have a spare room, consider renting it out through AirBnb, Vrbo or
  2. Make money from your backyard. Sites like Nookzy allow you to rent out your backyard for small events and gatherings. You can easily spread the word by creating an event flyer and sharing it with your family, friends and upload it online to get more reach.

Make Money From Your Unused Driveway, Garage or Car Spot

This is one that’s close to our hearts! Did you know you can make up to $450 a month by renting out space you already have at home? From those in New York, to Boston to Dallas, Spacer connects you to locals in your area who need parking. Find out more about becoming a host.


Make Money Off Your Boat or RV

The reality of being a boat or RV owner is that you’re likely not to make use of these vehicles every single weekend. Marketplaces like RVShare, GetMyBoat and Boatsetter connect you to people who would like to rent out your RV or boat for short term use.


Make Money Off Of Your Surfboard, Skiing Or Snowboarding gear
Similar to these above, it’s unlikely you’d be able to go skiing or snowboarding every weekend. You can share your surf, bike or snow gear with like-minded travellers and locals through platforms like Spinlister or FriendWithA.

Make Money Off Of Anything Else
If nothing on this list has sparked your interest so far don’t worry! Sites like Ruckify and FriendWithA allow you to rent out almost anything you have at home, from tools to kitchenware, to instruments and exercise gear. You’d be surprised at what people are looking to rent!


Related: Earn Passive Income From The Sharing Economy With These 21 Tips

7. Affiliate Marketing

The concept of earning a commission by referring people to a business is by no means a new concept. Affiliate Marketing is essentially just that, but applied to the digital word. You’ve no doubt heard of bloggers who are making some serious cash through affiliate links and while it’s certainly a more well known career path now, it’s still very possible to begin making money off off of affiliate links for yourself.


This idea is closely connected to the steps to building a blog that we mentioned before. In order to become trusted by sites as a referrer it’s important to begin building an engaged audience and have a clear niche where your knowledge is trusted. Once you’re well on the way to that you can begin signing up to affiliate programs and making money every time someone from your audience purchases something through your link. 

The most well-known affiliate marketing program is by far Amazon’s Associates, where you can earn up to 10% for each sale you help them make. However, there are plenty of other prominent programs that are also worth signing up for if affiliate marketing turns out to be the best passive income stream for you. These include:

 There’s generally no set rule for how many followers you need to qualify for these programs. In fact, most affiliate programs are pretty hush hush with the criteria they use to select those that get into their programs. In addition, none of the providers shared platform preferences e.g if you bring traffic from Youtube, Instagram, an e-commerce website or your blog. 

In fact, when signing up for eBay’s Partner Network they have a number of different streams and you must select the one most relevant to you e.g Social Media Influencer or Shopping/Comparison site. It appears that for most sites each application is reviewed individually and the main criteria they call out is that your content has to be ‘family friendly’ and not violating any of their terms of use. 



The last two options are a little different in terms of set-up. Rather than giving you access to one advertiser these sites function as a Marketplace and give you access to apply to a large range of other individual advertisers. Thus the rates you can expect to make vary hugely by the individual programs you apply for and are selected into. 

8. Create An App

While this option may seem like a lot more upfront work than some of the other passive income ideas, it can be extremely lucrative if you have the skill set. If there’s a need that you’ve identified, or even something fun you think people would enjoy then bringing it to life is the next best step. Even if there is an existing app for a concept, if you think you could do better than it might be worth putting your hat in the ring. 


The thing that makes building an app truly passive is that once you’ve created the application itself, it can often take very little maintenance. 


applications lit up on iphone

Plus, if it’s a hit can bring in an enormous amount of sustainable revenue. For example, the Top 800 Apps currently earn an average of close to $25,000 a week. 


There are a few different ways that you can monetize your app. For example, you can make it a pay-to-download app, or like many others you can make it free to download but charge either a one-off or subscription fee to upgrade to a premium account and get access to more features or turn off ads. The other popular option for monetizing ads includes having a free app but using advertising through ads to earn revenue. 


If you are developing an app solely by yourself from start to finish there are little initial investments compared to hiring an app developer. However, you will need the right software, a good computer and in-depth knowledge of coding and user testing. The other option is to use an online app builder but this can range anywhere from $10-$1000+ monthly. The last thing you’ll need to consider is buying a developer’s license if you don’t already have one. Apple’s App Store License will set you back $99, whereas you can expect to pay $25 for the Google Play Store equivalent.

9. More Passive Income Ideas

While the previous eight ideas made up a bulk of the highly recommended passive income ideas, we do have a few honorable mentions. 

Investing in an Established Business

 While this can certainly be high risk, the idea behind it is similar to investing in the stock market without the middle man and with smaller companies. For example, platforms like Mainvest and Seedr are equity crowdsourcing platforms that connect investors to small businesses looking for capital. Given the high risk nature of this type of investing, Seedr  and many other sites have a pretty severe eligibility criteria to help them make sure you know what you’re doing.

Peer to Peer Lending

Investing in peer to peer lending is the equivalent of becoming a bank for others. Platforms match those looking for loans with a lower interest rate than banks with investors like you, who are looking to make a return of roughly between 5% and 7%. The expected return and fees the platforms charges vary from provider to provider so it’s worthwhile doing more research, but some of the most popular platforms are Prosper, Worthy Bonds and FundingCircle.

Sell Your Photography

This is for all you budding photographers out there! If you’ve got high quality images that you’re looking to make money off of, there are a whole array of stock photography sites where you can license out your images. While the rates can be pretty low, it can pay off if you have a large portfolio of images or take product/brand specific photography. Some sites to check out include Shutterstock and iStock.

Resources To Get Started With

If you’re at a loss for where to start, here are a few of our favourite places and people to learn more about passive income and the ideas we discussed in this article.



Reddit Communities

Podcasts & Websites


Youtube Channels

Final Thoughts

There’s no one right choice for everyone when it comes to passive income. We hope this article shed some light for you on the potential options out there and got you thinking about which ones are the best for you. 

If you have an unused garage, driveway or car park we urge you to sign up as a host on It’s super easy to get started and is a great way to make extra money each month off of something you already have at home!

Important Information

The advice in this article is general and doesn’t take into account your objectives, financial situation, or needs. Please consider whether this advice is right for you, based on your own needs and financial situation and seek out professional financial advice if you feel you need further personalised guidance.

All information about performance and rates of returns mentioned throughout this article are historical. They shouldn’t be relied on as an indicator of performance in the future, as investments can always rise or fall in value.  The views and opinions expressed in this piece are my own personal views and don’t necessarily reflect the views of Spacer.