5 Passive Income Ideas That Still Work In 2024

So you have a job but want a way to earn some extra dosh on the side?

While many are crushing it, making extra money via the gig economy (ala Uber, Upwork, Fiverr etc), none of these are in any way, shape or form — passive income.

The reality is — not everyone has the time or pick up a second job or participate in the gig economy.

Karl Marx famously argued that the only thing that can create wealth is the labour of a human being.

But what if you could flip this notion on its head, and instead of you trading your time for money, you make your money work for you?

Such is the idea of passive income.

What Is Passive Income?

Passive income, as the name would imply, is money that you gain through little or no daily effort. Passive income strategies allow you to take advantage of properties or investments so you see a continual financial return that requires virtually 0 effort to maintain.

Passive income is a dream for many people as it represents the ultimate free lunch.

Some passive income methods, such as renting or building a website, require a bit of work to get off the ground, but once they get going they can generate income virtually autonomously.

Even if your stream of passive income doesn’t net you as much as Jeff Bezos, having some passive income lets you build up some wealth and gives you a way to exit the 9-to-5 daily grind and pursue your dreams as an investor.

To further that goal, here are some passive income strategies that can turn your spare pile of cash into a revenue-generating machine.

Why Build Passive Wealth?

The price of anything is the amount of life you exchange for it.

Henry David Thoreau

Obviously, the number one reason to build passive wealth is to get more money! But more specifically, having a steady source of passive income can, among other things:

• Secure funds for retirement
• Help you retire early
• Protect you if you unexpectedly lose your job
• Provide an additional source of income
• Help you pay off any outstanding debts, such as a car or house loan

Like any wealth-building strategy, passive income is not a get-rich-quick scheme. Building substantial wealth from passive income takes time and some investment. So it’s best to get started early. Although you may not immediately see the returns, laying a solid foundation will help your passive income stream grow exponentially as time goes on.

Passive Income Ideas That Actually Work In 2024

Investing

When most people hear the term “passive income” they automatically think of investing.

While investing is certainly a great way to build up substantial wealth, there is a difference between what one may call “retirement fund” and a stream of passive income.

Most normal people invest in the stock market to secure funds for their retirement. In that sense, the idea is to continually invest money, but not touch it until you are retired.

Retirement funds also tend to incur taxes and fees when the money is accessed, so using your investment funds as your sole source of passive income may not be the best idea, especially if you want a stream of income you have continual and direct access to.

Real Estate

One extremely popular method of accruing some passive income is renting out properties and real estate. Rental properties may not be the most “passive” choice as they do require continual upkeep and maintenance—unless you hire a property management company. Property management companies take care of the technicalities and logistics of renting, for a fee of course: normally a percentage of the income generated each month.

Many economic analysts have warned that the impending Brexit could drastically affect the British housing market, which could potentially see house prices plummet in the short term. However, according to data from UK.gov, the average value of housing in the UK showed continual growth in the past two years.

Depending on your risk appetite, and whether or not you subscribe to Warren Buffett’s “buy when people are fearful” investing methodology, there could be real estate bargains to be had in the short term. Just to be clear, this is not official investment advice. Do your own due diligence!

If you can afford it, buying a house might still be a solid financial investment even if it may not be as lucrative in previous years.

And like any investment, the key is to ride out the bad times and wait for the inevitable market uptick. Wherever there is a valley there is also a mountain, and the same holds true for market trends.

Start a Blog/YouTube channel

The prevalence of the internet has made it so anyone can find extra ways to earn some side cash.

If you have a topic you think viewers would find interesting, you could start a blog or YouTube channel and make content covering that topic.

Now to be fair, starting a website/video channel is quite a bit of work and requires some initial monetary investment, however, once viewer membership picks ups, it can become self-sustaining.

Streaming and video platforms like Twitch of Youtube generally pay creators by selling ads on their videos, so making a solid stream of revenue requires constant viewership.

The upside is once you get a good amount of content out there, you have many more videos to draw money from so your income base grows exponentially.

Another popular (and very lucrative) monetisation option for Youtubers/Bloggers is to sign up to affiliate networks to promote products that you’re using.

For instance, if you’re in the ‘travel’ niche, you could recommend backpacks and get paid out a referral commission for anyone who buys that backpack through your affiliate link. Blog articles and Youtube videos, if done well, can continue to drive traffic year after year, hence making it an extremely viable ‘passive income’ source.

Alternatively, you could rely on crowdfunding sites like Patreon to fund your blog/video channel.

Some content creators report making over £10,000 a month from crowd-funding sites. Again, building up a substantial following requires a lot of work, but once you put in the heavy lifting it pays off in dividends.

Even if your channel/blog only generates £100 a week, that is still £400 extra a month which comes out to an extra £5,000 a year that you can sit back and watch accrue.

Robo Advisers

Robo advisers are a relatively new trend in financial circles and are essentially AI algorithms that automatically buy and sell securities based on predefined user preferences.

The benefit of robo advisers is that they require zero manpower to operate and so have extremely low price-barriers for entry.

Several robo advising firms have minimum investment limits as low as £25 and some don’t have a minimum amount at all. Since they do not take any human labor, robo advisers usually have very low monthly fees, to the tune of 0.04%-0.22% of your investment totals.

With a robo adviser, you basically input what kind of buying/selling preferences you have and the algorithm takes care of the rest.

Read More: Putting Robo Advisers To The Test (Robo Investing Explained)

Robo adviser algorithms are based on cutting edge economic research and time-tested investment strategies to give you a continual stream of income with essentially 0 work on your part.

Say you set your portfolio preferences at a 70/30 stock/bond split. Your portfolio will automatically be updated when these ratios shift.

In some ways, the term “robo-advising” is a bit of a misnomer. Robo-advisers don’t actually “advise,” they just automate the investment process. You can hire a human financial adviser, but these typically have higher entry fees and higher monthly rates.

Rent Out Your Things

The idea of renting out your possessions to strangers may be anxiety-inducing, but it is a great source of passive income.

Say you have an extra kayak or video game console around. There are a number of apps like Buro that let you rent out things to other people. Most of these apps also have some kind of item protection in place so you will get reimbursed if anything is damaged or lost.

Apps like Airbnb let you rent out a room of your living space, which if you live near a popular tourist spot, can net you a substantial income every month.

Final Thoughts

For many, the idea of passive income just sounds too good to be true.

Passive income is based on the idea that wealth begets wealth; that is, the more wealth you have, the easier it is to build future wealth.

By starting small, your passive income streams can grow exponentially until they are essentially self-sustaining. All you have to do is find the right place to invest that initial time and effort.