Passive Income Ideas

Want money to keep rolling in whether you're working or not? Setting up some passive income could help with that. Here's how to get in the game.

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Want to make money while you sleep? Well duh, of course you do! Passive income can help you earn money without needing to actively do anything. It can be as simple as interest you accumulate in your savings account. Or it can be the result of a lot more upfront work like buying a dilapidated apartment building, fixing it up and then watching the rent checks roll in.

The passive income ideas in this guide are tried and tested. Just remember that creating passive income takes a lot of upfront work before you can gain the benefits down the road. It's not a short term endeavour.

22 passive income ideas to get the wheels turning

Note: We've split them into six categories and labelled the amount of effort involved.


This is perhaps the most hands-off way to earn passive income because all you have to do is deposit some money into an interest bearing account and leave it there while the cash starts rolling in. Of course, your income will depend on the level of interest the account offers, will how much you put into the investment and how long you leave it there.


Here are some passive income investment ideas:

These won't generate tons of interest for you, but they're dependable and it's better than letting you money fester in your checking account. Some brands like Ubank offer competitive rates at 1.1% p.a.

Effort involved: Low

If you're a peer to peer lender (you are the investor) you can lend out money privately to borrowers. Platforms like RateSetter let's you decide on the target rate you want to receive and the amount you want to lend. You're then paired up with a portfolio of borrow loans to match your preferences.

This is where you pool your money together with others to invest in a common range of assets. If the fund does well, you do well. IG Share Trading allows users to invest in index funds with a $0 monthly fee.

Effort involved: Low

These are kind of like savings accounts, but you invest a specific amount of money for a specific amount of time. They are also dependable but you won't be able to access your money until the agreed time is up. Check out this competitive offer from Citibank.

Effort involved: Low

These are like managed and index funds, but instead of buying units in the fund, you are buying shares in the ETF. This setup makes it simpler and less expensive to invest. IG's Share Trading platform allows users to trade ETF's with no monthly fee.

Effort involved: Low

Buying and trading shares in the short term isn't exactly passive, so if you want to earn passive income in the share market, your best bet is to buy shares in established companies with a track record of success or take an investment strategy that focuses on the long-term growth of a company. Look for companies that pay dividends. There are heaps of competitive share trading platforms out there including IG Share Trading as well as the winners of our 2019 Finder awards Saxo Capital Markets and Self Wealth.

Effort involved: Low

This is a fancy name for Automated Investing, a relatively new type of investment that is starting to take off in Australia. Robo Advice replaces a human investment adviser with a computer algorithm that invests and rebalances your portfolio for you based on your investment timeframe and risk tolerance. Without the need to pay advisers' salaries, Robo Advisers can offer attractive returns.

Effort involved: Low

Real estate

You always hear stories about people striking it rich in real estate. That's because it is a tried and tested way of bringing in some extra cash. Not only does the price of your assets tend to go up in the long term, but you can also earn rental income along the way.

These days, affording a rental property is out of many people's reach especially in Australia's big cities. But buying rental property is not the only way to get into the real estate game. Here are some other ways to invest in real estate:

Real estate

This is a no-brainer if you already have a property which you don't need to live in. You can either use the traditional rental market or go through the share economy with a platform like AirbnB host. (This may take additional work, so it's not truly passive but there's the advantage of higher returns than traditional real estate).

Effort involved: Low to medium

Get started with Airbnb

This is another way for the average investor to invest in real estate projects they couldn't otherwise afford. They are less complicated than REITs and usually involve buying a stake in a specific real estate project rather than buying a stake in a real estate company with many holdings.

Effort involved: Medium

Online businesses

Online businesses were tailor made for passive income since you can automate much of the work, and there are numerous ways to do it. Here are just a few:

Desktop with coin

A dropshipping business is one where you sell your customers items you don't even own yet, like printed t-shirts. When someone places an order through your online t-shirt shop, you place the order with the t-shirt manufacturer who then ships it directly to the customer. Other than setting up the website, handling paperwork and counting your profits, you're hardly involved.

Effort involved: Low

Learn more about Amazon's fulfilment program

If you have a blog, website, YouTube channel or any other online channel that gets traffic, you can earn money by recommending software, products and services to your audience and receive a kickback every time someone buys something. Just make sure they are products you can actually stand behind.

If you don't already have a following it can take some time to build one up.

Effort involved: Medium

If you've got the chops, you can attempt to do what hundreds have done before you, and that's to become Instagram famous (or YouTube, or Snapchat or whatever). If you can build a passionate enough following, you can make money by advertising, running affiliate links, being a spokesperson for brands and creating your own line of products.

To make it in this game, you have to have a ton of personality, dedication and creativity to pull it off.

Effort involved: High

If you're good at something like woodworking, affiliate marketing or yoga, you can build a following by sharing your knowledge through online channels like YouTube or ebooks. After you build your following, you can start to make money by selling more products like online workshops, more ebooks and branded products. Advertising and sponsorships are also possible.

As long as you're persistant, your skills should sell themselves, although it will take a little while to build a following from scratch.

Effort involved: Medium

Use your car

Here are a couple ways you can make money with your car.

Driving red car

Driving for Uber or another rideshare service isn't exactly passive, but in a way it serves the same purpose. It lets you control your own work hours and create an element of freedom in your life.

As long as you have a new enough car, it doesn't take much to sign up for Uber but you will need to be willing to work odd hours to maximise your income.

Effort involved: Medium

Get started with Uber

There are companies out there who will pay up to $600 per month if you slap a big brand logo on the side of your car.

Effort involved: Low

Companies like Car Next Door give you the ability to rent your car out to other people on an hourly or daily basis. So if you car's just sitting there a lot of the time, why not put it to good use bringing you in some passive income?

Effort involved: Low

Other companies will hook you up with someone who needs a ride to where you're going and are willing to pay you for the privilege.

Effort involved: Low

Listen: A beginner's guide to passive income on the Pocket Money podcast

Picture: GettyImages

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