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16 best passive income ideas from Reddit

Looking for another source of income? Reddit users share their best ideas for passive income streams.

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Having passive income is a great way of putting more money in your pocket and to achieve financial independence down the line. Such cash can boost your regular stipend when things are good and also see you through periods of low income. Whatever the case, passive income allows money to flow into your account as you focus on your primary job. Who wouldn’t want to make extra money on the side just because they can? 

In that regard, it’s up there with the best side hustles and freelance gigs. You can use the extra cash from your passive income streams to save for a house, buy a car, or even plan for retirement. It can also serve as a backup plan in case your employment ends, or if you quit your regular job. In fact, some of the most successful businesspeople and millionaires have at least seven streams of income. Therefore, if you want to make extra income on the side with the hopes of one day becoming richer, then it’s never too late to start. 

The big question is, where can you get practical and productive passive income ideas? One source that springs to mind is Reddit. The r/Passive_Income is one of many subreddits that is packed with brilliant passive income ideas that can help you make money while still retaining your regular job. Our team sieved through the discussions and compiled this list of 16 passive income ideas on reddit for beginners to help you find out how to make money online.

1. Start a website

Setting up your own website is one way of putting some extra dollars in your bank account with little effort. Whether it’s a blog or niche site, you can earn up to $5,000 per month in passive income just by monetizing it with an ad network like Google AdSense.

As Reddit user u/broke7 explains, you’ll need to put in some work in the initial stages of the website. This includes its development and search engine optimization (SEO). But once you start getting consistent traffic, you can simply update the main page once every other week and the site will be good to bring in more money.

Consider throwing in affiliate marketing to increase your passive income streams from a single website. This essentially involves you promoting a third party’s products on your website for a fee. A good example is adding Amazon affiliate links on your blog or site in exchange for referral income.

2. Sell digital products

Another way to make some extra money is to start an online business selling digital downloads on Etsy. A lot of people online are looking for downloadable digital art, journals, worksheets, and other templates. If you don’t mind putting in some extra work initially and then freewheeling later on, then you can consider creating and selling digital products. User u/Shaynon17 explains how he, together with his wife, started creating and selling digital downloads on Etsy

Therefore, to make extra income passively, all you have to do is create aesthetically pleasing templates using the free website Canva. Once you have created your blank templates, download them to your computer before adding them to your Etsy account for people to purchase. 

Passive income Reddit user u/Shayon17 states that digital downloads has been highly successful for her after learning the ins and outs of SEO. Once she was able to learn trending keywords and make her digital downloads, she has since begun making approximately $900 a month in extra income after a couple hours of creative work! 

As you would imagine, the biggest challenge with this idea is that you actually have to spend time, skill and effort in creating products. It can be a piece of art (like a painting), greetings card, workout routine, song, eBook, or even template for a resume. Just make sure it’s something that people actually need.

You may also have to create multiple pieces to give users options. You stand to sell more if you have 50 different designs than if you only have one. The good thing is, once you’re done creating the designs, you can sell them indefinitely on popular marketplaces like Amazon, eBay, Fiverr, as well as on your own ecommerce website if you have one.

3. Invest in rental properties

Real estate investing (REIT) is another excellent passive income venture you can begin. However, you may need money to put some work into your personal finances before making this a realistic passive income opportunity. In fact, real estate ranks highly among passive income ideas on reddit. For example, user u/brycematheson explains how he and his wife earns $2,900 passively each month from rental properties and storage units. Reddit user u/ISO_Metric indicates that to be successful in real estate investing, you should begin by having a good, long-term job that allows you to save money monthly. 

You will also need to have a good credit score, and relatively no debt. This will increase your chances of being approved for a loan at a financial institution. Once you have these factors set in stone, you can then proceed to putting down a 5% to 20% down payment on a home. After you own real estate properties, you can begin renting them out to help pay off the mortgage and provide you with extra money on the side. 

The draw to rental properties is that they offer recurring income on a monthly basis. And with average rent for apartments increasing each year (except in 2021) you can almost be certain of making a decent income by being a landlord. Plus, real estate is always in demand because people will always need a roof over their heads.

That said, investing in real estate does require substantial capital upfront. Acquiring land and setting up rental properties is cash intensive. Additionally, rental properties have running expenses like property taxes, homeowner association fees, insurance, electricity costs, garbage fees etc.

4. Do Airbnb rental arbitrage

If you dream of getting into real estate but don’t have the capital to erect your own rental properties, you can try Airbnb arbitrage. This involves you renting a property long-term and then putting it up on Airbnb for people who need short-term stays.

As Redditor u/LiveAwake1 states, you get to pocket the cash that comes in from Airbnb. Of course, this would only work if the rate you charge on Airbnb is enough to cover what you paid as rental fee for the property and your profit margin.

Something to keep in mind is that some cities do not allow rental arbitrage. These include Los Angeles, New York, Santa Monica, Las Vegas and San Francisco. Therefore, make sure to check with your state and city regulations before adding this on your reddit passive income ideas. Also, check with the owner of the property to ensure that they are okay with the arrangement. Some prohibit arbitrage completely and even include its ban in their lease agreements.

5. Sell a course online

Reddit user u/wawedewawe – who is a teacher by profession – explains how he managed to sell worksheets that students can use for personal studies. This is one example where someone earns passive income from selling online courses.

If you’re skilled in a particular field, you can also create an online course for people who need knowledge on the same. Whether it’s an eBook, audio or video syllabus, most of your work will involve creating the study material. You can then distribute it through sites like Coursera, Udemy and SkillShare for pay. Once the course is out there, you can sit back and earn passive income from everyone who is interested in taking it. Focus on something that you have a passion for and has a relevant market so you won’t get bored of managing the course, it could be anything from personal finance to video game design and more.

Needless to say, you’ll need to be an expert in the field. Otherwise, you may find it extremely hard to sell a course if its content isn’t great. For example, if you’re a professional film producer, you can create a videography course for freelance videographers.

6. Invest in the stock market

The stock market, including mutual funds is a fixture in most passive income ideas on reddit, and rightfully so. With the right shares, you get a long-term equity investment that may earn you dividends. And as user u/Cods_gift_to_reddit explains, you don’t have to do anything at all in terms of growing the company whose stocks you’re buying. You just need to do due diligence and pick a company or index fund that can be profitable both in the short- and long-term.

If you’re not in for immediate cash, you can consider investing in growth stocks and startups rather than dividend stocks. The difference between the two is that if you own dividend stocks, you earn dividends every time the company makes profits. With growth stocks, the company’s profits are reinvested, which increases the value of your shares. You can only materialize those shares by selling them later, preferably when their value is high enough to generate a profit for you. All in all, while you shouldn’t rely on it solely until you have a lot of money saved, investing can be a very solid source of income.

7. Make money with peer-to-peer lending

Peer-to-peer lending is one of those reddit passive income ideas with extremes. On the one hand, peer-to-peer loans are typically high-yield, which means you stand to make a lot from interest earned. Some lenders earn 10% to 12% return on their investment2. On the other hand, the loans are unsecured. This makes them high-risk and can expose you to losses should your loanee fail to pay back.

But as Redditor u/GrowMoreMinds discusses, you can take steps to minimize the risk. Rather than lending one person a huge chunk of money, divide it into smaller portions and lend to many different individuals. The interest they pay is your passive profit.

You can get into peer-to-peer lending by signing up to a website that facilitates this type of program. Some of the most popular options include Prosper, Upstart, Peerform, Funding Circle, and Payoff.

You can also get into peer-to-peer lending via various DeFi (or decentralized finance) protocols that operate on cryptocurrency blockchains. This is extremely risky and complicated, but it will allow you to lend out cryptocurrency like Bitcoin to other users for very lucrative interest rates, although because there is no central authority there is always the risk of losing funds via smart contract exploits and hacks.  Also, since cryptocurrency and blockchains are so new, if something goes wrong, you may not be able to bring a lawsuit in court.

8. Invest in vending machines

Vending machines can be decently profitable. If well-stocked and located in a safe and high-traffic location, an average vending machine can generate up to $400 per month in passive income. Reddit user u/chef_pants1 narrates how he started with six vending machines and managed to add 14 more in just one year. With such growth you’re already looking at $8,000 per month of passive income.

That said, maintaining vending machines does need a bit of work. You have to take a few hours of your week to restock them and collect money from the machines. Plus, they’re prone to vandalism. So, the cost of maintenance may be something worth keeping in mind.

9. Create YouTube content

Are you a professional mechanic? Perhaps a DIY enthusiast? Or maybe you have a desire to be an up and coming travel blogger? Sign up for a YouTube channel, create your own content and get paid with the YouTube Partner Program.

One advantage of using YouTube to earn passive income is that you don’t necessarily need to dedicate time to create content. You can simply record your typical home, work, or travel experience. People will watch as long as it’s interesting.

A good example is Sam Chui who gets millions of views just by recording his experiences with different flights. Some people hit it big with showcasing their home remodeling projects. Others offer insight into their work life. Whatever the case, it’s as simple as hitting the record button and going about your life as you normally would. And as u/brianjester states, you only need one video to go viral and your channel can turn into a money-making machine.

10. Buy tokenized real estate

If you’re into fintech or are interested in exploring its investment opportunities, then this might be an appealing but very risky option. Tokenization of real estate refers to the process of converting a real estate asset into tokens and putting those tokens up for sale. It’s like dividing a company into shares and then selling those shares to investors.

The good thing with tokenized real estate is that it’s tied to an actual physical asset, unlike other digital assets like NFTs. For that reason, the associated risk is lower compared to options like NFTs. However, if something goes wrong, you may have problems bringing a lawsuit in court and recovering your money.  Also as Reddit user u/ValueDifferent9722 explains, now you can invest in the asset’s cash flow rather than the asset itself.

In which case, you won’t own a token of the real estate asset. Instead, you’ll own a token of its cash flow. You get paid every time the asset makes a profit. However, this has the same problem mentioned above about bringing a lawsuit.

11. Make money with Amazon FBA

This is one of those passive income ideas on reddit that’s suitable for small business owners who are in retail and looking to expand into e-commerce easily. FBA is short for Fulfilled by Amazon. It essentially entails business owners sending their products to Amazon. The retail giant then handles all the storage, packaging, shipping, returns, refunds, and basically everything that involves order fulfillment.

Redditor u/Thrivingwonders includes Amazon FBA in passive income ideas because it doesn’t require a ton of effort to pull off. You can send your products to Amazon once a week (or on-demand) and let them handle everything from there. In doing so, you directly take advantage of Amazon’s huge marketplace, staff and logistics operation. Essentially this lets you get into dropshipping your products while you can be physically anywhere in the world as long as you have stock in Amazon’s warehouse.

12. Sell print-on-demand merchandise

On his list of passive income ideas on reddit, user u/out_of_hours includes creating designs for print-on-demand (POD) merch. Rightly so, particularly if you’re good with graphic design. You’ll only need to create designs and upload them to a POD marketplace like Redbubble.

Whenever someone orders your design – whether on a t-shirt, pillowcase, or handbag – Redbubble prints it on the product and ships it. That’s why it’s called print-on-demand. And of course, you get paid for every one of your designs that’s printed and shipped. You can earn multiple times from one design at the comfort of your home.

13. Self-Publish an Online Book 

Are you a relatively creative writer and artist? If the answer is yes, then you could be selling books you have self-published online with Amazon and Kindle Unlimited. Reddit user u/jpb209 says they’ve been making a full-time living wage selling low content books directly to the Kindle Unlimited Platform and Amazon. 

Write a book about a topic you are familiar with or passionate about before editing it and uploading it to the online platform. This is a great way to make extra income while honing in on your writing skills! Who knows, you may even be recognized for one of your books in the future. However, keep in mind that you may have to spend a lot of time in the beginning before you can begin making a passive income with this job. 

14. Create an App and Sell it 

Furthermore, another fantastic way to make passive income is to create an app and sell it on the Android and Apple app store. This one is specifically for individuals who know how to code as you will be unable to create an app without this fundamental skill. Additionally, you may have to commit to updating your app once it has been published in order to fix bugs and any other malfunctions to enhance user experience. With that being said, if you have a valuable app idea that you think other people may appreciate, this is a great way to earn passive income, especially if you can get your app onto the top lists of each app store! 

15. Instagram Sponsored Posts 

If you’re a social media expert, then Instagram sponsored posts may be the right passive income job for you. Brands will pay content creators with a decent follower count to promote their products. All you have to do is make an Instagram video with a review of the product so your followers can learn more about the product before purchasing it if they want. 

The nice thing about sponsored posts is that you can negotiate your contracts with businesses to determine whether you’ll be paid by post, using affiliates, or with free products. Reddit user u/ananthsoccer7 talks about how she makes money from sponsored videos so you can get a better idea how to maximize this opportunity. 

16. Create and Sell Stock Audio Tracks  

Are you musically gifted and love to make music? If the answer is yes, then you can potentially make extra passive income by creating and selling stock audio tracks. Many creatives and businesses are looking for non-copyrighted music to purchase for their projects. Reddit user u/_procyon indicates that he made approximately $1000 in two weeks by selling his music to others online for them to use as they wish. Therefore, if you think you can work your way around producing simple, short musical tracks, then this is a great idea you can venture into. 

Final thoughts

As you can see, passive income opportunities are available to those who are willing to put in a little effort before making money long-term. While, it may be a social media platform, Reddit is certainly home to some brilliant passive income ideas that really work. That said, most passive income ideas still require some effort on your part, especially in the initial stages. For example, you may need to create designs for print-outs before making sales with POD. Similarly, if you’re thinking of earning from blogs and websites, then you’ll need to either design them or pay a developer to do it for you. Whatever the case, it’s a cash and/or effort kind of investment. 

Earn more with Nearside

What’s next after picking a passive income idea and running with it? You may need an account to keep cash inflows in a safe place that’s separate from your full-time income earnings. Nearside offers a free-to-open account that comes with no NSF fees, no monthly fees, no minimum deposit requirements and 2.2% unlimited cash backs. Sign up today and get 2.2% on every purchase you make with your Nearside savings account and credit card. Yes, it’s really that easy!

Originally posted: 03/01/2022

Updated on: 05/23/20222

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