40 passive income ideas for 2026, and how passive each really is

What is passive income?

Passive income is money you earn without trading each hour for it. Active income stops when you stop working. Passive income keeps coming from something you built or own.

Here's how passive each kind really is:

The pattern: the less work something takes after, the more money or work it takes before.

How my course kept selling for years

Virtual Summit Mastery made $60,000 on its first launch, from an email list of 1,500 people. Later launches made almost $200,000, then over $200,000 with no affiliates. Between launches, it kept selling.

It made well over $1 million in total before I sold it to Jan Koch. That's as close to passive as I've seen, and it still needed launches, updates and support. Expect the same from any idea below.

Here's what passive income has paid, from examples in this guide:

Digital products you make once

You build these once and sell them again and again, with nothing to ship. They're the closest thing to passive income most people can build.

1. Create an online course

What it pays: course sales, bundles and payment plans.

How passive it is: weeks to build, then launches and support. A course with a steady way to reach buyers, like an email list or a channel, sells between launches.

It fits you if you've helped people get a result and can teach the steps.

Example: Justin Welsh has made $6.75 million from his courses and products since 2019 (his breakdown).

Watch: Pat Flynn on creating a profitable online course, step by step.

Tools: I sold mine through ThriveCart, which also hosts courses in ThriveCart Learn. Read my guide on how to create an online course.

Mistakes to avoid:

• Building before anyone buys.
• Expecting sales with no audience. A course needs a way to reach buyers.

Start: a little money · Time: 5 to 15 hours a week · On camera: optional · From anywhere: yes · Experience: real expertise · Paid: every business day through Stripe · Age: 13+ on Stripe, with an adult on the account under 18

2. Teach on Udemy or Skillshare

What it pays: a share of what the marketplace earns from your classes. The marketplace brings students who search for classes, so you can start without an audience.

How passive it is: a few weeks to record, then little work while the marketplace sells it.

It fits you if you can teach a skill people search for, like design, video or software.

Example: Ali Abdaal made $859,106 from his Skillshare classes in 2021.

Tools: record with Descript, and compare platforms in my best online course platforms guide.

Mistakes to avoid:

• A long, slow class. Short and practical gets finished and reviewed.
• Relying on one class. A catalog earns more.

Start: free · Time: 5 to 15 hours a week · On camera: optional · From anywhere: yes · Experience: some helps

3. Sell Notion templates

What it pays: a price per template that you set. Gumroad keeps 10% plus $0.50 of each sale you bring in yourself (Gumroad).

How passive it is: a weekend to build, then occasional updates.

It fits you if you've built a Notion system you use every day.

Example: Thomas Frank made $15,000 a month from one Notion template a few months after launch.

Tools: Notion, and Gumroad or Lemon Squeezy, which Thomas Frank uses.

Mistakes to avoid:

• A template that tries to do everything.
• No demo.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe

4. Sell Canva templates

What it pays: a price per template that you set, minus Etsy's $0.20 listing fee, 6.5% of each sale and payment processing (Etsy).

How passive it is: a weekend per set, then new sets when you want more sales.

It fits you if you design well in Canva.

Tools: Canva and Etsy.

Mistakes to avoid:

• Fonts or images you can't license for resale.
• Single templates instead of sets.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: weekly on Etsy by default · Age: 18+ on Etsy, or 13 to 17 through a parent's account

5. Sell printables and planners

What it pays: a price per download that you set, minus Etsy's $0.20 listing fee, 6.5% of each sale and payment processing (Etsy).

How passive it is: a few evenings per design, then almost none, since downloads deliver themselves.

It fits you if you like designing useful pages.

Tools: Canva and Etsy, and the Etsy fee calculator.

Mistakes to avoid:

• Copying other sellers.
• Vague titles.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: weekly on Etsy by default · Age: 18+ on Etsy, or 13 to 17 through a parent's account

6. Write and sell an ebook

What it pays: royalties per copy. Amazon KDP pays 35% or 70% of an ebook's price, depending on the option you choose (Amazon KDP).

How passive it is: weeks to write, then little work while it sells.

It fits you if you can teach something useful in a short book.

Example: Nicolas Cole made $5,000 from his first eBook series, his first money online (his story).

Tools: Claude to outline and the book royalty calculator.

Mistakes to avoid:

• A long book nobody finishes.
• A homemade cover.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: about 60 days after each month on KDP

7. Publish low-content books

What it pays: royalties on each copy. Amazon KDP pays 60% of a paperback's list price at $9.99 or more, minus the printing cost: a $15 book that costs $5 to print earns $4 (Amazon KDP). Royalties arrive about 60 days after the end of the month of the sale (Amazon KDP).

How passive it is: a weekend per book, then almost none, since Amazon prints and ships every copy.

It fits you if you like simple design.

Watch: Sean Dollwet makes a journal to sell on Amazon KDP with Canva and AI.

Tools: Canva and Amazon KDP.

Mistakes to avoid:

• Copying covers.
• One title only.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: monthly, about 60 days after each month on KDP

8. Sell stock photos and videos

What it pays: a share of each license sold. Shutterstock pays 15% to 40% of each license, by six earnings levels that reset every January 1 (Shutterstock), and pays monthly, by the 15th (Shutterstock).

How passive it is: each upload takes a little work, then it can sell for years.

It fits you if you already shoot photos or video.

Tools: Adobe Stock and Shutterstock.

Mistakes to avoid:

• People without model releases.
• Only shooting what you like.

Start: a little money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: monthly, by the 15th on Shutterstock

9. Sell presets and LUTs

What it pays: a price per pack that you set. Gumroad keeps 10% plus $0.50 of each sale you bring in yourself (Gumroad).

How passive it is: a few days to make a pack, then almost none.

It fits you if people ask how you edit your photos or videos.

Tools: Adobe Lightroom for presets, and Gumroad to sell.

Mistakes to avoid:

• Presets that only work on your own photos. Test them on others.
• No before and after.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe

10. Sell sound and music packs

What it pays: a price per pack that you set. Gumroad keeps 10% plus $0.50 of each sale you bring in yourself (Gumroad).

How passive it is: a few weeks to produce a pack, then almost none.

It fits you if you make beats, loops or sound effects.

Tools: Gumroad to sell, and Suno to sketch ideas.

Mistakes to avoid:

• Unclear licenses. Say exactly how buyers can use your sounds.
• Samples you don't own.

Start: free · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe

11. Sell website templates

What it pays: a price per template that you set. Gumroad keeps 10% plus $0.50 of each sale you bring in yourself (Gumroad).

How passive it is: weeks to build and test, then updates as the platform changes.

It fits you if you design websites.

Tools: Framer to build, and Gumroad to sell.

Mistakes to avoid:

• Templates that break on phones.
• No documentation for buyers.

Start: free · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe

12. Sell prompt packs

What it pays: a price per pack that you set. Gumroad keeps 10% plus $0.50 of each sale you bring in yourself (Gumroad).

How passive it is: a few days to build and test, then updates as models change.

It fits you if you've built prompts that get great results for a specific job.

Tools: ChatGPT, Claude and Gemini to test, and Gumroad to sell. Tidy your prompts with the AI prompt generator.

Mistakes to avoid:

• Prompts that only work in one model.
• No proof. Show what each prompt produces.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe

Content that keeps earning

Content is slow to build, and the library you build keeps earning from ads, sponsors and affiliate links.

13. Build a YouTube library

What it pays: YouTube's ad revenue share, sponsors, memberships and your own offers. YouTube pays you 55% of the ad revenue on your long videos and 45% of your share of Shorts ads (YouTube), once you have 1,000 subscribers and 4,000 watch hours in a year, or 10 million Shorts views in 90 days (YouTube).

How passive it is: months of weekly videos to start, then old videos keep earning while you make new ones.

It fits you if you can post every week for a year.

Example: Pat Flynn has made $27,732 from one podcasting tutorial with a million views. Ali Abdaal made $653,299 from YouTube ads in 2022.

Watch: Sean Cannell sets up a YouTube channel step by step.

Tools: vidIQ and Descript, and the YouTube money calculator.

Mistakes to avoid:

• Only trend videos. They stop earning when the trend ends.
• Quitting before a year.

Start: a little money · Time: 5 to 15 hours a week · On camera: optional · From anywhere: yes · Experience: none needed · Paid: monthly, between the 21st and 26th · Age: 18+, or a parent or guardian through AdSense

14. Run a faceless channel

What it pays: ad revenue share, sponsors and affiliate links, on the same YouTube terms as any channel (YouTube). Businesses pay for this work too: searches for YouTube automation faceless channels grew 239% on Fiverr in the six months to April 2026 (Fiverr).

How passive it is: a lot of work to build, and some channels hire writers and editors so the owner only manages.

It fits you if you can manage a process.

Example: Adavia Davis runs faceless AI channels that make roughly $40,000 to $60,000 a month, which Fortune checked against his AdSense records.

Watch: Gillian Perkins shares 8 ideas for videos without showing your face.

Tools: ChatGPT, ElevenLabs and CapCut.

Mistakes to avoid:

• Mass-produced videos. YouTube doesn't pay for repetitive content (YouTube).
• Clips you don't have rights to.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: monthly, between the 21st and 26th · Age: 18+, or a parent or guardian through AdSense

15. Build a blog

What it pays: display ads, affiliate links, sponsored posts and your own products.

How passive it is: a year of posts to build traffic, then posts that rank keep earning.

It fits you if you like writing and can wait.

Example: Adam Enfroy made $812,718 from his blog business in 2020. My business started with a blog in 2013.

Watch: Adam Enfroy's masterclass on starting a blog.

Tools: RightBlogger and Ahrefs, plus my guide on how to make money blogging.

Mistakes to avoid:

• Too many topics.
• Never updating old posts.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: monthly, by each ad network and affiliate program

16. Earn affiliate commissions from content

What it pays: a commission per sale or sign-up. Amazon Associates pays up to 10% of each sale, depending on the category (Amazon), about 60 days after the end of the month (Amazon). My biggest affiliate month came from a course, not Amazon: around $40,000 as Ramit Sethi's #1 affiliate for Zero to Launch.

How passive it is: reviews take work up front, then keep earning as long as people search for them.

It fits you if you write or film honest reviews.

Example: Pat Flynn has made over $1 million in commissions from five products, by 2022. Adam Enfroy made $601,698 from affiliate programs on his blog in 2020.

Watch: my interview with affiliate marketer Charles Ngo.

Tools: the affiliate program finder and the affiliate commission calculator.

Mistakes to avoid:

• Reviews of things you haven't used.
• Hiding the commission (FTC).

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: monthly, about 60 days after each month on Amazon

17. Grow a newsletter with sponsors

What it pays: sponsors, paid subscriptions, affiliate links and your own products. On Substack, writers keep 90% of paid subscriptions, minus card fees (Substack).

How passive it is: a weekly email, so not passive, but sponsors and paid subscriptions grow with the list without more work per reader.

It fits you if you can write weekly.

Example: Justin Welsh made $795,000 from newsletter sponsors since 2019 (his breakdown).

Watch: my interview with Ryan Levesque on quiz funnels that add 1,200 email subscribers a day.

Tools: Kit, beehiiv or Substack.

Mistakes to avoid:

• Skipping weeks.
• Too many sponsors.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: through Stripe for paid subscriptions · Age: 13+ on Stripe, with an adult on the account under 18

18. Build a podcast back catalog

What it pays: sponsors, listener support, premium episodes and your own offers. Spotify's Partner Program pays 50% of the ad revenue from its ads in your episodes, once your show reaches 2,000 hours listened and 1,000 listeners in 30 days (Spotify).

How passive it is: weekly episodes, but old episodes keep finding listeners and carrying sponsor reads.

It fits you if you like conversations.

Example: John Lee Dumas made $126,550 from podcast sponsorships in January 2024.

Watch: Pat Flynn's complete tutorial on starting a podcast.

Tools: Riverside and Descript, which I use.

Mistakes to avoid:

• Irregular publishing.
• No video version.

Start: a little money · Time: 5 to 15 hours a week · On camera: optional · From anywhere: yes · Experience: none needed · Paid: when sponsors pay

Memberships that pay every month

Recurring payments are the closest a business gets to a salary: members pay every month for as long as the membership is worth it.

19. Run a paid membership

What it pays: monthly or yearly memberships.

How passive it is: not very at first, since members expect new content and a community, but the income repeats every month.

It fits you if you can keep giving a group value every month.

Example: Ali Abdaal made $2,800 a week from his Part-Time YouTuber Inner Circle in March 2023 (his breakdown). Justin Welsh has made $630,000 from his community since 2019 (his breakdown).

Watch: my interview with Stu McLaren on building a successful membership site.

Tools: ThriveCart for billing and FluentCommunity for the community, both of which I use.

Mistakes to avoid:

• Promising more content than you can keep making.
• Ignoring cancellations. Ask every leaver why.

Start: a little money · Time: 5 to 15 hours a week · On camera: optional · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe · Age: 13+ on Stripe, with an adult on the account under 18

20. Get paid by fans

What it pays: monthly memberships and tips. Patreon keeps 10% of what you earn, plus payment processing (Patreon), and pays out when you ask or automatically on the 5th of each month (Patreon).

How passive it is: fans pay monthly for extras, so you keep making those extras.

It fits you if you already have fans who'd pay for more.

Tools: Patreon and the Patreon money calculator.

Mistakes to avoid:

• Too many tiers.
• Perks you can't keep up.

Start: free · Time: under 5 hours a week · On camera: optional · From anywhere: yes · Experience: none needed · Paid: on the 5th of each month on Patreon, or when you ask · Age: 13+ on Patreon

Software and tools

Software is the most scalable passive income, and the hardest to build. AI coding tools have made the building part far easier.

21. Build a software product

What it pays: subscriptions, which repeat every month for as long as customers stay.

How passive it is: months to build, then support and updates. Subscriptions repeat every month, so it can grow without more work per customer.

It fits you if you can solve a problem people pay for monthly.

Example: Nathan Barry built Kit, the email platform, to $46 million a year in 2024. Joel Gascoigne runs Buffer at $22.3 million a year (August 2025). I build my own tools with Claude Code and Codex.

Tools: I build with Claude Code and Codex, and charge with Stripe.

Mistakes to avoid:

• Building for months before talking to a customer.
• Free plans that never turn into paid ones.

Start: a little money · Time: more than 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe · Age: 13+ on Stripe, with an adult on the account under 18

22. Build a browser extension

What it pays: a price you set, as a one-time sale or a monthly plan. If you'd rather build them for clients, on Upwork, Chrome extension developers typically charge $25 to $41 an hour, and the median is $30 (Upwork).

How passive it is: a few weeks to build, then fixes when browsers update.

It fits you if you can build small tools, with AI's help.

Tools: Claude Code to build and Stripe to charge.

Mistakes to avoid:

• Asking for permissions you don't need.
• No reason to upgrade.

Start: free · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe · Age: 13+ on Stripe, with an adult on the account under 18

23. Build a mobile app

What it pays: subscriptions and in-app purchases, minus the app store's share. If you'd rather build them for clients, on Upwork, mobile app developers typically charge $18 to $39 an hour, and the median is $27 (Upwork).

How passive it is: months to build, then updates for new phones and app store rules.

It fits you if you can build an app that solves one problem well, with AI's help.

Tools: Claude Code and Cursor to build.

Mistakes to avoid:

• Too many features at launch.
• No plan to get users.

Start: a little money · Time: more than 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: weekly on Upwork, 10 days after each work week · Age: 18+ on Upwork

24. Run a niche job board

What it pays: job post fees, featured listings and sponsors.

How passive it is: weeks to build and fill, then companies post and pay on their own.

It fits you if you know an industry where hiring is hard.

Watch: Chris Koerner on starting a niche job board.

Tools: Claude Code to build it and Stripe to charge.

Mistakes to avoid:

• A niche that's too broad.
• Charging before there are job seekers.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: every business day through Stripe · Age: 13+ on Stripe, with an adult on the account under 18

Royalties and licensing

You make something once, and every sale or stream pays you a share.

25. Write a book

What it pays: royalties from each copy sold. Amazon KDP pays 35% or 70% of an ebook's price (Amazon KDP) and 60% of a paperback's list price at $9.99 or more, minus printing (Amazon KDP).

How passive it is: months to write, then royalties for years, especially if it helps your business.

It fits you if you have a book's worth of expertise or story.

Watch: my interview with Tim Grahl on selling the first 1,000 copies of your book.

Tools: Claude to outline and edit, and the book royalty calculator.

Mistakes to avoid:

• Publishing without a launch plan.
• Skipping a professional edit.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: monthly, about 60 days after each month on KDP

26. Sell your music

What it pays: streaming royalties, licensing fees and sales. On Upwork, music producers typically charge $30 to $65 an hour, and the median is $35 (Upwork). Employed musicians and singers in the US earn a median of $47.80 an hour (BLS, May 2025).

How passive it is: each song takes work, then streams and licenses pay over time.

It fits you if you make music.

Tools: Suno to sketch ideas and Descript for simple edits.

Mistakes to avoid:

• Waiting for one perfect song.
• Unclear rights on samples.

Start: a little money · Time: 5 to 15 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: per job for licensing and custom songs

27. Sell your art as prints

What it pays: the margin on each print. Employed craft and fine artists in the US earn a median of $55,290 a year (BLS, May 2025).

How passive it is: you make the art, and print companies print and ship every order.

It fits you if people would hang your art on their walls.

Tools: Topaz Labs and Etsy.

Mistakes to avoid:

• Low-resolution files.
• No story behind the art.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: weekly on Etsy by default · Age: 18+ on Etsy, or 13 to 17 through a parent's account

28. Sell print-on-demand designs

What it pays: the margin on each item sold: your price minus the print cost and the marketplace's fees. On Etsy, that's $0.20 to list an item, 6.5% of each sale and a payment processing fee that depends on your country (Etsy).

How passive it is: designs take a few hours, then the printer handles every order.

It fits you if you can design for a niche.

Watch: Mark Tilbury tries print on demand for 7 days and shows what he made.

Tools: Canva, Printful and the print on demand profit calculator.

Mistakes to avoid:

• Trademarks you don't own.
• No samples.

Start: free · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed · Paid: weekly on Etsy by default · Age: 18+ on Etsy, or 13 to 17 through a parent's account

Rentals

Renting out space earns from something you already own, but guests and tenants always need some work.

29. Rent out a room

What it pays: the nightly price you set, minus Airbnb's fee. Most hosts pay 15.5% under Airbnb's single service fee, which is replacing the older 3% split fee (Airbnb). Airbnb starts your payout by the end of the business day after your guest checks in, or 28 days after check-in until you've completed two stays (Airbnb).

How passive it is: setup and a few hours a week for guests and cleaning, less if you hire a cleaner.

It fits you if your lease and city allow short-term rentals.

Watch: Codie Sanchez on what a tiny home can earn on Airbnb.

Tools: Airbnb.

Mistakes to avoid:

• Skipping city rules.
• Underpricing your cleaning fee.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: no · Experience: none needed · Paid: the business day after check-in

30. Own a rental property

What it pays: rent, minus your mortgage, taxes, insurance and repairs. Rental income is taxable, and you can generally deduct the expenses of renting (IRS).

How passive it is: a lot of money up front, then tenants and repairs. A property manager makes it more passive, for a fee.

It fits you if you have savings for a down payment and reserves.

Tools: the mortgage calculator and the down payment calculator.

Mistakes to avoid:

• Buying with no reserves.
• Counting rent as profit before costs.

Start: a lot of money · Time: 5 to 15 hours a week · On camera: no · From anywhere: no · Experience: some helps

Small businesses that run with little work

These take money up front, then run with a few hours a month.

31. Run vending machines

What it pays: the margin on each sale, minus restocking and the location's cut.

How passive it is: money and setup up front, then regular restocking.

It fits you if you can find good locations and restock on a schedule.

Watch: Codie Sanchez buys three vending machines and shows what they really earned.

Tools: a simple spreadsheet for sales and restocking, and the profit margin calculator.

Mistakes to avoid:

• Buying many machines before you know a location works.
• Ignoring theft and breakdowns.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: no · Experience: none needed

32. Buy a website that earns

What it pays: the sale price, above what you paid and spent.

How passive it is: money up front, then a few hours a month to keep it growing.

It fits you if you understand how websites make money.

Tools: Flippa and Ahrefs.

Mistakes to avoid:

• Trusting income claims without proof.
• Sites that live on one traffic source.

Start: a lot of money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: real expertise · Paid: through escrow when the sale closes

33. Hold domain names

What it pays: the difference between what you pay and what you sell for, minus the marketplace's commission.

How passive it is: research up front, then you wait for a buyer.

It fits you if you have an eye for names businesses want.

Tools: GoDaddy and Namecheap, and the domain name generator.

Mistakes to avoid:

• Trademarked names.
• Renewing hundreds of names that never sell.

Start: a little money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps · Paid: when a buyer pays through the marketplace's escrow

Passive income from investing

These are the most passive of all, because your money does the work, but they need money first, and some can lose value. This section explains what each is, from official sources. It isn't financial advice, so speak to a licensed adviser about your own situation.

34. Keep savings in a high-yield savings account

What it pays: interest at a rate the bank sets, which can change. At an FDIC-insured bank, deposits are insured up to $250,000 per depositor, per bank, for each account ownership category (FDIC).

How passive it is: completely, once the money is in.

It fits you if you want a safe place for savings that earns something.

Tools: the compound interest calculator.

Mistakes to avoid:

• Keeping more than the insured limit at one bank.
• Chasing a teaser rate that drops after a few months.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed

35. Buy certificates of deposit

What it pays: a set interest rate for a set time. A CD holds your money for a fixed period, such as six months, one year or five years, and the bank pays interest in exchange (Investor.gov).

How passive it is: completely, until the CD matures.

It fits you if you won't need the money until a set date.

Tools: the compound interest calculator.

Mistakes to avoid:

• Locking up money you might need soon.
• Ignoring early withdrawal penalties.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed

36. Buy I bonds

What it pays: I bonds issued from May 1 to October 31, 2026 pay 4.26%, including a fixed rate of 0.90%, and the rate resets every six months with inflation (TreasuryDirect).

How passive it is: completely. You can cash them in after 12 months, but before five years you give up the last three months of interest. You can buy from $25 up to $10,000 in electronic I bonds a year (TreasuryDirect).

It fits you if you have savings you won't need for at least a year.

Tools: TreasuryDirect, the US Treasury's own site.

Mistakes to avoid:

• Buying money you'll need within a year.
• Cashing in early without counting the interest you'll lose.

Start: a little money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed

37. Buy Treasury bills

What it pays: the difference between the price you pay and the face value you get back. Treasury bills last from four to 52 weeks, sell at a discount or at face value, and start at $100 (TreasuryDirect).

How passive it is: completely, until the bill matures.

It fits you if you want a short-term place for cash.

Tools: TreasuryDirect.

Mistakes to avoid:

• Needing the money before the bill matures.
• Forgetting to reinvest.

Start: a little money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed

38. Invest in index funds

What it pays: the return of the index the fund follows, minus fees, and it can go down as well as up. Index funds follow a passive strategy that aims to match an index's return before fees, and usually cost less than actively managed funds (Investor.gov).

How passive it is: completely, once you've chosen.

It fits you if you're investing for many years and can ride out drops.

Tools: the compound interest calculator and the FIRE calculator.

Mistakes to avoid:

• Selling in a panic when prices drop.
• Ignoring fees.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: none needed

39. Own dividend stocks or funds

What it pays: dividends, a portion of a company's profit paid to shareholders, usually on a fixed schedule (Investor.gov). Companies can cut them, and share prices can fall.

How passive it is: completely, once you own them.

It fits you if you're investing for the long term and want regular payouts.

Tools: the compound interest calculator.

Mistakes to avoid:

• Chasing the highest yield. It can signal trouble.
• Owning only a few companies.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps

40. Invest in REITs

What it pays: a share of the income from commercial real estate. REITs own and usually run income-producing property, like offices, apartments and hotels, and let individuals share in that income without buying property themselves (Investor.gov).

How passive it is: completely, once you own them.

It fits you if you want real estate income without being a landlord.

Tools: Investor.gov's guides.

Mistakes to avoid:

• Non-traded REITs you can't easily sell.
• Forgetting that property values can fall.

Start: some money · Time: under 5 hours a week · On camera: no · From anywhere: yes · Experience: some helps

Passive income scams to avoid

"Passive income" is a favorite promise of scams. The FTC has shut down several schemes that sold people "done-for-you" online stores:

• Automators AI: the FTC said its owners sold "passive investment income" from online stores supposedly powered by AI, and two of them face a lifetime ban on selling business opportunities (FTC, February 2024).
• FBA Machine, formerly Passive Scaling: the FTC said it falsely guaranteed income from online stores using AI-powered software, and its owner is permanently banned from selling business opportunities (FTC, July 2025).

Walk away from any offer that guarantees income, asks you to pay for a store someone else runs, or promises returns from a trading bot.

How passive income is taxed

In the US, passive income is still income. Sales of products and royalties are taxable, and so is rental income: cash or property you receive for the use of real estate or other property is taxable as rental income (IRS). If you sell products as a business, self-employment tax applies once your net earnings reach $400 a year (IRS).

Keep records from your first sale, and ask an accountant once the money grows. I'm not a tax advisor.

Final thoughts on passive income

There are 40 passive income ideas in this guide, and none of them is passive on day one. Products, content and software take time up front. Investing takes money up front.

Pick the trade you can make: build something with your time, or put your savings to work, or both. My course was months of work that paid for years, and that's the best kind of passive income I know.

Keep reading:

• 108 ways to make money online
• How to create an online course
• 70 side hustle ideas

Your next step: pick one product you could build in a month, and pre-sell it before you build it.