11 Best Passive Income Ideas for 2021

It is worth noting that passive income does not in most cases mean “setting and forgetting” the revenue stream. It will help a lot if you keep fine-tuning your product for better customer experience.

1. Peer-To-Peer Lending – Over 10% returns pa

Peer-to-peer lending or Crowd Lending involves offering loans to individuals or small businesses through an online platform that links borrowers and lenders. In this case, the borrower that is often an individual or small to medium enterprise receives money from another individual directly without going through the complicated bank loan application processes.

If you are interested in making passive income from P2P lending, you may lend a small portion of the total loan requested by the borrower. When you act as a peer lender, you receive returns that are higher than an average savings account with your bank. There are several peer lending platforms available today, but two of the most popular are Prosper and Lending Club whose annualized interest rates stand well above 10%.

2. Mobile investment Apps – 3% to 5% pa

For many people, the word investment seems like a term reserved for people looking to put tens of thousands, or even millions of dollars into a business. This is not necessarily true. Today, there are numerous ways in which the average non-accredited investor can stash as little as $5 in a passive investment idea online.

Often, we have to operate on tight budgets due to a large number of expenses, leaving very little money for savings. If that describes you, then you need such investment apps as Acorns or Stash Invest that helps you boost your passive income by investing your loose change.

All you have to do is sign up to Acorns and then connect it to your bank account. The next time you use your card to buy your morning coffee or a burger, the Acorns app will round up your change to the nearest dollar and then automatically invest the difference for you.

3. Real estate investments – 10% to 15% pa

There are two ways in which you can create a passive income stream in the real estate industry. If you have a large capital backing, you may consider investing in a rental property by way of building them from ground up or through the purchase of commercial or residential property and then renting them out. Don’t have enough cash to purchase an entire property, you can also buy an apartment and rent it out.

Alternatively, you can invest in the less capital intensive crowdfunded real estate companies like Fundrise and PropertyCrowd. These ventures work by way of pooling in investor funds and advancing it as a loan to small and medium-sized investment real estate companies. Some companies go ahead and build or purchase residential or commercial properties. In this case, you get to earn dividends from the rental income as well as the appreciation of invested property.

4. Automated forex and crypto investments – 5% to 20% pa

The $5 trillion market, forex trading industry, and the relatively new crypto investments are virtually the biggest, most vibrant, and the highest rewarding passive investment opportunities. In more instances than one, you will read and hear experts bash either industry for its considerably high volatilities and massive exposure to risks. Some statistics have even placed the level of success in either field at less than 5%. But the automated forex and cryptocurrency investors like Cryptohopper are, however, well on their way towards levelling the playing field.

Through the use of award-winning trading and investment algorithms, these automated investors conduct and decide on the best trade entry and exit points. You might, however, have to spend as much as $1,000 on an effective auto-trading algorithm through a one-time payment or monthly subscription.

5. Invest in shares and stocks automatically via a robo-advisor – 3% to 6% pa

Shares, stocks, commodities, and equity markets are probably the oldest form of money market investments. Yet it still remains one of the most complicated trades markets to penetrate, especially for beginners given the several barriers to entry contained herein. For the longest time, you either had to use the expensive stock brokers or dedicated a significant portion of your day to analyzing the markets and companies in which you are interested in.

The advent of Robo-advisors like M1 Finance and Betterment has however sought to automate the process and turn it into a profitable income stream. Here, you don’t need previous stock or commodity trading experience. If you have little to no experience in trading shares, stocks, and equities investment portfolio, they will guide you through the process of creating a highly diversified and low-risk portfolio. They will proceed to manage the portfolios, effectively earning you supplemental passive incomes.

6. Invest in online discount brokers

You might also consider depositing your funds with such automated online stock brokers as Ally Invest. Registering with most of these funds is mostly free but they charge a per trade charge that averages $4.95 for most of the online stock traders. One of the most interesting aspects of these online stock brokers is their adoption of high tech investment analyses and trade execution tools. Plus some like Ally Invest don’t have minimum account investments or operating balances.

7. Write An eBook- unlimited returns

Today, there are numerous self-published authors who are earning decent incomes annually from eBooks that they sell online. The journey to a self-published author is quite straightforward. You only have to figure out a topic or niche that you are an expert in, or come up with a fascinating fictional story, write it up, format it as an eBook and upload it to an online ecommerce platform like Amazon Kindle or sell it via social media.

You only have to commit a few weeks of preparing the eBook for the market after which you get to earn passive income into the foreseeable future. The most interesting part of self-publishing an eBook is that you are selling digital copies and therefore don’t have to worry about packaging, postage or deliveries.

There are many places where you can promote and sell your eBook. For instance, you can create a website or set up a blog which has links to your book. You could set up the download link to be accessible via a payment gateway so you receive money for your publication before allowing access to it.

One of the most promising automated eBook distributors of digital content that is popular with eBook writers is Sendowl. For a low monthly fee, you can sign up, upload your book as a pdf file, set your price and enter your details, leaving Sendowl to handle all the transactions. Whenever someone purchases your eBook, you receive your money directly to your account.

8. Sell Stock Photos – unlimited returns

Do you know that you can also make passive income generating stream through the sale of your images and photos on several photo sharing sites? Numerous magazines, editorials, blogs, and business owners require stock photos for use in publicity materials, reports, publications, and websites. If you love snapping high-resolution photos, then you can sell them online per image or offer them as a photo bundle – for instance, 15 photos for $20.

There are many sites which offer you the opportunity to sell your photos, with two of the most popular being Shutterstock and iStock. You could also choose to build your own site and sell your pictures there while promoting them via social media. After creating a following on social media, popular photo selling sites or own website, these photos continue bringing in passive incomes for years on.

9. Rent your guest room or backyard on Airbnb – Depends on the space available

Do you want to make passive income through something that takes none of your time and requires no additional investment? Well, consider renting out a spare room in your home to your city tourists or even the backyard to backpackers through such online platforms as Airbnb. The most interesting about this passive investment is that it requires no additional investments or overheads as tourists carry with them their food and essentials. You can also rent out the entire house when going on business trips or vacations.

10.  Drop shipping website – Unlimited returns

This refers to a form of e-commerce where you don’t get to retain any goods in stock. On the contrary, you act as an intermediary between a customer and the wholesaler, another retailer or even the manufacturer of the item who ships items directly to the customer.

The best part is that you can launch your drop shipping business with little to no investment, without any inventory and without footing the shipping costs. All you have to do is set up a simple website, and add links to suppliers and wholesalers products and every time customer clicks through and makes a purchase, you get to earn a commission passively.

11. Get Refunds on Your Purchases

The Paribus app from Capital One is a really innovative app that helps you earn passive income from your purchases. All you have to do is install the app on your Apple device. When you shop online, the application will read through your confirmation email messages to track if there is a price drop. If the price of any of the products you have purchased drops, you get a refund credited to your bank account.

This is one of the easiest ways to earn passive income from your shopping since you do not need to get in touch with anyone to receive your refund. The Paribus app takes care of everything for you. Besides giving you refunds for your online shopping, this application compensates you for late deliveries. You should note that Paribus requires access to your emails to offer you refunds, so if you are uncomfortable with this, you will have to set up a separate email address for this purpose.