What is passive income?

Unlike the money you receive for doing your day job, a passive income is regular money you receive without having to consistently work for it.

Unless of course your daily work is working on passive income projects that, once complete, will pay you recurring income.

“True passive income means no regular work just regular income.”

In other words, you do the work once and then receive ongoing payments… like a recording artist or an author getting paid royalties. A second income or a regular passive income is something we would all like, right? But how can someone go about generating it?

Here are some interesting ideas for you to make passive income.

Get a mobile game or App built

You might initially think that this is very expensive, and it can be.

However nowadays you can take advantage of ‘off the shelf’ DIY platforms that can enable you to build Apps and Games very cost effectively. Check out www.appypie.com. Furthermore, the cost of hiring a coder to help you build the App is not as expensive as you may think either. Upwork, a freelance hiring platform has many talented coders and developers from around the world who will pitch for your job. Coders located in countries where the cost of living is less expensive will quote less money for their time.

It’s the idea, the usefulness, and or fun that the app or game can provide along with the size of the potential market and your promotional and marketing ideas and efforts that will make or break this passive income idea.

However if you are successful this idea does have the potential to make you a lot of money.

Create software

This is similar to an App or Game idea and believe it or not can also be done more cost effectively than you might first imagine. Look at off the shelf platforms and freelance coders to help create the softare.

Again it’s the idea, size of the market and your promotional efforts that will determine the success of this.

But if you have a winning software product that fulfils a real need as well as a good marketing and advertising strategy then you can generate passive income for many years.

You will just have to update the software from time to time to keep it relevant and fresh.

Again as with developing an App or game creating and selling software has great potential to make you a lot of money.

Vending machines, games machines!

This is an odd one. I have done a lot of research and read many articles and stories about this online and this method can be tricky and will fail a lot of the time as people end up paying more for the machines than they can comfortably make back in a realistic period of time.

Firstly, the successful factor is highly depending on the location, you need a lot of footfall, potential customers. Secondly the popularity of the machine (game or products, food, beverage) will make or break this idea.

Some vending machine sellers will sell you the location with the machines and it is recommended that you get a written agreement from the sellers as to the exact or at least type of location and criteria like traffic, number of people who visit, work at or walk by each day.

Acquire an existing online business

As it is passive income we are talking about you will need to ensure that the online business is either as automated as possible or has management and staff that’s are already working on the businesses daily activities so you don’t have to.

The sucess of this will depenjd on the size of the market and potential profit as well as the product or service you are providing along with the dedication, expertise and skill level of people working for you or with you.

Check out my list of passive income online business models below to see the most effective methods.

Sell on eBay

There and many ways to sell on eBay but to achieve passive income you need to find manufactures or suppliers that will take care of fulfilment, product packaging, delivery and customer service so you don’t have to.

This is known as Dropshipping, here is an article on Shopify that explains it well.

You will usual need to bulk buy the product you are selling and also do some work to make sure there is a real demand for the products as well as promote your listings.

Therefore a lot of upfront research will need to be conducted as well as an initial cash outlay but if you get this right the business can scaled and grown to provide you with a good source of passive income.

Design products

If you are creative and can create cool designs for things like T-shirts and or other novelty goods you can sell them online with the help of sites like redbubble and cafePress.

You can upload designs for Hoodies, T-shirts, Phone and laptop covers, pictures and wall arts, Home décor, stationary, bags and more.

You will receive a percentage of the profits for any items sold with your designs on.


You secure the business or jobs then outsource the actual work. Some work will be requiried, pitching and selling your service as well as managing your outsourcers.

You can find and pitch for jobs by setting up profiles on specific job boards and freelance websites depending on the service you are offering. It will take some time to find good virtual employees and freelancers but once you do you can keep them and build a team.

The best platform to hire coders

As mentioned earlier upwork.com is one of my favourite a platforms and in my opinion the best around if you are looking for coders. I have personally used Upwork to find freelancers who did very good work for me and ended up being a valuable part of our team.

www.outsource.com/ is another a good place to start if you are looking for web developers, marketers, Graphic designers and App developers for example.

Where you find your outsourcers and virtuial employees will depend on the industry you are interested in working in but it is wiorth noting that most successful outsourcing business work in the tech or online markets when you can work remotely from anywhere in the world to enablwe to to hire skilled professional in countries with lower costb of living and expected wages.

The key it to get jobs in say the UK or the USA where you can charge a premium price and ten get the work done cheaper by overseas workers. Of course the need to be pay a realistic and reasonable wage but you will be supprised how low some will work for sometimes. I used to have some very skilled guys in The Philippines who were happily working for me for $5 per hour!

This will be a lot of work initially as you will spend a lot of time finmding jobs and managing and nurturing your team of outsourcers. However, once you get well established your own workload will reduce and if you can generate a constent stream of jobs from your website and contacts with out much new effort and you can relpy of your outsources to get on and do a quality job without neeed yout help you can acheive somethign that will resemble a passive income.

Tip: Set up a professional website and brand which will help you secure more contracts and jobs. Also look for client testimionals and referrals to help build your business and pipeline.

Rewards & cashback

Some people want as many passive income streams or methods as possible on the go as they all add up right. So why not get cash back from credit cards and reward programmes or cash back when you shop. This will not make you rich but it can help you live more frugally to save and invest in other passive income opportunities.

Become an introducer or referrer

This can be very lucrative. Some businesses offer cash incentives to refer customers. You will need to research the types of business that do this and build a list of the best ones.

You will also need to prove yourself not to be a waste of time. You will need to sell yourself by highlighting your business knowledge, track record, and associates or contacts. Then get an agreement in writing and in some cases an NDA (Non-disclosure agreement) so both the business and customers you are referring cannot cut you out of the deals.

Of course the value of products or services being sold will determine how much money you can make.

A profitable example is referring people to property investment opportunities where the agent or property developer will give you a cash referral fee, usual a few hundred pounds or more.

Some work will have to be done to research the right investment opportunities and then to find people or customers to refer but once you have it set up and a stream of customers it can snowball and generate you a good regular passive income.

Make an online guide or how to website

The idea is to write about what you are knowledgeable or passionate about and can therefore share your own experience, expertise and unique viewpoints to add value.

However, you can still do this even if you don’t know much about the subject.

You can outsource the content creation part of this to a ghost writer or white label content provider, or even use royalty free or private label rights (PLR) content to help create the guide.

PLR is very interesting and a massive subject so I suggest researching this yourself online and be careful as there is a lot of misguiding and hyped up information out there but the more you read and research them more you will know.

In my opinion PLR is all about getting new quality up-to-date content thats hasn't been resold and rehashed many times before and then adding vaue with your own unique view points and expertise then packaging it up into a new fresh and valuable product, this can be ebooks, guides, and even software.

Again it’s the idea and subject popularity, quality of the guide and potential customers as well as marketing to reach the customers that will make or break this idea.


Selling stock photos, if you have an eye and talent to capture good images or photos and you enjoy this type of thing then you can submit your images to stock photo sites and receive commission every time someone buys or licences the image.

Here is some information about this on www.istockphoto.com/sell-stock-photos.

Network Marketing

Now this method is frowned upon by many people as in the past certain pyramid schemes and questionable MLM programs have given Network Marketing a bad reputation.

But nowadays some companies with quality products use this use network marketing as part of their distribution and sales strategy. The key to this is to choose the right product and company to sign up with.

You join a company selling products or services that let you build a downline or team. Anytime anyone in your team sells a product you get paid a percentage of the profits, so the bigger your team or downline the more you can make.

It can be a lot of work initially and will depend on the quality and demand for the product or service you are selling.

If you are successful and build a large team of good sellers, you can earn good passive income for as long as the team are working for you.

Affiliate Marketing

Check out this Podcast "5 Tips for Affiliate Marketing beginners" with Sonia Simone, Robert Bruce, and Jessica Frick from Rainmaker

They cover topics a range of topics including how to choose and affiliate program, the importance of content creation, advertising and legal issues. This is brilliant podcast which is very easy to digest and action.

www.rainmaker.fm is a digital marketing advice platform that provides a wealth of audio content. I highly recommend checking it out.

Online Passive income

Nowadays, this is one of the most popular and common. Not everyone has creative talents in the arts field (music, literature, film) however, they could be talented or experienced in another way which may help them achieve passive income streams.

Like business acumen or IT skills, programming or internet marketing for example.

In this day and age, a growing number of people are able to take advantage of mass communication, customer bases, marketing and sales opportunities available online.

Online business models can be an excellent way to generate passive income.

There are many ways to generate income online but most will require a lot of work, or some regular work will be involved, and as we have already said.

“True passive income means no regular work just regular income.”

However, some online business models can be ‘set and forget’ (you do the work once and receive an income all the time the business model is working). Although some adjustments and advertising may be required. It is these ‘set and forget’ online business models that have the potential to help you generate a passive income.

Some of the most effective online passive income business models include:

  • Selling information products (eBooks, how to information, instructions, online courses)
  • Selling software
  • Membership sites
  • Ecommerce sites as an affiliate, like an amazon affiliate site
  • Selling a business in a box
  • Selling Private Label Rights products (similar to a business in a box)
  • Creating niche websites
  • Affiliate marketing (promoting other companies products or service for a set commission)
  • Google AdSense (putting Google adverts on your website to get paid when people click them)

Most of these options involve ‘selling’ however, once your website is set up and has an automated sales and delivery mechanism funnel, the website will essentially do all of the work. Selling, taking the payments and delivering a product online which is essentially on ‘auto pilot’.

This will mean that you could get paid regularly without having to do any more work. 'set and forget'

Once your website and sales funnel is created the make or break success factor is to send a consistent stream of visitors or potential customers to your sales and landing pages, therefore...

“The key to generating passive income online is traffic generation or better still automated traffic generation.”

Most successful online entrepreneurs have automated traffic generation mastered. There are many methods and techniques to drive traffic online. If you would like to read about the most effective, follow the links below.

Traffic Generation

Online Advertising – these are the most effective methods:

Media buying

Buying advertising space on websites typically as banners. You can approach websites and media owners directly or use a media buying platform, here is a list of some of the most popular options.

Pay per click (PPC)

Basically you pay only when someone clicks on your adverts, text or banner. Some websites charge a set fee per click but the ppc platforms with many websites tend to ask you to bid the maximum you are willing to pay for the click. Google AdWords is the most popular choice and they explain it best here.


This is a cross between an article and a sales pitch. You will be writing articles for other websites relevant to what you are selling and generally pay them to publish it. You will need to make sure the websites you target have a good amount of regular, relevant traffic to make it worth your while. If they do, this can become a good source traffic and potentially regular sales as the article will help pre-qualify and sell to the customers for you. Here is a good article which will help you "The 14 Keys to Writing Advertorials that Sell".

Native Advertising

Similar to an advertorial but it has a higher emphasis on providing advertising content in context with the website on which you are advertising on (the style tone, and user experience). So in theory will have a better chance of being read and clicked on than an article, Advertorial or Ad that is less contextual.

Here is a good article on The Guardian which explains Native Advertising further.

Search Engine Optimisation (SEO)

This is basically getting traffic for free (organically) from the search engines results page.

A massive subject and a skill/art in its own right.

Search Engine Land is a good resource to start learning more about Search Engine Marketing and SEO if you are interested. Search Engine Land does have a lot of information but if anything I'd say too much and maybe a bit overwhelming and confusing for beginners.


So rather than trying to learn everything I’d recommend checking out an excellent blog and resource called Backlinko from Brain Dean who will help you focus on proven strategies that work only.

Brian has his own unique methods and strategies that in my option are the best out there. It’s all about researching and developing good high value unique content that people are actually interested in and will engage with and share. Which is what Google loves.

Meaning, if you do it right you will get rewarded with some good listings on the first page of google for your target keywords (products) and a constant stream of free visitors and traffic to your website and sales pages which in turn could help you generate passive income on autopilot.

Brain will show you some techniques and reviews so I highly recommend going to his site and signing up for the newsletter and training. www.backlinko.com.

Social Media Marketing

Social media marketing and management is all about getting involved in the online conversations around your industry, product or service. This a great way to build a loyal customer base, a following of fans and advocates.

However, this can be very time consuming as you have to actively engage with other influencers, followers and audience on a regular basis.

You will need to create, curate and share high value and interesting content to build your own industry persona, identity and voice.

Here is a good resource www.socialmediaexaminer.com which will guide you through the social media jungle.

To generate passive income I'd suggest you outsource this one your online business is generating enough revenue as its important but its not a quick fix.

Email Marketing

It’s no big secret that if you have a good list of responsive leads (email addresses), prospects or better still customers that you can simply email whenever you have something good to say or sell you can and create passive income, well kind of passive after you have created the offer, email, landing page etc...

This is another huge subject to cover but the low down is this.

Always look to capture your websites visitors email address to build your lists by simply offering something of value and relevance to them like a free trial, software, ebook, top ten tips for example via forms on your landing pages.

You can then email your list regular content and sprinkle in the odd product recommendation or sales pitch, but don’t pitch all the time as people will just unsubscribe.

This can be a lot of work creating good content to email and sending email's consistently and as we said true passive income means no regular work.

Automated Email Marketing

However, you can create the content once and set up an autoresponder sequence to email your list (signups) at set times after the initial signup.

I.e. a thank you email instantly, then some more useful content 5 days later, then another a week after, and so on and so forth. Some marketers upload a years’ worth of email's to send the subscribers and simply ‘set and forget’.

You can even use PLR content to loads up useful interesting email into your autoresponder sequence.

Then when you have a new product or want to generate a quick income boost you can simply create an offer and email your list whenever you want to.


Aweber is one of the most popular and cost effective autoresponder tools on the market. Building a good responsive list will take time and even years develop. Here is an article which will help from Hubspot another very good email marketing suite of software provider called 25 simple ways to grow your email list.

Another way is to pay to send your offers to other people’s or companies relevant lists.

You can use a list broker or contact a website or business directly, this can be expensive but if you have a winning offer / product, email and landing page created you can send it over and over again to different lists and continue to make passive income.

For some further reading and professional email marketing consultancy I also recommend visiting Jordie van Rijn excellent blog called emailmonday which has a wealth of information about email marketing strategies, news and resources.

Traffic Generation Summary

In summary, using the online advertising and promotional methods, strategies and techniques listed above can help you generate automated traffic to your website/landing pages and the sales funnels that will do the selling for you.

If it’s a digital product like software, music or eBooks, it can be sent automatically to customers online via a download link. So again, there is no manual work involved in delivering the product in this method.

If you are an affiliate and not the merchant, you don’t even have to handle any products, packaging, delivery, customer support or after sales service as the merchant will do it for you.

Essentially, with the right knowhow, creative thinking and a bit of work, you can use the internet to create true passive income streams.

'Set and forget passive income systems.'

Want some examples and reviews?

After reading the above, you may be thinking ‘with so many ideas and methods I have no idea where to start’. If you are looking for inspiration, look no further than Pat Flynn.

Pat shares his knowledge and experiences with the audience and followers of his 'The Smart Passive Income Blog' and considers himself ‘the crash test dummy of online businesses’. In fact, Pat even details his websites and monthly earnings. Cool Yeah!

Time consuming, high learning curve or skill level!

Although the above mentioned methods of generating passive income streams can be very effective they do tend to require a considerable amount of work upfront, and or special skills, knowledge and of course talent. All this can be very time consuming initially, late nights educating yourself and working on websites.

Maybe you don’t want to do any heavy lifting and upfront work and just want the regular hassle free income...

Other passive income ideas…

In life, you can’t get something for nothing and if you want to generate passive income streams then you have to put the work in.

Or do you! Alternatively, you can choose to invest money to generate passive income.

Passive income investing

Income investing is where you build a collection of investments that yield regular income streams. Here is a quick list of passive income investments with a very brief description.

IMPORTANT: This is not financial advice. If you are considering any of these income investments, you should consult a professional Financial Advisor.

Income investments:


Lend money to an organisation for a fixed period of time and receive regular interest payments. Then when the length of the Bond has expired you will receive your initial lump sum investment back.

Stocks that pay dividend

You purchase shares or stock in the company that will then pay you the dividend from the profit it generates throughout the financial year. However, if the company fails to make a profit, no dividends will be paid. It is similar to profit sharing.


Certificate of Deposit are fixed income investments that pay a set rate of interest. CDs are generally issued by commercial banks with terms ranging from one month to five years. The time deposit restricts holders from withdrawing funds on demand without incurring a penalty.

Peer-to-Peer lending

You may have seen this in the media recently as it becoming more popular, it is also known as crowd-lending. Companies match borrowers with savers who are willing to invest for a certain period of time. As the bank is cut out of the equation, the borrowers can benefit from lower rates and the savers/investors can benefit from higher returns than traditional savings accounts.

Investment Funds

Some funds, although only a few, are available that pay investors a monthly income. These funds are generally a mix of bonds and shares and, as such, investors’ money is at a risk. Here is a link to an informative article on The Telegraph that explains these in more detail.

Invest in a Business

You can invest in businesses in many different ways, as a silent partner, a venture capitalist, business angel, stocks, shares, start-up incubators, crown-funding and so on...

This can be confusing and will take a lot of research and confidence with many variables to consider, like the business sector, the market factors, the management team and even down to individual employee performance. It can be rewarding if the business is a great success,

But you won’t have much control as to the success and outcome of your investment as this will be controlled by the business owners, shareholders (depending on how much you invest and the contract you may have a say), board members, directors and managers.

Invest in startups via Crowdfunding

There are a number of websites that give you access to this type of investment. Seedrs 'Invest in businesses you believe I', Crowdcube, and Funding Tree as 3 worth mentioning. In some instances you can invest from as little as £10.

Buy-to-let property

Property investment is a popular choice for those who want full ownership of their income generating asset.

Especially in the UK which has strong and transparent property buying procedures and ownership laws, investors secure ownership/Title Deed and will therefore have more control over the capital invested.

Of course, lots of variables still have to be considered with property investment, like location, demand, market sentiment, market rates and prices, as well as local and national influences that may affect the market.

As the asset is tangible, investors are confident in their purchase and if they achieve good capital growth may even be able to release equity from the property.

Fully-managed buy-to-let properties

As it is passive income we are discussing the preferred methods of many investors is to acquire fully-managed hands free buy-to-let properties.

These types of buy-to-let properties are designed to enable the investor to sit back, relax and collect the rental income without having to do any sales or marketing work to find tenants as well as property management & maintenance therefore achieving passive income.

However, buying real estate can be more expensive than other options and not a readily available passive income idea for those with limited funds.

Passive income from property investment

As stated above the preferred property investment strategy for many investors or passive income seekers is fully-managed property investment or ‘arm chair investing’ as it’s also known.

In some instances property developers and management companies offer assured income for set periods of time from 1 to 10 years. A growing number of passive income seeking investors are opting for fully-managed property assets including:

  • Student property
  • Care Homes
  • Residential buy-to-let
  • Commercial property

Student Accommodation Investment

In the UK fully-managed student accommodation investment is now one of the most popular passive income investments.

In fact, in the UK some £2 Billion has been invested every year since 2012 (Jones Lang LaSalle). This trend is on the rise with around 5 billion spent on the asset class in 2015 (CBRE).

Here is an article talking about student accommodation rising into a mainstream asset class.

Student Accommodation Investment Guide

The demand is strong as there is a lack of new-build quality accommodation in many towns and cities around the UK as well as rising student numbers both domestic and overseas who desire to live in new purpose-built quality accommodation. Furthermore the evergreen nature of the property type is also an attraction - there will always be students who need somewhere to live.

For more information about this passive income investment strategy and asset class access the online interactive 2016 UK Student Property Investment guide..

Click here to access the guide


From selling products online to investing in property, stocks or shares, there are many ways to generate a passive income. Although some work or investment may be required beforehand.

The passive income ideas detailed in this article can work and help you toward you goal of financial freedom depending on your individual circumstances, time restrictions, current funds if you are interested in passive income investing, and knowhow.

Feel free to comment and ask us any questions for further explanation on any of the ideas and points covered in this article.