man relaxing at beach with laptop

10 Easy Ways to Earn Passive Income (A Beginner’s Guide)

Passive income can be the deciding factor as to whether you struggle financially and have little free time or have extra time and money to enjoy your life. Passive income can provide you with freedom, flexibility and more financial security. Without it, you are trading your time for dollars and there is only so much time in each day and, therefore, only so much work you can get done. But since some of you don’t know how to get started, I decided I would write this beginner’s guide to passive income to help you out.

Passive income is building or participating in a system that generates income with little or no effort on your part once the system is in place. Putting this system in place may require some initial investment of your time and money, but the idea is that once this is established, you continue to earn money with little or no maintenance.

These systems come in myriad ways and can be set up via the three facets of work, saving and spending, and investing. For example, if you take the time to write an ebook that then it continues to sell for years, you have created passive through your work. You took the time to create a product and then put it online for sale. If you do this through Amazon, then you are leveraging Amazon’s system of selling ebooks to create a profit for yourself.

Another example is putting your money into a high-yielding savings account. By doing this, you are using the bank’s system of lending to others to glean a profit for yourself with very little effort.


Todd Tresidder, the founder of, stresses the word freedom every time he is approached with the question of why passive income is so important. He says that the most important reason for you to develop passive income is that it is not interrelated to your time and this gives you the opportunity to engage in other fruitful activities. Tresiddder himself has established multiple systems of passive income which works for him which gives him freedom to travel all over the world with his children during their summer break.

Passive income can also guarantee you financial security. Although it involves taking effort and perhaps an upfront investment during its establishment, if it becomes steady, it offers some financial security since it requires little to no time thereafter to maintain. You can still earn money while you sleep, spend time with your family and engage in hobbies.

It becomes even more useful in adverse situations. Should you become too sick, too old or completely incapable of working, a system of passive income can keep the money coming in. In that sense, you have created some financial security during such situations.

While there are many different types of passive income, I decided to focus on ones that require little money to start and aren’t overly complicated. I broke down these various methods into how they are obtained—through work, saving (or spending) or through an investment vehicle:


Creating a product once that you can resell over and over again is one of the best ways to create passive income. You have probably heard by now how people are making money through blogging, creating videos, writing ebooks and courses. There’s a reason why these avenues are discusses so much—it’s because they generally work. They are also inexpensive to produce.

For each of these methods, you can leverage your current knowledge on a topic—and this topic can be anything. Don’t feel like you don’t have anything to offer to others. You would be surprised at how many people could be interested in something you have to say on anything from butterflies, how to restore an old car, properly storing valuables, taking care of fish and whatever else may interest you. Think about a topic you love and know a lot about and focus on that.

Have a love for something but feel like you don’t know enough about it? Then study it! Let’s say you want to offer courses and ebooks on traveling to and living in Japan but you feel like you don’t know enough at the moment. Take the time to read up and watch videos on the topic and then take notes. That’s your starting point. As long as you continue to learn about the topic, you’ll be able to create fresh content in the future.

quote by Robert Kiyosaki: A wealthy person is simply someone who has learned how to make money when they're not working.

Here are four basic avenues to content creation:

Create an Online Course

You can easily create an online course and create a substantive amount of income from selling lessons. Sites like, and allow you to create and sell your courses straight from their sites.

Creating online courses can bring in major passive income. Real estate agent Christoper Stafford created a course called “The Top Producer Blueprint: The Proven Step-by-Step System to Use Your Mind and Body to Develop Your Real Estate Business Into a Powerful Machine.” He has earned over $35,000 so far (and counting!) on just that one course.

The great thing about creating an online course is that you can reuse the same content to create an ebook, YouTube videos, blog posts and more—thus generating more passive income.

Some of the things that you may include in your online courses include video lectures, books for complementing your lessons, some audio for those who may want to learn while traveling and informative interviews with experts.

Create an e-book

I believe that everyone has a book in them. While fiction can be more interesting to write, you’re more likely to make money by offering ebooks on a non-fiction topic. Again, ask yourself what topic you know a lot about and go with that.

You might want to scope out your competition before writing. Search on Amazon to see what’s already out there. But don’t be discouraged if you find a lot of books already on the subject. By finding a particular angle or a unique way of presenting the information, you can still sell a lot of copies. For example, let’s say you want to write a topic about caring for fish but find the market saturated. You could try a different angle, such as caring for Beta fish or how to create a breath-taking aquarium.

After you’ve done a little research, start with an outline. Then write a rough draft and go back and read several times to revise. Once you feel like you have a solid ebook, pass it along to a well-read friend to critique or better still, hire a freelance editor from sites like or

Ebooks are great because they don’t have to be that long—approximately 6,000 words would suffice—yet they can continue to bring in income for years. After writing your own book, there is no need to send the book to publishing companies. You can create an account with Amazon and upload it there. After this, if you price your book between $2.99 to$ 9.99, Amazon pays a royalty of 70%. For prices below this range, then a royalty of 35% is paid.

You can also publish your ebook on iBooks, Apple’s publishing platform. You can also turn your written book into an audio book and publish it on iTunes and Amazon’s audio library, This would require more work on your end, though, and you would most likely need to hire a audio engineer (which you can find on or to help get the recording levels right.

Create YouTube Videos

You’ve probably heard of how some YouTube stars are making millions from their channels. Ray William Johnson, for example, is an American vlogger (video blogger) who has earned well over $18 million just from giving his views and opinions on viral videos. While most of us are unlikely to earn such an astronomical amount from our videos, there are plenty of “everyday” people earning six figures.

You can take your ideas for your online courses or ebooks and turn them into videos. All you need to have is a Smartphone or a camera and some video editing software like Filmora. You can also edit using the YouTube video editor, which is free but somewhat limited in its features.

While posting videos isn’t entirely passive—because you’ll want to keep posting videos regularly once you have your channel—the fact that you’ll continue to earn revenue on previous videos is what make this method a form of passive income.

To make passive income from your videos, join the YouTube Partnership program and then sign up for Google AdSense. You can also post affiliate links for products underneath each video on your channel. You make money anytime someone clicks the link.


Blogging is an excellent source of passive income. You can either start your own blog or buy a blog that has already been created by someone else. You earn passive income through ads, affiliate marketing (openly promoting some products on your site and then being paid a certain percentage of the amount of sales) and selling your own products, such as ebooks, tshirts, training courses and more.

Blogging is a great choice because it only requires a small financial investment. I pay less than $200 a year for hosting and to renew my domain name. The downside is that, if you don’t have any web design skills or are a poor writer, you will need to hire someone to assist you. A web designer can cost you an average of $50 per hour and a skilled freelance editor charges roughly $30 per hour.

Your best bet to earn money blogging is to choose a topic you love and nice down within that topic. For example, if you love hiking, you will want to find a genre within hiking for your blog. If you just blog about hiking, you will be competing with major sites that have teams of writers and have been established for years. But if you choose a blog specifically about hiking in Washington state, you have a much better chance of your blog ranking well on Google for that particular topic, which means more organic traffic to your blog.


Cash-Back Credit Cards

If you don’t already have a cash back credit card, you’re missing out on easy, passive income. These credit cards offer some cash or points when you shop. There are some cash-back credit cards with no annual fees and some even offer bonuses when you signs up for them. Some examples include:

Chase Freedom which is unlimited and earning one $150.

With this card, you earn 1.5% cash on all the purchases that you make. If you spend more than $1500 during the first three month after signing up, you are paid a bonus of $150.

Blue Cash Card by American Express

This card offers a back reward in cash of 3% for all purchases made in supermarkets, 2% from gas stations and 1% cash back in all the purchases. If you spend $1000 and more in the first three months, you get a bonus of $200.

Wells Fargo Visa Card

With this you earn 200$ if you manage to make purchases worth $1000 within the first three months and 1.5% cash back for every one dollar spent.


You earn a bonus of $150 for making purchases worth $500 or more within your first three months. It gives you cash back of 2% from purchasing from grocery stores, 3% from gas stations and 1% for all other purchases.

TD Credit Card

This gives you a cash bonus of $200 for making for purchases worth $500 for the first three months. A 3% cash is given back for all dining purchases 2% from any grocery store and 1% back for all other purchases.

quote by Warren Buffet: If you don't find a way to money while you sleep, you'll be working until you die.

Cash-Back Shopping Sites

With sites like and, you can get a rebate when you shop online. Simply open an account and then activate the browser. Then continue shopping online normally. You’ll earn back between 1-22% from your purchases. You can then receive a check at the end of every month, PayPal payment or a gift card, depending on the store you are shopping with. The more purchases you make, the more income you earn from it.

High-Yield Savings Accounts

This may be a boring investment but it’s a very safe way to earn passive income. The downside is that many banks offer very low interest rates of just 0.15 % or lower. With inflation running an average 3.3% per year, you will actually lose money in the long run by parking your money in a savings account.

That’s why keeping a large chunk of your money in a savings account is a losing proposition. You should only keep enough in there to pay for 4 to 6 months of living expenses (should you need it in an emergency) but no more. Anything beyond this amount should go into investments (see below).

For the money you do keep in a savings account, the percentage you earn from it can make a huge difference in your net wealth in the long run. Look for savings account that will pay you at least 1.5%. While rates can fluctuate, some of the banks that offer higher yields for savings account include: CIT Bank, Barclays, BBVA Compass, Ally and Synchrony. Minimum deposit requirements vary.


Divided Stocks

I write over and over again that my favorite choice for passive income is investing in dividend stocks. I outline some of the reasons in the post Why Everyone Should Own Dividend Stocks (A Beginner’s Guide).

A dividend is money you receive simply from owning shares in a particular company. Dividend stocks can easily earn you 5 to 7% or even more per year. This far outpaces inflation and is one of the ways the wealthy get wealthier.

The great thing about dividend stocks is that you can usually “set it and forget it”–meaning, you buy the shares in a quality, stable stock and don’t have to do anything else until you’re ready to sell. You can also make money from these stocks from the price per share increasing, called capital gains. But even if the price per share does go down, you usually will still be paid every quarter.

To engage in this type of investment, you need a brokerage firm, like Ally, TDAmeritrade, Fidelity, T Rowe Price, Vanguard or other. You can also use the Robin Hood app, which doesn’t charge a fee for trades.


Bonds are another way to earn passive income. Bonds are issued by corporations or the government to fund their investments. When you buy into a bond, you are helping to provide that entity the capital it needs at the moment in exchange for interest paid out over time on that investment.

There are two main types of bonds: corporate and government. Corporate bonds earn more interest than government bonds since it involves a lot of risks. You would need to first research the companies rating score from Moody’s or Fitch Ratings. The higher the grade, the more stable the investment.

Currently, the rate of return on most bonds return a rate that is right around the rate of inflation or even below it. Also, many bonds require at least a 5K initial investment. Dividend stocks, on the other hand, don’t require any minimum other than the cost of the trade plus the price per share (which could be well under $50) so this works out to be the better choice for most. Bonds do offer stability, however. For more about bonds, check out my article How to Bring More Money and Fun Into Your Life.

Renting Out Your Property

Passive income from real estate can come in many different forms: renting out a separate rental property such as a second home to either an ongoing tenant or to vacationers; renting out a room in your primary residence; renting out commercial space; even renting out something like your RV, parking space or storage.

Usually earning money from real estate isn’t entirely passive. Whenever you are dealing directly with people, issues will arise—like they don’t pay on time or your property gets damaged. You will have to manage the property. If you’re renting out an entire home or apartment, you can hire a property manager but there will still be issues that arise that will require your attention.

There is also the legalities of these situations. You’ll need contracts for the renter to sign and you could end up involved in a lawsuit should the renter not pay or damage your property.

Personally, I found renting out my home to be a pain. Even though the tenants I had were good, there were still issues that arose with the home and HOA. I couldn’t wait to sell. I also know a couple who own commercial property and, because of all the issues they’ve experienced with tenants, they are looking to sell.

Should you still want to take the plunge, you can use the following sites to help you get started:

  • or to rent out your room or place
  • or to rent out an RV
  • or to rent out a room
  • or to rent out a parking space
  • or to rent out storage space


Passive income is so important because it increases your net worth with less effort and it also can give you more time to enjoy your life (because you’re not having to work as much to earn money). The wealthy understand the importance of passive income and use it to it’s full advantage. If you want to join them, you need to understand and use it, too.

Just keep in mind that building passive income often requires some upfront time and money. As Jim Wang writes in the article “7 Income Streams of Millionaires: An Open Discussion of Passive Income,” “Typical passive income sources are front-loaded with active work, for which you are paid a small amount, while the bulk of the income comes later.”

If you’re willing to take the time now to learn or do research on something that can continue to give you money once your system is in place, why wouldn’t you? I believe that if you set up these systems in each of the three facets of career, saving and spending and investing, you will have more money and with much less effort than you could have ever imagined before. It’s something (big) for hardly nothing. That, to me, is really living the life:)

I hope this beginner’s guide to passive income has helped you. Please email me at and let me know what steps you are now taking to set up your passive income lifestyle. Au revoir, namaste and until next time!