Legit Passive Income Ideas: 2023 Guide

The best way to grow your net worth is to increase your income. I know that sounds obvious but most people focus just on “saving money” instead “making money”. I've been working on building up my passive income to supplement my main income. Passive income works while I sleep and isn't directly tied to the hours I work.

These are my top passive income ideas for 2023:

Note – Some of the links in this post may be affiliate links. When you click through and buy something I may earn a commission which helps support this website!

Dividends

Dividends can be considered true passive income. They require absolutely no time or effort on your behalf. All you need to do is own Stocks. Obviously to earn passive income from dividends you need a decent amount of capital to begin with. And there is also the ongoing debate as to whether you're better off investing in growth stocks that don't pay dividends as you'll earn a higher return in the long run.

Personally I don't earn a huge amount from dividends. And I don't have a dedicated “dividend” portfolio. Some of the stocks I own earn dividends and they are a nice little boost but I don't consider them a major income source.

Niche Websites

Building a niche website or blog might not sound like passive income. But once a website is up and running, it can generate income 24/7. I consider my niche sites to be passive income. I can go on vacation and they'll still generate income. I don't need to work set hours to keep them going. And some of them don't get updated at all and still make money.

If you monetise a website using affiliate marketing, it's possible to generate recurring income. I've made affiliate sales years ago that still generate income today. The site where I made that income doesn't even exist!

There are lots of guides online on how to make money with niche websites or blogs. It's something that will take a little investment upfront but will pay off later on down the track. The nice thing about niche websites is they can also be sold.

You can also buy an existing niche website that is already making money. My favourite place to buy (and sell) niche websites is MotionInvest. There are numerous marketplaces online.

Write a Book

Writing a book is hard. But once you've finished the book, it will generate passive income for potentially years to come. I've found the most profitable books are non-fiction books. So if you have knowledge to share, why not put it into a book.

Self publishing is super easy these days. The best way is to go through Amazon KDP which lets you publish eBooks and paperbacks for free through Amazon.

Music Royalties

Music Royalties pay passive income to the royalty holder. Many artists sell their royalties in exchange for cash upfront. But the royalties generate income for years. The amount you make is based on many factors. RoyaltyExchange is the worlds largest Royalty Marketplace. It does a pretty good job of explaining how royalties work.

Like Dividends, Music Royalties are true passive income. Once you own them, there is no work for you to do. Buying the right music royalties can be tricky I would consider this to be a high risk alternative investment.

YouTube Channel

Like many methods in this guide, creating a YouTube channel takes a lot of work upfront. But once it's up and running your videos can generate income for years to come. The amount you'll make isn't as good as it used to be. But depending on the niche you're in, YouTube can still be a great source of income. Finance and Tech are two niches that are super profitable. Obviously you can make money from YouTube ads, but you can also generate income from affiliate marketing.

Creating Digital Products

There are literally countless digital product ideas that you can make money from. I recommend starting by looking at a marketplace like CreativeMarket to see what other people are selling. Etsy is another great place to see examples of “printables” and other digital products people are selling. The top creators on CreativeMarket and other similar digital product marketplaces can make over $100k per year. Once a product is uploaded, it can continue generating passive income for years to come.

Real Estate

Real Estate is one of the most popular ways to generate passive income. You can own real estate and then rent it out to generate income. There is usually very little work involved. The downside is you obviously need to spend a lot of capital upfront. While Real Estate generally is a pretty safe investment, people get in trouble when borrowing money to generate income. All it takes is a market downturn for things to collapse.

Why You Should be Creating Passive Income

There's one thing I've learnt about income over the past few years – never rely on a single source of income. Sources of income that I thought were super secure ending up disappearing overnight. If you've built up a source of passive income, it's something you can fall back on if your main income disappears.

If you invest your passive income, you can also build up your nest egg. Even passive income deposited into a savings account will generate a little bit of extra income.

What I love about passive income is that I generate multiple streams of income and I don't need to work 9-5 to maintain it. While many streams of passive income require work upfront, I can be flexible in how I work. You can even generate passive income with a full-time job.

Leave a Reply