Beginner’s Guide To Earning Passive Income

Passive income has been an interest of mine for the past few years. However, up until recently, I never really did anything about this goal. Dreaming is nice, but nothing happens unless you actually start making some changes. And, that is just what I plan on doing over the next few years. Currently, building passive…

Michelle Schroeder-Gardner

Last Updated: September 12, 2023

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Check out this beginners guide to earning passive income. This is a great list!Passive income has been an interest of mine for the past few years. However, up until recently, I never really did anything about this goal.

Dreaming is nice, but nothing happens unless you actually start making some changes. And, that is just what I plan on doing over the next few years.

Currently, building passive income streams is a big interest of mine because I want to continue to bring in an income while being able to focus on other goals of mine (which may not generate income now or ever). I also want to diversify my income streams so that I am not too reliant on one area.

This way I can focus on what I want to do while not having to worry about how much money I am bringing in.

Below are different passive income-related questions you may be wondering. We will discuss what passive income is, the positives of earning passive income, passive income ideas, and the hard work that goes along with it.

What is passive income?

To start off, we should probably answer the question “What is passive income?”

Passive income is when you make money but there is not a TON of work to do in the future in order to continually earn more money. You, of course, need to do something in the beginning in order to set yourself up for the income, but after most of the leg work is done, income continually comes in without much effort from you. There might be a little maintenance here and there after you set it up, but overall the passive income stream should continue to operate on its own.

Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it is FREE.

Why would a person want to earn passive income?

Passive income is great, and I quickly touched upon some of the positive reasons above. Some of the positives of earning passive income include:

  • You can make money with little work to maintain it. This is a huge positive of passive income! Who wouldn’t want to continue to make money with little work needed to maintain it?
  • You want to do what you love while still making money so that you can pay your bills.
  • You want to retire but you would feel more comfortable doing so if you were still bringing in an income.
  • You want to start a family. Passive income may mean you have more time to devote to your family since you may be able to work less. This is a big reason for why I want passive income!
  • You want to travel extensively but you want to bring in an income to support yourself.

What are some passive income ideas?

Passive income sounds great, right?

You are now probably wondering how exactly you can go about earning passive income. Some passive income streams may require more set up than others and some are riskier than others. Each of the ways below have their positives and negatives so definitely do your research.

Some passive income ideas include:

  • Affiliate marketing. Affiliate income is what I am currently working on. I earned around $10,000 in affiliate income in just the month of March, and the majority of those earnings came from just a few posts that I wrote awhile ago. While blogging is definitely not passive because of the amount of work that goes into it, affiliate income can be very passive in that old affiliate reviews can continue to bring in income. If you want to start a blog of your own, read here.
  • Rental real estate. Some consider rental real estate passive, while others do not. If the rental property is in good shape and you have good renters, then there is probably very little work that needs to be done in order to continually bring in an income. This is considered especially passive if you outsource the property management duties and home maintenance tasks.
  • Dividends from your investment portfolio. This is one of the passive income ideas that many take part in.
  • Distributions from companies in which you are not active in. At my old day job as a financial analyst, I saw many clients who received hundreds of thousands of dollars a year (or sometimes even in the millions) from distributions where they were not active in the company. Must be nice!
  • Royalties from something you have created, such as a book, a patent, etc.
  • Running a laundromat. Yes, you will need an employee, but these are typically low cost businesses. Learn more at Are Laundromats Profitable? How Much Do Laundromats Make?

Related: How 17 Bloggers Earned Their First Affiliate Income

Is it hard to earn passive income?

Passive income through any of the passive income ideas above requires hard work but it IS attainable.

Passive income is definitely not a way to get rich quick. You may have to sacrifice sleep, work multiple jobs, and more in order to build your passive income stream. Passive income usually requires a lot of hard work in the beginning, or everyone would be doing it!

If you want it badly enough though, then earning passive income can be well worth it. If you do it right, you may be able to earn an income well into the future with little maintenance needed.

Are you interested in any passive income ideas? Why or why not? What is passive income to you?


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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Michelle Schroeder-Gardner

    Great to hear! What do you think you will aim for first?

  2. Michelle Schroeder-Gardner

    Awesome!

  3. Michelle Schroeder-Gardner

    Yes, love his definition!

  4. Allison @ Frugal on the Prairie

    Great job on the $10,000!!!! Who doesn’t love some good passive income? Too bad there isn’t passive income for the many loads of laundry we wash during the week. haha

    I’ve been thinking about dipping my toes in affiliate marketing but there’s just an overload of info out there that I don’t know where to start.

    1. Michelle Schroeder-Gardner

      Yes, affiliate marketing can be tough to get into. It took me years to finally start, but I highly recommend it. Just starting and playing around can help a lot.

  5. Michelle

    Passive income is a huge interest of mine! Thanks for this post.

    1. Michelle Schroeder-Gardner

      Welcome! 🙂

  6. Jason B

    I love this post. I’ve made a little bit of money from passive income streams. I know that I will make more too. I’m glad you stated in your post that earning passive income requires hard work. Too many times people will believe that things are easy when they actually take work.

    1. Michelle Schroeder-Gardner

      Thanks Jason!

  7. Michelle Schroeder-Gardner

    Thanks!

  8. diane @smartmoneysimplelife

    “Passive income usually requires a lot of hard work in the beginning, or everyone would be doing it!” Says it all, doesn’t it?

    I don’t think you can say you have a business plan if it doesn’t include a plan for generating passive income. Without it, you’re still just working for a pay cheque and time in, equals money out.

    Good luck with your plans!

    1. Michelle Schroeder-Gardner

      Thanks Diane!

  9. Jayleen @ How Do The Jones Do It

    I would love to earn passive income through real estate and affiliate marketing although I know both take a lot of work and aren’t really too passive. I’m taking it one step at a time!

    1. Michelle Schroeder-Gardner

      One step is a great pace 🙂

  10. nicole dziedzic

    Awesome post! Very helpful with great information! And good for you for earning $10,000 for just a month, i wish i could do this!

    1. Michelle Schroeder-Gardner

      Thanks Nicole!

  11. Julie Wood

    I love Passive Income because I live off of it! I do not know why more people are not finding out about it-but most of my passive income is from an annuity that has a high yield for 8 years when I locked into it. Passive income is where I get income, but my money works for me and I do nothing except see it grow!

    1. Michelle Schroeder-Gardner

      Awesome job Julie!

    2. Heidi

      Speaking for myself I think many people don’t get into it becaus we don’t know enough or anything about it. I do not have a website, blog or artistic sense at all. I noticed many people use that for passive income. I also have no knowledge of stocks, bonds, etc. And furthermore have zero dollars to invest. I look to these sites for inspiration on ways to get out of the financial rut we are in however no one ever teaches it. I am hoping passive income becomes a great part of my vocabulary and my bank account. Thank you

  12. Tiffany

    Hi Michelle, thanks for this post. I recently started a new blog (I used to blog for family & the adoption community) and was just about to start dipping my toe in the affiliate marketing world but specifically waited until I read this post. There are so many different companies out there, I would love to hear about some that you have tried or are trying in a future post. For now, it sounds like my plan of just jumping in and figuring it out as I go, isn’t too horrible? Love your blog, it has been a great resource to me. 🙂

    1. Michelle Schroeder-Gardner

      Thanks Tiffany! Yes, just jumping right in is usually your best bet! I recommend just searching for your favorite products on Google and adding “affiliate program” to the end of it. Many companies have affiliate programs!

  13. Jackie@ Freedom Through Passive Income

    Dividend stocks are one of the easiest and most hands off ways to earn passive income. Just buy the big blue chips like Coca-Cola or Chevron and forget about them.