How to Create a Passive Income Stream Online

What Is a Passive Income Online?

Passive income means getting revenue from various kinds of activities on the internet that requires minimal time and effort each day. Whether you work or take a day off, the earnings are regular. You have a business online but don’t participate in it actively.

For better understanding, let’s look at simple examples from the offline niche – passive income is generated by renting a flat or from royalties, for example.

How to Create Passive Income Online

A well-known hedge fund manager, Todd Tresidder, used to say that passive income only has a “get-rich-quick” appeal in the end, but it requires a lot of work at the beginning. So, your efforts are your investments that bring dividends later, providing you with freedom from everyday work.

Differences Between Passive and Active Incomes

Active income means everyday investments in the form of money, time, skills, etc. You just have a full or part-time job that requires a certain number of hours to waste on it every day. Another way of earning active income is owning your own business, which doesn’t force you to spend everyday in the office, but it demands funds and effort to do it and track results.

Online passive income gives the opportunity to work hard for a week and to keep earning online for a year. The passive online income comes from interest on savings accounts, royalties, dividends from investments, websites etc.

Active Income Features and Example

• If you stop working, you won’t get paid.
• Your salary depends on the number of hours you’ve worked.
• You rely  on your boss, colleagues, cofounders, partners and other businesses or office surroundings.

Mowing lawns after work is a clear example of active income – a part-time job where you get $5 for every square meter you’ve mowed.

Passive Income Features and Example

• Initial effort is required.
• Stable income whether you work or not.
• Free time for other plans and hobbies.

Being an affiliate travel marketer is one of the best passive income online ideas. You can create a travel blog with tips for travelers, then collaborate with the travel affiliate programs, and implement these successfully with your blog. If users click the link to enter the affiliate site and make a purchase, you get paid a commission of the amount of the sale/booking completed.

5 Reasons to Generate Income Online

The most attractive reason is that no special skills or education required. If you’re going to blog, you don’t no need to be trained in the classics. In the case of participating in an affiliate travel program, you shouldn’t work as a registered travel agent or a skillful digital marketer. However, the experience and tastes should be considered while choosing a niche to generate passive income faster.

The setup doesn’t imply large seed capital – one can earn with minimum investments. For example, you can earn money on flights and hotel bookings without a website and any investments, just share the link for flight tickets with your friends on social networks and get a commission for every purchase.

Certainly, you should spend your time researching, gaining new knowledge, visiting some classes or webinars. Nevertheless, you only need the minimum to get the maximum. For example, you can use a website builder to create your own blog. You can even use a free template to start and move on with a paid one to develop the site after a while.

Your location makes no difference because the internet has no boundaries. You can live in a country where the average salary is $500 per month and work in a foreign market where the monthly income is ten times more. You can even handle the job while traveling – a stable internet connection is the only requirement.

Plenty of businesses offer their partnership for creating passive income online. The opportunities encompass goods and services, art and education. If you are keen on photography, you can sell stock pictures. If you like traveling, promoting hotels, resorts or any other tourist facilities, that will bring a solid revenue.

Online business and digital marketing continue to develop at a pace that means great prospects and makes the investment out be a win-win situation for everyone. Until 2021, more than 2.14B of people in the whole world will make purchases and bookings online that will provide the demand for online business.

The Top 11 Best Ways to Create Passive Income Online

Let’s consider in the details how to make passive income online revealing the most forward-looking opportunities. The list below is based on the latest business trends and available web technologies. For example, drop shipping is included because 27% of retailers on the internet have their own drop shipping business and the number of their customers is to grow from 1.52B in 2016 to 2.41B in 2021 around the globe.

1. Start a Blog and Monetize Your Site

Blogging is not the fastest or simplest way, but it is a reliable and effective way to monetize other resources and to get a good start for plenty of profitable projects. Create a blog, write and publish useful content, take care of traffic and expand your audience to make users click the ads (in this case, you get a few cents per clock from the advertiser) or links in the blog to enter the promoted site in order to make a purchase.

Get a percentage from the bookings or purchases they make. To succeed, choose aniche you like enough to make your content convincing and authoritative. One of the reputable travel blogs is Maptia that publishes articles about exotic and little-known places of our planet, promoting unique fine art prints and photographic posters.

We’ve already collected all monetization methods on this page. In case you choose the travel niche, here is a guide on how to create and monetize the project. You can earn on travel with the Travelpayouts affiliate network.

2. Join the Referral Program

Participation in a referral program is a good way to earn, including passive income.

All you need to do is invite users to register on the website, download a mobile app, make a purchase, issue a bank card, etc. The target action determines the brand with which you collaborate as a referrer. 

For each targeted user action, you receive a reward from the brand. This reward could be a fixed amount, a percentage of the sale, or a percentage of the user’s income.

Usually, referral programs give their referrers an individual referral link. Referrers should share this link with potential users (referrals). When the referrals follow this link and make a target action, it’s fixed to the referrer and you earn.

There are many ways to share a referral link. Here are some of them:

• Share a link with friends, colleagues, or supporters at thematic events.
• Add a referral link to a product advertisement or website.
• Add a link to the bio of your social media profile.
• Explore question-and-answer pages or consumer review websites and answer relevant questions. Make sure to add a referral link to your answer.

You can start earning with the referral program immediately. For example, join the referral program of the Travelpayouts travel partner network.

All you need to do is invite users to register with Travelpayouts and start earning with travel affiliate programs. Travelpayouts provides many ways to attract referrals. For example, brand widgets can be integrated with the “Powered by Travelpayouts” button with your referral link and the brands directory supports a referral marker. This means that users who follow these links will become your referrals and you will receive 7% of their earnings on all affiliate programs for two years. Learn more about how the Travelpayouts referral program works and find out even more tips on sharing referral links in our post.

3. Create a Lead Generation Website

A lead generation site is usually created to make direct sales. It focuses on the sale of a definite service or commodity – flight tickets or hotels, for example.

The lead gen model demands a strategic approach for monetization with the main objective to make the user click a CTA button. You get money for every lead you generate for one of your client/partner companies.

You can make a deal with local businesses directly to generate leads for them or follow the affiliate model, trying platforms such as the Aviasales affiliate program that allows earnings of 1.6% on flight tickets or the Booking affiliate program that allows earnings of 4% from hotel reservations.

4. Create Mobile Apps

If you have developing skills, you can create a mobile app for any activity – fitness, cooking, traveling, etc. If your app is valuable for the audience, they’ll download them on their mobile devices. In 2015, app revenues were at $69B and they are to increase up to 188B by 2020.

The majority of apps are free to download, but the money is made through in-app purchases. The total world revenue from in-app purchases was $37B in 2017.

You can use the Travelpayouts White Label solution to create an app without any investment and then earn on every flight and hotel reservation booked thanks to you.

5. YouTube Videos

Create your own channel, integrate it with your Google Adsense account and start earning from the ads displaying on your videos.

The average income is a couple of thousand dollars for 1M views. One more way is to create e-commerce storefront and to make videos fitting into your product. You can also direct traffic to affiliate links for getting revenue.

For example, you can promote Amazon goods for traveling or make clips about world hotels to direct viewers to Agoda and earn with the Agoda affiliate program.

6. Drop Shipping

This means you create and set up your own e-commerce internet store and make a deal with the suppliers who accept your orders and ship the goods to your customers. You don’t need to house any inventory or to think of logistics.

You get paid for the product from the customer, then you pay your vendor for the order and the vendor, on his turn, makes the delivery. The difference between your and the vendor’s price is your revenue.

The most popular products in drop shipping are rare things, useful items and goods under $10. Sunglasses, fashion, hair care accessories, and pet products are at the top. Sunrise Wholesale and Megagoods are among the best platforms to launch your drop shipping business.

7. Ebook

This is one of the greatest ways to make passive income online for authors, bloggers, travelers and all of those who are ready to share his/her passion. Write an eBook about backpacking to Chile, for example, or any other topic you’re keen on, format it, and create a digital cover.

You can publish it on certain platforms to get a percentage from a sale. One of the most popular sites for publishing ebooks is Amazon Kindle Publishing. There, you can find a clear video and textual tutorial.

8. Online Courses

Creating a course means developing series of lessons on a variety of topics, including education and traveling, health care and marketing, etc. Such equipment as a PC or laptop, a mic and screen recording software are required.

Course sales can support existing businesses and they can provide easy passive income online when you sell access to them or record them to sell the access repeatedly.

Such platforms as SkillShare to solve technical issues or Ruzuku for being self-hosted while Udemy is rather helpful for promoting your course.

9. Selling Stock Photography

Create a solid collection of images (both photos and graphics) to help bring in the essential income in the future.

Your revenue depends on the type of licenses and can vary from a few cents to several hundreds of dollars. The most expensive photos are taken for advertising.

Do not create the limited-time graphics, for example a New Year’s Eve of 2020 image, because as the time passes, your work will be outdated and you’ll lose your passive online income. Chose evergreen topics such as illustration for businesses or websites.

To get paid, place your pictures on platforms such as Shutterstock, Depositphotos or iStock.

10. Develop WordPress Themes for Themeforest or Other Platforms

If you have web-design skills, you can become a theme developer. Create your own WordPress themes for blogs, LPs and other types of website to sell them to businesses.

Publish all your developed themes on a marketplace to get revenue every time the customers buy your theme.

Online passive income means there is no need to waste time on searching for customers. That’s why you can not only use Themeforest but also Envato Market or TemplateMonster to offer your unique theme to them. You can also develop the themes for Joomla or any other CMS that suits you.

11. Buy an Existing Online Business

If you are not going to invent something new, but feel good when developing other people’s ideas, you can buy an existing online business in any niche you want. That doesn’t mean you just own a website, but also its customers, marketing strategies to generate leads and sales, a social media presence, etc.

You can continue earning  the same profit as the previous owner, or try to improve the results. For example, when buying a travel blog that has been promoting goods from Amazon, you can start participating in the affiliate programs from Travelpayouts or any other platform.

Note that this way demands monetary investments before earning a profit, while most of the other ways  mentioned above do not.

Is Passive Income Online Real or Fake?

Some people think that earning passive income online means doing nothing, which is why they consider it being fake when they start learning about it. Those who understand the work ethic required before reaching freedom see plenty of hidden opportunities in passive income.

Passive income requires building online businesses to work for your good. Since building is an active process, you should start with active income, indeed. You’ll earn money for it but you don’t spend it on goods or services. Start developing your ideas for passive income online. For example, freelancing as a way of getting active income is a good start because it allows you to explore the niche you’ve chosen for earning  passive income from the inside.