ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Income & Making Money

Passive Income Opportunities: The Best Ways To Make Passive Income

Updated on February 29, 2012

Types of Passive Income

Passive Income, also commonly known as residual income, is basically any type of income that you make that requires only minimal effort to maintain. Know the definition of "minimal effort" is not explicitly clear, but the Internal Revenue Service considers any income generated by "activities in which you do not materially participate". Examples of passive income include:

*Rent (monthly checks from the tenants in your income property... my favorite means of passive income)

*Online income (advertising or affiliate marketing income... for example any money that gets made clicking an article on hubpages or a blog)

*Interest and Dividends (profits from your investment portfolio and savings accounts)

*Pensions (Not as common any more, but the passive income received from a previous employer after retirement that is based on your years of service)

*Royalties (Residual income generated from the sale of music, books, television shows, movies, or any other type of patented intellectual property... like the guy who invented and patented the Pet Rock!)

Passive Income

What exactly is passive income? I am sure you have read countless articles already that praise some get rich quick scheme for teaching them how to makea ridiculous amount of money working from home only a couple hours a day.

Does this happen? Sure, in some cases. But more often than not, these are just schemes to get money from you. I know for a fact that there are legitimate ways to make a passive income, but if you are buying what a lot of the people on the internet are selling, you are already buying more than you are making. It is possible to make a passive income, but it does take some work on the front end. You can pretty much count on any online advertisement that claims otherwise is not being entirely truthful... but I encourage you to check into it and see for yourself if you don't believe me (I find that the best way to learn is by doing...)

The Best Ways To Make A Passive Income

So what are the best ways to make a passive income? That really depends on who you ask, as well as what you enjoy doing. Now, if you ask me my favorites are residual income through rental income, investing, and online income (in that order).

How to create a passive income through rental income

How to make a passive income through rental income:

Creating a residual income through rental income is very easy in theory (as the late night "No Money Down" infomercials and various websites have undoubtedly pointed out to you...), but a little harder in practice. The hardest part about rental income is that there are no absolutely 100% safe way to do it. There is always going to be a little bit of risk. Now, I don't want to dissuade you from trying your hand at building a porfolio of rental properties, because I do believe that you can build wealth from it, but it is not a guarantee. Properties can (as we have learned over the last handful of years) go down in value, and tenants are not always a picnic. Late rent, noise complaints, destruction of property, and picky tenants do happen to the best landords. I happen to own an income property, and it does okay, and I am trying to buy another one in the next 12 to 18 months, so obviously it is something I believe in. The real value of creating a portfolio of homes is based on 3 factors: Cash Flow, Appreciation, and Tax Benefits... there are others, but these are the big 3. I will dive further into these factors in a different article in the near future.

How to create passive income through investing

How to make residual income investing:

A great portion of the wealth out there is created through investing, and there are many different kinds of investors out there. Some people play it safe and let their financial advisor choose safe mutual funds for them while others trade options and currencies. Value investing and dividend investing are my favorite ways to make a passive income through investing. This takes a little more research (and trial and error), but I like to pick my own stocks and try to create a nice portfolio of various securities in an attempt to beat the market. Some years I beat the market, some years I don't. I am sure I could save myself a lot of time by sticking my money in a few different index funds, but I enjoy researching different companies, and only having myself to congratulate or blame based on how my picks are doing. The bottom line is that you should be investing as much as you can as early as you can because compound interest is a magic formula and can really make you extremely wealthy if you learn to invest.

How to make passive income online

Can you make a decent residual income online? I believe so... I know there are websites that pay you to take surveys and websites where you can earn money writing in your free time. Some websites will pay you an up front fee (usually between $1 and $20 depending on how well you write), while other sites, such as hubpages, gives you a percentage of the income they make off of advertisements.

So how does it work exactly? Well basically you get a small amount of money everytime an advertisement is clicked on a page that you have written for. The idea is that good content will bring people to your website (in this case hubpages), or blogs, and the advertisers are willing to pay a small amount of money to you in return for turning your readers on to their products. It does take quite a bit of work up front, but you can make money through adsense, ebay, amazon, and other affiliate programs by creating articles online. As your articles grow in popularity, you will recieve more traffic, and subsequently more clicks on the advertisements, and your earnings will grow!

Make money writing for hubpages


    0 of 8192 characters used
    Post Comment

    • MeanGreen profile image

      MeanGreen 5 years ago

      Thanks Alisha

    • alisha4u profile image

      alisha4u 5 years ago from New Delhi, India

      Nicely written... Voted up!

    • MeanGreen profile image

      MeanGreen 5 years ago

      Thanks, Justin!

    • MeanGreen profile image

      MeanGreen 5 years ago

      Thanks Speedbag. That is exciting to still be earning years late.

    • profile image

      Justin 5 years ago

      Great article thanks! I am sharing the latest way to make money online. 3,000 people per day are joining! I am earning 2% per day/ 60% per month. No investment needed, no sponsoring required, no work required, daily withdrawals. The technology they use is patented. This is the only indefinitely sustainable high-returns program in the world. Start with FREE $10! It triples your money every 75 days. Don't believe me?.. Check the proof on my website;

    • Speedbag profile image

      Speedbag 5 years ago from Woodway, Texas

      Thanks for a good intro article into the world of Passive Income. Years ago I authored a book and video series, (The Speed Bag Bible) and still get royalties from Sales on sites like It's not so hard in the modern era of Self Publishing.