Passive income is one of the most highly debated topics in finance. Some people say that it’s real, other people say that it’s a total myth. But in this article, seven ways to make passive income that actually work are shared, along with clear explanations and real examples for each one.
Before getting into it, the goal here is to pack as much valuable information as possible. So for each one of these passive income streams, there will be one biggest piece of advice included that is useful when starting out with each of these.
There are seven different passive income streams to cover here. The easiest ones come first, then the medium difficulty ones, and the hardest one to start comes last.
1. High-Yield Online Savings Accounts (Easiest)
The absolute easiest way to make passive income is to put some of your money into a high-yield online savings account.
If you’re not familiar with what a high-yield online savings account is, essentially all it is is a bank account just like a checking or savings account, but the bank is willing to pay you a higher interest rate. It sounds like something that’s too good to be true, but most people just don’t know that these accounts exist.
If you search for “high-yield online savings,” you’ll find lists showing different banks that offer these accounts.
The biggest thing to know:
You do need to have money to put into these accounts in order to get passive income from them. This is easy passive income once money starts coming in, or if money is already sitting in savings. Switching it over to a high-yield online savings account means passive income starts automatically.
Best Advice for Starting High-Yield Savings
Some of the best banks found over the years for high-yield online savings include:
- Capital One — Their Performance 360 account offers around 3.8% interest. Capital One is extremely reputable, and a lot of people already bank there, so it’s easy to open an additional Performance 360 account and transfer money into it.
- Ally — One of the earliest high-yield savings account providers, offering around 3.8% as well.
- Betterment — Typically tries to keep their interest rate as high as possible, offering around 4%.
With that one out of the way, here is the second way to make passive income.
Note: Interest is strictly prohibited in Islam. If you are a Muslim please don’t go for it.
2. Amazon KDP (Kindle Direct Publishing)
This is the first business on the list, and it is the easiest and fastest way to make passive income.
Amazon KDP stands for Amazon Kindle Direct Publishing. Essentially, this business allows selling books on Amazon — but not by writing full books as an author or buying and reselling books. Instead, it involves creating books like low-content or puzzle books.
The way Amazon KDP works is simple:
- Upload the cover file (front and back).
- Upload the interior file (for example, lined pages or puzzles).
- Amazon creates a virtual listing.
- Anytime someone purchases the book, Amazon prints it, ships it, and handles customer service.
That means once the files are uploaded, there’s nothing more to do except receive a split of the profit on every order — the definition of passive income.
This is a business that anyone can start, from anywhere in the world, totally for free. Once the files are created and uploaded, the listing can stay on Amazon for a long time and generate income passively.
Best Advice for Starting Amazon KDP
There are many categories of books that can be sold, but one category sells especially well:
Word Search books.
These books include word search puzzles inside. They sell so well because not many people know how to create word search puzzles. If someone learns how to create them and uploads them to Amazon KDP, they compete with very few other sellers.
3. Amazon Merch on Demand
Amazon has another department similar to KDP called Amazon Merch on Demand, but this one is for creating and selling t-shirts.
The process is almost the same:
- Create a simple t-shirt design.
- Upload it to Merch on Demand.
- Amazon creates a virtual listing.
- When someone buys it, Amazon prints the shirt, ships it, and handles customer service.
On Amazon, you can find examples by searching for something like “funny golfing t-shirt.” Many listings that show the same style mockup are using this model. A clear sign is a label showing it’s printed through Amazon’s fulfillment.
These shirts sell for more than KDP books, so profit margins are bigger. However, more people are doing this business, so competition is higher.
Best Advice for Starting Amazon Merch
The best advice is:
Find small niches that other sellers haven’t thought of yet.
Popular niches are oversaturated. But if niche research is done properly, it’s possible to find gaps where designs don’t exist yet, and create t-shirts for those.
4. Affiliate Marketing (Medium Difficulty)
This passive income stream has been around forever, and many people have done it without realizing it. But online, it becomes a strong passive income model.
Affiliate marketing is basically using company referral programs.
In real life, if someone asks, “Who was a good person for this?” or “What product should I buy?” and you recommend something, that’s affiliate marketing. Almost every big company has an affiliate or referral program and pays a commission for each recommendation that leads to a sale.
Offline, it’s not passive because it requires direct conversations. Online, there are two main ways to turn it into passive income:
- Blog websites — write articles recommending products. People find them on Google, click affiliate links, and the company pays commissions automatically.
- YouTube videos — instead of writing blog posts, film them as videos. Many people prefer watching videos over reading. Videos often perform even better for affiliate income.
Best Advice for Starting Affiliate Marketing
The biggest advice is:
Create a free YouTube channel and film product recommendation content instead of only writing blog posts.
Video-based affiliate marketing can outperform written content because people are naturally consuming more video.
5. Creating a YouTube Channel (AdSense)
YouTube can be used for affiliate marketing, but it can also generate YouTube AdSense income.
AdSense is when advertisements play before, during, or after videos. The creator gets paid when viewers watch ads. Payments vary depending on multiple factors, but one factor makes a big difference.
Best Advice for Starting YouTube
There are two kinds of content:
- Entertainment content — vlogs, fun videos.
- Educational content — videos where people come to learn.
Advertisers pay significantly more for educational content. That means higher AdSense earnings per view.
The key passive income feature is this:
Once a video is published, it can continue getting views organically for years — even 5, 10, or 15 years later — and keep earning money through ads.
6. Creating Digital Downloads
Digital downloads are another proven passive income stream.
A digital download is a file created on a computer and sold online. Buyers purchase it and instantly download it.
A good place to see examples is Etsy. For example, searching “wedding invitation” shows many digital templates. People buy the template, customize it, and print it themselves.
Best Advice for Starting Digital Downloads
Think about what you’ve learned that can save other people time.
Examples:
- If someone is a graphic designer, they can create templates people don’t know how to make.
- In another niche, someone could create a budgeting spreadsheet with built-in calculations and sell it as a ready-made budgeting tool.
Once created, digital downloads can be listed on marketplaces like Etsy. Customers find them organically, and each purchase delivers the file automatically.
7. Creating Online Courses (Hardest)
The final passive income method is creating and selling online courses. This is the hardest one on the list, but it generates great passive income.
Online courses can be sold on marketplaces like Udemy or Skillshare. These platforms sell the course for you, similar to how Amazon sells books or shirts.
An online course is a formal, step-by-step program teaching a specific topic.
Best Advice for Starting an Online Course
The best advice is to look in two places:
- Career knowledge
- Hobby knowledge
In most cases, these are the areas where someone knows enough to build a full course.
Final Thoughts
These seven methods show that passive income is real — but it depends on choosing something that fits your situation and putting in upfront work where needed.
The easiest methods are solved with money already saved. The medium ones require learning a skill and building content. The hardest one requires expertise worth teaching. But each of these methods has been proven to create passive income when done correctly.
