10 Passive Income Investment Ideas That Actually Works

Guess how many people in this world live solely on Passive Income? You’ll surprised to know that it’s not more than 1%. And who are those people? Millionaires and Billionaires. Check the Forbes Billionaire list and you’ll discover that apart from having an active income source, they are heavily dependent on passive income source. In fact, passive income is what keeping them alive and providing them enough money to spend a stress-free life. The most common being stock dividends. And, if you think that since Amazon doesn’t pay off dividends Jeff Bezos doesn’t earn much? Well, good luck with that…

Being rational and practical enough, there’s very less chance that we both will become as rich as Jeff Bezos or Mark Zuckerberg, but we sure can become wealthy enough to live an opulent life… Hence, in this post, I’ll list down the 10 best and super-simple passive income ideas that actually works and are evergreen. Evergreen means, all these passive income sources have been there for centuries.

Ready? Let’s goooo….

(1) Franchise

Owning a franchise is a pretty common business ideas. While franchise are great investment ideas, the only thing to keep in mind is to choose the correct company. You cannot expect to open a franchise store that doesn’t make enough profit, and then complain about the whole situation.

Franchise business is physically and mentally intensive while setting it up, but once the business is in motion, it’s just pays for itself and the cash flows in. Trust me, I have seen people becoming millionaire just by owning multiple insanely profitable franchise stores.

In my research I have found that milk-based company franchise make great money. Because in most countries milk is a daily necessity. The other great thing about owning a franchise store is that you aren’t bound by the company. If you don’t like their business, you can just break the contract and move on to other, more profitable franchise ownerships.

Surprisingly, a car showroom also operates on the franchise business model. Hence, theoretically, owning an ice-cream franchise is pretty equal to owning a BMW franchise. The only difference being the initial investment cost.

(2) Leasing

Leasing is one of the oldest way of making passive income. Leasing is most common among land owners. Thank your grandpa or your dad who left you some land, or an already well-established leasing business. What makes leasing business so profitable? Your company’s assets stays with you, yet you make money from it. It’s like a tree. You enjoy the fruits while the tree stays intact, until of course, you cut it. Which I would absolutely NOT recommend.

Funny enough, majority of the world’s business operate on a lease. People stay at leased homes, real-estate companies lease heavy machinery until they finish their jobs, big businesses lease land and operate large warehouses. You too can start a leasing business if you want to make real passive income.

If I’m not wrong, the real-estate industry is the biggest leaser in the world. Almost everything about the real-estate industry functions on a lease. One of my friends tried their hands on leasing business and makes some sweet passive income regularly. He only has to check the business once a week and see whether everything’s fine. He hasn’t hired a manager because he doesn’t want to lose sight of what’s happening.

(3) Automated Dropshipping

I suppose you have heard about Dropshipping? It was a fad about a decade ago. I was too young to try my hands, but I remember YouTube videos of Dropshippers posting insane revenue. Yeah, those were the days… Anyway, Dropshipping is not as relevant as it was about a decade ago, but it still works.

Nowadays, automated dropshipping is on the rise. No, it’s not the AI nonsense, it’s about hiring the right people and tasking them to handle everything while you guide them to do everything. Automating a business has become pretty common nowadays, thanks to freelancing services like Fiverr and Upwork. You can either hire freelancers for a limited task or negotiate with them and hire them permanently.

On top of that, unlike before, Dropshipping store owners use market intelligence tools to find the best and trendy products to extract the best profits as fast as possible. Starting a Dropshipping store is super easy, the only issue is to choose the right product. In the previous decade Facebook was the hotspot of all Dropshippers, today, it’s TikTok.

Some trendy stores regularly make $1k a day in sales just by selling children stickers. it’s fascinating when you learn how lucrative it can be if you hit the jackpot.

(4) Dividends

I don’t have to tell you how famous dividend is as a passive income stream. You literally won’t have to do anything and the money just credits into your bank account yearly or quarterly (depending on the invested company). Steve Balmer, the Microsoft dude just made $1 Billion as dividend for owning Microsoft stocks. Mark Zuckerberg made a little over $700 Million in stock dividend from Facebook. Well, you might not own hundreds of millions of shares of a company, but you sure can make enough money in dividends if you invest intelligently.

Of course, there are too many factors that decide whether a stock is good for dividend. Here are some of them that I use to choose a good dividend paying stock:

(1) Check Dividend history
(2) Dividend Yield
(3) Is Dividend Yield higher than Inflation?
(4) If the company is paying too much Dividend (if yes, it’s a red flag)
(5) How is the company paying Dividend?

These are some of the factors I check out for before deciding to invest in a stock only for the dividend. If you ask me, then point (3) and (4) are highly crucial factors. Read the book Security Analysis by Benjamin Graham to know better about this. Trust me, it’s a hard book to follow, but once you understand it, you’ll be better at investing than anyone else beside you.

(5) High-Interest Fixed Deposit

There are people who don’t trust the Stock Market. Either it’s too complicated for them, or they had a really bad past experience. They prefer security more than high returns. For them High-Interest Fixed Deposit is a great option. It’s relatively safer than stock investment, but the only drawback is low interest yield. While in most years the stock market has performed way better than inflation, a high-interest fixed deposit might only beat inflation by 1%. And, when you account the taxes and your personal expenses, a high interest fixed deposit might not be a good investment option.

But, as I said, if you want high security for your savings, then just go for it. Invest the majority of your life savings into a High-Interest Fixed Deposit and just forget about it. But please do this one thing before investing your money. Check whether the bank you’re investing your money into has a strong Balance Sheet and Cash Flow. If not, then you might be heading into BIG trouble.

If the Bank files for bankruptcy, almost all your money goes down with them. So, before this disaster happens, do a thorough research of their Balance Sheet, Cash Flow Statement and also their Profit & Loss Statement. Because, at the end of the day, it’s the profit that decides everything.

(6) Rental Property

Airbnb made $5+ Billion in revenue in 2023, and most of the company’s revenue came from rental business. I used Airbnb as example just to explain how powerful and lucrative a rental property business is. There’s literally no limit to how much money you can make if you have a rental business. A multi-level parking space is also a good example of how profitable a rental property can be.

Other few examples are ATM, Billboard, storage units. I have never revealed this, but my mom rented her land to a bank for ATM. It’s been more than a decade and she’s still making money from it. And, the best part is that the land still belongs to her, and it has appreciated more than 5x since then. Though I cannot reveal how big the land is, it’s only big enough to setup two ATM machines.

Trust me, there’s a special joy in seeing passive money getting credited into your bank account every month. Of course, the utmost job comes when you make money from immense hard work.

(7) Corporate Fixed Deposit

Big and small businesses always need cash, and they don’t mind paying interest on it. Of course, they take business loan, but they also opt for better, and more secure options like Corporate Fixed Deposits. These are the major reasons why a Corporate Fixed Deposit is far better than a Bank Fixed Deposit:

(1) The interest are always higher than what the Banks will pay you.
(2) It’s more secure than the stock market

Of course, there are negative sides as well. The primary among all is that if the business goes broke, your Fixed Deposit goes down with them too (just like high-interest fixed deposit). So, if you’re eager to invest your money into Corporate FD, go through their Balance Sheet, Profit & Loss Statement, and Cashflow Statement. If you see that it’s a risk to invest in the company, you should immediately back off. No matter how attractive the interest rates are.

Innocent people in Third-world countries have suffered a lot because of this Corporate Fixed Deposit scam. Here’s how the whole thing works:

(a) The victim is offered an exceptionally high interest rate on their deposit
(b) When asked the Corporate company about their income source, they give a vague answer
(c) Initially, they payout the interest amount for few months and lure the victim to invest more
(d) Once the victim has invested enough, the company is gone for good, never to be found
(e) The result? The innocent victim has lost all their life savings.

Please be aware of such scams. Corporate Fixed Deposits/Bonds are fantastic. Only invest in the most reputed and Government controlled company. They won’t run away with your money…

(8) Subscription Service

Among all the passive income ideas I have written here, this one has the highest income potential. You might have heard about the term: SAAS (Software As A Service). People have become millionaires just by creating SAAS and selling them for as low as $2 a month. Heck, Photopea, the free Photoshop clone makes $1 Million every year just from ads. And guess what? The entire thing was created and still is managed by just one person.

If you know programming and have a great idea, you have a great chance of becoming a millionaire. If not, you can either hire programmers and make your dream software a reality. Few years ago, I had a so-called great idea but had no money. So, I started learning Java, but soon lost patience and trashed the whole idea. I wonder what would have happened if I continued and actually created the software!!

There’s a reason even the big leagues like Adobe are switching to subscription plan options. It simply works. Many people cannot afford a $500 software, but sure can afford $10 a month subscription plan. It’s more effective and there’s a high chance you’ll never stop using the software because of comfort-zone and price. Think about an idea and work upon it.

The famous company Ring.com was just a Dropshipping company. It was acquired by Amazon for a whopping $1 Billion.

(9) Vending Machines

90% of world’s vending machines can be found in Japan. The country is famous for their innovative vending machine ideas. Few months ago I saw a YouTube video of a Pizza vending machine and right next to it was a flower-dispensing vending machine.

Anyways, vending machines are a great passive income investment. You only have to invest money once, and after that it’s just occasional repair and refills. Yeah, a typical vending machine might not make the same money as other passive income investments, but it sure makes enough money to turn profitable.

Vending machines are cute and works great, but as an investor, there’s only one issue which I can think of. It’s a depreciating asset. That means, over time, the vending machine loses it’s value. So, if you’re thinking of buying a vending machine for, let’s say $5k, and sell it at $10k, that won’t happen. Because let’s be real here. a vending machine is just similar to a refrigerator. It’s mostly metal and plastic. Unlike Gold and other precious metals, metal and plastic doesn’t financially appreciate over time…

(10) Online Course

If you have an audience, then selling a course can make you more money than anything. Not even affiliate marketing comes close to how much a good course can make. Still, if you don’t have a sizable audience, you can release a well-made course on Skillshare or Udemy. If you’re confident enough, you’ll make a lot of money, that too in complete passive income.

Your initial hard work would be to create the course. That’s it. After that you just update the course and reply to student questions. Online courses are a hugely successful passive income business model. In the midst of the 2020 event, I saw some well-known sites making $250K a monthly from selling courses. Just to compare, that’s how much the same site usually make in a year.

If you have a good course idea and think people will buy, then you’re literally sitting on a goldmine…

Disclaimer: While I try my best to list down the best investment ideas, please keep in mind that these are just my personal suggestions. Before investing you must go through research about you risk appetite. Also, please keep in mind that createblogearn.com and the author won’t be responsible for any sort of loss occurred. Consult the experts before putting your hard-earned money to work. I wish you all the best…

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