When you want to earn a supplemental income without having to work for that money, you’re likely looking for the best passive income side hustles. Making extra money around the clock while you do other things including sleeping is an excellent way to increase your annual earnings.
I’ve been making money using passive income side hustles for 27 years now, so I have tried almost everything. There are a lot of scams out there that will try to prey on your dreams, so you do need to be careful about things that sound too good to be true. I’ve created this post to point you in the right direction with some of the best side hustles I’ve tried over the years to earn a second income.
What is Passive Income?
A passive income is regular money that you earn without spending time to earn it like you would from a normal job. There are different levels of this hands-off revenue in the real world though.
True passive income that requires zero work to start it and also zero work to maintain it over time does exist. The biggest downside is that you need money for it to be 100% passive. This could be a large lump sum that you invest, or you could contribute to a fund with a portion of your paycheck to build up your investment over years.
Without immediate investment money or the willingness to wait years to build it up slowly, there are other types of passive income. However, other kinds will require some type of work. You may have to put in a lot of work to create something, such as writing a novel, but then you get to sit back and collect checks from it over time without additional work. Other supplemental income may require both start-up work and ongoing maintenance, but it’s still considered passive because you can make money while you’re sleeping or taking a vacation.
Time vs Money Investments
Unless you get an inheritance, you’re not going to get a passive income without some type of investment. This could be a monetary investment, but large contributions of your time may be able to replace money. Immediate funds can be quickly turned into a passive income using multiple different strategies. Anyone that doesn’t have money available to invest will need to be willing to invest their time instead.
You simply need to figure out your financial goals and whether you can afford to contribute money and/or time towards creating a supplemental income. In many ways, investing your time and efforts doesn’t seem like a passive income. However, the idea is to build something that will eventually turn into a passive source of revenue.
When you work at a job, the moment you stop working for them you stop getting paid. You directly trade your time for money working a job. When you work for yourself to create side hustle, you may be able to keep getting paid even if you stop working. Personally, I would much rather invest time in my own future than to line the pockets of a boss I don’t even like.
One of my favorite ways to earn a passive income is with bitcoin mining. You can do this at home, but the best method is to use a hosted miner service. Upfront investment is required, with a minimum around $8,000 – $10,000. This amount can buy you a single machine that will generate around 0.014 BTC per month.
Bitcoin prices are at a low point for the past year right now. Even at current low prices, 0.014 BTC is around $400. Electricity is your largest regular expense with this type of business, and you’ll pay around $150 per month for each machine.
With profits currently around $250 per month per machine for a $8k – $10k investment, this doesn’t seem like a great return since it would take 3-4 years to break even. However, these numbers are also based on the current price of Bitcoin. By simply holding your mined Bitcoin and not selling while the prices are low, you can drastically increase your profits from this side hustle. Waiting for prices to double to $60k per BTC would provide a monthly profit of $690 per ASIC miner, so you could potentially break even in a year at those rates.
Right now, the profitability of this type of side hustle is a bit of a gamble. However, if you think Bitcoin prices will go up a lot in the next 1-3 years, then this could potentially be the best possible passive income side hustle to invest in right now. With Bitcoin prices low, the cost of each ASIC miner is also cheaper, so your initial investment will be lower if you enter the market now (June 2022 but potentially also anytime this summer too).
Trying to host your own ASIC miners at home is possible but requires technical knowledge and special set ups for noise, heat and electricity. The best way is to use hosted ASIC mining services. All you do is buy the miners and pay for electricity each month, and you receive the BTC you mine automatically without any work from you. This is truly passive income when you use a hosted mining service.
I personally use and highly recommend River.com’s Hosted ASIC Mining – click that link to take a look at my full review for this company and their hosted mining service. You can also find a special $100 off link for each miner you buy on that page.
Fixed Income Securities
Bitcoin mining is certainly a high-risk investment to generate a passive source of income, even though it can provide some of the best possible returns in an ideal scenario. Even if you want to start a mining side hustle, you may also want to diversify by having some less risky investments. To accomplish this goal, there are a wide variety of fixed income securities you can buy that can potentially provide a much more stable income.
Like mining, earning from security purchases is also 100% passive, minus the small amount of work it takes to buy them. For extremely low risk, try out US government issued Treasury Bonds, Bills or Notes (depending on the length of investment). For a similar low risk during times of high inflation, such as now, TIPS bonds also issued by the US government may be best. There are others that bring a higher level of risk that is still much lower than crypto mining, such as REITs that allow you to invest in a wide variety of real estate for passive rental income.
One of the best things about these fixed income options is the fact that they can work for all budgets. Large lump sum investments can immediately start generating a nice income for you with zero effort. For anyone that can’t afford that, you can set up automatic contributions to buy these fixed income assets for you each month. You’ll immediately start earning as soon as you make an initial investment, but the monthly or quarterly payments you receive will continue to grow over time. You can grow those payments even more by having the payments reinvested automatically until you’ve built the fund to your target.
A lot of people like to make a passive income by purchasing houses, townhomes and apartment complexes and becoming landlords. This strategy can certainly work, but it will require money to invest and likely good credit too.
To make rental properties a truly passive income, you would need to hire employees and/or employ a property management company. Buying houses and fixing them up to get them ready to rent out takes a lot of work, and a property management company likely won’t do those things for you.
If you choose to do everything yourself, this can easily turn into a full-time job if you buy numerous houses, so this may not be the hands-off revenue source you want. This ends up being a business that can actually take up a lot of your time and energy, or you pay a good chunk of your profits to others to make it 100% passive revenue.
Online Content Creation
All of the best passive income side hustles that I’ve talked about so far require money. Fixed income security buying is really the only one so far that can be done without a large up-front investment, even though it still requires regular contributions from your paycheck. It’s actually possible to create a truly amazing passive income online without spending any or much money.
Creating your own content and publishing it online offers a wide variety of different kinds of side hustles that all have the potential to earn a really amazing passive income. The biggest downside to this strategy is that it takes time and a lot of work to be successful. For someone that has millions of dollars in the bank to invest, they likely won’t want to try this approach. However, if you’re completely broke but have dreams of quitting your job with a passive income, this approach does offer that potential without risking but besides your time.
The general idea behind this strategy is to create content for a specific niche to build a following. This can be done in a wide variety of ways though. You could write articles and publish them on your own website as a blog, like this site. Video creation is another option, and those videos can be published on a YouTube channel or potentially other social media sites. You could create pictures with photography, or even run a podcast if you enjoy talking.
You’ll have to create and post content on a regular basis to build a following. Sometimes this can take years to gain a truly large audience that can make you a lot of money, but this success can also happen very suddenly after you’ve been doing it for a while. If you can’t continue to do this work every week for years, don’t even start or you’ll just waste time. The successful people in content creation are motivated and never quit, even when nobody sees their content for months.
Online content can be monetized in a variety of ways too. Advertising is one of the most common. On a YouTube channel, for example, you can join a Google Ads program to share ad revenue from your videos with YouTube. You may make around $4 per 1000 video views, so you’ll need to have a very large following to make a decent income. Affiliate marketing is another option that allows you sell products for other companies and you get a percentage of the sale as a commission payment. When you have a large following, you could even create and sell your own products, which is where the big bucks can really begin to roll in.
Ultimately, a content creation side hustle isn’t truly passive income. This business works best when you continue to create new content over time and never stop. However, you won’t directly trade your time for money. With a large following, you could potentially do a few hours of work each week and make hundreds of thousands or even millions each year. I’d call that a passive income, despite all of the work that it takes to create it.