Adding a passive income stream to your personal income statement has never been more accessible than it is today. The internet provides instant global reach and has created opportunities that simply didn’t exist a decade ago. With the rise of the Sharing Economy, more people than ever are building side hustles and generating passive income streams.
Before diving into our top passive income streams for 2020, let’s first explore what passive income actually means and why it’s crucial for your financial future.
What is passive income?
Passive income represents earnings from businesses or investments where you’re not actively involved in day-to-day operations. Simply put, it’s money you earn without trading your time for it daily. The classic example is rental income from real estate—landlords receive payments from tenants with minimal daily effort required. There are many different types of passive income, spanning everything from online businesses to passively managed rental property businesses.
Why pursue passive income?
Building passive income streams serves as the foundation for achieving financial freedom. This becomes particularly important given today’s economic landscape, where the rising cost of living in the U.S. coincides with stagnant wages over recent years. Multiple passive income streams allow you to separate earnings from time investment. When passive income from your businesses and investments covers your expenses, you gain the freedom to spend your time however you choose.
You have numerous ways to generate passive income. We’ve organized them into several categories below to help you identify which opportunities align best with your situation.
Financial Income Streams
Cash remains the most straightforward and reliable passive income generator available. With a substantial cash reserve, you can invest in low-risk opportunities and earn nearly 100% passive returns. This transforms you from borrower (95% of people) to lender (5% of people). After investing your money, you’ll receive regular interest payments throughout the year. Excellent places to put your cash to work include:
- Dividend Producing Stocks
- Corporate/Municipal Bonds
- Income Funds
- REITs
- Peer-to-Peer lending sites like Prosper or Lending Club
While most of these investment vehicles have existed for decades, what’s revolutionary is how easily they can now be accessed. Platforms like Robinhood enable you to purchase any of these investments within minutes from your smartphone—completely fee-free.
Once you’ve invested in these instruments, you’ll earn passive income through regular interest payments distributed monthly, quarterly, or semi-annually.
Business Income Streams
Business-generated passive income offers the highest earning potential on our list, with essentially unlimited income possibilities. This income flows from businesses you either own or invest in.
You have countless business options to explore, and platforms like Shopify make launching incredibly simple. If starting from scratch feels overwhelming, browse Flippa to purchase established, operating businesses.
For business investment opportunities, consider Nextseed, a platform that evaluates local business opportunities and makes them available for crowdfunding.
Online Income Streams
Online income streams rank second in earning potential on our list. Similar to traditional businesses, building consistent online income typically demands significant upfront effort before you see returns. However, many of the strategies below become nearly 100% passive once the initial work is complete.
Effective strategies for generating passive income streams online include:
- Create an online course or eBook
- Build a substantial social media following and monetize through endorsements/promotions
- Launch a blog and earn through product referral commissions
- Explore Royalty Exchange to invest in intellectual property and collect royalty payments when that property generates revenue.
The essential question becomes: what unique knowledge or value can you offer to others? What can you create that people will eagerly consume?
Sharing Economy Income Streams
Following AirBnB’s launch in 2008, entrepreneurs have rushed to create platforms that empower consumers. A decade later, you can now monetize virtually anything you own. This comprehensive list might seem extensive, but we’re confident you’ll discover new opportunities you haven’t considered.
Renting Out Real Estate
- Airbnb – By now, Airbnb is universally recognized. Rent your house or room to generate income.
- VRBO – (Vacation Rentals By Owner) Functions like Airbnb but focuses exclusively on vacation properties.
- Homeaway – Features over 2 million vacation rental listings across 190 countries.
- eVenues, Peerspace, Splacer, ThisOpenSpace – Monetize spare meeting rooms, creative spaces, or similar venues.
- Venuelust – Airbnb for distinctive, unique destinations.
- Glamping – Premium camping destination rentals.
- Storeatmyhouse – Transform unused storage space into income.
Rent Out Your Camera
- Sharegrid – Rent camera equipment ranging from lenses to drones to audio gear.
- Kitsplit – Equipment rental marketplace for filmmakers, video producers, and cinematographers.
Rent Your RV
- Campanda – Access to 26,000 RVs across 42 countries.
- Outdoorsy – List your RV and earn rental income.
- RVShare – Claims potential earnings up to $22,000 annually depending on your RV.
- URentMe – Accommodate any recreational vehicle type (RVs, boats, ATVs, motorcycles, etc.)
Rent Your Motorcycle
- Riders Share – Make your motorcycle available for others to rent.
- Twisted Road – Competing platform with similar services.
Rent Your Boat
- Boatsetter – Airbnb for watercraft. List your boat for rental with optional captain services.
- Getmyboat – Includes both boats and water sports equipment rentals.
Rent A Bike
- Spinlister – Global marketplace for renting bikes, surfboards, and snowboards.
Rent Out Your Fancy Clothing
- Borrowing Magnolia – Monetize your wedding dress through rentals.
- Style Lend – Rent designer items including dresses, shoes, bags, and accessories.
- Rentezvous – Designer clothing rental platform.
Rent Your Commute
- Roadie – Earn money delivering packages along routes you’re already traveling. Long-distance deliveries can pay up to $650.
- Citizenshipper – Peer-to-peer shipping marketplace.
Rent Your Car
- Turo – Got an unused car in your driveway? List it on Turo for others to rent!
- Maven – General Motors’ carsharing platform.
- GetAround – Operates carsharing services in 300 cities globally.
Rent Your Stuff
- Peerenters – List household items for neighbor rentals.
- Buro – Toronto-based platform promoting “don’t buy it! Buro it.” Earn by lending possessions to neighbors.
- Rentnotbuy – Additional marketplace for personal item rentals.
- Loanables – Another platform for monetizing your belongings.
Rent Your Driveway/Parking
- Pavemint – Generate income by sharing your parking space.
- Curbflip –
- Rover Parking – Canadian company dubbed “the Airbnb of parking” that helps monetize spare parking spaces.
- SPOT – Parking space rental income platform.
- Airgarage – Specializes in monetizing underutilized parking areas.
Many of these platforms launched recently and haven’t reached Airbnb’s saturation levels. Creating a listing is definitely worth testing to gauge potential results!
We hope this guide proves valuable as you establish new passive income streams in 2020! With this many options available, there’s genuinely no excuse for not adding at least one new passive income source this year. If you can think of any opportunities we missed, please share them in the comments below.
