How to Create Passive Income With Zero Money – 11 Ideas To Explore
Oh, how nice it would be to earn money on autopilot.
How nice it would be to wake up every morning, log in to your online banking portal over a cup of coffee, and see that your bank account has grown while you were off in dreamland.
Although some people do love what they do for work, we’d be lying if we said that most people don’t dream of this being their reality.
Earning passive income would allow so many people to pursue more hobbies and interests, travel the world, and spend more time with family and friends.
Many passive income streams do unfortunately require startup money, something that can be hard to come by.
Take rental real estate, for example. You need a lot of money and/or a mortgage to purchase a piece of rental real estate before you start earning passive rental income.
Same with investments like dividend-paying stock. Sure, you can buy some for a few dollars, but your dividend return will be too small to be useful until you own tens of thousands of dollars.
Thus, you run into the classic “job-seekers” dilemma, only with money. You want to make extra money via passive income, but you need money to do so.
Or do you?
Turns out that you don’t necessarily need startup capital to build a passive income stream. There are several ways to create passive income with zero money. We’ve compiled some of the best ones below.
The catch with these “zero-money” is that you’ll have to invest another valuable resource: your time. Put in the time, and you’ll be able to create one or more
The Right Way to Build Passive Income Streams
Many people making their first venture into passive income quickly become led astray by all the opportunity. One of two things happen:
- They’re so excited about the passive income potential that they try to build several streams at once, get burnt out, and have nothing to show for it
- They get caught up in the rush of one passive income stream at the start, get discouraged when the big bucks don’t roll in right away, give up on their income stream, then jump to the next.
In order to be successful in building a passive income stream, you have to do the opposite of these. You must focus on one thing at a time and do your best not to be distracted by all the opportunities.
On top of that, you have to realize that the money doesn’t come in right away. Even when it does, it won’t be in large amounts at first. In time, however, it will if you put in the work.
1.) Rent Out a Spare Room (Or Your Whole Home)
If you’ve got a guest room or even a room that you can turn into a guest room, sign up for Airbnb and start renting it out to others.
Once you build your reputation on Airbnb, you should have a steady stream of guests booking your spare room whenever you have it available.
Going on vacation? Traveling for business? Boost your earnings even more by listing your entire home on Airbnb. Not only can you charge more for a larger space, but there will be more room to add extras that you can charge for.
Do this right, and you could be covering a significant amount of your mortgage or rent payment without doing much extra work.
Now, Airbnb has a few legal issues to be aware of. Your local laws may prevent you from renting out your room or home to others; penalties for this sort of thing usually run you thousands of dollars.
You can try to sneak it under the radar (although we don’t condone this), but the penalty for being caught just doesn’t seem worth it.
Renters have another issue to be aware of: their lease agreement. Many landlords don’t let you rent any part of your house/apartment unless you do it through them via sublease or even more obviously, an unoccupied room.
Again, it’s technically possible to do this unnoticed, but you’ll be hit with penalties and fines should your landlord find out.
Clear things with the law and your landlord first.
2.) Rent Out Your Car
Even if you have a full-time day job AND deliver food or drive for a service like Uber 5 times a week, there will be times when you aren’t using your car. Instead of letting your car sit in your driveway earning you $0, why not rent it out to somebody when you aren’t driving it?
Thanks to services like Turo, earning passive income renting out your car to others has never been easier.
Now, you’re probably wondering how much you can make by renting out your car. Will your “boring” family crossover make any money?
Yes, and more than you think.
While it’s true that supercars, sports cars, and convertibles are flashy and thus command higher prices, not everyone wants one of those.
In fact, Turo’s highest earning car relative to its monthly car payment is none other than the Jeep Wrangler. A cool vehicle, yet quite common.
The Jeep Wrangler pays for itself in only 5 days on average: to put that into perspective Wrangler owners could own two Wranglers, rent one out about 3 days per week, and cover the cost of both while still walking away with some profits.
Other vehicles in high demand are SUVs and minivans. Traveling families often find that affordable models of these vehicles, especially the latter, are all rented out from rental car shops. They flock in drovers to services like Turo to rent SUVs and minivans from the locals, so yes, your “boring” crossover could be a cash cow.
Things to Be Aware of
A few small caveats: renting out your car won’t work if you have a lease due to mileage restrictions. You have to own your car.
If you do own your car, do be wary of depreciation and wear & tear. If your car is your prized possession and you want to keep the miles off it, then renting your car out isn’t a good idea.
However, if you don’t care too much about your car’s resale value, then Turo is the perfect passive income stream for you.
3.) Rent Out Nearly Anything Else
Homes and cars are some of the most popular rentals due to the large amounts of passive income, but the truth is you can rent out nearly anything.
It’s totally possible to do this in person without the help of an online P2P (peer-to-peer) rental marketplace. Anytime a family or friends needs to borrow something, that’s an opportunity to rent an item you have to them for some extra cash.
However, a P2P rental marketplace will expand your customer base. A well-renowned P2P rental marketplace called Fat Llama lets you rent out nearly any item, provided it meets their criteria. Popular items on Fat Llama include
- Musical instruments
- Camera/camera equipment
But chances are you could rent out almost anything useful you find around your house.
4.) Sell Class Notes
Broke college student? Un-broke yourself and create a passive income stream early in your life by selling your college notes online.
Your best bet for earning passive income on your class notes would be to sign up for Nexus Notes. If your notes meet Nexus’s Notes requirements, they’ll then list your notes on their site for sale for.
Students around the world can then purchase copies of your notes for $35 per copy; Nexus Notes pays you 50%, or $17.50, of each purchase.
As a student, that’s some serious money. Assuming just 1 sale per day for every day of the week (totally possible with the zillions of college students worldwide), you’d be earning $490 per month completely passively!
Since you’re bound to have more than one set of notes, it’s not out of the question to earn over $1,000 per month, either.
You get to help fellow college students, too. You’re all in this together.
Side note: if you’re interested, Nexus Notes lets you donate some or all of your earnings to charity as well.
5.) Build a Blog
Blogs are the gold standard of online passive income. Few business models let you work from wherever you want, write about whatever you want, and earn giant sums of money passively.
Now, blogs aren’t completely free: you will have to pay for hosting and a domain. This stuff is quite cheap, though. Bluehost sells hosting starting at $2.95 per month for the first year (that’s not even $0.75 per week), and they hand you a free domain name as well.
Keep in mind, you have to be in it for the long haul if you want to build a successful blog with no startup investment (aside from hosting/domain). It may take months to gain a non-negligible amount of traffic, even if you share with family and friends.
But given how many bloggers are earning six or even seven figures per year, it’s safe to say that putting 1-2 hours per day towards your blog will pay off big time.
So how do these bloggers earn that income?
- Ads – Placing ads on their site
- Affiliate marketing – Promoting other people’s products for a commission
- Guest posts
- Freelance writing
- Premium membership content
6.) Start a YouTube Channel
As a passive income business model, YouTube is similar to blogging. At first, you put in a lot of sweat equity putting out great video content in your niche of choice. Build a loyal subscriber base, and you’ll soon be able to monetize
YouTubers can monetize their channel by making it into the Partner program. You can apply to the Partner program when you reach 1,000 subscribers and 4,000 public watch hours over the last 12 month.
YouTube Partners earn money through
- Ads – Display, overlay, and video ads
- Premium channel memberships – Viewers can pay to access special perks
- Merchandise shelf – Create, advertise, and sell branded channel merchandise such as apparel right on your videos
- Super chats – Fans pay to have their messages highlighted in chat streams
- YouTube Premium – Every time a YouTube Premium member watches your video, YouTube allocates a portion of their Premium subscription payment to your revenue
YouTubers can also do affiliate marketing, as well as use crowd sourcing sites like Patreon to help fund their videos.
Lastly, you can earn sponsorships from companies. You shout the company out, and they pay you when they get new customers.
7.) Create Information Products
Information products are things like eBooks and online courses. These make for great passive income with large margins because you don’t have to make physical copies of them.
eBooks take less work to create than courses, but courses have a larger passive profit potential due to the higher price you can charge relative to your expenses.
Once you write your eBook or make your course, you may have to pay a few bucks to sell them, but not always.
For example, Amazon doesn’t charge you to sell eBooks on their site. However, they take a large chunk of the sale price as commissions.
As for courses, you’ll likely have to pay, but you can offset this with the typically higher prices of courses.
For example, Teachable has several paid plans available, starting at $29 per month if you purchase a year up front.
8.) Start an E-commerce Store
Ok, E-commerce may require a little startup capital; you may want to try another free passive income business model to earn some money first.
However, you can launch a successful E-commerce store with only a few hundred dollars; compared to traditional business models, that’s pennies.
But anyways, dropshipping will be your lowest cost option. You hold no inventory and don’t even need your own products. Instead, you build an online storefront (Shopify is a great platform for this) and list products from suppliers at a markup.
When a customer orders a product, they pay you. You buy the product from the supplier, give them the customer shipping information, and they handle the rest.
9.) Stock Photography
Did you know you can make passive income by taking photos without being an actual photographer? All you need is a smartphone camera and some good subjects for your photos.
See, people around the world flock to sites like Shutterstock and Getty Images for quality stock photos. On these sites (as well as several mobile apps), you can upload your stock photos and build a portfolio.
Each time someone downloads your photo, you receive a royalty.
If you spend several months slowly building up your portfolio with beautiful and useful images, you’ll start to see passive dollars hit your bank account.
10.) Open a Certificate of Deposit (CD)
A bank Certificate of Deposit, or CD for short, is a type of FDIC-insured bank savings account that pays higher interest than normal savings or money market accounts in exchange for withdrawal restrictions based on a term length.
When you open a CD, you can pick how long you want the term length to be; term lengths usually range from as short as 3 months to as long as 10 years and even beyond.
During the CD term, you aren’t allowed to withdraw your investment into the CD without incurring significant penalties. In exchange, the bank thanks you with a higher interest rate.
The longer the term length, the higher the interest rate.
One investment strategy CD investors use is called CD laddering.
You buy multiple CDs of varying lengths, with each maturity date being equidistant. As each CD matures, you take the money out of it and reinvest it into another CD of the same length as your original longest-term CD.
For example, let’s say you buy 5 CDs, each one with a different but equidistant term length:
- 1-year CD
- 2-year CD
- 3-year CD
- 4-year CD
- 5-year CD
When the 1-year CD comes due, you reinvest that money into a new 5-year CD. Repeat this every year with each subsequent CD that comes due.
After 5 years, you’ll have a 5-year CD coming due every year.
Since longer term lengths earn better interest rates, and since you’ll have a long-term CD coming due every year, you get to earn higher interest while maximizing CD liquidity.
11.) Start a Service Business
People say service businesses aren’t scalable. We say they’re mostly wrong.
It’s true, they aren’t scalable at the start. You have to trade your time (by providing your service) for money.
But at some point, you’ll have more clients than you can service yourself. When your service business reaches this point, you’ll want to scale up your business by hiring employees.
By having your employees take on more work, you’ll further divorce your time from your revenue; thus making your income more passive.
At first, you may just hire a virtual assistant to handle administrative stuff like marketing, email management, and bookkeeping. That’ll free up more time to perform client work.
That won’t last forever, though. Eventually, you’ll have so much demand that you’ll want to hire people to do the exact service you provide.
For example, if you’re a freelance copywriter with clients banging down your door, you might start a copy writing agency and hire other copywriters to work on specific clients.
Or instead of going deeper on one skill, you could cover more skills in your service business.
Back to the freelance copywriter example, maybe you open a full-blown marketing agency and hire copywriters graphic designers, web designers, SEO specialists, digital marketing strategists, etc.
Now, you have an entire business churning out work for more clients than you could ever handle alone; your only task is to manage the operation (which takes less time than the “boots on the ground” client work) and maintain client relationships.
Sure, it’s not completely passive. But a scaled service business can earn you multiple six figures per year while you work less than a full-time employee.
The best part of it all? Starting a service business costs $0.
Scaling Your Service Business: The Learning Curve
You will have to learn new skills and sharpen some existing ones: management, leadership, marketing, networking, and more.
But by the time you’re ready to scale, you should have plenty of cash to invest in educational resources that will teach you these.
There Are No Shortcuts
In the world of passive income, everyone’s looking for shortcuts. The reality is that there are no shortcuts.
If you want to kick start your passive income business, you’re going to have to invest money into courses, books, and other education (as well as do your due diligence to dodge scammers).
But if you don’t have money, you will have to invest your time instead.
No matter which way you cut it, there’s no easy way to the top. It all comes down to good, old-fashioned hard work.