Generating Passive Income from Home

by | January 24, 2019 | Making Money


If you’ve heard anything about passive income, it probably sounds like a dream: who wouldn’t want to literally make money in their sleep, after all? It sounds like the ultimate form of financial independence!

However, it’s best to put your dreams of lounging on a beach while money pours into your bank account on hold just for now and to weigh up your options, as passive income opportunities can require a bit more work than you might think. The good news is that a good number of options for generating passive income can be set up from the comfort of your own home!

What is Passive Income?

There’s a lot of buzz out there about passive income and how lucrative it can be, but what exactly is it?

Simply put, passive income is when you continue to be paid for work after it’s already done. It’s the polar opposite of working for an hourly wage; you bring in money without having to actively work for it. This includes things like royalties from music or books, ad revenue from blogs and websites, and also revenue from a business or real estate investment.

Once you have a passive income stream, you’re making money no matter what else you’re spending your time doing. You can earn while you’re sleeping, spending time with the kids, or on holiday, not lifting a finger since you don’t have to be present!

While some sources of passive income take a degree of upfront work to earn (such as writing an ebook or setting up a Youtube channel), others involve relatively little effort (like utilizing cashback opportunities). As with most things in life, typically the more you initially invest, the more you can get out of it – and passive income sources can be an incredibly useful route to lining your pockets.

They may not be able to replace your normal salary (unless you strike very lucky, of course), but having a little extra coming in is better than nothing and might help you in building up a safety net for emergencies.

How Much Can You Earn?

It’s best to stay realistic – it might be easy to read up on success stories with passive income methods and think that you can churn out an ebook or start a blog and be raking in tens of thousands of pounds the following week. Unfortunately, it doesn’t always work out that way!

Some people might be able to make a fortune on a single form of passive income, but the vast majority of people are more likely to pick up small amounts from a few different sources at once.

Chances are the more time and effort you pour into a project, the higher the likelihood it could become a profitable form of passive income for you. When you look at blogs that seem to effortlessly generate interest and hear stories of them bringing in thousands in revenue every month, what you don’t know is the backstory – how long they were working on developing it before it was able to break even, let alone make them a profit.

The trick is to choose a few different sources of passive income that sound interesting to you and work from there. You can balance your initial time investment out by making sure to look into some sources that do require some work to get started (such as a website or blog), and also some that don’t require much (investments and stocks, though these will cost you in exchange for saving you time).

Now, what are some of these sources of passive income, exactly?

Selling and Buying Online

Selling things to generate passive income can prove tricky, as selling tends to be quite an active process. Though unwanted belongings like old movies, games, and CDs can be sold off with relatively little effort, once they’re gone, they’re gone! Even opening up a store of your own to sell products can wind up being more active income than passive income if you’re making the product yourself.

As an example, imagine you’ve just set up a sandwich shop. You have to keep making sandwiches all day, every day, and for all your time and effort invested each one you make can only be sold once.

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8 Cheap Ways to Generate Passive Income at Home

So, how do you successfully generate passive income this way? Ideally, you want to sell something that you only have to create one which you can then sell over and over. Some of the most common ways are using an online store or even building a WordPress blog.

One of the simplest ways to expand a piece of art or graphic design that you have created from a single sale into a potentially lucrative passive income opportunity. These are sites where you can print all sorts of goods just by uploading your images – once they are up, customers can log into the sites, select an item, and design to purchase and place their order. The items themselves never have to be your responsibility, as the sites print the goods and deliver them to the customer – you just rake in your passive income payout.

Some options include:

The types of goods available and the amount of passive income revenue can generally vary between the sites, so it’s best to search among them to see which ones might be right for you.

2. Sell Your Knowledge

Are you an expert on a topic or a skill? Able to make it digestible and engaging for an audience? Then you could consider creating an online course as a source of passive income and selling it on websites like Skillshare or Udemy. They offer courses on countless subjects, including marketing, photography, website development, and illustration among many others, and it’s completely free to register and set up your own course on both websites.

Though it will take some time to produce a video course, it is worth it for the passive income – plus you don’t necessarily need to run out and buy expensive equipment. Many modern smartphones can record good enough quality video for web uploads! Both sites will continue to generate passive income for your efforts indefinitely after uploading, but they do have some key differences in how that income is calculated.


How does it work?

Skillshare is based around a subscription service: users pay monthly or annually for a premium membership which gives them access to all classes on the site. They often run free trial promotions through affiliate links with influencers (incidentally, a form of passive income for them) to entice new users into signing up for a subscription once the trial period ends.

The profit from premium memberships is then put into a royalty pool and distributed among all teachers on the platform proportionally in accordance with the percentage of minutes premium users spend watching their content. Basically, if your content made up 5% of the total watch time across Skillshare for that month, you would receive 5% of the royalty pot.

This means that pay each month can vary depending on a few factors: the amount of money spent on premium memberships by users, and the proportion of their time spent watching your classes. Views from users on a free trial don’t count, but their ratings and comments will push you higher up the rankings for whatever category you’re teaching, meaning more premium members will see your content and give it a try, earning you the passive income you’re after!

How much can I earn?

Skillshare claims that on average, first-time teachers earn $200 (over £150) in their first month, with top teachers raking in upwards of $3000 (£2300). This might not look too substantial, but as long as your content manages to draw in a total of 30 minutes of attention each month, you’ll keep getting your cut. You can set it and forget it – potentially generating infinite passive income if your courses keep getting enough traffic!


How does it work?

Udemy charges users for each class they take, rather than using a subscription model like Skillshare. Though you can set your course at whatever price you fancy, they have a near-constant set of promotions running where users can buy certain courses for $10. It can be quite difficult to get noticed, as the site automatically ranks any courses under that promotion above everything else, and full-price courses are not visible by default.

The amount of revenue you can generate depends on how users are accessing your content, too: if you draw them in with promotional vouchers yourself, you can grab up to 97% of the revenue. This obviously involves a much larger time investment than just uploading your course and leaving it up to Udemy, but if you have any ways to build your own audience you can also see larger returns and a more reliable flow of passive income.

Any sales that happen on Udemy without your input can get you a 50% share of the money users spend on your course unless they are advertised through their affiliates’ program (for example, pre-roll ads on Youtube videos) when you’ll grab 25%.

How much can I earn?

You set your own prices, so you can decide: whether you draw in an audience yourself using coupons or rely on Udemy’s $10 flash sales to get your content noticed, you can pick up some coin if you can get noticed. Udemy estimates that you could see earnings of up to $3000 (£2300) a month.

3. Sell work you’ve already done

If you’re a qualified teacher, you can sell your lesson plans on Teachers Pay Teachers. Due to the nature of the job nowadays, a substantial amount of your time will be spent producing lesson plans for your classes anyway, so you might as well repurpose them to grab some passive income for work you’re already doing!

Or, alternatively, you might have some photographs lying around in a folder in the depths of your computer – these can also prove a valuable source of passive income if you put them up for sale on Shutterstock. As you receive payment whenever a customer pays to use one of your images if you have a backlog of high-quality photos or a passion for photography you can easily accrue quite a bit of money this way.

Shutterstock rewards you for your success, too: the higher your lifetime earnings, the more you earn per download of your photos. Once you build a popular enough library, you can put your feet up and reap the rewards as a completely passive income source, picking up money for your old pics with ease.

4. Smart Online Banking

It might seem counterproductive to spend your money as a potential route to earning passive income, but this is one of the simplest ways to make a small difference in your bank balance. Numerous banks in the UK (including Santander and Lloyds) offer cashback schemes: the catch is usually that you have to manually activate the cashback offers one by one through online banking services and it’s easy to forget! By staying alert about cashback offers expiring or changing you can earn back a proportion of the money spent on certain purchases which you would have made anyway as passive income.

Naturally, if you are spending solely to claim cashback offers rather than sticking with things you would buy normally, it’s hardly an effective source of passive income, but if the only change in your routine is activating all the offers at your disposal there is nothing to lose and plenty of passive income to gain over time.

5. TopCashBack


TopCashBack is a website where you can get anything from 3% to 25% cash back when buying online with certain retailers – they feature over 4000 on their site, including Nike and Just Eat. Using the website as a portal, you can access the retailer’s website and shop normally, but you get an added bonus for going through TopCashBack first – an easy, quick source of a passive income! You can load your accrued cash back into a bank account, PayPal account or redeem it as vouchers for retailers like Amazon and Starbucks.

6. Start a Blog

One of the best ways you can establish a passive income is through setting up and working on a blog – through this particular passive income won’t just roll in overnight, so don’t expect immediate success!

At first, it is almost definite that you won’t be generating any income from your blog, but it is absolutely worth putting in the effort as the passive income will come over time. Once you can gain some traction and get regular hits, you may see it snowball.

Rather than trying to pick a topic that you think would be popular, try to pick a niche that you are personally interested in. Not only will this make writing content for the blog before you have a passive income stream from it feel like less of a chore, if you pick a topic that has fewer blogs out there you have a chance to rank higher on Google, easily bagging you more traffic. So, instead of starting up a generic diet and fitness blog, for example, you might focus on a specific diet like the 5:2 or the Atkins diet.

Creating Content

Sometimes a more long-term strategy can really pay off. Though these forms of passive income may take longer to get off the ground, they have the potential to remain sustainable long after you’ve put the work in.

7. Youtube and Patreon

You can potentially get a double whammy of passive income if you can successfully curate an audience on Youtube. Not only can you monetize the videos you upload to Youtube once you meet their requirements (which are relatively low) if you upload videos of over 10 minutes in length you can choose exactly how many ads you want to place and at what points of your video you want them to play at.

Getting too greedy can cost you, viewers, as people may click off a video with too many mid-roll advertisements – losing you more passive income than you could gain from spamming them.

If you can strike lucky and garner a loyal audience following, you can add in another source of passive income from that same audience! By setting up a Patreon, you can ask your audience to pledge an amount of money per month of their choosing (starting at a $1 pledge upwards) to support your Youtube channel.

This can add up to an astonishing amount of passive income, especially if you set up rewards for people who pledge higher amounts (such as a $5-£10 reward tier for behind the scenes footage or outtakes, which only those who pledge that amount or above can see). This incentivizes them to spend just a little more, which could see the amount of passive income you can bring in skyrocket.

8. Write a book/Ebook

Think writing a book is a massive undertaking? Think again! Provided you write about a topic you are knowledgeable about, you can write a non-fiction book relatively quickly and pick up passive income in the form of royalties. Fiction books can work for a valuable source of passive income too, but, are harder to market than a simple, short “how-to” or self-help book.

Amazon’s KDP (Kindle Direct Publishing) service couldn’t be more convenient for this. Despite the name, you aren’t just restricted to Kindle sales: you can list your book manuscript as both an Ebook and as a print copy.

Selling a paperback doesn’t involve you setting up an expensive printing press in your home, either – in the true spirit of passive income, Amazon handles all of that for you. They subtract the cost of printing and shipping from your revenue, but you receive up to a 60% cut of the sales of paperback editions and a 70% cut of Kindle editions of your work.

You can also opt into the Kindle Unlimited side of things, with your book offered for free to members – Amazon still reward you for downloads, so you’re not losing out on too much of your passive income from sales, and you can also gather vital reviews to push your book higher on the search rankings.

Though becoming a published author might sound extremely time-consuming, Amazon makes it very simple. You never know – a few weeks’ worths of writing to pick up some passive income might just become a bestseller!

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