Cash Flow,  Financial Freedom,  Making Money

50 Ways To Make Money While You Sleep

Two dogs sleeping on a bed

There are many paths to financial freedom and that’s great, because there are many different types of people. Sometimes the difference between success and failure is just whether you come across the right path.

I’m hoping my list of 50 ways to make money while you sleep will expose you to many paths to a better financial future.

Some of these ideas will be small improvements to your money situation, but others have the potential to bring in a full time income.

Types of Passive Income

This is a big list, but it is far from comprehensive. Each of my ideas fits into one of these categories:

  • Own something that grows in value over time
  • Create or buy a machine (business) that convinces people to pay you
  • Reduce or remove recurring expenses
  • Make more money from the things you already do

Things like real estate and stocks grow in value over time. These types of investments are staples of a wealthy person’s portfolio.

People buy burgers and electronics, they pay for access to gym equipment, pest control and lawn care. People spend money on all kinds of things, and if you can build something (or buy something) that convinces them to give you their money, then you can make money while you sleep.

You also spend money. And some of your money gets spent on the same things every month. If you can spend less money on those things, then it’s the same as earning more. In fact, it’s actually better because money that’s already in your bank account is tax free.

And if you could make more money without changing anything about how you live your life, that’s as good as a new income source. I’m talking about things like getting a raise or earning income from downloading certain applications on your personal devices.

So keep these categories in mind as you read on.

The Classics

Let’s start our list by talking about the things everyone already knows about.

1. Stocks, Index Funds

There are so many ways to get started owning stock shares.

In order to get started purchasing stocks you just need to sign up for a profile with a stock broker online. I signed my daughter up for a TD Ameritrade account.

These brokers have online interfaces that make signing up super simple and they walk you through the process:

Index funds are basically just large collections of stocks. When you buy a share of an index fund you are buying a very small portion of many companies. It’s probably the cheapest way to diversify a stock portfolio.

2. Dividend Stocks

I want to briefly differentiate two types of stocks. Some stocks can be bought and any value those stocks gain over time can only be realized when you sell the shares to someone else.

But other stocks pay out “dividends” to their owners. These stocks will make cash payments to their owners at least once a year.

I invest primarily to maximize cash flow, so when I invest in the stock market, I make sure to include stocks that pay dividends to me.

3. Retirement Funds

Many employers offer retirement funds where you don’t even have to think about what companies to invest in. And in the U.S. the government allows all individuals to open an IRA, which is another type of retirement fund.

The biggest benefit of these retirement funds is the tax benefits they offer.

The biggest drawback of retirement funds is that your money is hard to access until you reach retirement age.

Regardless, your retirement fund will be earning you money while you sleep.

4. Real Estate – Long Term Rentals

Kate and I made the leap into real estate investment a few years ago. Our first purchase was a triplex in a low income area of our city.

This building has made us money in our sleep in two different ways.

First, we of course get the rent paid to us by our tenants. This rent pays our mortgage, pays for the insurance, taxes and maintenance costs, and it still manages to put some extra money in our pockets.

Second, real estate appreciates in value over time. We don’t see that value come into our bank accounts, but we can realize that value either by selling the property (we won’t), or by borrowing against it. That means we can take out a second mortgage, or cash out and refinance.

5. Real Estate – Short Term Rentals

At the same time Kate and I bought that triplex, we also put some work into our basement and listed it on Airbnb. We got so many bookings our first week that we thought we could buy a property and list it on Airbnb full time.

Related: Read about our success with Airbnb investment properties.

A year after opening our basement short term rental, we bought another house and did exactly that. That house has actually ended up being our best real estate investment so far.

It’s the same story as long term rentals, but your rent is collected only when someone stays in your house. It won’t work in every market, but in our city we make 2-3 times more cash flow with our short term rentals than we do with our long term rentals.


I created the Investor’s Handbook to walk new investors step by step through the process of acquiring their first few real estate, business or stock investments.

Check it out if you want some additional guidance with your next investment.


6. Bonds

I don’t personally recommend bonds as an investment because they rarely beat inflation. However they are certainly one way to make money while you sleep.

When you buy a bond you are actually lending your money to someone. If you buy a government bond you’re lending money to the government. If you buy a corporate bond you’re lending money to a corporation.

You are given interest only payments regularly until your bond term expires and the original amount is returned to you.

7. Start a Business

Not too many things are more vague than telling someone to “start a business,” and I’m not going to attempt to be more clear.

If you can sell a good or service at a profit and put people or systems in place to do it over and over again, that’s a real recipe for scalable wealth.

The Internet

They say it’s always 5 o’clock somewhere, and the internet allows you to reach every person at every happy hour on earth.

The power of the internet created a multitude of business models. And you don’t have to have millions of dollars to make money online. You just need hard work, determination and stick-to-it-iveness.

8. Affiliate Marketing

One of the most passive ways to make money online is through affiliate marketing. This website uses affiliate marketing to make money.

The idea is that you may not have anything to sell, but lots of other online companies have things to sell. If you use some of those things and feel that your online audience would benefit from those products or services, then you can recommend them. You do this by linking to the stuff you recommend (in a specific way) and you earn a percentage when one of your readers clicks those links and ends up buying something.

The best thing about affiliate programs is that you don’t have to provide any support whatsoever. You don’t deal with making or shipping products. You don’t deal with product returns or customer complaints.

But that also means you’re generally making a small commission with each sale. In order to make serious money you need a large audience and lots of sales.

The easiest way to get started in affiliate marketing is buy recommending Amazon products with the Amazon Associates program.

9. Dropshipping

Dropshipping is one step up from affiliate marketing. With affiliate marketing you send people to someone else’s website so they can buy something.

With dropshipping you still sell a product made and distributed by someone else, but your website serves as the store front. Shopify is a common platform for building a dropship site.

They function very much like a full on E-commerce site in that you have product listings and your users can place orders right on your site (and pay you). But the difference is that when an order is placed, you buy that product from your distributor (who makes the product) on behalf of your customer.

The customer pays you, you pay the distributor, and the distributor mails the product to your customer.

You set the prices on your store, so your profit will be determined by the difference between what your customer pays you and what you pay the distributor.

10. Fulfillment By Amazon

Fulfillment by Amazon (also called FBA) is another online business model very closely related to dropshipping.

Here you do have a product to sell, but you don’t have to handle the distribution of that product. You allow Amazon to distribute your product, and they will also put your product on Amazon.com as well.

You simply sign up for a selling Amazon account and set up your product listings. Then you ship your products to an Amazon warehouse for storage.

Once Amazon has your products, they take care of all the distribution of them when they sell. It’s your job to promote your products.

The drawback of FBA is that you end up paying fees to Amazon to distribute your product, but you get to keep the rest of the profit. You also get to deal with customers and many of the things that come along with that (like returns), but you’ll make a much bigger cut of each sale when compared to affiliate marketing.

FBA and dropshipping are very similar, but some of the biggest differences are that dropshippers sell from their own site and they never see the products while FBA-ers sell on Amazon and they can quality control the products before sending them into the Amazon warehouse.

11. E-commerce

E-commerce is where you do it all. You own the online store and list your own products that you create and distribute to your customers.

Obviously the E-commerce business model is the most work for each sale, but you’ll likely have better profit margins since you’re not paying for anyone else to make or distribute the products.

12. Informational Products

You don’t have to sell tennis rackets or baby strollers. Information can be more valuable than any product.

Maybe instead of a tennis racket, you sell a 52 week tennis training schedule to improve your serving, hitting and footwork. Or instead of a baby stroller you sell an e-book that documents every developmental milestone in a child’s first 10 years and lists activities to encourage development in those areas.

These products don’t require distribution because they are distributed online. You may still require some customer support and you’ll want to keep your informational products up-to-date or just make new ones in order to continue making sales.

Selling info products offers many of the benefits of E-commerce without several of the drawbacks.

13. E-courses

Yes, E-courses are a type of informational products, but you can do more with a great E-course than just sell it on your website.

If you have an amazing course that is giving your readers tons of value, then why not let other people promote it for you? In fact, you may not even need a website of your own.

You can submit your course to a website like Udemy and reach more people, or you can even just put it up on YouTube and get paid from advertisements. And yes you can promote it on your own site as well. There are several ways to cash in on your quality E-courses.

14. E-books

It’s the same story with E-books. Why sell only on your website when you could list your product on Clickbank or get your book published for Amazon Kindle.

15. YouTube Channel

Nothing is a testament to how much people crave information and entertainment more than YouTube.

Want to learn how to replace the radio in your car? YouTube.

Want to learn how to build an 8-bit computer literally from scratch? This YouTube series blew my mind.

And yeah you can see rap battles from historical figures and celebrities eating ridiculously spicy wings.

If you can get people to watch, you can make money. YouTube allows successful channels to make money showing advertisements, but you may be able to make money in other ways too (by promoting products).

16. Streaming

I love games. Seems like I’m always addicted to some strategy game. Right now it’s chess (after watch The Queen’s Gambit) and I’ve gotten into poker, Magic: The Gathering, Hearthstone and plenty of others.

When I want to avoid the stress of playing, I go to Twitch to watch others play. I learn a ton watching others who are better than me, or sometimes it’s good to just watch someone who’s super entertaining.

Twitch streamers make money when their viewers subscribe to their channel. Subscribers get updated when you are streaming and they don’t have to watch ads on your channel.

If you already play every day (especially if you’re a very good player), then why not let others benefit and earn some money for yourself.

17. Online Service or Tool

Are there tools online that you use regularly and you don’t know what you’d do without them? I can think of a few I use.

There is this site that converts .jpgs into .pdfs and I use it every time I need to take pictures with my phone and them turn it into a .pdf. And there are a handful of loan calculators and investment calculators that I use all the time to make investing decisions.

If you know how to program (or know someone who does) and you have an idea for a tool like this, it can be a pretty easy way to create some recurring income while you sleep.

Anything online can be monetized with ads, and if your tool is unique and important enough you might be able to charge subscription fees or charge per use.

18. Digital Goods

If you have a knack for visual design, then websites like Zazzle give you a platform to create digital goods like calendars, planners, party invitations, T-shirts and more.

You can design the goods and Zazzle will produce and distribute them and you get a cut of the sale.

19. Domain Names

I think of websites and domain names like the online version of real estate. And like real estate a domain name can grow in value with little to no work on your part.

I don’t know very much about making money from owning domain names, but from what I’ve read it’s normal to have a huge portfolio, so that you can hit the occasional jackpot.

20. Sell Artwork

When I think about selling artwork online, I think about Etsy. But I know there are lots of online places to sell artwork. I bought Kate’s wedding ring on Etsy, and I know there are probably thousands of independent artists selling their original stuff.

You might be thinking “this isn’t money while you sleep!”

If you are a hobby artist then selling is just a way to make money doing something you already do. And remember that anything that makes money can be turned into a system. Creating the system is where you go from hard work to “money while you sleep.”

21. Sell Music

The great thing about music is that once it has been created, it can be distributed with the push of a button. While CDs and records are still a thing, you can sell music without the creation of any physical product.

I’ve listened to songs from local bands in my area on Spotify and Tunecore will help you get your music on multiple platforms.

22. Buy a Website

I’ll try not to be too wordy here because buying a website is my next big investment and I’m pretty excited about it.

People are already making money online. Someone built a website that’s earning money from affiliate marketing or FBA or dropshipping and they are ready to sell for one reason or another.

Someone is going to buy that site and not only will they be making money while they sleep, but they’ll also be getting exceptional return on investment. If this is something that interests you there are a large number of marketplaces to buy online businesses and websites.

Turns out you don’t have to build a website yourself to own a successful website.

Lesser Known Methods

I’m sure many of these aren’t new to you, but hopefully some will be. These are the “make money while you sleep” ideas that I don’t read about as often online.

23. Buy a Business

And it also turns out you don’t have to build a business yourself to own a successful business.

In my article on using leverage to build wealth, I talk about how you can create huge amounts of cash flow buying a business with an SBA loan.

Bizbuysell is the biggest online marketplace to search businesses for sale, but it’s often best to find local brokers that oversee business acquisitions since you’ll likely want to buy a business that operates near you.

My Investor’s Handbook will walk you step by step through your first business acquisition.

24. Raw Land

Like real estate, the value of raw land also appreciates over time, but raw land usually requires no upkeep or maintenance.

It is absolutely possible to create cash flow with raw land, but land really shines as a completely passive way to store your wealth. Many store their wealth in the stocks and over time they’ll get better returns, but raw land avoids the constant ups and downs of the stock market.

25. Phone App

In order to build a phone app you again need programming knowledge (or need to hire a programmer). Phone apps have basically the same monetization options of online tools. You can provide a free tool and display ads, or you can require a subscription or pay per use if your tool is critical to some people.

You might think phone apps are off limits to non-programmers, but guess what? You can buy phone apps too. Many of the online marketplaces have apps for sale.

26. High Yield Savings Account

In my view, high yield savings accounts are even less useful than bonds, but regardless, they do offer a way to earn money with no effort (even if your money grows slower than inflation).

27. Commercial Real Estate

New investors who have an interest in real estate typically start in the residential market. I did.

But there’s an entire real estate market outside the residential one. Most businesses lease the space they operate in, paying whoever owns the building. Commercial real estate has all the same benefits of your long and short term rentals, but it’s different in a few ways.

The most obvious difference is that the properties are more expensive, which means bigger down payments are necessary. That’s why most people will start in the residential space, it’s cheaper.

But commercial real estate can often provide a more stable situation since your “tenants” are businesses instead of people and those businesses will often sign 3, 5 or 10 year leases.

28. Pay Off Debt

The absolute, undeniable safest way to make money while you sleep is to pay off debt. I regularly call business, real estate and stocks the best investments on this blog, but it’s no secret that all of them carry risk.

Paying off debt is the risk-free way to increase cash flow. No matter what happens in your life or in the market, those debt payments have disappeared. You’ll be making more money each month by way of not spending money on your loan payments.

Most of my debt has an interest rate of 4 to 8 percent, which is higher than bonds and high yield savings accounts (usually considered extremely safe investments). And while interest on your debt isn’t the same as compounding interest, it’s still going to keep a lot more money in your pocket in the long run if you pay it off.

29. Refinance Debt

I’ve refinanced my debt in order to pull money out of my real estate investments so I can invest in more things. That’s one way to leverage a debt refinance to earn money while you sleep.

But the more obvious, and simpler way is to look for opportunities to lower your interest rate.

If you have multiple loans, then lots of lenders (studentaid.gov helps you consolidate student loans) will help you combine all your loans into one big loan with a lower overall interest rate. This usually means your loan payments get smaller.

30. Ask for a Raise

This is the quintessential “make more money from the things you already do.” Making more money at your 9 to 5 may not feel like making money while you sleep, but it’s the same end result. You’ll be making more money without changing anything about your life.

I’ll be honest, I think I’ve asked for a raise 3 times in my life and it’s never worked for me. Still, nobody can stop you from asking, and I guarantee you that you’re 100 percent more likely to get a raise if you ask for one.

31. Cryptocurrency

Here’s another thing that I’ve tried and failed at. I got all wrapped up in the big Bitcoin boom at the end of 2018 and bought $1,000 of a few different cryptocurrencies.

In my opinion, if you want to do well in the crypto market, you should spend a lot of time learning about it and its history. But even looking at the longer term, very few investments have done as well as Bitcoin in recent years.

And the other possibility (although it may not be a viable today) is crypto mining. You can set a computer to work for you mining different currencies. There’s some debate as to whether the return on this is worth the electric bill.

32. Become a Lender

Banks make their money by giving out lots and lots of loans. You can do the same and lend your money to others (with interest of course).

Sites like Prosper allow you to invest small amounts of money into their platform and they do all the hard work of finding, vetting borrowers and setting up the terms of repayment. You just put in your money and get your payments.

Of course you can get better returns if you go through the process of finding and vetting borrowers, but you can use the online platforms in your sleep.

33. Real Estate Crowdfunding

One step up from traditional peer to peer lending is real estate crowdfunding. You can play the bank/lender again for real estate investors and get better returns than you can with peer to peer lending.

Sites like CrowdStreet have given their investors returns between 10 and 20 percent.

The catch is that most of these opportunities require more cash invested. It’s unusual to be able to get into a real estate crowdfund for less than $1,000 and some places require more than $20,000 as an initial investment.

34. Precious Metals

Precious metals are often regarded as a great way to store your wealth. The history of the gold standard, as well as the commercial use of things like gold and copper have created a healthy market for these materials.

Some say that if our financial systems ever collapse, that those with stores of gold and silver will become the wealthiest group. I’m not sure if I’ve bought into that, but I do know that precious metals have seen their value increase consistently over time.

35. Collectibles

Turns out stamp collectors, antique furniture connoisseurs and even beanie baby collectors have seen some excellent returns on their investments over the years.

The category of “collectibles” encompasses just about every non traditional item of value:

  • Wine bottles
  • Paintings
  • Prints
  • Antiques
  • Books

Honestly the list goes on and on. The collectibles market is often full of fraud and scams, but if you become adept in a particular area, you can often outperform the stock market.

36. Royalties

Royalty Exchange has created a platform where artists of all kinds can sell the rights to their music, movies and trademarks.

When you buy these rights, you get all the royalty payments for a set period of time (sometimes for life) without doing a thing.

37. Rent Your Car

If you’re familiar with the concept of Airbnb (rent your own home for short-term stays) then you should also become familiar with Turo. Turo is a platform that allows people to list their cars for rent.

It may not be fully “money while you sleep,” but it’s pretty low effort.

Kate and I have talked about renting our current cars instead of selling them or trading them in when we upgrade to better automobiles.

38. Rent Anything You Own

Never stop thinking about the things you own as potential assets. If a home and a car can be an asset that creates cash flow for you, then why can’t a jacket, or power tools or bikes?

You may have to do some research to find the best platform for your area. Ruckify is the leader near my area.

39. Tax Deductible Expenses

I’ve seen a lot of hate online for “wealthy billionaires” who avoid paying taxes. Apart from the money, the biggest difference between you and them is knowledge.

Anyone can create an investment plan that allows them to pay less in taxes. You only need to learn how to do it.

Real estate, for example, often creates tax breaks that are greater than the income it creates. Kate and I have found that owning and operating rental real estate has lowered the tax burden of income from my full time job. If you spend time learning and adapting your investment strategy to lower your tax burden, you might be bring in extra money every time tax season rolls around.

40. Couponing

Staying in the lane of creating passive income by saving, you should never be too proud to use a coupon. However, I believe there’s an important line to be drawn regarding couponing.

If you buy something simply because “it’s a great deal!” then you won’t be saving any money. You’ll probably be spending more.

But anytime you’re able to use a coupon for something that you already buy, then it’s free money.

41. Cash Back Credit Card

There are lots of flavors of rewards credit cards out there, and many of them actually encourage more spending. If you’re earning miles on your credit card, then you are encouraged to travel, and travel leads to housing costs and eating out and special experiences.

But cash back credit cards literally just put money back in your pocket.

And if you already have a cash back credit card, don’t be afraid to go shopping for a better one. Kate and I recently upgraded from a 1.5% cash back to a 2% cash back card and that just means more money for absolutely no effort.

42. Honeygain

For a while, I regularly read the passive_income subreddit, and I kept seeing this software mentioned as a way to make money just by using your computer.

I never ended up trying it because I was afraid my data would be sold everywhere, but if they idea of making money from browsing the web then you should check out Honeygain.

43. Qmee

Qmee is another application that pays you to do normal online activities. Again, I’ve never used one of these, so you’ll have to check it out and do your own research.

44. Lower Utility Bills

Loan payments aren’t the only expenses that happens once a month. Utility bills are another.

If you can find a way to consistently lower your utility bills, that’s more money in your pocket each month. Here are some ideas:

  • LED light bulbs
  • Efficient toilet
  • Call your utility company and ask for an energy audit
  • Buy a smart thermostat (we use a Nest)
  • Shop for better deals on your internet
  • Buy your own modem/router (if you rent them from your ISP)

If you can implement a few ideas it’s not unreasonable to expect to save $50 a month on utility bills.

45. Solar Panels

Speaking of utilities, Kate and I have a friend who recently installed solar panels on their house. Obviously their electric bill has gone down significantly, but the really exciting thing is that they cashed in on so many tax rebates and incentives that their panels were less than half the normal price.

Solar panels usually start to pay off after about 10 years of use, but if you can find the right incentives, you can pay off that investment in less than half the time.

And if you really get serious, you can have your solar panels produce more energy than your household needs and sell the energy back to your utility company.

46. Cancel Subscriptions

Perhaps the easiest, most passive and cheapest way I’ve ever created extra cash each month is by looking through my bank statements and locating charges for things I never used.

I remember saving $10 a month on some web development software by canceling my subscription (which took about 5 minutes). And Kate and I also ended up canceling Amazon Prime after we realized that we were spending more online because of the 2 day shipping.

Also, I think one streaming service should be enough for any family. No need to pay for Netflix, Hulu, Amazon Prime Video and Disney plus. Just pick one (maybe two) and cancel the rest.

47. Buy an ATM

ATMs aren’t just for banks. Individuals can own, place and service their own ATM machines. You earn money from withdrawal fees when people use your machine.

You can learn more about it at ATM brokerage.

48. Buy a Vending Machine

Have you ever worked somewhere with a vending machine? Did you notice someone coming to stock the items from time to time?

Chances are that person actually owned the machine. A couple years ago my friend and I looked into a vending machine business that was for sale. I can’t remember how many machines the business had, but they were all in my city and the business brought in $60,000 profit each year. It can be a profitable gig for very little work.

49. Budget

I put this one at the end because it doesn’t exactly fit with the rest of my ideas. On any article I write about creating more money, I like to include creating a budget.

Being knowledgeable about how much money comes into your accounts and where that money goes is incredibly empowering. When you know what you spend money on it’s much easier to identify the areas of waste.

If you spend $200 a month on Starbucks and had no idea until you took a look at your financial trends, you might find a way to reduce your spending to $100 a month. Being aware of those things can make a huge difference in your ability to build and maintain wealth over time.

50. Sleep Study

Want to make money while you sleep? Why not literally get paid to let people study you while you sleep.

Again, this idea is a little outside the spirit of the article, but I did get a kick out of this gal who made $12,000 in 11 days doing sleep studies.

Conclusion

Anyone can create passive income for themselves “while they sleep.” Sometimes this means creating a business that runs 24/7/365 like a website. Sometimes it means taking some critical thinking to your life and finding ways to earn more or spend less doing the things you already do every day.

If you don’t limit yourself to a single way of thinking about passive income you’ll be able to find great ways to put more money in your pocket each month.

Happy investing.

Michael

I'm living the path to financial success and sharing everything I learn in this blog. I believe in the power of cash flowing investments, due diligence and time. This is my journey so far.

Before 2016: Just living my life, working full time and trying to get by.

2016: Kate and I start to discuss the possibility of getting into real estate investment. We read books like Rich Dad Poor Dad and listen to the Bigger Pockets Podcast. We find a Realtor and start looking at property. We even make an offer or two, but nothing happens.

2017: Kate and I continue looking for property. We meet with banks and find lenders willing to work with us. In one month (August), we turn our basement into an Airbnb and list it AND we purchase our first long term rental property, which is a triplex. We can't find good tenants for our triplex.

2018: In April, we finally get our first tenant in the triplex, our second in June and get it fully rented in July. Our basement Airbnb makes so much money that in September we decided to buy another property to exclusively rent out on Airbnb. It makes us even more money than the first one!

2019: Kate decides we should put together a mastermind group. So we get in touch with people we know who care about money and start sharing knowledge with each other. Our triplex is profitable, but our two Airbnb properties are making way more money, so we buy another property to put up on Airbnb and VRBO.

2020: Coronavirus hits in March and all the guests booked at our Airbnb properties cancel. We freak out, but after a few weeks everything comes back and we're making money again. Discussion and research from the mastermind group makes me want to investigate online business as an investment strategy. Kate and I started Unbound Investor with plans to purchase a website in 2021.

2021: Our Airbnbs hit new highs after Covid causes more travelers to be wary of using hotels. I spend about 6 months attempting to purchase a million dollar online business with an SBA backed loan only to have the deal come crashing down at the last minute. The experience makes me re-evaluate and I ended up purchasing a small blog instead. I also start a new website. At the end of the year I begin hiring writers and investing in online content in order to grow the online revenue of my 3 websites.

OK you're all caught up!

I learned everything I know from books, podcasts, conversations with friends and family and of course through real world experience as a cash flow investor. And I'm always pushing to learn more.

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