Imagine earning more money while you sleep. That’s what passive income is all about.

Passive income is a practical, strategic way for anyone to supplement income and reduce financial stress. As of early 2025, roughly 20% of American households report earning passive income from sources like dividends, interest, or rental properties. 

If you’ve been thinking about how to earn money without clocking in more hours, now is the time to act. With rising living costs, mounting financial insecurity, and growing interest in financial independence, consider turning to passive income streams to diversify earnings and reclaim your time. 

Who This Report Is For

This guide is for anyone who wants to build a more flexible financial future, including:

• Full-time workers looking to grow income without adding more hours
• Entrepreneurs exploring new business models and scalable revenue streams
• Creators, consultants, and anyone interested in scalable passive income side hustles 
• Anyone who wants to earn extra income without taking on more work or stress 

How This Guide Will Help You Win

This guide isn’t just a roundup of passive income ideas – it’s a strategic resource designed to help you take action. Whether you’re starting from scratch or ready to scale an existing stream, we’ll break down how to make passive income in 2025. 

Here’s what you’ll get:

• A curated list of today’s most realistic and profitable passive income opportunities
• Clear pros, cons, and earning potential for every income stream
• Insights into startup costs, effort required, and long-term scalability
• Real-world trends to help you choose the right path based on your goals, time, and resources

What is Passive Income? 

Passive income is money you earn without actively working for it day in and day out. Instead of trading time for dollars, you build something upfront, like an investment portfolio, digital product, or rental property, that continues to generate income with minimal ongoing effort.

This kind of income isn’t instant or effortless, but it can be powerful. With the right setup, passive income can supplement your salary, fund your savings goals, or serve as a stepping stone toward full-time entrepreneurship. More Americans are turning to passive income not just as a side benefit, but as a core part of their financial strategy as they learn how to make passive income that fits their goals. 

Passive Income vs. Side Hustles 

Passive income streams and side hustles both offer ways to earn money outside of a traditional job, but they work differently.

A side hustle usually involves active effort, like driving for a delivery app, freelancing, or selling products online. You’re still trading time for money, even if it’s on your own schedule.

Passive income, on the other hand, is about setting up systems that continue to earn money with minimal day-to-day involvement. That might include earning royalties from digital products, dividends from investments, or income from an automated business.

Both can be valuable, and in some cases, a side hustle can evolve into a passive income stream over time. The key difference is how much time and effort it takes to keep the money coming in.

Types of Passive Income

Not all passive income is created equal. There are many ways to make passive income – some streams require significant cash, while others rely more on creativity or upfront time. But most opportunities fall into one of three main categories:

• Investment-Based Passive Income

These streams are fueled by capital. You put your money to work through things like dividend stocks, bonds, REITs, or rental properties, and earn regular income in return. While they typically require more money upfront, they often involve less ongoing effort.

• Digital Product or Content-Based Passive Income

These streams rely on creating something once and selling or monetizing it repeatedly. Think e-books, online courses, stock photography, YouTube videos, or print-on-demand products. They require time, skill, or creativity upfront, but little to no involvement after launch.

• Automated or Business-Backed Passive Income

These income streams are built around systems, tools, or platforms that continue to generate revenue with minimal oversight. Examples include affiliate websites, dropshipping stores, or vending machine routes. They’re not 100% hands-off, but can run with very little day-to-day work once established.

Each type has its own tradeoffs in terms of startup costs, scalability, and how long it takes to start earning. In the next section, we’ll break down the best passive income ideas for 2025 and how to choose the right one based on your goals, skills, and resources.

1. Dividend Stocks 

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Investing in dividend-paying stocks is one of the most established and accessible passive income strategies. When you purchase shares of companies that distribute a portion of their profits to shareholders, you receive those payouts as dividends, often quarterly.

This approach is especially appealing for long-term investors who want steady, hands-off income. You can build a portfolio of dividend stocks in industries like utilities, consumer goods, and healthcare, which tend to offer reliable payments even in uncertain markets.

Many investors also choose to reinvest dividends to compound their earnings over time. With the right mix of stocks, dividend investing can help you build wealth passively while keeping your capital liquid and growing.

• Pros: Reliable income from established companies; potential for compounding returns; highly liquid investments
• Cons: Requires upfront capital; dividends aren’t guaranteed; market volatility can affect your portfolio
• Earning Potential: ~2%–6% annual dividend yield, depending on the stock and sector

2. High-Yield Savings Accounts & CDs

While not the flashiest passive income stream, high-yield savings accounts and certificates of deposit (CDs) are among the safest ways to generate passive income. With interest rates remaining high in 2025, these tools offer better-than-usual returns for low-risk savers.

High-yield savings accounts offer flexibility, allowing you to withdraw funds as needed while earning above-average interest. CDs, on the other hand, lock your money away for a fixed term in exchange for a guaranteed rate, typically higher than savings accounts.

Together, they make a great foundation for passive income, especially if you’re not ready to take on investment risk or want to park emergency funds in a productive way.

• Pros: Virtually risk-free; FDIC insured; set-it-and-forget-it simplicity
• Cons: Lower returns compared to other strategies; CDs tie up funds for a fixed term
• Earning Potential: 4.5%–5.25% APY for top accounts and CDs in 2025

3. Real Estate Crowdfunding

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Real estate crowdfunding platforms like Fundrise, Arrived, and Groundfloor make it possible to invest in real estate without buying or managing property yourself. These platforms pool funds from many investors to finance large residential or commercial projects.

Instead of handling tenants or maintenance, you simply invest and receive a share of the profits, either from rental income or eventual property appreciation. Some platforms even offer portfolio-style options that let you invest in a diversified mix of properties automatically.

It’s a great option if you want real estate exposure with minimal involvement and a much lower cost of entry than traditional property investing.

• Pros: Low minimum investment; hands-off real estate income; diversification potential
• Cons: Less liquid than stocks; returns can vary by project; some platforms charge management fees
• Earning Potential: 6%–10% annually, depending on platform, property type, and market conditions

4. REITs (Real Estate Investment Trusts) 

REITs are publicly traded companies that own or finance income-producing properties like apartments, shopping centers, data centers, or hospitals. When you buy shares in a REIT, you’re buying into that company’s portfolio and earning a slice of the income generated from rent or financing.

Because REITs are traded on stock exchanges, they’re easy to buy and sell, and many pay consistent dividends. This makes them a great option for people who want real estate exposure with the liquidity of traditional stocks.

REITs are also required by law to pay out at least 90% of their taxable income to shareholders, making them a strong source of passive cash flow. Check out our article on real estate holding companies vs. real estate investment trusts (REITs) for more information. 

• Pros: Easy to access through brokerage accounts; high dividend yields; no landlord duties
• Cons: Sensitive to interest rate shifts; dividends taxed as ordinary income; market fluctuations
• Earning Potential: 3.5%–5.5% average dividend yield, with some specialty REITs offering more

5. Bonds 

Bonds are one of the most traditional forms of passive income. When you buy a bond, you’re essentially lending money to a government or corporation in exchange for fixed interest payments over a set period of time. Once the bond matures, you receive your original investment back.

In 2025, bonds have regained popularity as a lower-risk income option, especially with interest rates remaining elevated. U.S. Treasury bonds, municipal bonds, and high-quality corporate bonds offer predictable returns and can be a stabilizing force in any portfolio. Bonds can be purchased directly or through bond ETFs, which provide access to a diversified mix with minimal effort.

While not as sexy as stocks or real estate, bonds can provide steady, hands-off income and preserve capital over time, especially for conservative investors.

• Pros: Predictable income; lower risk than stocks; useful for preserving capital
• Cons: Lower returns than other investment options; value may decrease if interest rates rise; longer lock-in periods
• Earning Potential: 3.5% to 6% annually depending on bond type, term, and market conditions

6. Money Market Accounts  

Money market accounts (MMAs) are a safe, interest-bearing place to store your cash while earning more than a typical savings account. Offered by banks and credit unions, these accounts combine features of both savings and checking accounts, often allowing limited check writing or debit card access.

In 2025, MMAs continue to offer competitive rates thanks to elevated interest rates, making them an attractive option for those seeking low-risk passive income. They're especially popular for emergency funds or large cash reserves that you want to keep accessible but still productive.

While they won’t generate the highest returns on this list, money market accounts are simple, stable, and insured — ideal for conservative investors or anyone looking to park funds without volatility.

• Pros: Low risk; FDIC or NCUA insured; easy access to funds
• Cons: Modest returns; some accounts have minimum balance requirements or transaction limits
• Earning Potential: 4% to 5% APY at top-tier institutions as of 2025

7. Affiliate Marketing

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Affiliate marketing lets you earn commissions by promoting other companies’ products or services. You share unique affiliate links through your blog, email list, social media, or YouTube channel. When someone makes a purchase through your link, you get paid.

It’s one of the most popular forms of passive income online, especially for content creators, niche website owners, and influencers. In 2025, affiliate programs have expanded across nearly every industry, from software and education to fitness, beauty, and home goods.

The key is to build content that ranks or spreads organically so that clicks and commissions roll in long after you’ve published a post or video. Once traffic and trust are in place, affiliate earnings can snowball without much hands-on work.

• Pros: No need to create or manage products; scalable with content; available across all niches
• Cons: Requires strong content or audience; earnings tied to platform algorithms; links can expire or get replaced
• Earning Potential: $50–$10,000+ per month, depending on traffic, niche, and commission rates

8. Peer-to-Peer Lending

Peer-to-peer (P2P) lending allows you to lend money directly to individuals or small businesses through online platforms and earn interest as they repay the loan. Rather than going through a traditional bank, borrowers apply through platforms like LendingClub, Prosper, or Groundfloor, and you get to fund all or part of their loan.

As a lender, you can spread your investment across multiple loans to reduce risk. Many platforms let you filter borrowers by credit score, loan purpose, or expected return, and some offer automatic reinvestment based on your preferences.

P2P lending gives you more control and higher earning potential than traditional savings products. While it carries some risk, it can be a reliable source of passive income when managed strategically.

• Pros: Higher returns than savings accounts or CDs; monthly cash flow from repayments; accessible with small starting amounts 
• Cons: Risk of borrower default; not FDIC insured; limited liquidity
• Earning Potential: 5% to 11% annually depending on borrower quality and platform structure

9. Vending Machines 

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Vending machines are a physical asset that can generate consistent, low-effort income once placed in the right location. You purchase the machine, stock it with snacks, drinks, or specialty items, and collect income as customers make purchases. Many vending machine owners visit their machines just once a week or less to restock and collect cash or monitor remotely through connected apps.

This business can be started with a single machine and scaled over time. Location is the most important factor — high-traffic areas like office buildings, gyms, schools, apartment complexes, and laundromats often bring the best results. You can buy new or refurbished machines, and many owners start small by purchasing a route from another operator.

While there is some physical maintenance involved, vending machines are often considered semi-passive. With good placement and product selection, they can become a reliable source of recurring income. For more information on setting up a vending machine LLC, check out our article. 

• Pros: Tangible asset; consistent cash flow; can be automated and scaled gradually
• Cons: Requires upfront investment; physical restocking and maintenance; performance depends heavily on location
• Earning Potential: $100 to $500+ per month per machine, depending on traffic and inventory mix

10. Airbnb & Short Term Rentals 

Renting out property for short stays through platforms like Airbnb, Vrbo, or Furnished Finder can be a highly profitable way to earn passive income. Whether you’re offering a full home, a guesthouse, or just a spare bedroom, short-term rentals often generate significantly more income than traditional leases.

You set your own availability, pricing, and house rules, and the platform handles bookings, payments, and guest communication. With strong demand in cities, college towns, and vacation destinations, it’s possible to build a consistent monthly income stream from just one well-run listing.

While short-term rentals aren’t fully passive, much of the work can be outsourced or automated. Tools like smart locks, automated messaging apps, and professional cleaning services allow many hosts to manage their rental with minimal day-to-day involvement.

• Pros: High earning potential; flexible scheduling; can monetize existing property
• Cons: Requires setup and maintenance; subject to local regulations; variable occupancy rates
• Earning Potential: $1,000 to $10,000+ per month depending on location, size, and seasonality

11. Print-on-Demand Products 

Print-on-demand (POD) is one of the most accessible ways to earn passive income by turning your designs into physical products. You upload a design, choose the products you want to sell like t-shirts, mugs, hoodies, tote bags, or stickers, and connect with a fulfillment platform such as Printful, Printify, or Teespring.

When someone places an order, the POD platform prints, packages, and ships the product directly to the customer. You never have to deal with inventory, shipping, or customer service. Your job is to create the designs, set up your store, and drive traffic to your product pages.

Print-on-demand works especially well for creators, artists, and influencers who already have a following or understand how to reach a niche audience. Once your products are live and generating interest, sales can come in passively with little ongoing input.

• Pros: No upfront inventory costs; scalable; integrates easily with Shopify, Etsy, and other platforms
• Cons: Profit margins can be low; requires ongoing marketing; competitive space
• Earning Potential: $100 to $2,000+ per month depending on traffic, niche, and product lineup

12. Local & Small Business Investing 

Investing in local or small businesses gives you the opportunity to earn passive income by funding entrepreneurs in exchange for a share of profits, equity, or interest on a loan. This can take many forms – from being a silent partner in a brick-and-mortar store to participating in revenue-sharing agreements with startups or service-based companies.

Some investors strike deals directly with business owners. Others use platforms like Mainvest or Honeycomb, which allow individuals to invest in vetted small businesses around the U.S. with low minimums and structured repayment plans.

While this strategy requires careful due diligence, it can offer meaningful returns and help support your local economy. Many arrangements require no involvement in day-to-day operations, making them ideal for people who want their money working behind the scenes.

• Pros: Potential for high returns; supports entrepreneurs; customizable investment structures
• Cons: Risk of business failure; limited liquidity; requires upfront capital and careful vetting
• Earning Potential: 5% to 20%+ annually depending on the structure, success of the business, and platform used

13. Merchant Services Residuals 

Merchant services refers to payment processing — the systems that allow businesses to accept credit and debit card payments. When you help a business set up a payment processor such as Stripe, Square, or a traditional provider, you can earn residual income from a small percentage of every transaction they process.

Some people build this income stream by working as agents or affiliates for payment processors and receive monthly commissions long after the initial setup. Others invest in or acquire a portfolio of merchant accounts, creating a consistent stream of income tied to card volume.

This passive income idea works well for those with access to business networks or niche industries. Once an account is onboarded, the income becomes mostly passive and can grow as your clients process more transactions.

• Pros: High long-term earning potential; scalable with each new account; recurring income with minimal ongoing effort
• Cons: Requires initial outreach and sales experience; income depends on business performance; some providers require contracts or approvals
• Earning Potential: $500 to $10,000 or more per month depending on the number and size of merchant accounts
  
  

14. ATM Ownership

How He Makes $500K A Month With His ATM Business | 1,200 ATM Machines

Owning and operating ATMs is a lesser-known but highly effective way to generate semi-passive income. You place an ATM in a location with regular foot traffic such as a bar, salon, convenience store, or dispensary and earn a fee every time someone uses it to withdraw cash.

ATM owners typically earn a fixed surcharge from each transaction. You can purchase new or used machines, manage them yourself, or partner with a service provider to handle installation, maintenance, and cash loading. Some business owners are even open to revenue-sharing arrangements in exchange for hosting your machine.

Once placed in a reliable location, an ATM can quietly generate income for years with minimal upkeep. The key is choosing the right location and maintaining the machine to ensure it stays operational.

• Pros: Consistent transaction-based income; low ongoing effort; scalable by adding more machines
• Cons: Requires upfront investment; occasional maintenance or refilling; performance depends on foot traffic
• Earning Potential: $300 to $1,000 or more per month per machine depending on location and volume

15. Purchase a Monetized Website 

Instead of building a website from scratch, you can buy one that’s already generating traffic and income. Many websites make money through display ads, affiliate links, sponsored content, or digital product sales. When you acquire one of these sites, you take over its traffic and revenue. If it's well-built, you can keep earning with little day-to-day involvement.

Marketplaces like Flippa, Empire Flippers, and Motion Invest list thousands of income-producing websites for sale. Some buyers take a hands-off approach and let the site continue as-is, while others make small improvements to increase traffic and earnings over time.

This strategy works well if you're comfortable analyzing website performance and want a shortcut to a digital passive income stream. Just like buying real estate, the key is due diligence – evaluating site history, traffic sources, and monetization stability before making a purchase.

• Pros: Immediate access to an income stream; avoids startup phase; potential for growth or flipping
• Cons: Requires upfront investment; earnings may decline without upkeep; due diligence is critical
• Earning Potential: $200 to $10,000 or more per month depending on site type, traffic, and monetization model

16. Party Supply Rentals

Investing in party equipment such as bounce houses, inflatable slides, popcorn machines, or tents can generate reliable weekend income with limited hands-on work. Parents, schools, and event planners regularly rent these items for birthdays, fundraisers, and community events,  often paying a premium for convenience and setup.

You’ll need to handle delivery, setup, takedown, and basic maintenance, but the work is limited to event days. Once the equipment is purchased, most rentals can pay for themselves within a few bookings. Many owners expand by purchasing additional inflatables and building a full-fledged party rental business over time.

This model works especially well in suburban areas with lots of families, or regions with strong year-round weather. Listings can be promoted on platforms like Facebook Marketplace, Google Business, and local event directories.

• Pros: High demand in family-focused areas; equipment pays for itself quickly; scalable with more units
• Cons: Requires storage space and physical labor on event days; liability insurance is recommended; seasonal in some regions
• Earning Potential: $200 to $1,000+ per weekend per item depending on size, location, and demand

17. Early-Stage Startup Investing

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Investing in early-stage startups allows you to purchase equity in a young company with high growth potential. If the startup succeeds, your shares could increase dramatically in value, providing a strong return with little to no active involvement after your initial investment.

Opportunities come through personal networks or investment platforms like AngelList, Republic, and SeedInvest. Some investors choose to participate in syndicates, where multiple investors pool capital and gain access to vetted startup deals with lower minimums.

This approach requires long-term thinking and a high tolerance for risk. Many startups fail, but one successful exit through an acquisition or IPO can provide significant gains. It’s a strategy best suited for investors with available capital who want exposure to the innovation economy.

• Pros: High upside potential; low effort after investment; accessible through modern platforms
• Cons: High risk of loss; long time horizon; limited liquidity; requires upfront capital and research
• Earning Potential: Returns vary widely, but successful exits can yield 10x to 100x or more on the initial investment

18. Royalty Investing

Royalty investing involves purchasing the rights to receive income from creative works or revenue-generating assets. This might include music, books, patents, trademarks, pharmaceuticals, or even oil and gas production. When someone uses or licenses the underlying asset, you earn a royalty payment, typically monthly or quarterly.

Platforms like Royalty Exchange and SongVest allow individuals to invest in music royalties from artists, producers, or rights holders. Others buy royalties directly from inventors, authors, or product creators in private deals or specialized marketplaces. In some industries, royalties are structured as a percentage of gross sales, making them relatively predictable if the asset performs well.

This is one of the few truly passive income ideas that can deliver consistent cash flow over many years, especially when backed by a proven, in-demand asset. However, it requires strong due diligence to assess the long-term value of what you’re buying.

• Pros: Predictable recurring income; minimal management; long-term cash flow potential
• Cons: Requires upfront capital; some assets lose value over time; limited resale market
• Earning Potential: 5% to 15% or more annually depending on the asset and terms

19. Laundromat Ownership 

From Homeless to Making Millions With Laundromats

Laundromats are one of the most proven semi-passive income businesses. Customers come in, use coin or card-operated machines, and leave with no need for inventory, sales staff, or extensive marketing. Most laundromats operate 7 days a week, many 24 hours a day, and generate consistent foot traffic, especially in urban or high-renter areas.

Once set up, your main responsibilities include machine maintenance, collecting payments (usually automated), and keeping the space clean. You can hire someone to handle routine upkeep or even outsource operations entirely. Some owners add vending machines, drop-off laundry service, or dry cleaning to increase profits.

With the right location and reliable equipment, a laundromat can deliver strong monthly cash flow for years with minimal hands-on work.

• Pros: Steady, year-round demand; recession-resistant; predictable income
• Cons: High upfront costs; requires space and equipment; utilities and repairs can cut into profit
• Earning Potential: $500 to $10,000+ per month depending on size, location, and services offered

20. Self-Service Car Wash Ownership 

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Automatic or self-service car washes offer another solid path to semi-passive income. Once the equipment is installed and the property is managed, customers handle the washing process themselves. Your job is to keep the site clean, machines operational, and supplies restocked.

There are several models to choose from, including coin-operated self-service bays, automated touchless washes, and full-service car washes with optional staff. While maintenance is required, many tasks can be outsourced, and payments are typically handled through automated kiosks.

Car washes tend to perform best in high-traffic, high-visibility locations, especially in areas with consistent car use and limited public transit.

• Pros: Recurring income from daily traffic; minimal customer interaction; scalable with multiple locations
• Cons: High initial investment; mechanical upkeep required; performance tied to location and weather
• Earning Potential: $1,000 to $15,000+ per month depending on model, traffic, and pricing

Forming an LLC for Your Passive Income Business 

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Many of the ways to make passive income in this guide can be treated like real businesses, and if you’re serious about growing long-term income, it’s worth setting yours up the right way from the start.

Forming an LLC (Limited Liability Company) can help you:

• Separate business and personal finances
• Protect your personal assets from liability
• Establish credibility with vendors, platforms, and customers
• Unlock potential tax advantages and business deductions

Whether you’re launching a vending machine route, licensing digital products, investing in real estate, or running a print-on-demand store, forming an LLC gives your income stream a solid legal and financial foundation. 

LLC Attorney helps entrepreneurs and side hustlers form LLCs in all 50 states with fast filings, transparent pricing, and access to real business attorneys. Not just templates or chatbots.

Want to learn more about what business structure is best for your passive income idea? Schedule a free consultation or start your LLC today.

Final Thoughts: Best Ways to Make Passive Income in 2025 

Not every passive income idea is right for every person. Some require capital, others demand creativity or time upfront. But all of them share the same goal – helping you earn money without constant effort.

There are many ways to make passive income, and the best one for you depends on your budget, skills, interests, and risk tolerance. Maybe you’ll start small with a print-on-demand shop or affiliate site, or go bigger with a laundromat, rental property, or startup investment. What matters most is that you take action and learn how to make passive income in a way that aligns with your lifestyle and long-term goals. 

Start with one idea. Build a system. And give yourself the freedom to grow it over time.

Looking to make it official? LLC Attorney is here to help you protect your assets and income, legitimize your business, and plan for long-term success