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26 Awesome Passive Income Ideas for Beginners UK

Updated: Jul 26

Passive income means to earn money while you sleep.


Sounds pretty good right, but how do you do that? You can't work if you're sleeping?


Well, if you've been smart enough to build a source of passive income, you won't need to work at all. That means you get paid while you sleep, while you watch TV, and while you spend time with your family.


You get paid whether you work or not.


What is Passive Income?


Passive Income is income that requires little or no effort to earn or maintain


It's the opposite of Active Income. When you go to work and you are paid per hour, or per job - that's active income. If you don't work, you don't get paid (not including sick benefits and annual leave of course).


How to make passive income: passive income usually requires some kind of input upfront, which then continues to pay you back long-term with little or no further input. This upfront input could be a financial investment, or simply time and effort.

  • Active Income - work once, get paid once.

  • Passive Income - work once, get paid forever.


Some example of passive income:

  • Shares in a company that pay you dividends every month.

  • A property that you own that earns you rent every month.

  • A business that requires little input from you.


If you're looking for active income ideas, have a read of our post:

16 Side Hustle Ideas for Full Time Employees


Why Passive Income?


If you're happy trading your time for money (and there's no shame in that), then passive income may not not be that important to you.


I never particularly enjoyed being an employee, so my reasons to look for passive income streams were:

  • To get paid whether I work or not.

  • Complete flexibility - I work when I want to.

  • Frees up time to work on other ventures or hobbies.

  • It can be scaled to generate very high income, unlike Active Income.

  • It will continue to pay me when I retire.

 

DISCLAIMER


Please note that this post may contain affiliate links, which means I will earn a small commission if you decide to make a purchase through my links, at no additional cost to you. Any information contained in this post is for general informational purposes only and does not constitute any form of advice or recommendation.


As an Amazon Associate, I earn from qualifying purchases. Please read our full disclosure here.

 


26 Passive Income Ideas for Beginners in the UK


Passive Income Ideas 2021


 

Contents


Using stuff you already have

Rent Out a Room

Rent Out a Parking Space

Rent Out Storage Space

Rent Out Building Ad Space

Rent Out Vehicle Ad Space Rent Out Your Stuff Get Paid For Your Internet Usage Get Cashback

Passive businesses

Start a Blog

Affiliate Marketing Start a YouTube Channel

Start a Business Buy a Business

Create a Course Create an eBook

Dropshipping Print On-Demand Printables

Stock Photos

Passive investing

Invest as a Silent Partner

Invest in Stocks

Invest in Crypto

Invest in REITs

Invest in Bricks and Mortar

Peer-to-Peer Lending

Invest in Domain Names


Using Stuff You Already Have


The following methods are probably the ones with the least effort required, because they involve using things already available to you. These are some of the best passive income strategies because they make use of assets that would otherwise earn you nothing.

Rent Out a Room


If you have a spare room available in your house or flat, why not rent it out to lodger to generate yourself some additional income.


Advertise it on SpareRoom or AirBNB - rooms let for around £70-150 per week in my local city, Sheffield.


Rooms tend to command a higher rent when they're closer to the city centre, but rooms near large workplaces such as shopping centres, hospitals and factories can also work well.

Rent Out a Parking Space


If you have a drive or parking space in an area where they are in demand, you could rent it out to earn yourself some extra passive income.


Again, these are likely to work better near town and city centres, since it's pretty easy to park for free everywhere else.


You can rent out parking spaces on these websites:

Rent Out Storage Space


Don't let the empty space in your garage or loft go to waste - rent it out!


People pay good money for storage space, and with the price of storage lock-ups these days, there is definitely an opportunity to make some good money.


Using sites like Storemates and Stashbee, you can rent out your storage space to people in your local community.


A reasonable price to advertise at is roughly 50% of what a commercial lock-up would charge.

Rent Out Building Ad space


If you have a commercial property with a blank wall, or a piece of land in the right location, you could earn passive income by installing an advertising panel.


The building will usually need to be in an area that sees plenty of foot or road traffic such as town and city centres, or overlooking busy main roads or motorways.


Get in touch with an advertising agency, and they will assess your site based on location, and potential audience level etc.


Passive Income Ideas for Beginners UK - Advert on side of a building

Rent Out Vehicle Ad space


Get paid monthly to advertise on your vehicle using Car Quids.


Head over to Car Quids and fill out the application form and you will be assessed for eligibility based on your vehicle, lifestyle and driving habits.


It doesn't get much more passive than this - as long as you don't mind driving around looking like a wally!


Rent Out Your Stuff


Using Fat Llama, you can rent out your possessions and earn passive income.


The sort of things you might want to rent out are usually things that are expensive to buy, and people might only need to use once in a while, such as bikes, expensive cameras, recording equipment, power tools, drones and other specialist equipment.


Get Paid for Your Internet Usage


Nielson is a company that monitors the internet usage and browsing habits of willing participants, in order to provide market information to third party companies.


If you are one of the willing participants, you can get paid for allowing Nielsen to do this.


All you have to do is install the programme on your computer, and that's it - just use your computer as you normally would.


Even better - if you sign up using TopCashback's offer, you get an additional £10 cashback just for installing it for 7 days.


Get Cashback for Online Shopping


Whether this is classed as passive income, I don't know. But the way I look at it, a penny saved is a penny earned, so it's getting a mention anyway.


You are seriously missing a trick if you shop online (which I'm sure is most of us during the pandemic), and you're not using a cashback site.


All you have to do, is use the link on the cashback site to navigate to your chosen retailer, and then just shop as normal.


When you've made a purchase, the cashback site will claim the money back from the retailer and it should be available for you to withdraw within a few weeks (sometime they can take a few months)


The main cashback site that I use is TopCashback and I believe it usually has the best rates. There is also QuidCo which can also have very good rates. These are both free to use.


There is also one called Complete Savings that charge £15 per month but do very good rates on a lot of big sites such as eBay, Just Eat and Iceland. If you do a lot of shopping on these sites, you could make some big savings. There is a free 30-day trial so you can test the waters.


 

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Passive Businesses


If you're wondering how to generate passive income with no initial funds, you will find ideas in this section. These are the smart passive income ideas that will require some upfront and ongoing effort. They involve building an asset that will pay you back for years to come.


Start a Blog


A blog is a great asset to have to generate passive income, but they do require significant work, dedication and maintenance.


A blog is an informal website that is updated regularly with new information, or 'content' - like this one.


Once you have a large audience, you can make money blogging in one of the following ways:

  • Affiliate marketing - recommending third party services in return for a commission.

  • Adverts - using an ad service such as Google Ads to place adverts on your website in exchange for a monthly fee.

  • Sponsored content - get paid by third parties for writing about a specific topic/product.

  • Sell digital products such as printables, courses or worksheets.


Affiliate Marketing


Affiliate marketers get paid by promoting third party services through an affiliate link.


Get people to head to the third party service using your specific affiliate link, and if they make a purchase, you get a percentage of the sale as commission.


You can send your affiliate link out via social media, Pinterest, email or on your blog or website.


Or you can create paid adverts using Google Ads, Facebook Ads or Pinterest Ads. These will cost money but have the potential to get your affiliate link in front of thousands or more viewers.


You can find affiliate programmes by searching for them on google, or through affiliate networks such as Clickbank or ShareASale.


Start a YouTube Channel


Similar to a blog, a YouTube channel will only make you money when you have a large number of viewers, or Subscribers.


Once you have built a respectable following, you can apply for the YouTube Partner Programme, which will allow you to get paid in the following passive ways:


  • Advertising revenue - get paid for the ads that YouTube places on your videos.

  • Memberships - viewers pay monthly to receive perks from you

  • YouTube Premium revenue - paid by YouTube when premium members watch your content.

You can also do sponsored videos and get paid by third party companies without being part of the YouTube Partner Programme.


Start a Business


This might seem like it's not very passive at all, starting a business can be very hard work and continue to be hard work for a long time.


The last thing you want to do when looking for passive income is to create a second job for yourself.


But, here me out...


Certain business that don't involve skilled labour, such as e-commerce for example, can be heavily outsourced to employees or virtual assistants (VAs).


I currently have an Amazon business which should be quite labour intensive for me. but here are some of the tasks that I outsource, or plan to outsource in the future, that will take me out of the equation - making it a very passive business:


  • Product sourcing - sign up to deal sheets such as Online Arbitrage Deals or train a VA to source products.

  • Product prep and labelling - use Amazon's prep and labelling service or outsource to another prep centre.

  • Inventory storage - currently stored at Amazon warehouses.

  • Order fulfilment - fulfilled by Amazon (FBA).

  • Repricing - use repricer software such as Profit Protector Pro.

  • Bookkeeping and accounting - bookkeeper and accountant.

  • General admin / customer service - train a VA.


That leaves me pretty much free to work on important tasks such as business development. But if I chose to have the day off, my products would continue to sell on Amazon and orders would reach customers without my input.


Related post: 11 Ways You Can Make Money with E-Commerce.


Buy a Business


Don't fancy the effort of starting and building a business from scratch?


No bother, why not buy an established business instead?


Buy an established UK business on Businesses For Sale.

Create a Course


We are are currently in the Information Age - the age where vast knowledge is available to the masses at the click of a button (or at the entering of credit card details).


If you have an area of specialist knowledge that you could share with others, an online course could be a valuable asset that requires little maintenance.


Create a video course or written course, and you could sell it on your blog/website, or on course websites such as Udemy or Teachable.

Create an eBook


Just like courses, people pay good money for eBooks - especially if it something informative such as a how-to guide.


Here are some of the more popular eBook topics to write about:

  • Self-help

  • Health and Fitness

  • Cooking

  • Business and Money

  • Parenting and Relationships

  • Personal Development

  • Crafts and Hobbies

You can sell your eBook on your blog or website. You can also publish it on Amazon for free using Kindle Direct Publishing.


Dropshipping


If you're looking for passive income ideas with little money to get started, this is the one I recommend.


Dropshipping is not completely passive in nature - it requires some input.


However, like I explained with my Amazon business above, most businesses can be outsourced in some way.


I recommend eBay dropshipping, as it's the easiest to set up and you could have your first products listed today - and maybe even your first sale.


All you have to do is process the customer order by ordering the product from your supplier to their address. Certain dropshipping services such as Hustle Got Real, actually have an auto-ordering system that automatically process the order for you - amazing.


Check out our Guide to eBay dropshipping for the lowdown.

Print On-Demand


This is one of the many great passive income ideas for designers.


Print on-demand is really a form of dropshipping; it allows you to apply your own designs to products such as mugs, hats, shoes and t-shirts and sell them on your online store or an online marketplace.


Using a print on-demand service such as This New, you can sell your own designs to your eBay customers by dropshipping straight to their address. No handling needed. This New is also compatible with Hustle Got Real.

 

Outsourcing Tip

If you're not feeling creative, hire a professional designer on Fiverr to produce some hot designs for your products.

 

Sell Printables


Printables are exactly what they sound like - things that you can print.


It could be a worksheet, a recording/tracking sheet, journal pages, planners - you name it.


Another one of the awesome passive income ideas for creatives.


Somethings of a more creative nature can sell very well on Etsy, such as wall art, illustrations or colouring pages.


Again, it doesn't matter if you're not the creative type - outsource the design work on Fiverr and you have an asset that you can sell over and over again.


Stock image showing wooden desk with various objects - clipboard, papers, scissors

Sell Stock Photos


If you're a keen photographer, you'd be daft not to upload your shots onto a stock photo website such as Shutterstock - where designers and businesses can purchase them for use in marketing materials or designs.


If you've got good photographs, you may as well upload them - what have you got to lose? They could be a great asset that will generate recurring income without you having to lift a finger after you've uploaded them.


 

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26 Passive Income Ideas for Beginners in the UK
 

Passive Investing


The following passive income ideas require financial input. They involve purchasing assets that will pay you passive income month after month.


Invest as a Silent Partner


Have you or anyone you know ever had a unique business idea and never pursued it?


Well, if you have the capital to fund it, and someone willing to take on the work, why not invest in it as a silent partner - Dragon's Den style?


Split the business shares down the middle, or however you choose to divide up the company. You supply the capital, and your partner runs the business, each getting a share of the profits.

Invest in Stocks


You don't need to be an expert to invest in the stock market these days, not when you can copy other experts.


Using the eToro's Copy Trader feature, you can automatically copy the trades of experienced traders without lifting a finger. The experienced trader does all of the work for you.


ESMA Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


If you prefer long-term investment over trading, put your money with a mutual fund and their experts will invest your money where they believe it will perform the best.

Invest in Crypto Currencies


Crypto currencies are a very volatile and unpredictable investment - but, if you like a little risk then please read on...


I invested about £1,000 in Crypto Currency around 4 or 5 years ago. The market then crashed and my investment was worth a pitiful £200.


Since then it's been up and down, but each peak is a little higher than the last, and each crash is little smaller. Last month, my investment was worth nearly £3,000.


If I had invested another £800 when my initial investment had dropped to £200, my total investment would now be worth £15,000.


Hindsight is a bitch.


But it's one of those things. Only invest what you can afford to lose and don't get carried away.


I buy and trade Crypto Currencies using Coinbase.


Invest in REITs


Similar to a mutual fund, Real Estate Investment Trusts (REITs) invest for you and give you a share of the profits. But in this case, it will be invested in real estate portfolios rather than company stocks.


They offer a good return of passive income, but do not offer much capital appreciation.


Invest in Bricks and Mortar with CrowdProperty


CrowdProperty is a website where property developers can apply for crowd-funding, and investors can lend money to them.


They are property experts themselves so they know what they're doing. Each application for funding will be judged based on the merits of each project by the property experts at CrowdProperty, so you know your money will be invested as safely as possible.


They currently have a perfect track record, with all funded projects paid back in full.


You can invest as little as £500 and expect returns of up to 8% PA.


Peer-to-Peer Lending


If you have some money sat in the bank earning less than 1% interest, why not invest it on a peer-to-peer lending platform, offering you up to 4% interest on your investment.


Peer-to-peer lending is an investment, not a savings account, and should be treated as such.


It comes with a level of risk that you don’t get with a bank. But there’s no reward without a little risk, right? Such is the nature of being an entrepreneur.


See what Money Saving Expert has to say on peer-to-peer lending.

Invest in Domain Names

Domain names are the first part of a website URL that usually tells you which website you are on. For example, mine is anhonestbuck.com. It appears in the URL for every page on my website.


It took me a long time to come up with that name, and it was not my first choice. I went though a long list of other ideas but all of them were already taken, but not all of them were being used.


Some of the domains I tried directed me to a website where I could purchase the domain name for a significant sum of money.


Now if I was a big company, and the perfect domain was available to purchase, I probably would have paid a good amount for it.


There is a huge demand for short, memorable domain names. If you can find some obvious ones that have not yet been taken and purchase them cheaply now, you may be able to sell them in years to come to someone who really wants it.


Even if you have to buy one for a larger sum now, the value could increase in the future as good domain names get harder and harder to come by.


If I hadn't found anhonestbuck.com, I may have been forced to purchase it if someone else had it for sale.


Warning: like all investments, this one comes with risk. You may find it difficult to sell domain names in the future, so be prepared to hang on to them for a long time.

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