The majority of people currently work for their money at their day jobs, living paycheck to paycheck, unable to enjoy life, relax, or retire early. They are unaware of passive income and the ways to make money while you sleep.

These people depend on their job to make money—it's the only source of income they have. This can be anyone from a fry cook at McDonald's to a successful surgeon. No matter what, they need to show up at their job and work for someone else in order to earn a living (the key word here: EARN. They are not "making" money. They must work to earn it).

But the biggest question entrepreneurs ask themselves is "How do I make money work for me?" Warren Buffett said it best himself: If you don't find a way to make money while you sleep, you will work until you die.

If you don't find a way to make money while you sleep, you will work until you die.

I've met people who are fine with this reality. They seem to want to be stuck behind a desk or working at some other job for 40 years until they retire. Because that's "just what life is." They claim not everyone can find ways to make passive income or that a wealthy lifestyle isn't for them. Maybe if they realized how easy it is to find ways to make money work for you with passive income, they would see life a little differently. Who wouldn't want to be able to retire early, travel the world, and spend time with loved ones all while making money?

If you're here reading this, it shows you are ready to take the next steps and find creative ways to make a passive income. Congratulations! Welcome to the club.

Disclaimer: This page contains affiliate links with products I recommend. I may receive a small percentage of the sale if you purchase something, but at no extra cost to you.

First: what is passive income?

Passive income is money you earn through various ventures that require little daily effort or upkeep. Once you get things up and running, this is income you can essentially make in your sleep.

Think of it as "residual" income. This means it's constant and ongoing income coming from efforts you built but don't need to maintain on a regular basis. There are many ways to make money in your sleep, including our ideas below.

Here are some ways to make money while you sleep through passive income streams:

Affiliate Marketing

If you're starting a blog (like us), affiliate marketing is a great option to make a passive income. Affiliate marketing is when you sign up or partner with a product or service, and promote their goods to your readership. You typically use a special promotional link to track orders and you earn a commission from that. You can craft informative blog posts that use those affiliate links, and if your readers click and make a purchase from that, you get a percentage or fee of the sale. Remember, it's important to always be transparent with your readers that you may earn a commission from those links (like you see above).

There are tons of success stories about bloggers using affiliate marketing, like my favorite personal finance blogger, Making Sense of Cents. She makes over $50,000 a month from affiliate marketing. To find the best affiliate partners for your business, check out this list.

Recommended Reading: How To Start a Money-Making Blog

Start a Business

Your blog can be a business. Freelancing can be your business. But once you start earning money from it, the key is to find the right people to run the business for you. Remember, these are "passive" income ideas, so the more hands-off you can be, the better.

You can start your very own money-making blog right now. We use Bluehost because it's affordable, offers 24/7 support, and you can connect a WordPress site with a click of a button. Use this special discount link to secure hosting for just $3.95 a month.

Real Estate

This definitely has some upfront work, but it can be worth it in the end. You can look for properties with potential (not money pits) and earn hundreds to thousands each month from rent. Rental income is taxable income, but you can write-off any repairs you have to make. The key here is not just your monthly profit margin; your renter eventually pays off your down payment, plus extra cash every year on top of that. Short version: someone pays your mortgage and then pays you more. Win-win.

This is also something you can't do with stocks (mentioned below). You can't borrow $200,000 and have someone else pay it down while making money at the same time, on top of tax benefits of real estate.

Let's break it down more: Let's say you put 20% down on a $200,000 rental property ($40,000) at a 5% interest rate. You're paying around $1100 a month for a mortgage, insurance, and property taxes. If you are able to rent that home for $2000 a month (depending on where you live), you're making $900 in passive income each month. In one year, you'd make almost $10,800 from just one rental! And you can make your initial down payment back in just a few years. While vastly simplified, this method can compound exponentially into something greater if you keep investing your earnings into more rental properties. You'd just need ten rental properties to make $100,000 a year.

Recommended Reading: The Beginner's Guide to Real Estate Investing

Stocks

This passive income tactic involves a different knowledge set, but can still make you an average annual return of 9.8% (the S&P 500 index's average for the last 90 years). You can also start investing in stocks with any set amount of money and you don't need to borrow or take out a loan to get started.

Sell a Product

This is easier than it sounds. You don't need to get on Shark Tank to make passive income on a product. You just need a great idea and a niche. Consider selling an e-book or online tool made for a special audience (photographers, marketers, designers, etc). Once you complete the upfront work of building and marketing the product, you can sit back and relax as you watch people sign-up or purchase it. Simply monetize an idea you think your niche needs.