Important Notes
My goal herein this article is to be as transparent as possible with earnings and other details. I am not a financial adviser, and this is not any kind of personalized financial advice. While I’ve had a lot of success with building digital income streams, everyone’s experience is going to be different.
Why Passive Income Matters
Income Diversification
A lot of my income streams are online money-making opportunities such as affiliate marketing. Just having multiple income streams in general is crucial. The most logical reason behind earning passive income is being able to replace your active income someday. Most people don’t want to work a job forever, and something like a rental portfolio or a well-funded 401k has the potential to support your living.
Current Financial Realities
The reality is, today, many people need these additional income streams just to help out with day-to-day living costs. According to a side hustle report from Zapier, 33% of surveyed Americans who started a side hustle did so to diversify their income. That side hustle or side gig could actually be a passive income stream.
Long-Term Perspective
If you want to build passive income streams to cover day-to-day living costs, diversify your income, or maybe just for enjoyment, all of the same fundamentals apply. The main thing to keep in mind is that, generally speaking, passive income streams are a long-term investment. Whether this means investing your time, energy, or money, these things do not happen overnight.
My Challenge to You
My challenge to you is to think about what you could potentially build over the next 5 to 10 years. With that said, let’s dive into the first passive income stream.
1. High-Yield Savings Accounts
How It Works
Interest income is the first way that I make passive income, and I do this by putting my extra savings and emergency fund into a high-yield savings account. Interest rates are higher than they have been over the last few decades, so you can actually make a decent amount of money on your parked cash right now. For me, this is usually $200 to $300 per month, but the cool thing is this is 100% passive income. I don’t have to put in any work whatsoever, and every single month I get my interest payment.
Initial Investment
However, I did have to put a lot of time and energy into actually making that money in the first place. For me, personally, I use the M1 Finance high-yield account. However, this account might be out of reach for some, as you need to have at least $10,000 with them to avoid a monthly fee. A great alternative here is Ally Bank. They offer high-yield savings and CDs with no account minimums or monthly fees.
Getting Started
If you want to take action on this yourself and start earning passive interest income, the very first step here is to build up an emergency fund and aim to save this up in a high-yield savings account. Another plus to this passive income stream is that the interest you earn today can earn future interest tomorrow, meaning that your interest compounds.
2. Rental Properties
Monthly Income
The next way that I earn passive income is through rental properties. I personally own two apartments that I rent out, and the total rent collected there is $2,300 a month. However, I do have a mortgage on this property as well as other expenses like taxes, insurance, and capital expenditures. When you look at the rental income versus the costs here, this is more of a break-even.
Asset Appreciation
However, that does not mean there aren’t alternate methods of earning passive income through something like real estate. For me, personally, I’ve made the most passive income in real estate through something called asset appreciation, or the value of the underlying asset going up over time. I was able to buy my rental property back in 2019, and since then, the value of the entire US housing market has increased substantially. For simple numbers, let’s say I bought it for $400,000 in 2019, and the value increased by 30%. That means the new value today would be $520,000. So even though I might be breaking even from a monthly cash flow perspective, I am earning a significant amount of passive income from the value of the asset growing over time.
Accessing Equity
The only frustrating part is it’s difficult to tap into this value without either taking out a loan on the property or selling the property. So personally, I look at this as my long-term passive income that I won’t be realizing today.
Getting Started
If you’re looking to take action on this yourself, I would recommend looking into the FHA loan and pursuing a 2 to 4-unit property. With this type of loan, you can sometimes put as little as 3.12% down. For example, with my rental, I put $22,000 down. One final tip here: I spent over 18 months looking at different properties before buying my first rental, so don’t be afraid to have extreme patience here.
3. Digital Content Businesses
My Experience
I’ve been involved in the digital content business for close to a decade. Outside of posting content weekly, I also have my personal channel as well as other channels and blogs that I’m involved with. The content channels that I own outside of my main channel are through separate business entities, and I earn passive monthly distributions from that as a part owner of the business. Through these partnerships, I earn about $5,000 per month on average, but the main source of revenue generation here is actually our website that we started back in 2018.
Early Struggles
In the first few years of running this business, we only made a few thousand dollars total, and my business partner and I almost gave up on multiple occasions. But we stuck it out, and it has been a successful business endeavor. The main way we make money through this business is through affiliate marketing, where you earn a commission when someone signs up for something using your link.
Getting Started
In general, this business model is very competitive, but there’s always room for more helpful content out there. If you want to take action on this yourself, consider starting a content channel or website that provides very niche-specific information about something you already know a lot about.
Choosing Your Niche
For me, personally, I’ve always been passionate about the world of finance, so all of my content businesses are related to that. I think it’s crucial that you choose a niche that you’re passionate about too. I’ve been writing and posting content about money for close to 10 years now, but I could never see myself wanting to do anything else.
4. Content Channel
My Journey
My fourth passive income stream is actually the very first one that I started, and that is my content channel. Since 2016, I have posted 799 pieces of content on my main channel. That took thousands of hours of work, but today I’m able to earn passive income from the ad revenue generated from that portfolio of content.
Current Operations
Yes, I do have to keep posting a few pieces of content each month in order to keep the channel going, but it’s not really a huge lift. I leverage teams of freelancers, editors, and graphic designers, which allow me to really focus on the parts of the content process that I truly enjoy. On average, my channel has made about $10,000 per month in ad revenue, but there have been ups and downs over the years.
Important Considerations
Nothing is guaranteed here, and everyone is going to have a different experience with something like this. It took me years of refining my content to figure out what worked for me. If you are interested in the content business, what I will tell you is that diversification of revenue streams is crucial.
5. Dividend Investing
How It Works
The final passive income stream on my list is one that was a large component of my portfolio years ago but not as much today. Back in the late 2010s, I was big into dividend investing. This is where you invest in stocks that pay out quarterly cash payments in most cases, and then you get to keep that payment and either collect it or possibly reinvest it.
Example Calculation
For example, PepsiCo is a popular dividend stock. As of March 27th, 2025, the current share price is about $150, and the dividend yield is about 3.63%. That means, based on the current share price and dividend payout, you would earn 3.63% of what you invest back as a dividend annually. So if you invest $100, you’d expect to earn $3.63 in dividends annually.
My Experience
This may not sound like a lot of money, but back when I had a six-figure dividend stock portfolio, I was making a few hundred a month in dividend income. However, what you have to keep in mind here is that the underlying value of these dividend stocks can and will change. It’s entirely possible to make money with the dividends but actually lose more money because of the value of the asset declining in value.
Important Advice
So make sure you do more research on dividend investing and portfolio diversification before diving into this passive income stream.
Final Advice
Focus on One Thing
That’s going to wrap things up here. One last thing I want to leave you with is this piece of advice about building passive income streams: You might be trying to juggle multiple different things right now, but often times the best approach is to focus on just one passive income stream when you’re starting out. Maybe it’s going all-in on the rental business or starting a content channel. These things are going to take a lot of effort, and you can’t be spreading yourself too thin across different income streams when you’re trying to do all of this at once.
Long-Term Strategy
So my advice to you is to pick one thing, go all-in, and start learning about it. You can always create additional passive income streams later after you’ve mastered the first one, and that’s exactly what I did.