What is passive income and how you could earn it

Key points:

• Passive income is money earned with minimal ongoing effort after an initial setup.
• Unlike active income from a 9-to-5, some ventures can shift from active to more passive over time.
• There’s no one-size-fits-all approach – match ideas to your goals, time, and risk tolerance, and always research before investing.
• Creative and asset-based routes could include renting out space or items, blogging, launching a video channel, creating online courses, and selling photography or written work.

‘Passive income’ is money coming in with minimal ongoing effort from you. You do some work to set up the money‑making venture and, once it’s established, it can provide a steady stream of income going forward.

Active vs. passive income

With passive income, you wouldn’t have to work regularly for it like you would a standard 9-5 job – or what you’d call ‘active income’.

Some income streams may start off as more active but can become increasingly passive over time. For example, building a business, writing a book or developing an app often requires significant effort upfront. However, once you’re up and running, these ventures can generate ongoing income with less day-to-day involvement.

Ready to explore your options? Here are some ideas to help you start earning passive income – whether you’re interested in investment opportunities or are intrigued by more active-to-passive routes.

6 ideas to earn passive income

There are lots of ways to earn a passive income and no one-size-fits-all solution, so here are some ideas to get you thinking, whatever your situation:

1. Invest in stocks and shares

Depending on your circumstances and if you’re comfortable with the risk, investing in stocks and shares can be a good way to generate passive income. When you buy shares in a company, you may receive dividends, which are regular payments made to shareholders from the company’s potential profits. Over time, the value of your shares might also increase, giving you more returns if you decide to sell your shares. You can invest through different accounts, such as:

• a Stocks and Shares ISA (Opens in new tab), which protects investment returns from UK Income and Capital Gains Tax
• a General Investment Account (GIA) (Opens in new tab), which allows you to invest more of your money in a flexible way after using your ISA allowance – and any returns will be taxable.

Heads up: always do some research, consider getting professional advice and bear your financial goals in mind before investing your money. And remember: you can lose money when investing, and you should only invest what you can afford to lose.

2. Rent out your spaces and possessions

Got space you don’t use? It could be just what someone’s looking for – whether it’s a spare room, a garage, or even your driveway or parking spot, especially if you’re near a city centre or event venue. You can also rent out items you don’t use all the time, like bicycles or designer clothing, instead of letting them sit in your cupboard. There are plenty of online platforms that make it easy to turn your unused spaces and possessions into extra income.

3. Start a blog

If you’ve got a knack for writing and a unique or interesting area of expertise, starting a blog could be a great way to earn some extra income. With enough visitors to your site, you can make money by selling ad space, hosting sponsored content, working with brands, or joining affiliate programs with big companies. The blogging world can be competitive, so it’s worth keeping your content fresh and regularly updated to attract and keep readers coming back.

4. Start a video channel

If your skills shine best through visuals, you could earn passive income by launching a video channel. A smartphone with a good camera and a decent idea might be all you need to get started. Keeping your content up to date can help attract viewers, and if your videos start getting regular views, you could earn money through advertising or sponsorships. Just like with blogging, choosing a subject that isn’t already crowded with content can help you stand out. ‘How to’ guides are always popular – it’s all about sharing your take on familiar topics in a unique and relatable way.

5. Create an online course

If you have professional qualifications or expertise in a niche area, creating online courses can be a great way to earn passive income. Whether you’re teaching a language, sharing business tips, or offering creative skills, digital courses are always in demand. There are plenty of easy-to-use platforms that let you set up your course and pay you whenever someone signs up. You can pre-record videos, write guides, or mix in visual and audio content – whatever suits your teaching style. Once your course is live, it can keep earning money for you with little ongoing effort.

6. Publish stories and sell photography

Your creative talents could be working for you – even when you’re not. Whether you have a way with words, a passion for photography, or a flair for design, there are ways to earn money from your creations online. For example, if you have high-quality photos, you can upload them to stock image websites, where people can purchase and use your work. While it’s not a guaranteed windfall, it’s an opportunity to generate passive income from something you already love doing.

Passive income isn’t about getting rich overnight. It’s about setting up a simple, sustainable income stream that fits your goals and lifestyle. The key is to start small, do your research and build steadily – whether you lean toward investments like stocks and shares, or prefer more creative routes. Choose one idea to test, set clear expectations around time and risk, and review your progress regularly. With a bit of upfront effort and light ongoing maintenance, you can set something up that works alongside your 9‑to‑5 and gives you more financial flexibility over time.

The Hub is intended as a knowledge portal to provide information on a range of topics, including financial products and lifestyle management. Articles may refer to products and services which Chase UK does not currently offer.

As with all investing, your capital is at risk. The value of your portfolio can go down or up and you may get back less than you invest. Tax rules vary by individual status and may change.