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How To Create Passive Income With No Money

The moment I got out of debt, I began my quest to learn how to create passive income with no money to my name. I started reading every book I could get my hands on and listening to podcasts. I learned that passive income is what sets the wealthy apart from the rest of us.

Warren Buffett said it best when he said, “if you don’t find a way to make money while you sleep you will work until you die.”

3 Passive Income Ideas

Being wealthy is not my primary goal, but I also don’t want to work until I die. I don’t want to rely on my employer for all of my income because they could go out of business, or I could lose my ability to work.

Today, I have created several passive income streams, including real estate, investment income, and my blog, and I earn thousands of dollars per month from my passive income streams.

If your willing to put in the time, as I did, you too can create passive income without much money.

How to Build Passive Income 

When you learn how to generate passive income, you have more financial security than a job alone can provide. If you’re living paycheck to paycheck, like I did, you’re probably wondering how you could ever get started building passive income streams.

Even if you don’t have money to spare, you can still create passive income streams; you’ll have to put more time into doing so. Perhaps you have more money than time, these 13 things that you can do to create multiple income streams might be more helpful.

If you like the idea of creating a passive income, early retirement, building wealth, and having a more secure future, then here are three strategies to consider:

1. Real Estate

Create Passive Income With Real Estate

Currently, my eight rental properties are one of my best sources of passive income; they provide me with a way to earn extra money every month as well as a portfolio of houses worth over half a million dollars that I accumulated in less than five years. 

Real estate is my favorite way to make passive income; once you renovate the house and take the proper steps to find suitable tenants, there isn’t much work to do. If you don’t want to do any work at all, you can hire a property manager.

I bought my first rental property seven years ago after reading a self-improvement book that said to stop telling yourself that you CAN’T do something and instead start asking yourself HOW you can do something, and that’s what I did.

Even though it seemed the odds were against me financially, I was determined to find a way to purchase a rental property.

I saved some money and borrowed some from my 401K for the down payment, I know the experts say not to touch your retirement money, but I knew I could pay it back quickly once I got the property rented out, and I did.

Lending Options

I made some mistakes in buying the first property, but I learned from them and managed to buy seven more. If you don’t have any money to put down then I suggest getting an FHA or USDA loan and not touching your retirement money, I took a significant risk by doing that.

You can purchase a multifamily property with low or no money down and have the money that your tenants pay you each month to cover the cost of the mortgage.  A multifamily property is a small apartment building with two to four units.

For example, if you buy a duplex with an $800 a month mortgage and live in one unit while renting out the other for $1,000 a month, you make $200 a month.

Once the mortgage is paid off, you would be making $1,000 per month.

There are lending options that don’t require any down payment and some only need a 3.5% down payment.

Agreeing to live in the property for at least a year makes financing easier to obtain.

If you can buy in a rural area, you can get a USDA loan for $0 down.

An FHA loan requires a down payment of only 3.5%, which is still pretty affordable.

If you’re ready to get started, read “An Intro to House Hacking: Here’s How I Get Paid to Live for Free.” You don’t have to pay a real estate guru to learn how to invest in real estate; you can learn everything you need to know for FREE on the Bigger Pockets website. Here is a list of the books that I read before I invested in real estate.

Renting Rooms

Not ready to take that big of a step? Try renting rooms out of your current house with Airbnb. If you already have a home, you can rent part of it out for extra income, and you won’t need any cash, you can start right away.

2. Information

Make Passive Income By Selling Information Products

Wondering how to make passive income online? Create an informational product that you can sell, and you’ll have an income-generating asset. You will have to put time into creating the initial product, but you will earn extra money long into the future. 


McKinzie Bean of Moms Make Cents has a free step by step guide to help you start a blog, she even has a free Pinterest class to help you drive traffic to your new blog.


Calendars, binders, pictures, workbooks, and guides are all things that you can sell online to make passive income. Tracie Fobes, one of my favorite bloggers, has made a fortune selling printables on her site. Tracie guides you through the process with her Easy Printables class.


Amazon Direct Kindle Publishing, or Amazon KDP for short, is a FREE self-publishing service. You write the book and then you can publish it in less than 5 minutes. You control the price of your book and maintain the rights to it.

A step by step guide is available on Amazon’s website to walk you through the process.


Creating online courses is a booming business, according to Global Industry Analysts, Inc. it is expected to reach $240 billion by 2021. Online course platforms like Teachable, Udemy, and Skillshare, make it easier than ever to start.

Affiliate Marketing

If you already have a blog, or you’re thinking about starting one, you can learn how to monetize it here. You can earn passive income from products that you love and endorse at no extra cost to your readers. If you prefer making videos to writing posts, you might want to consider earning affiliate income from a YouTube channel.

3. Investments

Earn Passive Income By Investing In Stocks

One of my best sources of passive income comes from investing in the stock market through index funds. Here is a quote from Investopedia regarding index funds.

“Warren Buffett recommended index funds as a safe haven for retirement. Rather than try to pick out individual stocks, he said it makes more sense for the average investor to buy all of the companies of the S&P 500 at the low cost an index fund offers. Cheap index funds often cost less than a percent, compared to the much higher fees active managers charge. The average index fund will perform well over time, the legendary investor has said, while most active managers will not.”

What Is An Index Fund

An index fund is a group of stocks that are put together to match different components of the stock market.

For example, the top 500 stocks traded on the New York Stock Exchange are referred to as the S&P 500.

The Dow Jones Industrial Average is a collection of 30 stocks picked by the editors of the Wall Street Journal to represent the American economy.

An index fund is similar to a mutual fund in the sense that they are both individual stocks grouped together. Mutual funds have an active manager that decides when to buy and sell shares in the fund. Index funds follow a collection of stocks, like the S&P 500, therefore eliminating the cost and risk associated with a fund manager.

The S&P 500 has averaged a 10.35% return between the years of 1985 and 2015, according to The Motley Fool.


Index funds can be bought without paying a commission and taxes are usually low on the capital gains.

Where To Buy Index Funds

Investing in mutual funds is easy, all you need to do is set up an account with an online broker. Stocks are one of the best things you can buy to make money.

Charles Schwab

According to The Motley Fool, The Schwab Total Stock Market Index Fund (NASDAQMUTFUND: SWTSX) is one of the least expensive funds. You pay just $3 per year for every $10,000 you invest in the fund. You can start at $1, and there are no investment requirements. 


The minimum investment is $3,000 unless you commit to a monthly investment of $100.


You need $2,500 or a $100 a month commitment to investing here.

Other Brokers

Other online brokers include E-Trade, T.Rowe Price, TD Ameritrade, and Ally Invest.

The minimum amount that you need to open an account varies, so you need to check the requirements for each broker. You can learn more about how to invest in index funds and find step by step instructions here.

What are your best sources of passive income? Let me know how you’re generating passive income in the comments below.

Passive Income Ideas


  1. Hi Cara — this info is great!

    I think real estate has a lot of opportunities! The only downside is when I end up with a tenant who feels entitled to literally every thing and has something to complain about even when there is really nothing wrong! There are those types of people. ?‍♀️ But when there’s a good and appreciative tenant, it feels 100% passive!

    And blogging is great too; it’s so cheap to get started and the amount of ideas is almost unlimited! I love how flexible blogging is — you can scale up or down with your time.

  2. Let us thank Cara for putting all those ‘ Money Making Tips’ ( MMTs ) as a great compilation-

    If one has creative talents in ‘writing’ , ‘Art’ , ‘teaching’ or ‘Coaching ‘ –the tools to utilize them are hinted amply–

    Money apart , it is a sure way to become ‘Socially popular’ and useful with no barriers–

  3. This is a great post. I just love your blog. And I have follow Titus’s blog for a while now. She is awesome. However I do blog but it is not my biz it has now become just a hobby I don’t make much with. However I do plan on build several streams of passive income! This is encouraging and I will relook at how she did it in shopify! I shared your post in Pinterest!

    1. Thanks, Susan I really appreciate the compliment and thanks for sharing my post! If you haven’t already, you should join Titus’s Facebook group for printables, it’s very helpful. If there’s anything I can do to help you create passive income please let me know. I checked out your blog, your winter chili recipe looks delicious, I’ll have to give it a try.

  4. We found lots of blogs and articles about passive income, but We didn’t get the information like your blog. Thanks for giving this informative article.

  5. This is actually the best blog I have read on passive income. It is methodical, easy to read and follow.

  6. Hi Cara,

    great article. Trying to build multiple income streams really helped my family, and starting with no money really made us think creatively.

    I started a decade ago by learning about, and investing in, property and paper assets. Eventually real estate took off and helped me retire in my mid-thirties. Right now my paper assets are booming and funding part of my retirement.

  7. I just bought my third property. I hope to grow my passive income enough to retire in 10 years or less! I love to write and am considering starting a blog., great suggestion there. The new passive income strategy I learned from you is writing online courses. Having just finished my first year of online school, I have a few suggestions for my teachers… maybe I should write the curriculum and get financially independent From it!

  8. Hello! I love this and I’m at the absolute beginning stages but I’m not sure where to start. You had mentioned reading some great books, which ones would you recommend? Thanks!

    1. Kristen, If you look right above the heading “Renting Rooms,” you will find a link to the list of books that I read before I started investing in real estate. I’ve also read all of Dave Ramsey’s books, Tony Robins books, Rich Dad Poor Dad, The 4 Hour Work Week; they were all beneficial books.

    1. Praful, I suggest that you get your finances in order before investing in real estate. Pay off all of your debt, build an emergency fund, and then learn all that you can about investing in real estate. Good Luck 😊


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