Best Passive Income Ideas to Start in Your 40s

Best Passive Income Ideas to Start in Your 40s

passive income ideas to start in your 40s picture of santorini

Passive income is the holy grail of online business. Here are 5 passive income ideas to start in your 40s.

Over 50% of people say they would rather take the risk to start their own business than to keep working for somebody else.

But only around 4% self-identify as entrepreneurs. Let's close that gap.

Start your passive income business in 2019 with one of these 5 ideas.

First, let's define passive income...

Related Post: The 3 Levels of Passive Income

What Is Passive Income?

There are many definitions of passive income.

My definition of passive income: Money earned after initial hard work that is not tied to hours spent working.

To make my definition more clear, here are some examples of what is and what isn't passive income in my opinion.

❌ NOT passive income:

  • Any salaried employment
  • Any hourly employment
  • Side hustle based on someone else's schedule
  • One-on-one consulting / coaching / teaching

✅ YES passive income:

  • Online course or training
  • Group consulting / coaching / teaching (online or offline)
  • Affiliate/referral sales via website
  • Membership website
  • Sharing economy (,,, etc.)

There are certainly other good passive income ideas. But these five ideas are flexible enough for anyone to get up and running.

Now let's get into how to start one of these passive income businesses in 2019.

The List: 5 Passive Income Business Ideas To Start In Your 40s

For each of these passive income ideas I'm going to share an overview and then rate them from 1 to 5 stars (⭐️) based on three criteria.

3 Rating Criteria:

  • Impact - The potential for serious income
  • Confidence - How likely you are to succeed 
  • Ease - How easy it is to start

I will also link to any good examples or other resources that may be helpful for you. 

Here are 5 passive income ideas to start in 2019...

#1 Online Course(s)

Picture on man at laptop doing online course


Online education is huge. And it's only getting bigger.

What we're talking about here is a discreet, standalone course to teach someone a specific skill or get them a specific result or outcome.

And after some initial one-on-one training and feedback, turning the course into an automated system that can run (and make money) without you.

An online course involves a creator (you) organizing their knowledge of a topic into lessons. The lessons take a student from point A to point B and provides them with a specific outcome, skill or result.

Building a course may involve face-to-face or group teaching and feedback up front. This is to confirm the need for the course and to get important feedback.

Once the need and feedback are incorporated, the course can then be automated via a teaching platform or on your own website.

The key to getting started with an online course or training is to be specific.

A specific skill, result or outcome will make it easier to create your course. And easier for a student to see the value in purchasing.

A bad course idea: "How to improve your health."

Why is it bad? Too broad with no specific outcome or result.

A better course idea: "Hot to systematically cut added sugar from your diet in 30 days."

Why is it better? Leads to a specific result (no added sugar) in a specific time frame (30 days).

A good way to think about your course idea is: If it tries to appeal to everyone, it appeals to no one.

"If your online course idea tries to appeal to everyone, it appeals to no one." - someone really smart who is not me 😀

Click to Tweet

I'm not sure who first said that, but it's great advice.

So what specific skill, outcome or result could you get a student right now?

Ratings: Online course




Summary: The right course(s) can turn into a significant income and business. It can also lead to other opportunities (see #2 and #4 below). If you don't keep it specific though, it can be a tough slog to get traction. With the myriad online course platforms, getting started is pretty easy.

#2 Group Coaching

5 passive income ideas - group coaching


Group consulting / coaching / teaching is another education based passive income source. It's the cousin of online courses, just live and in person (or virtual).

The key word here is group. Educating in a group setting gives you an important boost: Leverage.

Instead of teaching the same content 50 times in a one-on-one setting, you teach the content one time to 50 people.

The benefit to the audience is they get the questions/perspectives of lots of other people. If one person asks a question, chances are most of them would (eventually) have the same question.

They may also have the opportunity to meet and develop relationships outside the education setting.

You may be thinking that group consulting / coaching / teaching is no different that an online course.

While they are similar, there is one big difference: The perspective of the student.

In the online course, a student feels like they are getting one-on-one help from you, the creator. They may be able to work at their own pace. The anonymity may be an important feature.

But with group consulting / coaching / teaching being part of a larger cohort is a valuable benefit to the student. Having the chance to sit among, chat with and learn from others in their situation is a compelling offer.

Another difference is online courses are typically based on the number of trainings. It could take a diligent student only a week to go through the lessons. Or they may slowly consume the content over 6 months.

On the other hand group consulting / coaching is usually based on time. It could be five sessions in a week of 2 hours each. Or eight weeks every Tuesday and Thursday evening in an online video chat.

Like the online course, it's important to keep it specific or niche. That could be by topic or by audience.

Running a local, in-person training gives you another benefit. You can tap into your local market by networking and getting referrals from prior students. This is easier that getting random people on the internet to buy.

As I mentioned in the online courses section, group consulting / coaching / teaching can eventually lead to an automated online course. You could simply record your in-person sessions and offer them along with other resources.

Would you feel more comfortable teaching via an online video course, or an in-person group setting?

Leave me your answer in the comments below. ⬇️

Ratings: Group Coaching




Summary: Group teaching can give you a high effective hourly rate vs. one-on-one. Using technology can allow more scale (and income). Confidence is high if teaching something you already know. Just be specific. Easier than creating an online course due to avoiding tech and software. Can be foundation for future online courses.

#3 Affiliate Sales

5 passive income ideas - affiliate sales


Affiliate sales means referring someone to a product or service you have used and getting paid a commission if the referral buys.

Amazon Associates is maybe the best known. But there are tons of affiliate options out there.

Just consider things that you buy and use often. Then check if that company offers an affiliate program for you to join.

You get a custom link that has your referral number or code. So if you email that link or have it on a website, people who purchase after clicking will be credited to you. And you get paid.

Super easy to get started.

Have you done this?

You bought a product online and loved it. You texted or emailed people you know to tell them about it. They bought the product and loved it too.

Did you get paid a commission when they bought?

If not, you need to learn affiliate sales. It's an easy way to make money by referring people to products and services you love. And get paid when they buy.

Amazon Associates may be the biggest affiliate program. But there are tons of online affiliate programs for all kinds of products and services.

Almost all product review websites make money from affiliate sales. Reviewers purchase and use a new product. They write a review for people interested in buying.

People reading the review click the affiliate link to purchase the product. Then the reviewer gets a commission for that sale. If the review and website are easily found online, the commissions can become passive.

Affiliate commission can run from 10% to 90% of the purchase price. For recurring revenue products you may get a recurring commission as long the the purchaser stays with it.

Just don't be spammy or dramatic with your referrals. And please don't refer people to products and services you haven't actually used.

What is a product or service you love that you constantly recommend to people?

If you found it on Amazon, check out the link for the Amazon Associates program.

Ratings: Affiliate Sales




Summary: Get paid a commission to refer people to products and services you love. Building a specific audience can take time. So a significant income can take time. Using a blog  and SEO can make affiliate sales passive. Very easy to get started immediately.

#4 Membership Website

5 passive income ideas - membership website


A membership website is a place for people who are interested in the same things to gather and interact. And they pay you money to facilitate the experience.

Members access each other (and other resources) via a website where they must be logged in. If you're not a member, you can't access the site.

At a minimum there is a forum or chat area. This is where conversations between members (and you) can happen.

A membership website can have tons of other resources too to make it more valuable. Like courses, downloadable files, software or discounts.

Have you ever gone to a bar to watch your favorite team on TV? And the room is full of other fans of your team.

Everyone is cheering together. There are high-fives. People chatting about that big win from last year. You have a great time. You decide to come back to watch next week's game.

In this analogy the bar is like a membership website.

A place where people interested in the same goal, topic or idea can gather to share the experience.

A paid membership website can become a massive income source. And while it may not start out passive, it can become more so in time.

Hiring someone to monitor and facilitate conversations can make sense. And if you develop the right audience, they will do most of the work for you. By sharing ideas and answering each other's questions.

Like online courses and group coaching, the key is to be specific.

Having a niche audience will make it easier to start conversations. And make those topics more engaging.

There is some technology involved, but doesn't have to be complicated.

At a minimum you'll want a forum or chat area. This is software that allows members to start conversations and ask questions. Then other members can answer and the software keeps track.

You also want a way to collect payment online, whether from credit cards or Paypal.

Additional features can be online courses, monthly live webinars and discounts for members.

With the right group of members, conversations and engagement can happen without a lot of involvement from you. At least eventually.

Membership websites are a growing industry and can become a great passive income source.

Ratings: Membership Website 




Summary: Membership websites can develop into significant passive income. They can take a long time or large audience to get started. Again, engaging a specific audience is key. Membership software is pretty turnkey today, but you'll still have to deal with significant technology set up.

#5 The Sharing Economy

5 passive income ideas - sharing economy


The Sharing Economy just means getting paid to share assets your already own.

Ever heard of That's the sharing economy. You share a room, house, apartment with someone and they pay you.

But it's not just real estate you can share.

There are lots of online platforms to share different assets. These websites let you post an asset for rent. Then people who need or want that asset can search and pay for it.

Instead of having a valuable asset (house, boat, car) just sit there, you share it with someone and get paid.

This may be the quickest and easiest way to start a passive income.

The sharing economy has become a huge opportunity for people all over the world.

Instead of having valuable assets sitting idle, you are able to share those assets and get paid for it. 

While may be the most well known, there are dozens of platforms on which to share your stuff. And you can get paid handsomely for many of them.

The reason the money can be good is you share for short time periods. For real estate, think about a hotel vs. renting an apartment.

The apartment you likely have to rent out for a minimum of a year. Let's say the rent is $1,000 per month. That's $12,000 for the year.

On you might rent the same apartment for $200 per night. Let's say it get's booked on for an average of 10 days per month.

That's $2,000 per month, $24,000 per year. Double what you would get paid in rent. And that's with it booked only a third of the time.

Of course, the drawback is you may have to clean and reset the place more often. Or you can build those expenses into the nightly rate.

If you're working on your first passive income source, the sharing economy may be the best place to start.

Check the Resources section for examples.

Have you thought about sharing your house, boat or car?

Ratings: Sharing Economy




Summary: The Sharing Economy can provide a quick, easy income source. But because it usually involves a physical asset (home, boat, car, etc.) there is a limit to how much you can scale it. Certainly the easiest way to generate income if you have physical assets.

So which passive income idea will you start?

You're not getting any younger. If you have any inclination to have your own business, these 5 ideas are a great place to start.

Your future self will thank you for starting now. I promise.

This is your year to start!

Tommy Sikes

What to Read Next: The 3 Levels of Passive Income