7 Best Passive Income Ideas To Build Your Wealth in 2026

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7 Best Passive Income Ideas To Build Your Wealth in 2026

Laura Beck

Thu, January 22, 2026 at 8:01 AM EST

5 min read

If you want to get rich in the short term, simply working might not be enough. However, if you want to focus on long-term financial goals, you need to start generating passive income as soon as possible. January is a great time to start.

It can be confusing and overwhelming to figure it out on your own, so to help you get started, GOBankingRates consulted financial experts to uncover the best passive income strategies for the new year. From low-risk options to high-yield opportunities, these investments can help you increase cash flow, diversify your portfolio and grow your wealth without taking on a second full-time job.

While there are no perfect scenarios, here are seven proven passive income ideas to help you build financial security in 2026.

1. Invest in Dividend-Paying Stocks for Steady Cash Flow

Dividend-paying stocks remain the gold standard of passive income investing. Erika Kullberg, an attorney and personal finance expert at Erika.com, thinks it’s a no-brainer as long as you have the funds to get started.

“Dividend-paying stocks can provide consistent income, along with the potential for capital appreciation,” she said, “once you have the capacity to make a sizable upfront investment.”

These stocks offer regular payouts to shareholders, meaning you have a steady income stream. Additionally, as Dutch Mendenhall, founder of Radd Companies, pointed out, they offer “the potential for long-term capital gains.”

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2. Get Exposure to Real Estate Via REITs

Real estate investment trusts (REITs) continue to be a popular choice for generating passive income. “Real estate, particularly through fractional ownership and REITs, remains a top choice for generating steady income while benefiting from property appreciation,” Mendenhall said.

Kullberg echoed this sentiment by noting, “REITs offer another attractive option, as they give you good exposure to real estate markets while earning dividends, and importantly, they don’t require you to manage any properties directly.”

This is a great option for investing in real estate if you don’t want to necessarily deal with the people that come with earning money through rental income.

3. Consider Index Funds and Exchange-Traded Funds for Long-Term Growth

If you’re looking for broad market exposure with minimal effort, index funds and exchange-traded funds (ETFs) are excellent options.

Mary Tung, founder and CEO of Lido.app, mentioned a few specific funds to consider. “A good fund to buy would be, for example, Vanguard Total Stock Market, Vanguard Total Bond Market Funds, Vanguard Total International Stock Market, and Vanguard Total International Bond Market,” she said. “They have low expense ratios and high levels of asset class diversification.”

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You can also consider ETFs. “Like index fund investments, ETFs have the same structure but behave as stocks. They also have the same low-cost and diversified benefits,” Tung said.

4. Earn Interest with High-Yield Savings Accounts and CDs

In the current environment of high interest rates, high-yield savings accounts and certificates of deposit (CDs) are worth looking into for earned interest payments alone.

“First off, any excess cash should be placed in a money market account. Most are yielding around 5% at a time when CPI is now back down towards 2.9%. That yield differential is a no-brainer,” said Anthony DeLuca, CFP, an expert contributor at RetireGuide.

Kullberg also liked this idea. “For more low-risk options that can still provide passive income, you could consider high-yield savings accounts and/or certificates of deposit (CDs),” she said. “Both of these methods can generate passive income through interest, albeit at a relatively modest rate that makes them more suited to long-term growth.”

5. Build Wealth Through Peer-to-Peer Lending Platforms

Peer-to-peer lending platforms offer an innovative way to earn passive income. Mendenhall said these platforms “provide lower-risk avenues for earning interest on your money with minimal effort.”

How it works is pretty simple, too. You act as a lender to individuals or small businesses, potentially earning higher interest rates than you would with a traditional savings account. If done well, this can yield you higher annual returns than a savings account or even some stock market options.

6. Generate Rental Income Through Real Estate Investments

If you’re willing to take on a bit more responsibility, rental properties can be a great way to earn passive income. “Rental properties have been a reliable source of passive income,” Tung said. “You purchase a house, put tenants in, and in return, they pay you every month.”

However, she did offer a word of caution. “This strategy comes with some initial cash outlay and effort in terms of management of tenants and repairs,” she said.

That being said, the payouts can be worth it in some cases. “Returns can be quite significant due to capital appreciation in property over time,” she said.

7. Create Digital Products for Ongoing Royalties

In the digital age, creating and selling digital products has become a passive income way of life, and 2026 is looking to expand on this concept. “Self-publishing e-books or making some … digital products such as Notion templates is a way to earn passive income,” Tung said. “Once the digital products are made, they can be sold over and over with marginal effort after that.”

Annie Cole, founder of Money Essentials for Women, recommended leveraging your expertise. “Offer freelance or gig work in your area of expertise,” she said. “It’s never been easier to connect with potential buyers online who would be interested in your services, whether you offer fitness coaching or train people on how to enter data in Excel.”

Caitlyn Moorhead contributed to the reporting for this article.

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