Top Ways to Earn Passive Income with Investing in 2025

Imag­ine wak­ing up, grab­bing your cof­fee, and see­ing that your bank account grew a lit­tle… while you were sleep­ing. No extra work, no side hus­tle, no answer­ing emails at mid­night. That’s the mag­ic of real pas­sive income.

In 2025, we’re lucky—there are more legit ways than ever to put your mon­ey to work with­out babysit­ting it every day. Here are the top ones that actu­al­ly make sense for nor­mal peo­ple (not just the ultra-rich).

1. Dividend Growth Stocks & ETFs (Still the King)

Com­pa­nies that pay you just for own­ing their stock? Yes please.
Look for “div­i­dend aristocrats”—big, bor­ing com­pa­nies that have raised their div­i­dend every year for 25+ years (think Coca-Cola, John­son & John­son, Proc­ter & Gam­ble).

Even bet­ter in 2025: Grab an ETF like SCHD or VYM. You get instant diver­si­fi­ca­tion, super low fees (0.06%), and they’re yield­ing 3–4% right now with grow­ing pay­outs. Set it, for­get it, and watch the quar­ter­ly deposits hit your account.

2. High-Yield REITs (Real Estate Without the Landlord Drama)

Want rental income with­out fix­ing toi­lets at 2 a.m.? Real Estate Invest­ment Trusts (REITs) are your friend.
In 2025, some sol­id ones are pay­ing 5–8% div­i­dends because inter­est rates final­ly cooled off. Favorites right now:

• Real­ty Income (O) – lit­er­al­ly called “The Month­ly Div­i­dend Com­pa­ny”
• Agree Real­ty (ADC) – triple-net retail prop­er­ties
• Inno­v­a­tive Indus­tri­al Prop­er­ties (IIPR) – yes, cannabis ware­hous­es, and it’s been crush­ing it

You own real estate. Ten­ants pay rent. You get mailed a check. Done.

3. Covered Call ETFs (The New Kid Everyone’s Talking About)

This one feels like cheat­ing (in a legal way).
Funds like QYLD, JEPI, and XYLD own stocks and sell options on them to cre­ate extra income. Cur­rent yields? 8–12% paid month­ly.
Yes, there’s a small trade-off in upside dur­ing huge bull runs, but most peo­ple are per­fect­ly hap­py col­lect­ing $800–$1,200 a month on a $100k port­fo­lio while the mar­ket just does its thing.

4. Private Credit Funds & BDCs (The 9–12% Zone)

Inter­est rates went up, so lenders are mak­ing bank—literally.
Busi­ness Devel­op­ment Com­pa­nies (BDCs) like Ares Cap­i­tal (ARCC) or Main Street Cap­i­tal (MAIN) lend to small and mid-sized busi­ness­es and pay you 9–11% div­i­dends. Many go month­ly now.
New­er plat­forms (Yield­street, Per­cent, Ground­floor) let you get in with just $1,000–$10,000 and still pull 8–14% on pri­vate loans. Not as liq­uid as stocks, but the yields are juicy.

5. Broad Market Index Funds + Automatic Reinvestment

Not sexy, but it’s the foun­da­tion.
Put mon­ey into VTI or VXUS, turn on div­i­dend rein­vest­ment (DRIP), and let com­pound­ing do the rest.
This isn’t “income” today if you’re young, but in 15–20 years it becomes a pay­check you nev­er have to work for. Many peo­ple in their 50s–60s now live com­plete­ly off this.

6. Bond Ladders & Treasury ETFs

Rates are still decent in 2025. Lock in 4.5–5.5% on Trea­sury notes or use funds like SGOV (ultra-short trea­suries) and BINC (active bond ETF) that pay month­ly.
Zero dra­ma, backed by the gov­ern­ment, and your mon­ey comes back when you need it.

7. Royalty Income (Yes, This Is Real)

Buy tiny pieces of song cat­a­logs, oil wells, or even solar farms through plat­forms like Roy­al­ty Exchange or Ener­gy­Fun­ders.
Peo­ple are qui­et­ly mak­ing 7–15% per year own­ing frac­tions of things that just keep pro­duc­ing. Super hands-off once you’re in.

8. Automated Robo-Advisors with Tax-Loss Harvesting

Wealth­front, Bet­ter­ment, and M1 Finance now do almost every­thing for you—including har­vest­ing loss­es to save on tax­es and rein­vest­ing div­i­dends.
You lit­er­al­ly set your risk lev­el, fund it, and walk away. Many offer 4–7% pro­ject­ed income port­fo­lios built around ETFs.

How to Actually Get Started in 2025

1. Max your retire­ment accounts first (401(k) match = free 100% return)
2. Open a reg­u­lar bro­ker­age (Fideli­ty, Schwab, Vanguard—zero fees now)
3. Pick 2–4 of the ideas above that match your risk com­fort
4. Set up auto­mat­ic month­ly invest­ments (even $200–$500 adds up crazy fast)
5. Turn on div­i­dend rein­vest­ment and for­get about it

The Golden Rule

Nev­er put mon­ey into some­thing just because the yield looks high. If it sounds too good (12%+ guar­an­teed with no risk?), run. Stick to things you under­stand.

Pas­sive income isn’t about get­ting rich tomor­row. It’s about build­ing a sec­ond pay­check that shows up whether you’re on vaca­tion, retired, or just hav­ing a lazy Sun­day.

Start small. Stay con­sis­tent. In a few years you’ll won­der why you didn’t do this soon­er.

Which one are you try­ing first? Drop it in the comments—I’d love to know! 🚀