Who doesn't want to earn more income without doing more work every day? Setting up a passive income stream sounds like a dream come true for busy parents. Yet it might take more effort than you'd think.

Before you get started, it's important to note that even passive income requires work. So what distinguishes it from your usual day job or side hustle? Typically, most of that work takes place upfront — leaving you free to keep earning afterward. Over the long term, if you do it right, you can reap the rewards of your initial efforts.  

Whether you're a stay-at-home parent or you already have a day job, extra padding in your bank account is always welcome. Read on for tips about earning passive income and a few ideas for getting started.

What is passive income?

Passive income usually stems from an endeavor that requires work to set up — but once that work is completed, money continues to flow on an ongoing basis without requiring much time or effort on a day-to-day basis.

"The IRS definition of passive income is any rental activity or any business in which a taxpayer does not materially participate," explains Tony Steuer, financial preparedness advocate, author and podcaster. 

What are the benefits of having passive income? 

Having passive income can be a helpful way to diversify your earnings and boost your bank account, without placing unreasonable demands on your time. 

"Why it would be of interest to parents, and basically of interest to anybody, is it's income that's generated in the future from either limited activity or past activities, so the idea is having your money work for you," Steuer says. "The more passive income you have, the more you can become financially independent or partially financially independent, which allows you more freedom."

Passive income ideas

1. Create your own YouTube channel

If you're a people person and the camera loves you, consider starting your own YouTube channel and building a following. If you can get enough subscribers or views, you'll be able to earn ad revenue of about 10 to 30 cents per view, paid out directly by YouTube. 

You can also earn money through affiliate marketing, which is a fancy way to say that you can earn commissions if people buy products that you recommend and link to in the description section of your video. The work involved happens upfront when you record the content, but once it is live, you can keep earning with minimal effort.

2. Create a blog

Prefer to communicate through the written word? Instead of making videos, you can create a blog to share your thoughts with the world. You’ll want to think about your target audience and come up with a theme or an approach that allows you to develop helpful or interesting content that will keep them coming back. 

Similar to YouTube, you can earn money through advertisements or affiliate links if you can attract enough readers. In addition, some bloggers will write sponsored posts where they mention or review products in exchange for a fee. 

3. Sell stock photography

The market for stock photos ranges from homeowners looking to adorn their walls with scenic snapshots to marketing professionals searching for just the right image to go with their company's new website. With the power of the internet, you can easily peddle your photos to millions of potential buyers. 

Before you start shooting, research potential websites that can help sell your photos, like Shutterstock, Getty Images, SmugMug, iStockPhoto or Zenfolio. You can get an understanding of what types of photos are popular, and talk to other photographers about what lessons they've learned. 

Keep in mind that maintaining your inventory does take time, though. "I sell digital content so I don't have to create orders, or deal with physical product or shipping," says one What to Expect Community mom. "I make money regardless, but I can't grow it right now with my young babe. There's just not enough hours in the day. I'm only able to dedicate about 10 minutes a day to messages."

4. Write an e-book

Whether it's a romance novel, a self-help treatise or a children’s book, self-publishing an e-book can be an enjoyable way to explore your creativity with the possibility of earning passive income through sales, if you're successful. 

Just make sure that your expectations are realistic — no matter how much of a page-turner you write, it's a mistake to assume that "if you write it, they will buy it." If you don’'t already have a built-in audience, you'll need to come up with promotion strategies to drive sales. 

5. Rent out a room 

This is a great option if your house has a garage apartment or is mother-daughter style (sans your in-laws moving in). You may be able to turn this unused space into an income generator without too much effort by finding a renter. 

"I live in a tourist city, so I Airbnb my basement," says one What to Expect Community mom. "[There's] nothing special down there — just a clean bedroom, bathroom and TV room."

If you don't want strangers traipsing through your house or property all the time, a long-term renter can be a good option — perhaps a college student or recent graduate who may not be able to afford their own place. You can also advertise through your own networks if you want to find someone whom a common acquaintance can vouch for. Remember to look into your local zoning laws to see if you need a license or permit first. 

6. Get your investments in order

"Set it and forget it" investment strategies can really pay off over time. Instead of letting money just sit in your bank account, consider whether you could be earning more by diverting that money to other assets, such as interest-generating CDs or mutual funds. Of course, when you invest in the market, it’s important to remember that losses are possible, too. 

"Investment income is definitely a huge part of [passive income strategies] because that's what retirement is: having enough income so you can live passively off of the interest generated on your income portfolio," Steuer says. 

Don’t know where to start? Try calling your bank or any financial management company and asking if they offer free investment advice. 

Do your research 

Passive income can be a dream come true — when it works. But it often takes lots of planning, skills and resources to succeed, along with a little bit of luck. Even then, you may not see rewards right away, and the rewards that you do see can vary.

"I think that you need to look at not only how much money you can make, but how much it's going to cost you in dollars and how much it's going to cost you in terms of time," Steuer says. 

If you're spending that time on something you’d enjoy doing anyway, however, like writing a blog or taking pictures, it could be a win.

Before you begin your quest for passive income, talk to others who have done it before to learn about possible pitfalls and how much you may be able to earn as well as what they wish they knew before they started. That way, you can make a more informed decision on whether pursuing passive income makes sense for you.