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What Is Passive Income and How to Build Passive Income Streams
What Is Passive Income and How to Build Passive Income Streams
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What Is Passive Income and How to Build Passive Income Streams

Doris Kendi
November 10, 2021

Although it might be cool to get a steady paycheck from a 9 to 5 job, deep down, we all know that we want more, and deservedly so. We want more money. We want to afford more, provide more for our families, and probably afford one more vacation in a year. 

And it is possible!

Imagine waking up in the morning, you open your banking app, and there is a new Ksh30,000’ deposit that was not there last night. How would that feel? Like free money, right? This is the kind of magic passive income-generating activities can bring into your life. Pleasant little surprises every so often. 

But how is that possible with your already busy schedule? 

In this article, we give a picture of what passive income is and how you can create one for yourself. 

What Is Passive Income?

The textbook definition of passive income is money earned without the individual’s active participation - includes income from rental property, limited partnership, or other activities that do not require active participation. 

Passive income has to be one of the most delightful ways to make money. Imagine money flowing in at regular intervals without the need to put in too much effort - it feels a lot more like free money.

I know you are thinking, ‘I do not have rental property or limited partnership.’ Well, do not worry. 

There are many other sources of passive income that require a lot less initial investment and effort. For example, if you create an online course, you might need to put in only a few hours or days of hard work, and once published,  the content will require little to no effort to keep the money flowing in.

Examples of What is and is Not Passive Income

There is usually a lot of confusion about what is and what is not passive income. That’s why before we proceed further, it is important to clearly understand what is and what is not passive income.  

There are three different types of income: 

  • Active income
  • Passive income
  • Portfolio income

The salary from a 8-5 job is an active income. The income you receive from investments, interest from your fixed deposit, and even capital gains are all portfolio income. 

The table below shows what is and what is not passive income:

Examples of Passive Income Stream You Can Start in Kenya

Selling your own digital products e.g, e-books

The world is going digital. We are in an era where people are spending more time online than having face-to-face conversations. So why not use this to your advantage. 

For example, technological advancement has allowed people to read books more efficiently on their mobile phones than to bring around a physical book. As such, the popularity of e-books and audiobooks has significantly risen in the past decade and is still steadily rising. 

Hence, you can write a book and publish it online on sites like Amazon Kindle Store, then sit back and perpetually enjoy your money. Other digital products include;

  • Online courses. Perfect for people who are experts in certain fields, e.g., Farming, affiliate marketing, accounting, data science, etc.
  • Software programs or Mobile applications. If you have some programming experience, you can create a software program and sell it on app stores. 
  • Audiobooks. If writing is not for you, why sell the audio online. Quick research will give guidance on how get started on this.
  • Educational products. For example, you can create a website and pull together resources that are useful for school candidates who are sitting the national exams.


Do you have a spare room in your home? Well, you could make a quiet kill by renting it out to travellers and providing a local home experience. It is a great way to make some extra shillings with very minimal effort and investment. 

All you need to do is furnish it (or not, depending on its current condition), log on the Airbnb website and register your business, then enjoy some passive income while meeting new people from all over the world. 

Blogging and affiliate marketing

This is by far the best passive income source but also not very popular. But this is not to mean that it is easy to create. There is more that goes into creating a successful blog than just creating a few articles and posting them on a blog site. 

With a successful blog, there is no limit to how much passive income you can make - once it gains traction, your site will start bringing in traffic whether you put in any additional time or not.

In addition, you can combine the blog’s success with affiliate marketing and make bank - every time someone makes a purchase through your link, you get a cut. 

Sell stock photos

Now, this is for the photos and photography lovers. If you have a good camera or even a decent smartphone camera and enjoy taking pictures of yourself, nature, different scenarios, animals, etc, then you can publish them on sites like Shutterstock and earn every time someone uses your photo.

This is a cool way to enjoy your hobby and earn from it at the same time. 

Car rental services

If you have a car you are not using, do not let it sleep in the parking and gather dust, rent it out and earn income from it. All you need to do is get a commercial insurance and a reliable tracking device for security, and then you can rent out the car monthly or even on-demand. 

Alternatively, you can hire a driver and register your vehicle on Uber, Bolt, or the other taxi apps available in the market. 

Start a YouTube channel or podcast

Now, this is definitely not for everyone. To gain traction on YouTube and be able to earn anything from it, you need to be able to provide value or at least provide something that will interest an audience. 

However, this is the coolest way to make a passive income if you ask me. For example, let's say you enjoy cooking. You will be able to have great fun inventing new recipes and making fun videos of you cooking these recipes. And once published, these videos will earn you an income for as long as they remain online - read years and years to come. 


This is another good example of a passive income source. But it might need a huge initial investment. 

With rentals, you only need to hire a property manager (or a caretaker as they are commonly referred) and then just wait for your money to come in every month. 

Subsequent maintenance costs are typically passed on to tenants. 

Wrapping Up

There is a saying that I really like, ‘there is no school that teaches you how to be street smart.’ 

In my opinion, there has never been more truth in one sentence. To make it in this country and especially with the current economic situation, you need to be more than just your ‘degree.’

However, with that said, remember nothing comes easy. Nothing mentioned in this article is a make-money quick scheme. It is all about determination, diligence, and commitment. A lot of hard work and discipline will have to go into any of these ventures. 

Now go for it. Good luck. 

Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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