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10 Passive Income Ideas for Software Developers

Qualified software developers are more in demand than ever before and the digital age has created many passive income opportunities for software devs to make passive income. According to the U.S Bureau of Labor Statistics, “employment of software developers is projected to grow 22 percent from 2019 to 2029, much faster than the average for all occupations.” (source). However, such a job usually entails an hourly rate and a fixed salary. If you are looking to trade your active salary for passive income, you are in the right place.

How can you earn passive income as a software developer? Software developers can make passive income in a variety of ways from selling their own software, creating and selling chatbots, running or flipping monetized blogs, sharing their skills on YouTube, automating QA, affiliate marketing, selling their tools, and gaming. 

Software development is a broad and extensive field and there are numerous opportunities for generating passive income. And so, here are ten passive income ideas for software developers. 

1. Selling Chatbots 

Chatbots perform many useful customer service tasks like greeting visitors, collecting user information, answering common FAQs and assisting companies to increase their productivity and enhance customer relationships.

As a software developer, you can create chatbots and make passive income by selling them as a service, using them for advertising, affiliate marketing, lead generation and more. Bots as a Service (BAAS) is becoming a popular way to make passive income from chatbots. Companies are looking for chatbots that can effectively handle their most common, repetitive and demanding tasks.

With the right industry choice depending on your interests, and flows that are adapted to their specific needs, you can earn a decent passive income creating and selling bots as a developer. Learn more about how you can make passive income from your bot in our chatbot for passive income guide.

2. Blogging

Blogging as a passive income idea may seem overdone but it is still highly valid today. Have you ever searched for something in your field and not found a relevant answer to your search term? That is an excellent blogging opportunity. You probably are not the only one searching and not finding answers. And that is where most bloggers fail – they cover topics people are not searching for and therefore do not get any traffic, and ultimately make no passive income.

As a software developer, you can share your hobbies or knowledge and skills with passionate and aspiring developers through a monetized blog and make passive income. The problem with blogging is not knowing how to generate sustainable traffic for passive income. Valuable resources like income School’s Project 24 offers effective blogging strategies to help you make over $1,000/month with a monetized blog. You can learn how to make a successful niche blog in our blogging for passive income guide.

Even though there are hundreds and thousands of bloggers, still today, blogging can generate excellent monthly passive income. But what most bloggers get wrong is their approach since they usually blog about their day or about themselves without considering what people are actually searching for. And it makes sense – it’s hard to find a clear blogging method specifically for passive income. Some internet marketers ruthlessly promote their keyword tools, others talk about link building which is a very outdated SEO method. We spent a lot of time looking for an up-to-date blogging method that can actually generate passive income, and finally found it when I tried Project 24. Learn more about Project 24 here.

3. Automating Quality Assurance 

Automated quality assurance testing is extremely important, especially for software-as-a-service companies. Software companies rely on Quality Assurance testing to validate code quality, prevent bugs, reduce risks, reduce costs and overhead. Excellent quality assurance also reduces the burden of customer support since bugs can lead to floods of calls. 

As a software developer, your development skills can be an essential asset to the core business in need of SAAS companies. It does not matter which business niche you choose; automated testing can verify code, run tests and validate software functionality faster than a team of human testers.

Therefore, offering QA testing automation services can be an excellent source of passive income. You can find initial clients by cold-pitching to companies or joining freelancing boards. Moreover, you can make this idea more passive if you create your QA processes for free and then charge recurring monthly or yearly fees for software use.

4. Affiliate Marketing

As a software developer, there probably is software that you use, and love, and would not mind promoting to other developers. If so, then you might want to consider affiliate marketing. Identify your favourite tools and inquire if they offer affiliate programs. They can most often be found in the footer of the website. If they do, you only have to sign up and promote the software on your site or channels by telling your audience about its benefits and why you love it. 

If someone purchases the software via your affiliate link, you can make a commission on that sale. Commission rates vary but can range from a flat Dollar amount to a certain percentage (usually between 5% to 50% depending on software). Currently, Amazon is one of the most popular platforms for affiliate marketing since the barriers to entry are low. Although it requires patience and dedication, affiliate marketing can be a lucrative passive income stream for software developers. For detailed information, learn more in our affiliate marketing guide.

5. Selling Your Tools & Assets

One way to increase your passive income is to sell your custom coded software tools. If you created custom software in the past to save yourself time or money on a project, and you believe it can be useful for other developers, you may be able to sell the code to others in need.

Try to think of any pieces of software or tools you created that saved you time and have the rights to sell. If you do not need to update the code, you can sell for a flat fee. However, if you believe your code will need updating in the future you could sell it for a monthly or yearly recurring fee online.

You can make money by making the software development process easier for beginners or experienced developers who are looking to write their own code faster, to improve their dev processes or to save time. 

6. Gaming 

Nowadays, many developers have turned into gaming enthusiasts and some are transforming this widespread passion into a lucrative passive income stream. Sites like Twitch and YouTube are excellent platforms to showcase your gaming skills and make passive income while at it. Numerous players are eager to improve their skills or just hang out in a community with other players online.

As a software developer with an interest in gaming, you may have a perspective that has not been explored much on such platforms. For example you could give insights into the design, structure, and coding practices behind building games.

Such expert and niche tips can increase your audience’s willingness to spend money to watch you play. Some ways to increase your passive income with this idea are also doing affiliate marketing and eCommerce. You can learn more in our passive income gaming guide.

7. Selling Your Own Software 

Creating software can be a long and hard process, from finding a problem your software can solve to developing it and selling it. However, if made to be sold passively, selling software can be an excellent way to make passive income. You do need to be careful to ensure that your software is evergreen, meaning your code does not require constant updates or customer support. Otherwise your project will not be as passive as you hoped.

After you have put in the hard work, your software could be sold repeatedly to companies or individuals looking for what you have created. Rather than focus on marketing to people, you will want to find those that need your solution before even getting started.

If you already found a niche you are interested in and can serve well, or already have an audience that needs what you can develop, make sure that you thoroughly understand their biggest pains in order to solve them with your software. Some popular reasons businesses need software are to increase productivity, lower overhead and thus reduce costs, gamification, or to improve finances.

8. YouTube 

Software development is more and more in demand and as someone with these skills, you can share your software development knowledge through videos and earn a passive income online. YouTube has become a credible and compelling platform for sharing information, and with the right content and strategies, you can start a channel, monetize it, and earn over $1,000/month (source). 

However, you must be aware that building a successful YouTube channel is not easy and requires a lot of consistency and dedication, especially at first. Currently, you must have at least 1,000 subscribers and 400k hours of watch time within 356 days for your channel to be considered by YouTube for monetization. But, there are proven ways to achieve these milestones fairly quickly.

You can learn these and other tips for turning your channel into a passive income source from Ricky and Jim’s Project 24 course (of which we are members). Check out our guide for details about YouTube and how you can turn your YouTube channel into a passive income stream.

9. Creating Software For an Industry Expert

Professionals in various domains such as fitness, education, food, health and personal development have incredible knowledge and resources they would like to transform into interactive software. However, they lack the technical development skills to do so. This is where you can come in.

If you can partner with a well known professional to build software that answers their market needs, instead of getting paid a flat or upfront fee, you can request a percentage of sales for more, ongoing and passive revenue. You can then outsource or delegate ongoing maintenance, support or future development requests.

Partnering with an industry expert in a domain you are interested in to create software that answers a problem they have can be a great way to make passive income. Instead of being paid to create the software, you can get paid in equity, based on leads generated, sale volume or other more passive and creative means.

10. Developing & Selling API Bridges For Passive Income

An awesome way to make passive income as a software developer is to develop API bridges between software and charge monthly or yearly recurring fees. Many companies use multiple pieces of software that they often need to communicate together. Being built by different companies, it’s often the case that they just cannot send information to each other without connecting their APIs. Therefore, software developers can cash in on this idea by creating strong API bridges between software allowing companies  to eliminate man hours, reduce overhead, replace manual tasks with automation and save tons of money. 

If a company uses one piece of software as their sales tool, but another CRM for order management, instead of having an employee spend time manually copy/pasting information between software, an API bridge allows the two apps to communicate together directly in real time. By offering bridges as a SAAS product, you can make excellent monthly or yearly passive income. The most important work will be ongoing maintenance and support which you could always outsource to make this idea more passive.

Want even more passive income ideas for software developers and other types of developers such as web, app, game and crypto developers? Check out our 34 passive income ideas for developers article!

Related Questions

How can a software developer make passive income? Software developers can make passive income in a variety of ways from selling their own software, their custom coded tools and assets, with chatbots (for passive income), running or flipping monetized blogs, sharing their skills on YouTube, automating quality assurance processes, affiliate marketing, developing and selling API bridges for MRR, and even gaming. 

Can software engineers become millionaires? Software engineers can become millionaires but they have to keep in mind that it is easier with strong, sustainable passive income streams. Most software millionaires made their money by developing applications that answer real-world business needs. It is by creating passive income assets that software engineers can become rich, not by trading their time for money. 

Can I make money coding from home? You can make money coding from home, especially since coding requires just a computer, adapted software and a reliable internet connection. However, it also requires skills, a good business idea, a problem people need solved and your ability to actually solve that problem. The best way to make money coding from home is from a passive income idea, instead of trading your time for money.

Check out our 58 Passive Income ideas here.