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How to make passive income


Picture yourself on a boat on a river, as they say. Imagine you, relaxing, knowing that someone, somewhere is giving you money that you’re not directly swapping hours of your life for.

That’s passive income – when one of your assets makes you money on its own. It’s the only reliable way to get wealthy… but only if you can find an asset that will work for you. Assuming you’re a regular person, the asset that would work best for you is… your assets!

Whatever your angle, there are two approaches to passive income from the financial sector. There’s an investment (where, generally, your capital can go up or down in value while it’s generating income), and savings, where your capital stays the same (aside from bank fees and inflation) and you are given interest on your assets.

The world of non-Crypto investment is too large and varied to write about helpfully, but interest rates have been low for a long time in the savings arena. In a high-inflation time like ours, the interest is nowhere near making up for your savings being ravaged. In the investment arena, it’s also hard for normal people to make a decent return even in the medium-to-high risk investment categories.

Cryptocurrency, as a new sector that the banks have largely avoided, has much more opportunity for returns: even low-risk ones. But let’s look at the options.

Interest-Bearing Asset Accounts – AQRU

By far the simplest to understand and get going is interest-bearing asset accounts. At AQRU, we borrow and look after your Crypto tokens (we take Bitcoin and Ethereum) or your Stablecoins, which are coins that track a real-world asset less risky than Crypto. We accept USDC all of which track the US Dollar. While your Crypto could go up or down in value, the interest rate/yield you get from AQRU is 0% (Crypto) or up to 7% (Stablecoins), which compares favourably with interest rates in the traditional finance sector.

Other companies do offer interest-bearing asset accounts. Gotchas to watch include:

  1. The reputation of the company (how are they regulated? What are the users saying behind the company’s back?)
  2. Hidden fees, especially on deposits
  3. Tiered interest rates (some companies give less interest on bigger amounts)
  4. Conditional interest (the best interest rates are reserved for people who have fulfilled other, potentially expensive, conditions)
  5. Withdrawal fees to fiat (these could be substantial)
  6. Security measures put in place

For reference, AQRU is an Authorised Digital Assets Provider and well-reviewed, has a flat, simple-to-understand interest rate, and the only fee is $20 to withdraw into Crypto (with no fee for withdrawing into regular currency). You can buy Crypto assets in the AQRU app to save on hassle and transmission fees from exchanges, though there would be third-party transaction fees from our payment provider MoonPay. AQRU has hired one of the best companies in the world to provide security to safeguard customer assets.


There are various platforms that you can join, register, and start lending to people all over the world for interest rates you define (take that, banks!). The system manages the transactions, competitive bidding, etc. Sounds good? Well, there’s one major problem: you’re lending to people all over the world. “People” is a problem, because people are unreliable. “All over the world” is a problem because of jurisdiction.

The net result is that the risk that any loan won’t be paid back is really rather high.

Cloud Mining

No, you can’t mine clouds, that would be silly. However, you can mine some Cryptocurrencies, namely the ones that are driven by “proof of work”.

That is, new coins/tokens created through computers all over the world competing to solve mathematical puzzles by brute force. It’s rather like a game of “Battleship” with a vast number of possible squares and the size of the squares narrowing every so often.

In the old days, you could mine Bitcoin with a regular computer. And it was worth very little back then. Nowadays, to do mining in your house, you need to spend thousands on equipment and join a mining pool to co-operate with large numbers of other computers.

Of course, that’s not a sensible thing to do, not least because the equipment is really noisy and you’d never get any sleep.

Companies have been set up that allow you to rent processing power from them. They then lend that power to mining pools, and you get a tiny share of any Bitcoins they find. Some cloud mining companies such as Shamining offer as much as 40% return on your money, though they’re vague about timescale.

This strategy is different to the other strategies because you have “spent” your investment and must hope that your return covers that and makes a profit. Profit calculators on their websites are generally meaningless because they usually don’t consider future changes to the difficulty in finding Bitcoin. Sometimes they don’t include their hidden fees either.

If you’re going to go down this route, due diligence is your friend. Check reviews and look at the company very carefully indeed. Cloud mining companies have collapsed before in Bitcoin bear periods, and they might well again.

Proof of Stake (PoS) Staking

Some of the currencies that aren’t “proof of work” are “proof of stake”: that is new coins are generated by rewarding existing coin-holders who “stake” tokens and then process transactions for the coin. The rewards are distributed based on the amount staked, the time it’s been there, and a bit of randomness.

In general, returns from this strategy are similar to interest-bearing asset accounts. There’s a vast choice of coins you can stake, though many of the smaller coins exist to draw the inexperienced in and keep their tokens.

There are a few downsides:

  1. You can only do one coin in one place.
  2. You need to be online and processing transactions 24/7 (staking your coins gives you the right to process transactions, but it’s processing transactions that give you the reward).
  3. It’s more technical than interest-bearing asset accounts.

Yield Farming

This strategy involves taking the yield (i.e. interest) from one place and moving it to another place to optimise your passive income. In theory, this spreads your risk around and results in the greatest return.

So, you don’t need tractors to plough the yield field. But you do need to spend an awful lot of time and have an awful lot of experience to get it right.

There are a number of problems with this strategy:

  1. Moving goalposts – the optimum strategy might change from day to day, and even from hour to hour because Cryptocurrency is a fast-moving development.
  2. Moving tokens about is currently way more expensive than it should be until an upgrade to Ethereum 2.0 happens. Every time you move Crypto anywhere, you lose a chunk of it.
  3. It requires you to be extremely well-informed: in fact, it requires you to be actively engaged with Crypto on a daily basis.

Hard work for passive income.

Pros and cons of earning passive income with Crypto

By now, the pros are rather obvious: you get more return than traditional finance.

The cons? Well, yes, in the world of Crypto there are plenty of them, which is why you have to be careful.

What now?

If you’re of a mind and think that interest-bearing asset accounts might be for you, why not try AQRU? We give you a 10 dollar USDC no-strings investment to start with, so you can see the interest being added per second (it’s calculated daily).

There’s a $75 referral bonus (terms apply), and you can fund your account from a debit card, bank transfer or buying Crypto in-app with our payment provider “MoonPay”. There are Apple and Android apps, and our website is also highly useful. So what are you waiting for? Sign up for free today and start earning a passive income from Crypto!

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