passive income in malaysia
Earning Money

[UPDATED] Guide: 6 Types of Passive Income in Malaysia

Passive income in Malaysia comes in many shapes and forms. This guide will help you to navigate most, if not all available options and help you decide which one to go with. I’ll also share the passive incomes that I personally have.

Passive income vs active income

Firstly let’s make the distinction between passive and active income. Active income is what you actively work for, on an ongoing basis. Your day job is an example of this. My writing business is an example of this.

Passive income, on the other hand, requires one-time massive work, then will generate income ‘as you sleep’. It requires inactive participation – perfect for lazy smart people.

There might be some ongoing work to make sure it still generates the same or more income potential, but mostly can be left by itself. Which is cool, because then you get to do the funner things in life.

It is important to have a few steady sources of passive income. When you can’t work – by choice or by force – this will be the money to keep you going. They say that true financial independence comes when you can quit your active incomes and simply rely on your passive incomes. I think that’s true!

Related post: What to invest with RM1000 in Malaysia

Types of Passive Income in Malaysia

To the best of my ability, I have researched all the possible types of passive income that you can get as a Malaysian. If any of the information below is inaccurate, or lacking, please let me know in comments! I categorised them into six types.

#1 Property

Buy and rent out property spaces to tenants. To make this profitable, the amount of rent must exceed the amount of monthly/yearly payments you make (some of them: mortgage, insurance, renovations, taxes, etc).

The (oversimplified) steps if you want to do this type of passive income:

  • Research locations and demand (example of a good location)
  • Buy/lease the property
  • Renovate it (optional, but common in order to attract tenants and get good price)
  • Hire property agent to handle rental inquiries and draw contracts
  • Hire property manager to look after the property (optional, but not uncommon. Who wants to deal with leaked toilets?)
  • Receive rental checks monthly or according to agreed schedule

Pro: If you get tenants for the whole duration of the mortgage, you are essentially getting the property for free by the end of the term.

Con: Tenant woes; high start up cost

Alternative: REITs (Real Estate Investment Trust). Similar to above, but the property management team will do the work for you. You don’t own the property though. Also, brokerage fees. Read: 5 Things I Learned About REITs in Malaysia (From a Bursa Malaysia-Sponsored Workshop)

#2 Intellectual Property

Create/make software, apps, websites, books, songs, graphics, photographs and sell them on online platforms (either directly or via advertising revenue). To make this profitable, networking/marketing/advertising efforts must be ongoing so you can expose the product to new audiences. It’s possible to outsource and/or automate this.

The (oversimplified) steps if you want to do this type of passive income:

  • Research what’s in demand (commonly overlooked)
  • Make said intellectual property and trademark it/proof ownership (stealing happens)
  • Package it to the right target audience
  • Choose selling platforms
  • Market/advertise the heck out to the target audiences
  • Receive royalties when people buy/use it

Pro: Lower start up cost; infinite income potential

Con: Most IP don’t make much money due to too much competition; piracy; lack of marketing/advertising

This blog is an example of IP, and yes I do make money from it. Related: The Exact Steps I Use to Earn Money from Blogging

#3 Lower Risk Investments

I’m grouping a few types of investments here because they’re similar: Mutual funds (ASB, ASW, etc), fixed deposit, unit trust, stocks/shares from blue-chip companies (big, stable companies that everyone have heard of), ETFs (Exchange-Traded Funds) and REITs.

The (oversimplified) steps if you want to do this type of passive income:

  • Choose the right vehicles for you – probably the hardest part. Malay people have it good with ASB, but the rest of y’all have to research a bit more on brokerage fees that’ll eat into your income
  • Contribute monthly/yearly (you can automate this)
  • Receive dividends*, usually yearly (*to be fair, sometimes you don’t get this if the company is not profitable that year)

Pro: Easiest type of passive income to get into; great for long-term investors as you can just forget about it

Con: Not much control


#4 Higher-risk Investments (NEW)

Tricky category because higher-risk investments that are NOT scams are pretty diverse. For example, you can invest via P2P (peer-to-peer) lending platforms, ECF (equity crowdfunding) platforms, and buy into penny stocks and IPOs (Initial Public Offering)/ ICOs (Initial Coin Offering) . (Note: Are there more? Add in comments!)

The (oversimplified) steps if you want to do this type of passive income:

  • Pick a legit platform. There are many illegal platforms for these types of investment. This is the list of unauthorised investment platforms in Malaysia, as per Securities Commission. If the one you picked is in here, take your money out ASAP and report their ass.
  • Research market condition. Everyone wants your money to make money, but will they, realistically speaking? Access to industry-specific insight is a must.
  • Give money to them. There may be maximum limit that you can invest, so check with the platform.
  • Wait for them to start making profit so you can cash out.

Pro: If you’re lucky, the profit will be really good. It’s possible to get back 100% return on investment, or more.

Con: You must be OK with not getting your money back. It can be all or nothing. It’s not uncommon to lose all initial investment.


#5 Keep valuable items

Some items make great passive income as their value grows, but that’s the thing – there’s no guarantee that the worth will remain the same after some time. For example, tulip bulbs and Beanie Babies used to be sold/traded for high profits, but not any more.

That said, a few things stood the test of time, but they’re still not guaranteed. For example gold, antiques and rare collectibles. I’d even put properties and currencies in this list. Basically, things that have value, according to society at large. Some may overlap with #4.

The (oversimplified) steps if you want to do this type of passive income:

  • Make research on supply and demand, know everything about it and the market price (be expert-level, preferably)
  • Purchase said items
  • Keep said items safely and in good condition
  • Sell when the timing is right to the right buyer (to be fair, it’s incredibly, incredibly hard to get the timing and buyer right)

Pro: Suitable for already-hobbyists and experts in the field

Con: Kind of risky, you won’t know if you’ll make a profit until you sell it

#6 Referral-type Investments

I don’t like these at all, but most of you would have been exposed to some of these by now. Some are legit, but others are in the category of investment scams (read how to avoid them here). They usually make money for the top few people in the pyramid, but the rest will lose money.

The (oversimplified) steps if you want to do this type of passive income:

  • Choose a platform to be part of their network, pay their fees
  • Promote to friends, families, colleagues and acquaintances (I’d argue that this makes it borderline active income, but anyway)
  • As your network below you grows, and your referrals get their own referrals, you get income from their fees
  • Collect income

Pro: Technically unlimited income potential

Con: You’ll become ‘that’ person; if you promote HYIPs (high yield investment programmes) / Ponzi schemes, there’s a chance you’ll get harassed by people wanting their investment back (or worse, arrested for it)

My passive income streams

I love the word ‘streams’, it’s pretty refreshing to have nature references in investment. I have the image of pretty small river trails that leads to the ocean (aka my bank account). Don’t ruin that image for me pls. Here are my investments.

Lower-risk investment:

Higher-risk investment:

Valuable items:

Intellectual property:


As someone who loves the idea of constant income generation even when not working (who doesn’t!), I always look around for more opportunities. However, from years of reading up on it, I regret to say that this is most probably it.

Feel free to challenge me on this, but I do believe that whatever new passive income opportunities you may have heard is most likely investment scams. ESPECIALLY if they depend on referrals.

What do you think of this guide? Are you doing passive income, and if yes which ones? If no, which ones are you considering?

As always, if this guide helped you, share it around 🙂

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  1. An awesome article. Multiple streams of income is the way to when it comes to achieving financial freedom!

  2. Thank you for sharing this with us, Suraya. I’ve been more or less on the same journey as you searching for the best local options for passive income. I have asb, unit trust funds, and 1 investment property, but i never had the skill to pen things quite as eloquently as you. After reading your blog i think we came to similar conclusions that asb would give a pretty reliable source of annual income. Dont forget asb2, the sequel. Anyways, will wait with baited breath on your upcoming debut in the erotic arts section.

  3. I’ve spent the last hour or so reading through several articles of yours.
    Great fun and informatively helpful – love your work.
    Looking forward to your adventure in your book. When you’ve succeeded, know that you’ve got one buyer here already! 😀

    1. Thank you, Aaron 🙂 Comments like yours always make my day and inspire me to keep going!

      Thanks for supporting my future book too lol

  4. Hi Suraya,

    Im stumbled upon your blog when I google about BitCoin in Malaysia. I thought (that time) it was just a single page of blog reading about bitcoin, but I just kept going through all your article and trust me, they are all unstoppable (Mobile Legend slang for damn you’re good) and full of information.

    Wish you all the best in the blog writing and I really should promote this blog for young Malaysian out there 🙂

  5. Interesting! and yes i agree with you, those relying on referrals are usually scams!
    Well, i am more into shares and unit trust, can see that you are into cryptocurrency!
    I am new to your website, not sure if you have written before, but it would be nice to see your asset allocation too!

    1. Thanks Henry! Perhaps I will share that asset allocation, but also concerned about personal safety if share too much. Why’d I want a target on my back? Ahaha

  6. This article is what I keep coming back to, because we’re searching for basically the same thing and you’ve done most of the homework. I threw away my career at 40 and put most of my cash assets in diversified unit trust funds and an investment property, thinking I could just hang back live off the dividends. So far (its been almost a year) the most reliable income is the property. The funds, although diversified into different sectors and locations, all seem correlated in their ups and downs. Since Trump is at the helm, he farts and the market plunges, leaving my investments stuck, unless i withdraw at a loss. Rethinking the plan to put more time and energy into property.

    1. Hi Mantoya,

      Missed your comment, sorry!

      Many people do go back to properties for the appreciation value and rental income. I’m considering it myself, learning slowly. Which areas are you looking at?

  7. Hi Suraya! Would it be better to loan-finance my ASB or just put money in monthly to my ASB account? Also, between life insurance plans for “wealth creation” like the ones offered by Great Eastern and ASB funds, which would be better? For durations between 5yrs-10yrs.

    1. Hey A’rif,

      I’m a big fan of ASB loan – if you can afford the monthly payments, can’t go wrong with that tbh.

      Re: life insurance plans – ABS got one of those? Can clarify?

  8. –> Hire property manager to look after the property (optional, but not uncommon. Who wants to deal with leaked toilets?)

    Hi, on the point above, what are property managers’ charge and do they settle all issues (i.e they look for plumbers/electrician and liaise directly with tenants)? It can be useful for someone with many properties, if the chargers are not exorbitant.

    1. Hey Dinesh,

      I don’t know the charges, but I know these services are available. It’s a good idea to check on service listing platforms or even the AirBnB Malaysia fb page

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