What's the best way to monetize a newsletter?

The easiest to start with is as already mentioned Affiliate marketing - very low barriers to entry and doesn't cost the reader anything. Beyond that you'll have to provide so great value to either the brand (for sponsored posts) or the reader (for subscriptions)

As a marketer that has advertised in niche newsletters, I recommend Swapstack for connecting with advertisers. Hecto and Letterwell are two other good options. Depending on your niche, it's worth reaching out to tools/products/services you personally use and vouch for, and asking if they would be interested in sponsoring your newsletter. For advertisers, we usually see the best engagement when we're working with newsletter creators who can include a word of support alongside the ad. That synergy also gives you more flexibility to be creative with your ads and less salesy.

I would suggest to focus on one topic, build a community and when you deliver real value start with a paid option additionally. Have a look at Trends.vc or Bankless I love both and I'm paying a subscription for them.

When you already have an audience then why not drive your audience to your website and offer subscriptions? A paywall restricts online content access to paying subscribers. It’s software that shows a preview of your content but prevents the reader from seeing it fully without first subscribing to your platform. This is like a membership site, but it’s much simpler for subscribers as it takes only one click to make the payment. If you are writing about niche topics, run a small news publication, have a premium podcast, or any other valuable content, a paywall might be the best monetization method.