Passive Income Ideas for Young Adults

If you are seeking to establish yourself in life, you know it is vital to have financial stability. Unfortunately, most traditional jobs are getting more demanding by the day. They’re also paying less when compared to the rising cost of living. Also, many young adults want the freedom to create, initiate, and do what they love, all of which are severely limited by a full-time job. 

Are you one of those looking for a way to increase your earnings by adding side hustles to your full-time employment? This article looks at some possible income streams you can pursue and provides a few success stories.

Unlocking the Power of Passive Income

When looking for ways to become financially independent, you must have come across the term “passive income.” Earning this type of income involves doing something new and reaping its financial fruits months or years down the line without additional effort. This is an initiative that keeps on giving.

While this does not mean that you will not be working on your passive income stream after setting it up, your additional effort will enhance what you initially set up, increasing your potential revenue. It is unlike conventional jobs, where your effort determines just the next payout, meaning that you have to work for every dollar earned.

There are several passive income streams that you can explore and create substantial recurring revenue from your efforts. Here are a few benefits to unlocking the power of passive income: 

• You do not actively trade your time for dollars. Instead, you reap the rewards over time.
• Passive income streams can help you generate wealth rather quickly as you put in less time and money as the ventures grow compared to traditional side gigs and 9-5 jobs.
• You free up more time to focus on other activities, including spending time with family, traveling, or building additional sources of income.
• Passive income helps you build a safety net to cover unexpected expenses or financial gaps in traditional income sources. 

The first step to passive income generation is figuring out what stream to pursue. Then, determine what you need to have the stream up and learn. Go through the various income-generating streams we will share in the section below to select one that matches your skills, financial goals and situation, investment risk appetite, and comfort level. You do not have to be perfect in any area to get started. The earlier you get things moving, the closer you are to meeting your goals.

Why Is It Important to Start Thinking About Passive Income Early On?

Be sure to start thinking about passive income before you are too deep into financial problems and fail to meet your goals. It would help if you began with whatever you have at hand as soon as possible. Here is why this is important: 

• You Achieve Financial Freedom Early in Life 

Many people are unable to reach their full potential and live the life they wish for due to financial issues. As a young adult, passive income may open avenues for growth and self-development early in life. 

• You May Retire at a Young Age 

Your passive income streams can get higher than your paycheck and be enough for you to lead a comfortable lifestyle. You can then retire early in life and do what you love. Passive income can enable you to travel, enjoy the best things in life, and raise a family comfortably. 

• You Have Time to Experiment 

When you are young, you have the time to experiment with different passive income streams before settling on a few with the best returns. This luxury is not there if you start passive income methods when you have many responsibilities competing for your time and money. 

• You Take Advantage of the Compounding Effect 

When you start early in life, your investments have time to grow and compound. You have time to apply new insights and get results before retirement age. You also have a higher risk appetite and can put plans with great potential returns into place.

Best Passive Income Ideas for Young Adults

There are countless passive income streams out there. Some require substantial capital and skill, while others take a long time before you can see the results. Yet, others are easy to start and provide desirable returns. Here are some of the smartest passive income ideas that young adults can try, how to run them, and a few success tips.

1. Create a Course

If you have skills or expertise in any area, you can make money by selling online courses. People would buy the courses or subscribe to learn the specifics of the skill area. Sites like Udemy and SkillShare offer distribution and sales options for such classes.

An alternative approach is a freemium model, where you use free content to build a following before charging for more detailed information or advanced courses. You need to have a website from which to build an audience with accessible information. Nowadays, you don’t need coding skills to create a website. Use AI-powered website builders to create professional websites effortlessly by analyzing content and design preferences.

Each of the course distribution platforms mentioned above has its terms and minimum requirements. It is good to check the reviews of each platform and go through the requirements before making a choice. On the other hand, if you are going freemium, determine how much content will spur action and how to create value for your audience so that they are willing to spend on your courses.

So, how does one start off on this venture? Creating a successful course takes significant effort and expertise. You should also build a robust platform and effective marketing strategies for success. In addition, plan for future products and consistently create high-quality content to sustain a successful business.

Start by looking at your area of expertise, such as programming, marketing, or web design. Then, check the internet for insights into the main areas required for your students to gain competency in your area of expertise. Next, create a step-by-step course that takes them through the basics and builds on that to showcase advanced concepts in the field. You may also have another professional review your course.

With the course in hand, you can approach one of the course distribution platforms indicated above or create a website. The former method gives you an easy entry into the market. After this, market your course using methods like paid ads, social media marketing, and posting in relevant forums.

There are many success stories related to the digital course business, but this one stands out. Shaan Patel started Prep Expert, a test preparation platform that offers online SAT and ACT prep courses, with just $900 left over from his undergraduate scholarships. The company has since generated over $20 million in sales through its prep classes, books, and licensed items. In 2016, Patel secured an investment from billionaire entrepreneur Mark Cuban on ABC’s Shark Tank.

Patel credits his entrepreneurial success to self-control and never giving up. Also, his advice to others is to do what they know and avoid going into industries they know nothing about. He emphasizes the importance of not trading time for money and encourages entrepreneurs to automate their businesses wherever possible.

2. Write an E-book

Writing an e-book is a low-cost publishing opportunity that gives you worldwide distribution potential. E-books can be relatively short, and if you have expertise in a niche area, you can use them to create a valuable resource for readers. Besides, you can sell your e-books years after you wrote them, even as you carry out other income-generating activities. It is also possible to develop your e-book using free online resources and even test-market different titles and price points to maximize your chances of success.

However, remember that writing a successful e-book takes time and effort. You need to be an expert in a specific topic and have a way to market your e-book, such as an existing website or promotion on other relevant platforms. Your e-book must also provide valuable insights to help you build up a following, especially in the beginning when you may not see immediate results.

To succeed in this field, consider writing more e-books and building a business around them to mitigate the risks. You can also use the e-book to drive traffic to your other offerings, such as audio or video courses, other e-books, a website, or higher-value seminars. It helps you increase your chances of success and maximize your passive income potential.

Focus on creating valuable content and building a business around it. You may also support your business with social media coverage of the book and paid promotions.

Take Lindsay Buroker’s story for inspiration. She was a budding writer who struggled to find a home for her half-written novel until she discovered the world of self-publishing. After learning from successful indie authors, she self-published four e-books in a year, allowing her to quit her day job and become a full-time writer. She turned down traditional publishers and Amazon publishing imprints, as her self-published books have sold incredibly well, and she now has complete control over her work. Buroker is now a thriving author and proudly advocates self-publishing as a viable career path for writers who want to take control of their work and income.

3. Invest in Real Estate

Real estate investment is one of the most lucrative passive income streams available. It also comes with several options that help you meet specific goals or deal with your inexperience in the industry. Each option has its pros and cons. Therefore, you should take the time to review all of them.

Overall, the real estate market provides a steady income if you make a suitable investment. It has the potential to grow rather quickly compared to the other streams explained here. However, it is also vulnerable to economic downturns and requires you to have substantial capital to join in. Let’s look at some of the available options for investment. 

• Building a Rental Property Portfolio 

Investing in rental properties can be an excellent strategy for building long-term wealth through rental income and real estate appreciation. You deal with the property directly and can look at ways to enhance it.

What are the benefits?  

• Regular rental income
• Reliable appreciation of real estate
• Tax benefits from real estate investments  

At the same time, consider these disadvantages:  

• Lack of liquidity
• Substantial upfront payment to own the property
• Varying upkeep costs that may eat into your profits
• Possibly difficult tenants
• Investing in Real Estate Crowdfunding Platforms 

If you wish to join the real estate market but are low on funds, you can pool resources with other investors. This method enables you to purchase and manage real estate projects through crowdfunding. It is also a lucrative investment opportunity if you wish to invest in real estate but do not want to get involved in managing or maintaining properties. Instead, an experienced team picks the property for you, and you can decide if you wish to invest in it and by how much.

The management team charges an annual management fee and may require you to have minimum investment amounts. These two factors vary from one crowdfunding platform to another. Popular real estate crowdfunding platforms include Yieldstreet, Fundrise, and DiversyFund.

This venture is gaining popularity by the day for the following reasons:  

• Asset diversification
• Access to the latest real estate projects
• Ability to tap into expertise in the real estate market, which increases the likelihood of success  

However, you should be wary of these risks:  

• Lower returns than most other real estate investment options
• Lack of liquidity
• Risk of default   
• Investing in Real Estate Investment Trusts (REITs) 

REITs are usually publicly traded firms that own and manage properties on behalf of the shareholders. These companies hold a unique position in the law because they pay little or no corporate tax if most of their earnings reach their shareholders. It means that you, the investor, will be earning more from your money. In fact, most REITs increase shareholder earnings every few years.

Here are some other attractive features of REITs:  

• High dividend yields due to low tax requirements
• Portfolio diversification helps lower the risk of a loss
• High asset liquidity enables companies to deal with cash flow needs  

Likewise, keep both eyes open to the following issues:  

• Dividends are taxed similarly to ordinary income
• Sensitivity to fluctuating interest rates
• Property-specific risks and trends  

Itching to get started? Study the local market, evaluate potential real estate properties, and consider factors such as property management, maintenance, and vacancy rates. Then, pick an investment model that you are comfortable with and zero down on organizations that offer these investment opportunities. Determine the starting capital and sign the relevant paperwork to get started.

Soon, you’ll mirror the success of Melanie Bajrovic, the daughter of immigrants, who made her first real estate investment at 22. She continued to invest in properties, reaching the multi-million dollar mark by the age of 27. She bought her first house using the earnings from her job as a bartender and saved enough money to purchase more properties.

Bajrovic emphasizes the importance of taking action rather than just learning about real estate and advises others to get started by having proper contingencies in place. Bajrovic’s real money comes from commercial property assets. She stresses that finding the right deal can lead to creative financing options that will allow for more considerable investments.

4. Affiliate Marketing

Affiliate marketing is a business model in which website owners, bloggers, or social media influencers promote a third-party product by including a link on their platform. Amazon, eBay, Awin, and ShareASale are among the most prominent names in this field. You can use your blog, social media platforms, or forums to promote products. Instagram and TikTok are currently the leading social media platforms for those looking to grow a following and market products.

You’ll earn a commission when a visitor clicks the referral link and purchases from the third-party affiliate. Although the commission may range from a seemingly low 3-7%, it is possible to generate significant income if you can grow your following or have a lucrative niche, such as software, financial services, or fitness.

When starting, you’ll need to take time to create content and build traffic. Create a website or social media platform from which to promote the products. Then, start building a follower base by developing engaging content for your audience. It’s essential to be patient, consistent, and strategic in your approach to building your affiliate marketing business.

Some affiliate marketing platforms have specific requirements that you must meet. For example, you may need to have a particular number of unique visitors to your website each month or get traffic from specific locations. Go through these requirements beforehand and fine-tune your marketing strategies before signing up.

If you do all that, you may emulate the success of Asen Stoyanchev, a Bulgarian entrepreneur who started Gear Up Hiking as a passion project. His niche blog generates an impressive $16,200 annually by offering beginner hikers, campers, and outdoor enthusiasts actionable tips and advice. Asen’s love for the great outdoors and his desire to share his modest knowledge has led to Gear Up Hiking’s growth.

Even if Asen emphasizes that he is not a hiking expert but shares his passion with others who also enjoy the outdoors, his blog’s traffic has continued to grow over the years. The site has also become a valuable resource for anyone looking to explore and enjoy the great outdoors.

5. Invest in Dividend-Yielding Stocks

Dividend-yielding stocks enable you to generate passive income without actively managing your investments. When a company pays a dividend, it means that they are distributing a portion of their profits to their shareholders. You can earn a share of these profits without having to do anything other than own the shares. Here’s how: 

• Choose Your Investment Well: Pick companies with a history of steady dividends and strong financial performance. You may also look at dividend-focused mutual fund assets or exchange-traded funds (ETFs) to diversify your holdings and reduce risk.
• Check the Stock’s Yield: Evaluate a stock’s dividend yield when selecting a company to invest in. This refers to the percentage of the stock price paid out in dividends each year. You will also need to monitor your portfolio’s performance and adjust your investments as needed. This helps you know what stocks to increase, decrease, or sell out in due time.
• Consider Reinvesting: Reinvest your dividends into additional shares to compound your returns and increase your passive income over time. However, do not increase your investments blindly. Check the low-risk high-interest potential stocks in your portfolio for a funding increase. 

Remember that investing in the stock market involves risk and requires intensive research and analysis. So, do your due diligence and carefully consider your options before making any investment decisions.

If you make smart moves, you’ll reap long-term passive income, much like Joseph Carlson. He has achieved remarkable success through his disciplined approach to dividend investing. He started his YouTube channel, The Joseph Carlson Show, to document his journey toward financial independence and share his knowledge with others.

Carlson advocates for a long-term investing strategy that involves building a portfolio of high-quality dividend-paying stocks. He has successfully amassed a diversified portfolio of dividend-paying stocks that consistently generate passive income, thanks to his rigorous research and emphasis on company fundamentals like earnings increase, dividend growth, and financial stability.

The young entrepreneur regularly shares his investment portfolio with his audience and provides updates on his financial progress. He is candid about his successes and failures and encourages others to learn from his experience.

6. Flip Products on E-commerce Sites

You can also earn passive income by flipping retail products online. Visit platforms like Amazon or eBay and find products you can purchase at a discounted price and sell for a profit. This strategy works best if you have access to merchandise that few other people can find or if you can find valuable items that others have overlooked. Some such products may be old, pricey pieces that are not readily available, things with more than one use, or items that have bounced back into fashion due to a viral trend.

The potential for profit in this market is high. You only take advantage of price differences between what you can find and what the average consumer can find. However, you’ll need to find a reliable source of merchandise and invest money in all your products until they sell.

Research the market so that you buy items at the right price. Otherwise, you may end up with products that no one wants or that you have to drastically discount to sell. Visit the online marketplaces and select the items to sell. Where possible, contact the supplier to inquire about the availability. You may buy the items or create a dropshipping deal with the seller.

Then, market the items on your own platforms, such as your website, another e-commerce platform, or social media profile. Establish yourself as a reliable source of discounted merchandise and make speedy deliveries wherever a customer places orders.

Here’s a success story that will whet your appetite for this venture. Reuben Wall started selling Rubik’s Cube at age 14. He reinvested the earnings in Japanese anime merchandise before moving on to streetwear. Wall only buys hyped items and spends about three hours a day reselling them, earning between $1,200 and $2,400 a month.

On the other hand, Scarlett Gillespie started on Depop at age 14, selling American Apparel and branded clothes. She now buys and resells hyped products from cult-like brands and earns an average of $120 a month. The reselling trend creates desire and is good for brands, says Simon Beckerman, founder of Depop, one of the leading reselling platforms.

7. Investing in Peer-to-Peer Loans

Peer-to-peer (P2P) loans are an opportunity for you to lend money to businesses and individuals through intermediary platforms. These platforms enable you, as the lender, to earn income through interest payments on the loans. This is an excellent opportunity to make significant income from your money. Unfortunately, there is also a risk of losing the investment if the borrower defaults.

There are ways to mitigate the risk. First, you can invest small amounts over multiple loans to create a diversified lending portfolio. Many platforms provide this data to lenders on their respective platforms. You should also analyze historical data on prospective borrowers and make informed investment decisions.

To get started, sign up for an account at your desired P2P lending platform. Carefully vet borrowers and monitor payments received. Also, consider reinvesting part of the interest earned to build income over time. Manage your portfolio carefully to ensure profitability.

Keep in mind that during economic recessions, the risk of default on high-yielding personal loans may rise. This situation may lead to an increased rate of bad loans. Therefore, you must know market trends and adjust your strategies accordingly.

If this sounds like an interesting method for passive income, check out these popular platforms: 

• LendingClub: A leading online credit marketplace that connects borrowers with investors
• Prosper: An online lending platform that allows borrowers to request personal loans of up to $40,000
• Upstart: A P2P lending platform that uses artificial intelligence to underwrite loans for borrowers with little or inconclusive credit histories (a machine learning feature helps graduate borrowers repay loans)
• Funding Circle: A global lending platform that focuses on small business loans
• SoFi: A personal finance company offering student loan refinancing, personal loans, and mortgage loans
• Peerform: A platform specializing in personal loans for debt consolidation, home improvement, and other purposes
• Kiva: A non-profit organization that connects lenders to entrepreneurs and small businesses in developing countries. You get to invest in a project that has meaningful results. 

Consider mixing personal and business loans to diversify your risks and get a better chance for a higher income.

Now, are you ready for a P2P lending success story? Peter Renton is a prominent figure in the world of peer-to-peer lending, having made a name for himself through his successful venture, Lend Academy. After moving to Denver in 1991 to expand his family’s printing business, Renton became interested in alternative investment options and discovered the world of peer-to-peer lending in 2009.

After investing in several platforms, Renton recognized the need for an educational resource to help investors navigate this new investment landscape. In October 2010, he founded Lend Academy, which quickly became a leading educational resource for investors interested in peer-to-peer lending.

Renton uses the academy to share his vast knowledge and experiences with investors around the globe. He is now a celebrated industry leader, frequently featured in prominent financial media outlets such as Bloomberg and Forbes.

8. Develop an Application

Developing an application may take time and effort, but it can yield significant long-term rewards. Your app could serve various purposes, such as providing mobile users with an easy-to-use functional feature or an engaging game. Once your app is available to the public, users can download it, and you can begin to generate revenue.

Before creating an app, determine the target audience, as it affects possible monetization methods. Come up with an app that solves one or more of their problems. You can monetize your app by running in-app advertisements or charging a nominal fee for downloading it. If your app gains popularity or receives feedback that points to additional improvements, you may add extra features to keep it relevant and successful.

The most considerable risk associated with developing an app is the possibility of wasting your time and resources. Many successful apps require revenue in the form of subscriptions to build functions and pay testers and developers. Given the crowded marketplace, your app must provide a compelling value or experience to users to be successful.

You must also ensure that your app complies with privacy laws, which vary by location. Remember, the popularity of apps can decline quickly, resulting in a rapid drop in cash flow. Therefore, consider creating more apps or refining the existing ones as time passes.

Contrary to what you may think, you don’t need a computer science degree to excel in this field. Nick D’Aloisio is a young app developer who made his first million at 18. He rose to fame for his app Summly, which uses artificial intelligence to summarize text content. Nick had started another app called Trimmit, which received a $300,000 venture capital investment from Apple. He then revamped Trimmit and relaunched it as Summly. The app would go on to receive additional capital of $1.23 million from various investors.

Yahoo! then acquired Summly for $30 million in March 2013, which made D’Aloisio one of the youngest self-made millionaires ever. The Wall Street Journal also named him Innovator of the Year. D’Aloisio continued to work with Yahoo! as the leader of the Yahoo News Digest operation, which won the 2014 Apple Design Award for its technological and product excellence.

9. Create a YouTube Channel

YouTube is arguably the second-largest search engine in the world and boasts over two billion monthly active users. The platform has a diverse user base, with India having the largest YouTube audience, followed by the United States and Brazil. It showcases content in all languages, but English and Spanish are the most common. Besides, the largest age group using YouTube is between ages 15 and 35.

The platform makes money chiefly from ads on video content. It shares this revenue with content creators. YouTube generated over $7.9 billion in advertising revenue in Q4 2021 alone. Vertical video has become increasingly popular on the platform, with marketers optimizing for mobile viewing and vertical creative assets delivering 10–20% more conversions per dollar on YouTube Shorts.

To venture into this field, start by determining your niche and target audience and selecting a topic that aligns with your interests and expertise. Use analytics reports to ensure that the subject has a sizable following. Establish your niche, open a YouTube channel, and give it a unique name. Then, create high-quality content that resonates with your audience’s interests.

Remember to optimize your videos for search engines using relevant keywords and tags. It is also a good idea to work with other YouTubers to expand your reach and increase your influence, which helps grow your channel. As the channel gains popularity, consider monetizing your content through the methods listed below. 

• Advertising Revenue: Get revenue from displaying and overlaying ads as well as video ads.
• Channel Memberships: Offer special perks to members who make recurring monthly payments.
• Merchandise Shelf: Showcase branded merchandise for fans to browse and purchase on your watch pages.
• Super Chat and Super Stickers: Allow fans to highlight their messages in chat streams for a fee.
• YouTube Premium Revenue: Receive a portion of an audience’s subscription fee when they watch your content.
• Other Services: You may also use your channel to market other services you may be offering, such as consulting, web design, or business coaching. 

Evan Carmichael is a successful YouTuber, co-host of the Something to Prove podcast and author of the book Built to Serve. His channel has over 2 million subscribers and 300 million video views.

The YouTuber started his channel in 2009 to share his entrepreneurial journey and provide educational content. As the platform grew and evolved, Evan began to take it more seriously and post daily content. Today, with over 6,000 videos and 300 million views, YouTube has become Evan’s primary content hub, helping him land book deals, speaking gigs, and collaborations with other thought leaders like Tony Robbins and Gary Vaynerchuk.

Evan’s YouTube channel is geared towards entrepreneurs and those who aspire to be entrepreneurs, with a focus on helping them believe in themselves and push forward. His content mix includes personal advice, stories, journeys, and remixes of content from other successful people.

10. A Bond Ladder

A bond ladder is an investment strategy where you purchase varying bonds with different maturity dates over a period of several years. This approach helps reduce their exposure to reinvestment risk, which arises when bond interest rates are too low to provide adequate returns.

It has long been popular among retirees and individuals nearing retirement who seek a steady stream of interest payments. However, it is still a viable investment plan for the youth. When a bond matures, you can use the proceeds to purchase new bonds from the same company with longer maturity dates. On the other hand, you can continue to “extend the ladder” with another set of bonds.

Investing in individual bonds carries a couple of risks, including the possibility of default for corporate bonds and the potential for rising interest rates and decreased bond values. Such risks have caused many investors to opt for bond exchange-traded funds (ETFs) that offer diversification and eliminate the risk of a single bond. While there is still risk in a diversified portfolio, you stand a better chance of earning more in case one or more bonds go down.

A bond ladder can be an effective investment strategy if you seek regular income with reduced reinvestment risk. However, it’s essential to carefully consider the pros and cons before making any investment decisions.

Let’s consider a scenario where you have $100,000 and wish to replace $20,000 in annual income in five years. You may consider investing $20,000 in a bond that matures in a year and equal amounts in bonds that mature in two, three, four, and five years.

Alternatively, you may invest $25,000 in one- to five-year bonds. Then, invest a similar amount in three months in another bond that matures in one to five years. Repeat the process every six months until you fully invest the $100,000.

To learn the ins and outs of a bond ladder, check out Ramin Nakisa. He is an investment banker and co-founder of PensionCraft. He is a passionate bond ladder investor, too. He has several lessons on YouTube, the company’s website, and other platforms where he gives detailed information on the investment. His followers can also reach out to him for one-on-one coaching sessions.

11. Start a Podcast

Podcasts are digital audio files that you can download or stream and listen to. These files can be about any topic or genre, from the latest news to fashion, biographies, and specific issues such as investment, health, home improvement, entrepreneurship podcasts, and personal finance. You can monetize podcasts just like you do with YouTube.

Ensure that the niche you pick for your podcast resonates with your audience and has brands willing to spend money on it. Above all, you must deliver value to your audience so that you are able to grow your channel. Market your content on relevant platforms, such as your social media pages and forums.

Podcasting is not the solution if you’re looking to make quick cash. Building a reasonable following takes time. But if you’ve created a large following of subscribers, there are several ways to generate revenue on the platform. 

• Secure sponsorships from brands and insert ads into each episode. You can also participate in affiliate programs, such as Audible, which many podcasters and YouTubers use. These programs provide a unique affiliate link that you can promote. When someone uses your link, you receive credit for the sale.
• You can also explore platforms like Patron, where you offer your listeners exclusive content in exchange for monthly donations. Besides, you can create merchandise related to your podcast, such as t-shirts or mugs, and sell it to your listeners. This can be a great way to build a community around your podcast and give your fans something tangible to show their support. 

Before starting a podcast, invest in quality podcasting equipment that fits your budget. Audio and content quality are critical factors in building an audience and monetizing your podcast. Once your numbers start to rise, look for ways to build a strong relationship with the audience and engage them through email newsletters, live events, Q&A sessions, and giveaways.

How much can you expect to earn as a podcaster? Check out these success stories: 

• The Joe Rogan Experience gets over 190 million downloads monthly and earns $30 million a year.
• Georgia Hardstark and Karen Kilgariff get about 35 million downloads monthly and earn $15 million annually.
• The Dave Ramsey Show gets about 13 million weekly listeners and earns $10 million a year. 

12. Become a Social Media Influencer

You can make a solid and steady passive income stream on popular platforms like Instagram, Facebook, or YouTube as a social media influencer. Social media influencers are a new class of celebrities. You can use this standing to make lots of cash from your outreach efforts.

Some brands would love to be seen by your audience. Therefore, they are willing to pay you to have their products showcased on your social media platform. One way to earn money is through affiliate links, which allow followers to purchase featured products, download apps, visit specific web pages, or sign up for services. However, it takes time and effort to become a social media influencer.

Start by choosing a niche, optimizing your social media profiles, and understanding your audience. Develop engaging content to build a large following and eventually earn money by promoting products or advertising for companies. Many bloggers also combine influencer marketing campaigns with their blogs to make money through advertising and affiliate income.

FoxBusiness.com estimates that an average influencer can earn from $30,000 to $100,000 annually. Influencers with 1 million followers may earn over $250,000 for each sponsored post. While it may not be 100% passive income, once set up and scaled correctly, it can become a lucrative source of money.

Picture your upcoming success by studying the efforts of Loren Gray, an American model from Pottstown, Pennsylvania, with a following of over 23 million on Instagram. She is a social media sensation, famous for her TikTok videos, with an estimated net worth of $19 million. She began her social media journey by posting on TikTok when she was only 13 years old, back in 2016.

13. Create an Online Business

You can generate a passive income stream by doing business online. It is possible to build a profitable company by leveraging the power of the internet and your skills. Here are a few ideas: 

• Sell Your Products 

If you currently have an offline business, you can set up an online store and sell items there. There are several internet marketplaces like Amazon and eBay where you can list your products. You may also set up your e-commerce platform with Shopify. 

• Dropshipping 

Dropshipping is a way to fulfill orders without handling the items physically. Instead, you purchase products from a third-party supplier when you get an order. It differs from traditional retail in that you do not own or stock inventory but only act as a middle-person between the customer and the supplier.

To get started, you may seek out individual suppliers using a database or sign up for a platform that connects you to thousands of suppliers. Once a customer places an order, an app automates the fulfillment process, with the product shipped directly from the supplier to the customer. 

• Sell Digital Products 

Creating and selling digital products can be an excellent source of passive income. Once created, digital products can be sold multiple times, requiring no additional effort on your part. Here are some popular digital products:  

• Online Courses: Online courses are a great way to package in-depth content on a particular subject. Start with defining learner outcomes and consider implementing teaching models like ADDIE. 
• Licenses for Digital Assets: You can sell licenses for your digital assets, including stock photos, videos, music, software, and more. Marketplaces like stock photo sites can help you gain exposure, but they can also take a significant commission. Alternatively, you can build your digital storefront using platforms like SendOwl.
• Membership Sites: Bundling your digital products behind a paid subscription can generate recurring revenue and foster a community of passionate members. This approach suits businesses with a growing library of premium content and marketing efforts that can be monetized.
• Digital Templates and Tools: These products solve common pain points and meet the needs of specific audiences. Examples include marketing strategy, resume, and graphic design templates, mobile apps, Photoshop filters and plugins, icons, fonts, and UX kits. Freelancers can turn their skills and services into digital products to create passive revenue streams.
• Art and Music: Artists and musicians can monetize their talents by selling digital products such as ringtones, printables, phone wallpapers, and print-on-demand products. Filmmakers can sell their movies online. Digital products allow you to experiment with different formats and minimize risk. Check out this blog on passive income ideas for artists.
• Services With Digital Products: You can sell services that pair well with digital products, with the latter serving as part of the purchase. For example, a personal trainer might deliver a workout plan, while a designer might provide logos. Packages containing valuable digital products can be offered alongside services.
• Ad Space: You can monetize your website or blog through advertising. Display ads from Google AdSense or other advertising networks and earn another source of income for each click or impression.   

To get started with an e-commerce business, you need a business plan, licenses and permits, and dedicated finances. Additionally, create an e-commerce website, source your products or services, and market to online customers.

Follow these six steps to start your e-commerce business: 

• Create and refine your e-commerce business idea: Create your e-commerce business model and write a business plan. Include how to get your products or services to your customers, research the permits you need, and work out the costs involved in launching your business.
• Set up your business for success: Choose a business structure, create and register a name for your venture, and apply for an EIN. Then, open a business checking account, and obtain licenses and permits.
• Source or manufacture your products: Decide how you will acquire the products or services you intend to sell. You can either manufacture them yourself or work with a supplier. If you’re selling physical products, determine if you will hold inventory or rely on dropshipping.
• Set up your e-commerce website: Your website serves as your storefront. Customers learn about your business, browse products, and make purchases right on the website. Build it with good UX strategies to make the purchasing process easy and accessible.
• Figure out order fulfillment: Go for an e-commerce website builder that offers shipping label printing. You may consider handling order fulfillment yourself or using a third party. Research shipping rates and make sure to communicate any shipping restrictions clearly on your website.
• Market your e-commerce business: Use social media, paid advertising, email marketing, and other tactics to promote your business and drive traffic to your website. Build brand awareness and customer trust to ensure the long-term success of your e-commerce business. 

Alternatively, you can sign up on platforms such as Amazon and post your items. Read the terms and conditions of the platform and determine its commission rates before signing up.

Irwin Dominguez from San Diego made $1,000,000 within eight months of starting a dropshipping business. He was a sales consultant before venturing into dropshipping. The entrepreneur marketed his products via Facebook ads before using other means. His sales go up to $20,000 on a good day. He says that patience and consistency are key to his success.

14. Online Membership

A membership site is any website that requires payment to access specific content. This content is only available to members who have logged in. Such sites often have different membership levels, offering varying access rights.

You must present something unique and exclusive to entice people to become and stay members. Such items include interesting and valuable content, special discounts, or access to exclusive products and services.

There are two main models for membership sites: 

• The Drip-Feed Model: With the drip-feed model, members pay a monthly fee for access to the site or part of it. The content must be premium and updated regularly, with new material provided at least every six months to entice members to continue paying their membership fees.
• The “All-In” Membership: This model allows members to access complete content immediately, which is great for those who don’t want to wait for new material each month. You post all new material to the existing database. This model works best with certain types of content, such as how-to manuals. Members pay a fixed price upfront for full access to the guides, with discounts offered based on how long they have been members. 

It’s essential to make your members feel part of an online community and offer fresh content regularly to ensure they keep coming back for more. Membership sites guarantee a monthly income as long as you keep producing quality content. Determine the best model for your content and provide that extra touch that will cause readers to become loyal followers. Then, create a website or use a subscription system to develop a reader base.

That’s what Jason Coleman believes. Hailing from Reading, PA, he is the co-founder of Stranger Studios and the brain behind Paid Memberships Pro, a membership platform for WordPress that he created almost 13 years ago. The platform has become a popular choice for associations, businesses, and solo entrepreneurs to collect recurring payments and manage memberships, paid blogs, podcasts, and community sites. PMPro has approximately 6,000 premium customers who pay for add-ons, support, and other services, contributing to an impressive monthly revenue of $100,000 in 2020, with an expected growth of 25–50% this year.

15. Sell Photos Online

Selling photos stands out from the other online businesses discussed here. This is why it has a slot of its own on this list. You can monetize your photography and videography skills by selling photos and videos online. If you have an eye for capturing stunning images or producing engaging clips, you have the potential to appeal to various audiences.

Fortunately, several marketplaces are available for you to sell your digital assets. For instance, you can sell your photos on stock photo websites such as iStockPhoto, Shutterstock, and Adobe Stock, while video assets can go on marketplaces like Pond5, Shutterstock, and VideoHive.

Start by selecting platforms from which to sell your photos. Open a few to maximize your potential sales. Then, upload your images according to the terms of each platform. Your earnings are dependent on the platform you pick.

For example, as an Adobe Stock Contributor, your earnings will depend on the download options selected by platform users, such as subscriptions, on-demand, or extended licenses. The platform pays a 33% commission for each image download. Subscription-based downloads earn you anywhere from $0.33 to $3.30. Meanwhile, extended license downloads can fetch you $21.12 to $26.40.

For video assets, you can earn a 35% commission for each download, with subscription-based downloads making you around $2.80 to $7.84 and on-demand downloads fetching you $22.40 to $70.00.

Ryan Longnecker is a talented young photographer who has made a name by selling stock photos online. His passion for photography started in high school, where he honed his skills in a photography club and eventually became a yearbook photographer. Longnecker learned the art of optimizing his work for successful sales through careful research and trial and error.

The entrepreneur creates in-demand content in niches such as lifestyle and travel and pays close attention to market trends. Over the years, Longnecker’s success in selling his photos and videos online has grown, with various clients purchasing and using his work for advertising, marketing, and editorial purposes. His story highlights the potential for young adults to thrive in the stock photography industry with hard work and a keen understanding of the market demand for quality visual content.

16. Invest in a High-Yield Savings Account

If you have some cash and seek the best passive income idea with low risk, consider investing in a savings account or certificate of deposit (CD). Both provide a higher interest rate than ordinary savings. You just need to research the top savings accounts and CD rates to maximize your earnings. It is best to transact with an online bank because it allows you to access the best rates nationwide.

Investing in a high-yield savings account comes with its own set of pros and cons. Let’s start with the advantages. 

• You enjoy higher interest rates compared to traditional savings accounts or checking accounts.
• FDIC insures the principal amount up to $250,000, providing security and protection for your investment.
• Compounding interest allows you to earn returns on your interest, boosting your profit over time.
• Funds are easily accessible, providing liquidity and flexibility in managing your money.
• Returns are not correlated to market fluctuations. This venture provides a stable and predictable source of passive income. 

However, a high-yield savings account comes with disadvantages, too, such as: 

• Interest rates may change, affecting the earnings on your investment.
• Potential fees, such as monthly maintenance or transaction fees, may be charged, which can lower your returns.
• Accounts may be subject to withdrawal restrictions, limiting your ability to access your funds.
• Inflation may reduce the purchasing power of your returns over time, reducing the actual value of your investment. 

Investing in a high-yield savings account can be an excellent option for generating passive income, especially for young adults who want a low-risk investment with higher returns than checking accounts. Start by selecting an online bank with the best rates and terms to maximize your returns. Then, open a high-yield savings account and transfer your funds.

If you make the right moves, you’ll be like Michelle Schroeder-Gardner, an individual who has achieved success in high-yield savings. From her accomplishments in this area, she created a personal finance blog called Making Sense of Cents. Here, she shares tips on personal finance, ranging from saving money to budgeting and investing. Apart from high-yield savings, the entrepreneur has monetized her blog using sponsored content and affiliate marketing.

Today, Michelle has become an expert in personal finance and is sought out by several leading outlets to speak about finance-related issues. She advocates for financial literacy and encourages the culture of saving, especially in high-yield accounts. Her success also shows how disciplined saving can lead to financial freedom.

17. Sell Your Art Online

Art includes anything you can craft, design, and sell to another party. Here are some works of art that you can sell: 

• Original Art: This includes drawings, paintings, and illustrations. You can sell the art as an original piece and as reprints.
• Limited- Or Open-Edition Prints: You can sell prints unframed, framed, or on canvas.
• Custom Art: You can create a platform where customers can order art. Then, you make art according to an order from a customer request or a business commission. Generally, this type of art is one-of-a-kind, and you cannot sell it again as a reproduction.
• Merchandise: You can print your art on various items, such as iPhone cases, mugs, hats, t-shirts, greeting cards, enamel pins, and stationery.
• Digital Downloads: This includes templates, desktop wallpapers, and print-at-home art, among other products.
• Repeat Prints: Prints of your work can be repeated on wrapping paper, fabric, or wallpaper.
• Licensing Work: You can license your work to other brands or publications, which can be an excellent opportunity for illustrators and photographers.
• Collaborations: You can collaborate with brands to create and sell a limited collection through a partner’s store. 

If you choose to sell original artwork, you may want to price these items higher because they are individually created. On the other hand, prints and digital files typically sell for less money than originals, but they offer a good way of repeatedly making money with one piece of artwork.

Print-on-demand services such as Printful and Printify make it easy to sell items like T-shirts, mugs, and notebooks with your art on them. These platforms only create things when someone places an order. You only need to set up print-on-demand services, and the platforms automatically print and ship after each sale.

If selling your own art takes off, you can also start hosting other artists in your store. This provides more variety for your customers and allows you to support other up-and-coming artists. Putting a few famous pieces on your website will also help your marketing efforts and drive traffic.

When determining where to sell your art, consider your brand or the type of brand you want to build. This helps you stay on track and produce the kinds of art that reinforce your brand and help you go in the right direction.

Consider the following options to sell your art: 

• Market it directly on your website.
• List and sell your fine artwork online at Fine Art America or Society6.
• Sell on Etsy, a platform allowing you to sell all types of custom art, including original and digital art.
• Sell wall art prints and originals on Amazon and Amazon Handmade.
• Use your designs to create products, such as T-shirts, hats, and mugs, on Zazzle and Redbubble. 
• Sell via Facebook Marketplace and Instagram Shoppable posts.
• Sell images online and earn a monthly commission on Getty Images, which caters to photographers, videographers, and graphic designers.  

Selling on multiple channels can increase your exposure and sales. For example, if you plan to sell on Etsy, you may also post on Society6 to boost your online visibility. The reason is that sites like Etsy and Amazon have millions of monthly visitors. When determining the number of platforms to pick, consider the time and effort required to manage multiple channels.

Ready for a success story in this industry? Alejandro Giraldo is a Colombian artist and illustrator who has achieved worldwide fame by dedicating long hours to creating artwork, which he sells online through his website and on print-on-demand platforms like Society6. He started as a freelance graphic designer but switched to illustration and has been living off his art for three years, earning a living as a full-time illustrator and art director.

Giraldo sells various products with his designs, from art prints and t-shirts to iPhone cases, comforters, mugs, and tote bags. Prints are his best-selling product, and he believes people love having unique art on their walls. He doesn’t rely solely on mockups to promote his designs; Giraldo also prefers to do photoshoots for his projects.

How Many Income Streams Should You Have?

The number of income streams you should have for substantial passive income varies widely depending on your financial goals and other factors. The rule of thumb is that you should only start businesses that you can manage effectively.

To determine the number of income streams to pick from, consider the following questions: 

• Do you have a product that can benefit from multiple platforms? 

Several products can result in several income-generating streams. For example, suppose you have a business consulting venture. In that case, you can create a YouTube page where you teach about commercial operations, start a course on an area like social media marketing, and have an e-book on any of the related topics. Your YouTube channel can help drive traffic to your e-book and service and bring additional revenue. Also, you can sell your e-book on Amazon to help enhance your course. 

• How far can you spread? 

You do not want to spread yourself too thin, as it may cause you to lose opportunities to increase your earnings. Despite being passive income-generating methods, they all require effort, updates, and sometimes a regular presence.

Besides, you may need to continue working at your regular job before they can guarantee a full-time income. Consider starting with the most lucrative income stream and gradually adding more as it takes off. 

• Do you have support staff? 

At some point, you may hire support staff to help you meet the requirements of various passive income-generating platforms. This step can free up some time to work on newer projects. However, if you start alone, concentrate on one or two streams until they are successful before gradually adding more.

Additionally, consider your expertise and skills in your selections. Go for areas you can handle comfortably or with little training as you learn about the rest. For example, if you have been a freelance writer or journalist, you can run a blog or YouTube channel with little training. This helps you accelerate towards making a substantial income as soon as possible.

In conclusion, there is no limit to the number of passive income streams you can engage in. Ensure you have the requisite knowledge and can handle each effectively without experiencing burnout or spreading too thin.

Final Thoughts: Turning Your Money on Autopilot

You do not want to have to work for each dollar that you earn. This is the whole concept of passive income. It is possible to stream passive income into your accounts with minimal effort and investment. To achieve this objective, you need to make an initial investment and follow the best practices. Aside from being one of the most accessible passive earning platforms, Pawns.app paid surveys can help you earn money by providing educational resources to help you get started and increase your income.

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