My 20+ Favorite Passive Income Ideas For Young Adults
The idea of creating new passive income streams, or multiple streams of income, can be daunting for young people. After all, how on earth are we supposed to get ahead financially if we're just graduating and working to increase our incomes?
This was the question I was asking myself a few years ago when I was still in college. But since then, I've been able to create multiple streams of income, many of which are passive.
And that's what this post is all about. I'm covering some of my favorite passive income ideas for young adults. And many of these ideas are perfect for beginners and just take one day to start.
Table of Contents
The Best Passive Income Ideas For Young Adults
I'm going to start this guide with passive income ideas I'm using right now to create multiple income streams. Then, I'm going to wrap up this post with even more popular ideas that young adults can try.
1. Dividend Stocks & ETFs
Investing in dividend-paying stocks or exchange-traded funds is an amazing way to diversify your income. And this idea is also something that young adults can easily start with.
After all, many online brokers and investing apps let you open an account without much money. You can then begin investing in dividend-paying assets, often without paying commissions.
This is also an amazing way to build wealth as a young adult. This is because compounding interest plus time can yield impressive results.
Here's an example: if you invest $1,000 and then add $25 each week, you'll have over $22,000 after 10 years if we assume a 7% annual rate of return.
And this is just assuming you consistently add $25 per week. If you add more, you can create a much more significant investment income stream for yourself.
Personally, I stick with a variety of index funds, ETFs, and dividend stocks. I bank and invest through TD, but you can use your own bank or a myriad of stock brokers that are out there.
Pro Tip: If you live in the United States, you can invest easily with companies like Stash. New members also get a $5 sign up bonus, and Stash lets you invest in thousands of securities and even crypto.
2. Invest In Real Estate
Many people think you need to be a millionaire to get into real estate. However, this isn't the case if you know how to invest with smaller amounts of money.
For example, I invest in several real estate investment trusts (REITs) – which are essentially companies that operate income-generating real estate portfolios. REITs must legally distribute at least 90% of their taxable income to shareholders, so it's a popular passive income idea.
You can also turn to real estate investment platforms that let you buy shares of assets like apartment buildings and multi family homes.
Arrived and Fundrise are two of my favorite companies in this space. And you only need $100 and $10 respectively to begin investing. Each platform also pays out quarterly dividends, and you can also earn if properties appreciate.
Both companies also handle everything, from property management to finding tenants. This means they can generate autopilot cash for you, and you don't need a lot of capital to get started.
Disclaimer: This is a Fundrise endorsement and we receive compensation if you sign up with the provided link.
3. Blogging Income
Starting a blog has been the best passive income stream I've started as a young adult, and it's not even close.
For some context, I started WebMonkey in 2018 to document my online income progress. It made under $2,000 in that first year, even after I sunk hundreds of hours into it.
A few years later, I made $272,000 blogging in 2022. And my blog now makes money with a lot of content that I wrote years ago, making it semi-passive.
Most of this income comes from my Mediavine ads and affiliate marketing. But blogs can also make money through online coaching, sponsorships, selling products, and so much more.
I also love this passive income idea for young adults since it's freeing. As a full-time blogger, I now make money with my laptop while traveling the world, and I don't need to work for anyone else.
Plus, starting a blog is a low-risk investment. I started WebMonkey for about $150, and I reinvested earnings to help it grow.
Want to start your own blog? Check out SiteGround's affordable hosting to get started!
4. High-Yield Savings Accounts
A high-yield savings account is the perfect place to deposit some idle cash or your emergency fund. And this is one passive income strategy I'm using for my savings.
We're also in a great environment for fixed-income products. After all, a lot of the top savings accounts pay out 4% to 5% APY or even more right now.
If you're on the market for a new account, you can also snag a $50 bonus and earn 4% APY on up to $6,000 in cash by using Current.
Current is a no-fee Fintech company that lets you earn interest on your deposits. It also has a nifty credit-building tool to help out young adults. And again, you can get a $50 welcome bonus if you sign up and set up qualifying direct deposits.
5. Use Passive Income Apps
I've been using apps to earn passive income ever since college when I was phone farming. And let me tell you, anyone can start this idea today as long as they have a smartphone.
Several of my favorite apps that I still use today include:
- Nielsen Computer & Mobile Panel (my current favorite)
- Mobile Performance Meter
- MobileXpression
- Dosh
- Honeygain
- Pogo
- Pawns
Between these apps, making $10 to $30 a month in passive income is quite realistic. Just note that you have to be comfortable selling your data with market research companies for these apps to be a good fit.
6. Invest In Bonds & CDs
Bonds and certificates of deposit (CDs) are two more popular fixed-income investments. And this is yet another low-risk way to generate passive income for young adults.
Both these investment options pay you a fixed rate of return over a set timespan. Historically, both bonds and CDs have been a popular way to generate income with a portfolio while reducing risk.
And right now, you can actually earn a whopping 7% APY if you invest with a platform like Worthy Bonds.
Bonds start at just $10, so anyone can start. You don't pay platform fees either or even withdrawal fees if you cash out early. And my favorite part is that interest compounds daily.
Learn more about Worthy Bonds!
7. Earn YouTube Income
Like blogging, YouTube is another one of my all-time favorite passive income ideas for young adults.
I started my channel in 2020 as a way to diversify from blogging. Within six months, my channel was monetized, meaning videos began generating AdSense revenue and paying me every month.
It's been a slow and steady process to grow my channel. These days, it's over 28,000 subscribers and has been making $100 a day lately in just advertisement revenue.
Making money with YouTube won't happen overnight. But it's a low-cost side hustle that you can start with your phone and a cheap USB microphone. Plus, a single viral video can change your life and income forever.
8. Print On Demand Selling
Print on demand selling, or POD, involves selling products with a manufacturing partner. Here's how it works in a nutshell:
- You add your creative designs to existing products in a POD catalog
- When you make a sale, your POD partner manufactures and ships the product to your customer
- You and the POD partner share the profits of the sale
The main attraction of POD selling is that you never have to worry about logistics or manufacturing. This makes it a nice low-maintenance business idea, and it's also extremely passive once you build up your sales funnel.
Personally, I tried selling Etsy print on demand products back in college with Printify, one of the leading POD companies.
My Etsy shop didn't go so well. But heaps of people earn passive income on Etsy through POD selling. You can also sell products on your own Shopify store or other online marketplaces and never deal with shipping or manufacturing.
9. Using Cash Back Apps
One more idea I've been using to earn passive income for years is to use cash back apps whenever I shop.
This is an easy way to save money each month. And like passive income apps, there's plenty of money on the table if you're willing to share your data.
Some of my top apps in this category include:
- Rakuten (my favorite shopping extension)
- Fetch
- Capital One Shopping (the best for coupons)
- Ibotta
- Upside (the best gas rewards app)
Once again, with this combination of money making apps, I think earning $10 to $50 a month is possible. It all depends on how much you shop and how much effort you put in, but it's a nice source of passive income you can try.
Note: Capital One Shopping compensates us if you sign up with the provided link.
Other Popular Passive Income Ideas For Young Adults
Now that I've covered some passive income ideas I'm personally using, I want to share even more popular ideas that you can consider:
- Invest in mutual Funds
- Try peer-to-peer lending
- Automate an Amazon FBA store
- Start a dropshipping business
- Make money renting out things, like your car, a spare room, or even a parking space
- Become a landlord or try making money with Airbnb
- License videos to companies
- Start a vending machine business
- Sell digital products like eBooks, courses, spreadsheets, and downloadable products
- Sell stock photos and videos
- Invest in index funds
- Start a podcast and make money through sponsorships
- Try staking cryptocurrency to earn rewards
- Write Amazon Kindle Direct Publishing books
- Create an app and monetize it with ads
- Create a Software as a Service (SaaS) product
- Create a faceless YouTube channel with AI
- Shop with cash-back credit cards
- Earn passive income with royalties (you can do this with music, books, or invention ideas)
- Invest in small businesses as a silent partner or equity partner
Just note that many of these ideas start out as passive income side hustles. In other words, you have to put in some effort upfront to then reap the passive rewards later on. Some of these businesses also require outsourcing to become more passive, which is possible with smart and efficient planning.
Extra Reading – The Top Businesses That Run Themselves.
Final Thoughts
It doesn't matter if you're a teenager, college student, or are relatively new to the job market; young adults can earn passive income if they pick beginner-friendly ideas and put in the work to succeed.
My favorite part about this is that you can start even if you're currently struggling with money. After all, some of the ideas in this guide take $0 to start, so anyone can give these ideas a try.
Just set an income goal and then put in the work. You'll be amazed at how far you can go in just a few months or years with consistency on your side.
Want more money-making ideas? Checkout:
