Passive income is money that rolls into your bank account without you having to put in much effort to earn it. But it’s not like winning the lottery — you do have to put in an initial commitment to build the momentum, and most (but not all) of the ways to make passive income require an upfront investment of time or money and generally some sort of upkeep. Like any business venture, there’s a range of paths you can take that vary in difficulty level. So we’ve rounded up five of the top passive income ideas for young adults that range from extremely low effort (see #5) to a larger time commitment with a rewarding journey (check out #3).
1. Set up an Etsy shop
You don’t actually need to be artistic or crafty to have success on Etsy, but it’ll take some research to figure out the right products for your store that don’t require your involvement every time you get a sale. For example, ready-made downloadable PDFs, like recipe cards or inspirational posters, or a print-on-demand item like stickers, greeting cards or coffee mugs that can be sent directly from a dropshipping partner. You can find affordable freelance designers on a marketplace website like Fiverr if you don’t want to DIY or don’t have the time. Once you get sales and positive reviews, your store will get more traction in search results and could become a great way to make passive income.
2. Get invested in the stock market
If your passive income dreams are aimed at achieving financial freedom a decade or more down the road, then the stock market can be a wise passive income idea, especially for young adults. Unlike older generations, you have the time to benefit from compound interest and watch your money grow without the pressure of a rapidly approaching retirement. There is a range of investment vehicles to choose from beyond picking individual stocks and bonds. Index funds, for example, are popular with passive investors since they are low-cost and designed to replicate the performance and returns of a given index, such as the S&P 500. Take the time to research investment vehicles or meet with a financial advisor to better understand your options and help manage expectations.
3. Create an online course
What is your unique expertise? It could have to do with your profession, a hobby or an area you are particularly skilled in — anything from getting started with amigurumi to home maintenance 101 to bookkeeping basics for single-member LLCs. After you identify the specific skill you want to teach, you’ll create the course outline and then make the content, such as video lectures, worksheets, quizzes and other engaging material. Then you’ll price and sell your very own course on a site like Udemy or Teachable to generate passive income — and have a cool addition to your professional portfolio! Developing an online course requires a larger upfront time commitment than the other options we’ve listed, but if you’re passionate about the subject then it could be a fun use of your time. Plus, you’ll have an impact in other people’s lives by helping them build new skills.
4. Star in a YouTube channel
If developing an online course sounds interesting but you feel that structured teaching is too far outside of your comfort zone, then running a YouTube channel may be a better option. On YouTube, you aren’t limited to teaching a topic or skill either. For example, if you have a relaxing voice, you might make meditation or ASMR videos that help people fall asleep. If you travel a lot, you can create video guides to each destination you visit. Or if you are a professional sports therapist, you could record short videos that demonstrate therapeutic exercises that athletes can do at home. Running a YouTube channel is a popular passive income idea for young adults since you can continue to monetize your videos long after the date you publish them.
5. Share your car for cash
Do you have a spare car or live in a city where you don’t drive much? With car sharing, you can put your car to work while you’re not using it and earn hundreds of dollars in passive income per month. There are a handful of car sharing companies operating in most major cities, but be aware that the level of effort that each requires varies greatly. Car sharing platforms like Turo and Getaround are more like Airbnb in that you as the host will be interacting with the borrowers and receive a review and star rating. Avail, however, doesn’t require much effort at all. You just schedule your sharing dates and then park the car in a designated spot and drop off the keys — that’s it! Avail offers the quickest way for young adults to make passive income.