20 passive income ideas for young adults

When you’re in your early 20s, you’re probably not dreaming of wasting the next 40 years of your life behind a desk. 9-to-5 might be the best option now, but you want other ways to make ends meet and only spend a couple of hours a day doing something you love for work. Are there any real ways to make money passively as a young adult?

There are tons of different passive income ideas that you can utilize as early as your late teens. Young adults, Zoomers like you and me; we have access to so much information and truly unique perspectives that we can monetize.

That’s why we’ve covered 20 of the best passive income ideas for young adults below — from truly passive ideas, like investments, to more hands-on projects with huge potential, like digital products. We’ll go over all these in more depth in just a bit.

But I get it. You have a bunch of questions right now. Can you realistically make money passively? Why should you start working on these ideas now? Or, why passive income, anyway? Isn’t it just a scam that gurus pitch? Let me eliminate the last sliver of doubt you might have about this.

Why Passive Income?

Focusing on passive income as a young adult can help you reap the benefits down the line. Plus, you’re at the most advantageous stage than basically anyone else. You’re not too young to not be able to start working on these ideas or too old to have too many responsibilities and not enough time to work on these.

Basically, as a young adult, you have a whole range of things going your way:

• Time: You’re building up your passive income streams early into your career, meaning they’ll compound to higher earnings earlier. 
• Risk Tolerance: Even if some of these ideas don’t work for you, it’s not the end of the world. You’ll still have much of your 20s and 30s to recoup.
• Flexibility: Let’s face it; we usually don’t have as many responsibilities as our parents or folks well into adulthood. So, we can put in the hours to create that digital product or that online course.
• In the Loop: You’re not old enough to be out of touch with what a younger audience wants or young enough not to understand how older audiences think. Being right in the center will help you adapt your passive income ideas to cater to different age groups.

Now, I know what you might be thinking. Since you’re young, it’s better to earn as much money right now and leave these ideas for down the line, right? Well, not really.

Starting a passive income stream as early as possible will come with:

1. Financial Stability: If you get fired from your job, you still have a couple of income streams that will keep you afloat.
2. Wealth Building: The earlier you start building your wealth, the higher the compounding effect. 
3. More Freedom: The more money you earn passively, the earlier you can retire or only work on projects and ideas you like without focusing on the monetary gain.

We’ve already said starting early is best, and we’re pretty late into the article. So, let’s follow our own advice and get straight into our 20 best passive income streams for young adults, starting with 5 that you can do from the comfort of your home.

5 Ideas for Young Adults to Make Money Passively From Home

We consider these 5 ideas as the foundation of your passive income. These will be your main sources or teach you enough to create an even more lucrative stream down the line. We’ve carefully selected these based on the following:

• How easy they are to start
• How much effort they’ll require (either initial or recurring)
• How much risk they involve
• How much money you’ll need to start

1. Mutual Funds Investments

Mutual funds are hands down the best way to make money in the long run, especially if you start early. With these, whether ETFs or indices, you’re buying groups of companies instead of investing in single ones. This might sound boring, but, as is valid in all markets, time in the market always beats timing the market.

And, as a young adult, you’ve got one advantage over everyone else. You’ve got time. Sure, you won’t have tons of money to invest in funds, but you won’t need it anyway. You can start with $10, $50, or $100 monthly. And best of all, this is truly passive, as it won’t take more than a couple of hours to set up an account.

For example, let’s go over a $100 monthly investment on the S&P500, which has an average annualized 10% return or 8% for inflation adjustment. In 30 years, you’ll have 3x your total investment without having to do anything besides setting buy orders every month and reinvesting your profits. Give it another 10 years; that compound interest will take that $142k up to $324k.

2. Invest in Bonds

Let’s say that you want something even safer than mutual funds. Bonds, like the 10-year US Treasury Bond, might bring in half of the yield of the S&P500, but they do so consistently. So, while you’ll get, say, 5% of your total investment yearly, you don’t have to worry about the market going under. 

Now, why are these great for young folks? Well, for one, they’re truly passive and are the safest way to make a small percentage of your initial investment back each year. 

Again, as with mutual funds, the point here is to have something safe and consistent. We’d suggest you put some money on both of these, of course, as they’ll be a great introduction to passive income.

That said, I understand that you want something more lucrative. So, let’s get straight into it.

3. Become a Social Media Influencer

If there’s one thing that nobody can do better than young adults, it’s social media influencing and becoming a content creator, in general. Influencing will require some effort, sure, but it can also be a great moneymaker.

Considering that you’re in your early 20s, you’ve grown up to see influencers become a thing in real-time. Nowadays, you only need a video or two to go viral and become an influencer. 

To get started with influencing, set aside some time each day to create and post content. Create your accounts on the platforms you primarily use, and post different content. See what sticks, but be consistent with it. You might not get views initially, but it only takes one viral video to get into people’s feeds. Then, once you’ve found your niche, go ham!

Now, you might say that this is far from passive, and you’d be right. 

When you get that viral vid, though, you’ll only have to spend a couple of hours on creating the content, and you can outsource the rest of the operations. At that point, a single post might take an hour to create and bring in hundreds of dollars.

4. Become a Streamer

You might not be the type of person who’s into influencing, but you want to have more direct communication with your audience. You might also like watching streamers and have dreamt of becoming one for years.

Well, as a young adult, now is your chance. If teens, like Speed, managed to get millions of followers, tons of fame, and achieved their dreams, by screaming in front of a camera, you can do so, too.

Unfortunately, becoming a streamer isn’t that simple. You’ll have to provide something unique to your viewers. There are thousands of creators streaming across every category on platforms like Twitch and Kick. You’ll need to stand out.

But, once again, if you get a bunch of subs, you’ll have that sweet, sweet recurring revenue. At that point, you can just hop on the stream for a few hours a day, and that’s it.

5. Become a YouTuber

I imagine that every Gen Zer has, at some point, considered becoming a YouTuber. We grew up with people like Smosh, PewDiePie, and The Sidemen, all of whom started YouTube for fun. Now, they’ve got entire businesses behind their names and are raking in that passive income.

Like influencing and streaming, becoming a YouTuber will require effort. You’ll need to find your niche, post tens of videos that might not get a single view, and hope to slowly rake up an audience or have a couple of viral videos.

I know what you’re thinking at this point. Aren’t these 3 all super difficult to start and require much effort? Isn’t this supposed to be about passive income? Sure, they might need a little bit of initial capital to start, but how will they make me money passively if you have to put in hours for them to work?

And, to that, I say, “That’s the point of passive income”. It couldn’t be more true for YouTube. When you post a video, as long as you are eligible for monetization, you can make money from it indefinitely. 

Think of it like this. You spend 5 hours on a vid, which racks up a million views over the next 3 years. That’s about $2000 for 5 hours of work. Now, do that for 100 vids, and it slowly becomes much more lucrative.

5 Passive Income Ideas for Young Adults Online

At this point, you might have a couple of investments going on and maybe even a semi-successful social media profile or channel. Even if you don’t have the latter, you still have some experience with running a business. Or, maybe you don’t have any of these.

Thus, let’s look into some online businesses that you can start, which will eventually earn you a bunch of recurring revenue. These are beginner-friendly, so don’t worry if you have no business experience.

Note that these will require some upfront time and effort. But, instead of being personal brand-based, like the 3 we mentioned above, they’re product-focused. You’ll see what I mean as we go.

6. Make Print-On-Demand (POD) Designs

Print On Demand (POD) really kicked off in the mid-2010s, but it has been rising ever since. You can take 2 routes with this: either just create POD designs and sell them on platforms like RedBubble, or create a POD store yourself. 

In the former’s case, you’ll get a cut for every sale with your design. So, you get to use your artistic skills and make some quick bucks from them. If you do create a store, you’ll have some platform, like Printful, that takes care of fulfillment while earning profits for every sale.

Both of these are great for young adults because they don’t require income to start out. You don’t need to hold inventory, and the only running costs are your domain and any tools you use.

7. Create Digital Art

You might not be a big fan of POD designs, but you still want to use your artistic skills in some form. Then, you should consider creating digital art. Digital artists create whatever they want and sell it on the web, in the form of stock images, or on an ad hoc basis.

To turn this into a passive income source, you’ll need to… turn these into POD designs. Hear me out. Instead of creating something viral to make sales on platforms like RedBubble, you can simply draw whatever you like. If you have a following behind your art, sell your prints as mugs, shirts, and other merch.

Drawing digital art as a way to make passive income is a great way for you to utilize a somewhat traditional skill with a digital twist. Plus, you can really put in the time to create a true masterpiece and then make true passive income when you end up selling prints of it.

8. Create a Blog

This seems kinda ironic, but starting a blog is definitely a way for young adults to make passive income. Your blog is your chance to write about whatever you like, gather a following, and monetize it through ads or affiliate marketing.

Think of your blog as a written or long-form version of your YouTube or social media account. Now, here’s the caveat. You’ll need skills like SEO and some basic HTML knowledge to manage your blog, and it will take a year or two to get some traffic to it.

However, once the traffic is there, and as long as you provide value to your readers, you’ll get that sweet ad revenue every month. Plus, you’ll be able to create sponsored posts or use affiliate links to supplement said income further.

Keep in mind that blogging and creating digital art (the one we mentioned above) can also be further monetized, which we’ll cover in just a bit.

9. Start a Dropshipping Store

Now we get onto the gurus’ favorite buzzword of 2020: dropshipping. Despite getting a lot of hate online, dropshipping is actually a great way to make passive income, especially with young adults who can find gaps in the market.

Starting a dropshipping store is going to be difficult, though. If you really want to succeed from the get-go, you’ll need to find a product that is starting to go viral but doesn’t have too much supply yet. Plus, you’ll have to secure a quality supplier to guarantee that your products don’t come off as just “cheap plastic toys from China”.

Still, the potential is huge. While you’ll need to try out plenty of products before you make a lot of money, finding that one moneymaker will turn this into some great passive income. And you get all the benefits of dropshipping, like not having to hold inventory or deal with the fulfillment.

10. Build a Mobile App

Creating a mobile app is an ambiguous idea you might not have considered. Now, from the get-go, yes, you’ll need coding skills and a bunch of time to make this. But there are basically no other real costs, and once you launch it, your only work will be to maintain it.

How do you go about building an app? Well, it’s simple. Discover a problem that your peers face when they’re on the go, and create the solution in the form of an app. Or, go down the entertainment route and make an app full of quizzes and drinking games.

Then, you can start earning passively by either putting the app itself behind a paywall or monetizing through ads and in-game add-ons.

5 Passive Income Ideas With Low Start-Up Costs

So, now, you should have tried out a couple of the ideas we mentioned above. Maybe you have some passive income coming in from those funds or your dropshipping store’s making bank. Either way, it’s time to check out an entirely different perspective.

If you've made it this far, you probably have 1-2 marketable skills. Coding, writing, art, videography, whatever it is. Here’s the kicker - you can sell that knowledge in different forms that require very little upfront investment. Even if you’re running a profitable YT channel, you can still use these ideas to further monetize your audience.

Again, these aren’t truly passive from the get-go, but they won’t require as much effort as any of the ones we’ve mentioned above. At this point, you’ve probably put in a lot of that effort to come here.

It’s also worth noting that you can create all of the following passive income ideas right here on Whop. You can make your whop and use it as your hub of operations or host many of these, like courses and communities, right within it.

11. Start an Online Paid Community

Having a paid online community is the best way to monetize your existing audience. Even if you don’t have one, you can still create a Discord server or your community on Whop and start selling access to it. It’ll take a bit more time to grow and make you passive income.

Paid communities can really revolve around anything you like. You can share sports news and picks within it or simply create one to gather folks interested in dropshipping, print-on-demand, etc. 

To start your online community, simply go on Whop, choose a name for your whop, and create a chat. Then, invite folks using your page on the platform and have them join your whop. You can also market this to your social media accounts or put it in your Instagram or Twitter bio.

12. Publish an ebook

If you have the writing chops to write a book, why not publish an ebook instead? Ebooks are pretty lucrative, and once you’ve written them, you only have to focus on marketing them, so they’re essentially passive.

Whether you’re a young adult or not, these are an all-around great option. It’s just that the younger you are, the more creative you tend to be. So, even if you write more information-based ebooks, you can still come up with unique ideas that would have otherwise been lost in your mind.

The process of publishing an ebook is quite simple in theory. Simply write it and publish it through Amazon or any other platform, like Whop. I suggest writing at least a couple of pages a day. Being consistent with it will help you actually create something in the end, and then you’ll just need to edit it.

13. Create an Online Course

Now, ebooks and communities are definitely not everyone’s fortes. You want to create something that’ll take a few hours and nearly no maintenance. Well, an online course might be the way for you.

There are tons of courses out there about virtually everything. All you need to do is find something you’re good at, create a course where you go over the basics of it, and share it with the world.

For example, let’s say that your blog is doing great. Lots of traffic, steady revenue coming in, and all. You can sell a course about getting a blog from $0 to $1000 in, say, 1 year. You’ll create step-by-step videos and guides on what you did and help your learners understand what they should do to follow your steps. 

14. Start Affiliate Marketing

Let’s take one step back. Say that you’ve already tried out some of these ideas, and you have gathered a somewhat significant following. Even 2-3k followers/subscribers will be a good start. In this case, you should take a look at affiliate marketing.

With affiliate marketing, you’re basically paid every time someone buys something using your link. You’re someone your followers trust, and you connect them with reliable products and services. 

This is fully passive once you’ve created the video/tweet/post with the affiliate link. At that point, you just get the percentage per sale you’ve agreed upon with the seller. This is great for young adults, as you can understand how affiliate marketing works better than Millenials and Gen Xers. 

15. Start a Podcast

If you’ve been watching a bit too much of the JRE, you’re probably already thinking about starting a podcast. As we’ve already said, everyone has some unique skillset or perspective that they can sell. So, now’s your chance to do so because you don’t even need many skills to start a podcast.

All you really need is to keep the conversation flowing and a small initial investment in a good mic and camera. This will set you back $200-$300, but it’ll be worth it. Eventually, you’ll start earning money from people watching your podcast, or you can put all your podcasts behind a paywall. That way, once you have a few of these live, you’ll start earning some passive income.

As for how you can start a podcast, feel free to host it on YouTube, Spotify, or even Whop. Find a topic you’re really invested in, and just record yourself rambling on about it. There are tons of people out there who really love to watch these, and that number’s only going up.

5 Passive Income Ideas for Those With Money to Spend

We’re nearing our last few ideas, so let’s go out with a bang. Let’s say you have a bunch of money to spend — like in the thousands or even higher. While you should still check out all the ideas we mentioned above and see if you like any of them, some will require a higher budget, similar to what you have on the side.

These can become pretty big passive moneymakers, but they also come with a higher risk, as you’ll be investing a lot of capital in them. However, these will essentially be passive once you outsource some day-to-day operations.

16. Dabble in Real Estate Investing

The real estate market has and will always be a lucrative one. If you have the budget to buy a house or a residential building, you can expect passive income each month. Sure, you’ll need to take care of maintenance and whatnot, but all that can be outsourced to contractors.

Now, you might say that starting out with real estate this young is too far-fetched. I say that if you have the capital, start out slow and see how it goes. After all, if you have the money to buy a house to rent out or resell down the line, you also have the small investment a real estate mentor or coach will require.

17. Open a High-Yield Savings Account

A much safer option than real estate investing takes us back to good old compound interest. This time around, instead of investing in bonds and stocks, you’ll be placing your trust in banks through high-yield savings accounts.

These are pretty straightforward. You lock your money for a certain period, earning a yield once that time passes. That percentage is usually in the 4%-6% range, which is certainly not a lot. But, if you have a high enough budget on the side, which you’d otherwise let sit inside a checking account, it’s better to put it in one of these savings accounts.

18. Become a Silent Business Partner

Okay, it’s time for our article's riskiest passive income ideas. Let’s start with becoming a silent business partner. If you’ve racked up enough money on the side, you can reach out to startups and small companies that require capital and invest in them. 

You’re basically an investor/venture capitalist, but you only help the company with money rather than partaking in the day-to-day processes. In turn, you get a percentage of the profits every year without doing pretty much anything.

19. Flip High-Value Items

You might have heard of the watch craze during and after the pandemic. Flippers were buying Rolexes, Pateks, and APs in bulk and reselling them as soon as they were out of the dealer. Flipping high-value items, in general, is a pretty lucrative market that you can tap into, automate, and profit off of passively.

You can flip anything from cars to watches, sneakers, or even limited-edition luxury items. The risk is pretty high with this, but you can outsource most of the day-to-day tasks, so they can be truly passive.

20. Try Out Peer-to-Peer (P2P) Lending

P2P lending will require tons of capital to start if you really want to make a bunch of money from it. With P2P lending, you’re lending money to others for a set interest rate. You’re basically the bank, and they’re the lenders.

There are platforms like Prosper, where you can connect with folks and lend them money. And you can even reach out to businesses and loan to them instead of investing in them and earning equity.

Tips For Passive Income Success

If you went through all the ideas we’ve included above, you’ve probably already gathered some of our main tips when it comes to passive income. But, to have all of these in one place, here are our tips to help you make passive income as a young adult.

• Start small: There’s no reason to rush into any of these ideas. Start small with some of the ones we mentioned higher on the list, and move on to the more difficult ones as you scale.
• Diversify: You might be tempted to focus only on one income stream just because it’s been the only one that works. That’s not the right thing to do. Scale that to a certain degree and diversify as soon as you can. Having 4 pillars supporting your bank account is better than just 1.
• Long-term compound interest over Short-term large returns: The 10% you’ll earn from the S&P500 yearly might seem too low for some, but consider it over many, many years, Always be in this for the long-term game. 
• Low cost, high earning potential: Focus on ideas with low or zero initial costs and high earning potential in the long run. Digital products are the best to do this. Accompany these with safe investments, like bonds or savings accounts, and you’ll be set.

Generate Passive Income with Whop

Having passive income sources as a young adult will put you ahead of most people who are much older than you. In our opinion, the best way to earn passive income is through digital products. They won’t cost you anything, and you can really scale these to the point where they become your main source of income while being completely passive. 

But where can you sell these? Right here, on Whop. 

Whop was designed for creators like you who want to sell access to their communities and digital products. Through your whop, you can host your course, manage your community through the Chat app, share guides, ebooks, and so much more.

On top of this, you can also make passive income through Whop by becoming affiliated with the communities within the platform. You can do all of this from one single hub: your whop. Plus, you’ll get access to all the data you need to scale your whop directly on your Dashboard.

So, if you’re ready to get your first income stream up and running, create your whop today. The whole process will only take a few minutes, and you can share it with your friends and followers in no time.