The 10 passive income ideas for young adults in 2024 are:
- Generating local business leads
- Creating a YouTube channel
- Venturing into real estate investing
- Investing in dividend-yielding stocks
- Building an online business
- Investing in a high-yield savings account
- Taking part in peer-to-peer lending
- Developing an app
- Writing blogs
- Selling photos and videos online
Building passive income can be a great way to generate extra cash flow. As a young adult, it helps you be financially stable as you move forward in your career. You can engage in creative ideas like blogging, vlogging, and podcasting. You can also create digital products and online courses if you have an entrepreneurial mindset. Easier alternatives include automated trading and creating niche websites. There are many digital real estate investments and online marketplaces available in 2024.
According to the Global Entrepreneurship Monitor, young adults are 1.6x more likely to build their own business than older adults. Built in Chicago states that time flexibility and financial independence are the main reasons for this. That's why most Zoomers (also called Gen Z) or adults aged 18-25 start an online business. They look for profitable side hustles that they're passionate about. This helps support their lifestyle.
Starting a passive income stream as a young adult requires time and effort. You need to learn the skills needed in your craft and business operations. This Redditor mentioned how he makes around $1,800 monthly at 19 years old. His first step was learning about his target industry. In this case, stock trading and real estate investing.
Most young adults engage in making digital products. It's because of how easy it is to access the internet and use different money-making platforms. One Redditor suggests developing products that are in demand. Creating content for such products leads to better online traffic. Another Redditor mentioned doing stock photography and videography because of their profitability.
Keep in mind that achieving success as a young adult is challenging. Since you don't have experience, it takes more time to learn your chosen business model. It requires careful planning, smart investments, and consistent effort. But what are the best passive income ideas for young adults in 2024?
This article discusses 10 profitable business models fit for young adults. We also feature success stories from real people on their chosen digital investments.
1. Generating Local Business Leads
Local lead generation is a business strategy that involves generating leads. You provide potential customers for local businesses in a particular area or region. As a young adult, you can do this with the right skills. It works by using various digital marketing techniques like SEO and content marketing. This way, you connect local businesses with potential customers. This can help them increase their sales and revenue. You earn a commission for every successful lead or sale.
Young adults can benefit from this business model. Local lead generation is the easiest form of passive income. It takes only around 2 to 6 hours to create a website. Plus, there are free SEO tools you can use. These include Ahrefs, Google Analytics, and Semrush.
Quora user Philip Laboon reveals making $45M from generating leads in just 12 months. He also stresses the importance of learning before engaging in local lead generation. You can join online courses, communities, and forums.
Moreover, local lead generation does not require significant investment or overhead costs. It's an ideal business model for young adults who may have limited resources. You can generate a steady stream of passive income with the right strategies.
2. Creating a YouTube Channel
YouTube is the world’s second-largest search engine. That is why creating a YouTube channel can be a great way for young adults to generate passive income. Those interested in vlogging or content creation can make money from this. YouTube garners millions of searches, active users, and minutes spent on the site. It’s a powerful platform for building a brand, promoting products, and making extra money.
To create a successful YouTube channel, you must identify your niche and market. Choose a topic that aligns with your interests and expertise. It should generate a sizable following. Know your competition and what makes your channel unique. Determine what value you can bring to your YouTube viewers.
Once you establish a niche, start creating high-quality content. This should fit the theme of your channel and the needs of your audience. This Redditor recommends using keywords and tags to optimize your videos. Consider collaborating with other YouTubers to expand your influence and reach.
As your channel grows, you can start monetizing your content through various means. You can earn through YouTube ads, brand sponsorship deals, merchandise, and affiliate marketing. The challenging part is creating content and maintaining your YouTube channel. It requires immense time and commitment. However, you can use YouTube automation strategies if you're in school or working at your 9-to-5 job.
Success Story of a Young Adult YouTuber
Safiya Nygaard is a YouTuber who first gained popularity as a video producer for BuzzFeed. In 2017, she started her personal YouTube channel. Six years later, she amassed a following of over 9.64 million subscribers. According to Yahoo, she earns an estimated $187,917 per YouTube post.
Safiya’s content is primarily focused on fashion, beauty, and lifestyle. People love her quirky and creative video ideas. Her success on YouTube has led to various other opportunities. These include a book deal and collaborations with major brands such as ColourPop. She was also featured in various media outlets, including The New York Times and Forbes.
3. Venturing Into Real Estate Investing
Real estate investing can be a powerful way to start passive income streams. This business model entails buying and selling properties. It also includes renting out properties for short- and long-term stays. Some individuals even engage in simpler ways like Real Estate Investment Funds (REITs). Young adults can dive into this industry by pooling money as an initial investment. They can also consider crowdfunding options.
According to Forbes, you should research the market before investing in real estate. You should take into account factors like demographics, city tourism, and job security.
These are the three ways you can start a passive income stream in real estate as a young adult:
Pros
Rental income
Real estate property appreciation
Tax benefits
Cons
Lack of liquidity
Huge upfront payment
Varying upkeep costs
Possibility of working with difficult tenants
Pros
Asset diversification
Access to real estate market with smaller capital
Access to real estate projects
Cons
Lower returns
Lack of liquidity
Risk of default
Pros
High dividend yields
Portfolio diversification
High asset liquidity
Cons
Dividends are taxed similarly with ordinary income
Sensitivity to fluctuating interest rates
Property-specific risks
These opportunities can be lucrative. They can present you with many ways to earn passive income. However, it’s crucial to consult with experts before making a property investment. This Redditor suggests talking to the property management company and the realtor. This way, you can get detailed information about the property first.
Conduct a study of the local market. Then, evaluate potential real estate properties. You should also consider factors such as property management, maintenance, and vacancy rates. You can take advantage of this passive income opportunity with smart investing.
Success Story of a Real Estate Investor
Brandon Turner is one of the most successful young adults who focused on investing in the real estate industry. He co-founded BiggerPockets, a real estate investing education platform. Brandon is widely recognized as a leading expert in real estate investing.
Brandon began his real estate investing journey in 2007. He purchased his first rental property at 21. Since then, he built his portfolio by purchasing rental properties in different markets.
Later on, he co-founded BiggerPockets. The platform has become the leading online resource for real estate investing education. It includes articles, podcasts, and online courses. It also has an estimated 2 million community members
Besides his work with BiggerPockets, Brandon continues to invest in real estate. He has built a portfolio of 7,400 rental units across the country. He is also the author of the top-selling title, The Book on Rental Property Investing. It garnered over 700 five-star reviews and is ranked in the top 50 business books in the world on Amazon.
4. Investing in Dividend-Yielding Stocks
Owning dividend stocks that yield high returns is passive yet complex. Young adults can invest in dividend-yielding stocks if they have the money. It's also one of the most straightforward means of earning extra money. You can take advantage of automated trading platforms in the market. Some popular examples include TradeStation, eToro, and AvaTrade.
Dividends are regular payments that companies pay their shareholders to distribute their profits. By investing in stocks that pay dividends, you get a passive income stream. You earn a share of the company’s profits without having to actively manage the investment. The more shares you own, the higher your dividend payout.
Quora user Jim Caron suggests opening an account with a reputable trading company. As a beginner, it's important to transact with legal, customer-focused businesses. You should also consider companies that offer free market investing training.
To maximize your income in this type of income stream, consider:
The tricky part of this passive income idea is selecting the right company in the stock market. Investing in dividend stocks is a relatively low-risk way to earn passive income. But it also involves market risk and requires intensive research and analysis.
Success Story of a Dividend Investor
Joseph Carlson is a young adult who has achieved significant success through dividend investing. He is a finance YouTuber who started his YouTube channel, ‘The Joseph Carlson Show’. Joseph aims to share his journey towards financial independence.
He is a proponent of long-term investing. Joseph believes in building a portfolio of high-quality dividend-paying stocks. His disciplined approach to investing allows him to amass a diversified stock market portfolio.
Joseph emphasizes the importance of researching companies before investing. He also stresses the need to focus on company fundamentals. These include earnings growth, dividend growth, and financial stability.
His transparency sets him apart from other personal finance influencers. He regularly shares his investment portfolio and provides updates on his financial progress. Joseph is open about his successes and failures. He also encourages his audience to learn from his experience.
5. Building an Online Business
Building an online business means engaging in different digital channels and products. As a young adult, you can leverage the power of the internet. Use your skills and passion to create a profitable business. Some famous platforms include Amazon, Shopify, Kajabi, and CJ Affiliate. You can also start profitable services such as Amazon FBA or Walmart dropshipping. These ideas will generate income long after you put in your initial efforts.
This Redditor stresses the importance of marketing and presentation in any online business. It lets you drive the right traffic to increase your reach and sales. He also recommends identifying your product, target market, and selling platform.
Here are a few different ways to build an online business:
Pros
Low startup cost
Potential for higher income
Worldwide reach
Business scalability
Cons
Potential loss during site crash
Very competitive
Longer shipping times
You can't ensure product quality
Pros
Inventory management is simpler
Delivery is easy
No sales limit for each product
Cons
Smaller payout per transaction
Very competitive
Concerns for product piracy
Pros
Low cost to set up
Minimal expertise needed to manage
Convenient and flexible
Work at your own pace
Cons
Can be very competitive
A need to constantly generate leads
Revenue is not guaranteed
People can perceive your approach as spammy
Pros
Lower cost
Can target specific customers
Wide range of content formats
Improved customer interaction
Cons
Limited ad space
Concerns for data privacy
Declining ad clicks
Site visitors can block ads
Pros
Very flexible
Scalable
No overhead costs
Income potential is limitless
Cons
Very competitive
The development process may be complex
Site maintenance and upkeep
Longer sales process
Success Story of an Online Entrepreneur
Pat Flynn started his online entrepreneurial journey at 25. He is one of the young adults who achieved a stable passive income by building online businesses.
Pat began his career when he was laid off during the 2008 financial crisis. To get back on track and earn money to help support his family, he turned to online business ventures. In his projects, he discovered that he had the passion for teaching others.
One project he developed is The Smart Passive Income Podcast. Pat believes podcasts are essential tools for learning about business strategies and management. His show lets him reveal online business and blogging strategies and marketing tips. Since 2010, Flynn’s show has earned multiple awards and has been featured in The New York Times. It garnered about 60 million downloads.
6. Investing in a High-Yield Savings Account
Investing in a savings account or certificate of deposit (CD) gives you a higher interest rate. For young adults with significant savings, this is a profitable investment. The best thing about this income source is that you don’t have to do anything. All you need is to select the nation’s top savings accounts and CD rates. With high-yield savings, it’s best to transact with an online bank. This will allow you to gain access to the top rates across the country. Alternatively, you have limited options if you go for a local bank.
A high-yield savings account has Federal Deposit Insurance Corporation (FDIC) coverage. You can protect your money for up to a maximum limit of $250,000.
Pros
Higher interest rates
The principal is FDIC insured up to $250,000
Compounding interest
Funds are accessible
Returns are not correlated to market fluctuations
Cons
Interest rates may change
Potential fees
Account subject to withdrawal restrictions
Inflation may hurt returns over time
The risky part about these savings accounts is inflation. It will play a big part in determining the purchasing power of your money in this account. Quora user Amy Leung suggests investing your emergency funds in a high-yield savings account. This way, you make extra income while your money sleeps.
Success Story of a High-Yield Savings Account Investor
Michelle Schroeder-Gardner is a young adult who has achieved success with a high-yield savings account. She is the founder of the personal finance blog Making Sense of Cents. The platform lets her share tips on budgeting, saving money, and investing.
Michelle started her blog in August 2011 when she was in her early 20s and before she finished her finance MBA. She maximized her savings in a high-yield savings account to achieve financial independence.
Michelle monetized her blog through various means, including affiliate marketing and sponsored content. Her affiliate marketing online course propelled her business forward. It helped pay for her student loan debts and maximize her cash flow.
Through her success, Michelle has become a sought-after speaker. She's been featured in major media outlets such as Forbes and CNBC. Michelle is a powerful advocate for financial education. She encourages others, especially young adults, to save money early. Her success is a testament to the power of disciplined saving and smart investing.
7. Taking Part in Peer-to-Peer Lending
Peer-to-peer (P2P) lending allows you to make money through interest payments. It works by lending money to individuals or businesses. As a young adult, you can earn passive cash flow through P2P lending. You can invest your money in loans offered on these platforms.
P2P lending involves selecting a P2P lending platform. It is also known as a ‘marketplace lending platform'. Some examples are Lending Club or Prosper. Then, you have to create an account. Browse available loans to determine which offering matches your investing objectives. Once you have selected a loan, you need to transfer funds from your bank account to the platform. It will then lend the money to the designated borrower.
You’ll receive a part of the interest payments as the borrower makes repayments on the loan. The amount of money you earn from this setup will depend on the interest rate of the loan. It also depends on your initial investment.
P2P lending offers high returns compared to traditional savings accounts or bonds. However, there is also a higher level of risk involved. For example, the possibility that the borrower will default on the loan, resulting in a loss on your part. One Redditor also warns about the dangers of P2P lending.
To mitigate this risk, you can:
Success Story of a Peer-to-Peer Lending Investor
Peter Renton is a successful individual who is famous in the world of peer-to-peer lending. He is the founder of Lend Academy. It is a leading educational resource for investors interested in peer-to-peer lending.
Peter moved to Denver, Colorado in 1991 to expand his family’s printing business. He became interested in alternative investment options such as peer-to-peer lending. In 2009, he started investing in this lending practice through various platforms.
Peter invested in various peer-to-peer lending platforms. He saw the need for an educational resource to help potential investors. So, he founded Lend Academy in October 2010. It provides investors with the knowledge and tools to succeed in peer-to-peer lending.
Peter has shared his knowledge and experience with thousands of investors worldwide. He has become a leader in the industry. Peter is often featured in financial media outlets such as Bloomberg and Forbes.
8. Developing an App
The financial reward of creating an app is like creating an online course. Both of them require a huge amount of initial investment of time. But you get to reap its benefits upon completion and in the long term. Creating an app gives you the potential to generate another passive income source. This is great for young adults with application development skills.
You can earn passive income from an app with no constant supervision. It's better than a traditional 9-to-5 job that requires trading time for money. Because of digital advancements, the global app market is booming. There’s a constant demand for innovative and useful apps that can impact people's lives. According to David Villegas, creating an app isn't as complicated as it sounds. You just have to research apps that aren't available on the market yet.
Here are useful tips to achieve a successful app creation business:
Success Story of a Young Adult App Creator
Ben Silbermann is a young adult who has achieved outstanding success in the tech industry. He co-founded and created Pinterest. It's a social media platform for saving ideas for projects and interests. Ben previously worked at Google and had experience designing user-friendly products.
Ben and his co-founders developed a unique and user-friendly interface for Pinterest. It allowed users to easily save and organize images and content from around the web. They also focused on building a strong community around the platform.
One key factor in Pinterest's success was tapping into an underserved market: women. Pinterest quickly gained a devoted following. The platform helped discover and organize content related to fashion and other topics popular among women.
Ben continued to lead Pinterest through many challenges and opportunities over the years. He oversaw the development of new features and products. A great example is the ‘buyable pins’ feature. It allows users to purchase products directly from the platform.
Ben Silbermann has created one of the most influential platforms in the world. His success with Pinterest inspires other young adults who want to create impactful products in the tech industry.
9. Writing Blogs
As a young adult, you can earn extra cash by creating a blog. It's where you can provide knowledge, ideas, and experiences to a larger audience. You can monetize your blog while establishing yourself as an authority in your niche. These include affiliate marketing, display advertising, sponsored posts, and many more. Your blog can continue generating income after creating content and implementing monetization strategies.
Writing blogs helps with networking and building relationships with other industry experts. This can lead to collaborations and guest posts. It opens opportunities to expand your reach and grow your dedicated audience base.
There are many free tools you can use as a blogger. This Redditor warns that this factor leads to a business model with a low barrier to entry. It means that bloggers should have a unique identity. Plus, AI platforms like ChatGPT can help speed up your research process.
Success Story of a Young Adult Blogger
Ella Mills is a successful young adult who became successful in the world of blogging. She is also known as Deliciously Ella. She started her blog in 2012 while she was studying at university. This was her way of sharing her journey towards healthier eating after being diagnosed with a rare illness.
Her blog features plant-based recipes and lifestyle tips. It has since expanded into a successful brand. She has authored several cookbooks and launched a podcast. Ella even opened multiple delis and cafes in London.
Ella became successful because of her relatable and engaging writing style. Her blog offers a wealth of resources for those looking to change their diet and lifestyle. Her honest and transparent approach has earned her a loyal following. Ella is also a successful entrepreneur and philanthropist. She uses her platform to raise awareness for various causes like mental health and sustainability.
10. Selling Photos and Videos Online
Selling photos and videos online is a great passive income idea. It allows you to monetize your skills in photography and videography. As a young adult, you may have a natural talent for capturing images or producing engaging videos. There are many platforms available that allow you to sell your photos and videos online. You can use stock photo websites like Shutterstock, iStockPhoto, and Adobe Stock. For video assets, you can sell them on marketplaces like Pond5 and VideoHive. You can sell your digital assets with no ongoing effort through downloads.
Each photo or video you sell on these marketplaces entitles you to royalties. As an Adobe Stock Contributor, your earnings will depend on your assets downloads. Platform users can buy them through subscriptions, on-demand purchases, or extended licenses. You’ll earn a 33% commission per image download. So for subscription-based downloads, you’ll earn between $0.33 and $3.30. It’s higher for each extended license download ($21.12 to $26.40).
It’s also a higher figure for video assets. You’ll get a 35% commission for each video download. This lets you earn $2.80 to $7.84 for a subscription-based download and $22.40 to $70 for an on-demand download.
The key here is to upload as many high-quality digital assets as you can. This idea requires substantial effort. But since these marketplaces have a wide user base, it’ll be easier to increase your sales potential. A Redditor also suggests engaging in microstock and using automation systems.
Success Story of a Young Adult Selling Photos Online
Ryan Longnecker is a young adult who has achieved success in selling stock photos online. He began his photography journey in high school when he joined a photography club. This is where he learned about the darkroom process. In his senior year, he became a yearbook photographer.
As his skills and portfolio grew, he tried selling his work online. Ryan learned how to optimize his photos and videos for more successful sales. He pays close attention to market trends. Ryan creates content that is in high demand, such as lifestyle and travel niches.
Over the years, he has built a successful business selling his photos and videos online. Many clients purchase and use his work for advertising, marketing, and editorial purposes. Ryan attributes his success to a keen understanding of market demand. This strategy creates opportunities for young adults to succeed in stock photography.
What Skills Can You Learn To Earn Money as a Young Adult?
You can start building a portfolio and establish your brand by learning these skills. They can help you earn passive income in the future. Additionally, starting early allows you to have more time to hone your skills. This way, you can build a network and create a firm foundation for your future career.
Why Is It Important To Start Thinking About Passive Income Early on?
Should You Take Passive Income Courses?
You should take the best passive income courses if you have the budget. These programs will offer foundational knowledge and unique strategies. Some even offer personalized learning and one-on-one coaching. In local lead generation, you can go with Dan Klein's online course. Some famous course creators on passive income include Sadie Smiley and Morten Storgaard. Passive income courses help you make fewer mistakes than taking the venturing alone.
One Redditor suggests identifying your target business or industry first. This way, you know what skills and resources you need. However, you need to do in-depth research on a passive income course before joining one. Choose reliable mentors with experience and skills.
Can You Start an Online Business as a Student?
Yes, you can start an online business as a student. It's highly feasible since university or college students have extra time to spend. According to Yale University, students have the resources to start a business. They can access the school Wi-Fi, laptops, and library materials. The first step is determining a niche, product, and target market. Then, you have to create a business plan. You also need to develop a unique brand and establish a good online presence.
Quora user Josh Snow revealed how he started a successful business between classes. He closed multiple 6-figure client deals while still achieving top awards. Josh attributes his business success to outsourcing contractors and doing online classes. One Redditor also mentioned operating an e-commerce business while in high school.
What is the Best Source of Passive Income for Young Adults in 2024?
The best source of passive income for young adults in 2024 is local lead generation. It offers low startup costs and schedule flexibility. Plus, making a niche website only takes a few hours. Other passive income sources like blogging and selling stock photos are indeed profitable. However, most of these business models require you to produce content regularly. And since they have a low barrier to entry, competing on a global scale is challenging.
As a young adult, there are various ways to create passive income streams. Some require upfront investment. Others entail significant effort to build a following or create high-quality content. Alternatively, local lead generation requires less maintenance on a daily basis. You just need to rank on the top of search engine results pages. Once you achieve that, you'll stay ranked and continue generating leads.
To start, you need to pick a niche and local service. Then, create a website for each one you choose. You can rank these sites organically through SEO. Once your website ranks, you can start generating leads at zero cost. This lets you earn around 80% to 95% in profit margins.
Local lead generation provides passive income to give you a financial boost as you begin your adult life. You can generate ongoing cash flow with minimal effort.
