“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffet
This sums up the importance of passive income in a nutshell. To be financially independent, you must find a way to make money passively. This article will look at some Passive Income Opportunities to help younger people become financially independent.
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What is Passive Income?
Passive income is the money you earn without having to make daily efforts. In a conventional job, one typically trades their time and money for a fixed amount of money. While there is certainly potential for promotions and raises, you’ll always be trading time for money.
With a passive income strategy however, you invest the bulk of your time and effort upfront, building a system that ideally runs itself, earning money from it over an extended period of time without having to do anything.
Passive income is a fantastic way to secure your income as it will always keep generating money with little or no effort put into it. So whether you become ill and need to spend time with your family or a global pandemic forces you out of your job, you will still have a steady form of income.
Can You Earn Passive Income as a Teenager?
It’s never too early to start preparing kids for what lies ahead of them in the real world. The lessons they learn from hands-on business experience now could have a far greater impact than anything they’ll ever learn in school.
Teenagers growing up today are in a historically unique position to earn passive income. Some of the best passive income opportunities include Blogging, YouTubing, Creating apps, buying and selling online products, and many more activities that they enjoy doing anyway.
Passive Income Strategies for Teens
There are three main strategies that you can follow to earn money passively.
1. Save money to Invest
The easiest way to earn passive income for teens is to save money and invest it. Now, saving money during your teen may not be easy, but you have the power of time on your side. You will be surprised by how much you can earn passively from compound interest over a period of time.
Let’s say you save $100 per month for a period of 10 years (interest rate of 10%); you will make over $20,000 during this time. But say you invested the same $100 for 20 years instead of 10, by the power of compound interest, you now have over $72,000 at your disposal. If that sounds fascinating, you’re not alone.
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” – Albert Einstein
2. Create a Product You Can Sell (Preferably Multiple Times)
Another great way to earn passive income is to create a digital product that you can sell multiple times on the internet. You will need to have a specialized skill, but it can be a worthy investment. You can create website templates, create a course, build mobile applications, and so on. The best part is that you invest your time once and keep reaping the benefits.
3. Promote Your Talents
Use social media, blogs, or your own website to publicize your skills. Most teens are technologically savvy; use this knowledge to your advantage. You may also make money by using affiliate marketing tactics. One promotion on your social media sites might set the wheels in motion for you to turn a hobby into a scalable business model.
7 Passive Income Opportunities for Teens
The following is a list of passive income ideas we’ve come up with that we think are particularly well-suited to teens.
1. Blogging
Blogging has become a popular way to create a passive income stream. Although most bloggers are young adults, blogging has attracted a lot of teens as well. With the right niche and consistent work, anyone can grow their audience and monetize it to earn money passively. Consistency is key when it comes to blogging, as it is often difficult to get started. Also, finding the right niche is essential as you will need people searching for the particular topic to make a decent income.
There are many possible ways to make passive income through blogging. You can run ads in your blog and earn from that; you can also do affiliate marketing, selling digital and physical products, and much more. The amount of money you can earn through blogging varies from a few dollars to thousands of dollars a month. Some people make millions from blogging alone, so it can be a great passive income opportunity for teens as long as you are consistent.
2. Youtube
Youtube is another great way to earn passively. The entry requirement to get started on youtube is relatively low, and anyone with a smartphone can get started. There are kids like Ryan Kaji (an 8-year old YouTuber) who are earning millions. Much like blogging, YouTubing too takes time to create an audience and start earning passively. You also need to have a certain number of videos before you can sit back and watch the passive earnings unfold. The start will not be easy, but youtube is one one the highest-paid passive income opportunities for teens out there.
But again, the start won’t be easy, and the trick is to keep creating fresh and unique content in your particular niche. Create a video that you will love to watch yourself, and don’t worry too much about video quality.
3. Sell Products
Selling a digital product is another excellent opportunity to make passive income. You create the product once and list it on different platforms. People will pay you a fixed amount to use the product, earning you a steady flow of income. But creating a product can be a difficult task, and you can never be certain that the product will be a success. But with few trials and errors, you can perfect a product, and a single hit will ensure a source of passive income for life.
You can also sell physical products that can be reused, for example, your study materials or notes. You have to be creative and find ways to repurpose your product so that you can reach a wider audience.
Dropshipping and affiliate marketing can also be a great passive income opportunity for teens. How this works is you sell other people’s products. They create and maintain the inventory; you just make the platform and market the product to get a profit percentage.
4. Dividend Stocks and Treasury Bonds
Earlier, we emphasized the importance of saving money and the power of compound interest. If you want a much greater profit, you can consider putting the money in the stock market. Now we won’t go into details here, but stock investment is risky and may not be the best move if you do not want to take any risk. But in the long run, stocks can provide a steady source of passive income and, in 5 to 10 years, will make you a substantial amount of money. So if you have small savings, Dividend Stocks can be a great passive income opportunity for teens.
Investing in treasury bonds can also be a safe and secured passive income opportunity. The government takes full responsibility for your money, and you receive a fixed interest rate each month. If you want a safe investment, a treasury bond is the way to go.
5. Create Online Courses
Similar to blogging and YouTubing, one popular option for creating passive income is through online courses. Thanks to the internet, we no longer need to rely on school and colleges to learn new skills, and there is always someone in the group who teaches better than the teacher. You can use that skill to create online courses and continuously make money off them.
Creating an online course has become effortless thanks to platforms like teachable and kajabi. Anyone even without the knowledge of coding can upload their content on these platforms and start earning passively.
6. Gaming
A rather interesting passive income opportunity for teens is through gaming. Most teens love to play video games and do spend a fair share of their time playing the latest AAA titles. But if you can record your gaming sessions and add some funny commentary to it, bam, you have decent content that other teens will spend time watching.
There are many live game streaming sites like Twitch that allows you to build a community of like-minded gamers. You can then monetize them through the platform and, if you get lucky, can even get hefty donations.
7. Social Media Marketing
Most people are on social media right now, and it can be a great passive income opportunity for teens. The idea is to invest your time to build up a social media following. Once you have a lot of people following your profile, you can then monetize them by pairing up with other companies who will pay to post about their products.
If you are someone with a large social presence and have already built up a fan following, this can be a great passive income opportunity.
Summary
As we discussed, there are a ton of opportunities for teens to create a source of passive income. You do need some time to get your gig going, and therefore starting early during your teens makes the perfect sense. Having a source of passive income gives your financial freedom and a breathing space in a world where it is increasingly getting difficult to make a living.
Some final thoughts…
- Create a source of income that makes you money while you sleep, put in the effort once and see a steady flow of money coming in for life.
- Be prepared to fail, not all passive income ideas will work, but you have to learn from your mistakes and try again.
- Try investing long term and let your money work for you.
- Consistency is the key; keep putting in the hours now to have a hassle-free life in the future.
