Passive income is awesome. It’s one of the keys to being wealthy and reaching financial freedom. And the good news is you can start earning passive income as soon as you’re ready: in university. The college student’s life is honestly the best time to start planting some passive income seeds.
What do I mean exactly by passive income? Put simply, passive income is putting in a lot of effort into something to reap the benefits later on. It’s creating an asset which will generate income for future months/years, without much additional work (so not starting a business). By generating passive income, you stop trading time for money. You achieve many people’s dream: earning money while sleeping.
I’ve compiled a list of the top ways a student can earn some passive income, most of them personally tried out by me (therefore doable)
1. Open an online shop
It really is much more simpler than it seems. You find a product, make a website for it (Shopify is great), dropship and market it. If you do this well, you will hear the ka-ching in your pocket every day. The effort here involves finding a good product and marketing it properly.
I did this myself with my Wicked Chokers website selling chokers (shock horror) and I lasted around 2 months with one sale. The reason it didn’t work? I had no idea what I was doing and there was way too much money going out and none going in. Now that I’m a bit more experienced, I’m pretty sure I could do a good job (maybe in the Xmas hols…). Interested? Check out my Money Experiment 2 on how to get started
This is one of my absolute favourites. Ideas are literally the new currency of the world: the ability to be unique. Ideas are such an abstract concept that it’s hard to explain how they can make you money; you are the one who has to come up with the opportunities. Ideas could make you money in different ways: find you a job, get you a business idea, open more passive income streams, etc. You want to make ideas work for you.
The upfront work consists of building that idea muscle. To be an idea machine. My method to building that muscle: writing 10 ideas a day. I’m currently at 690 ideas and nearly 3 months in. They’re not all good, but they help me solve problems. Can’t sleep? Write down 10 ideas to help me sleep. Feel sad? Write down 10 ideas. Want to be rich? 10 more. And it all comes from within. If you start making it a habit now, think of what you could come up with when you graduate (would be 10,950 ideas for me).
Writing is a great skill because you can really use it in any field. However, to be successful at writing as a passive income stream you also need to be good at marketing. This means writing an ebook/book/short story, marketing it well, and boom: more ka-ching in your bank account. Here obviously the upfront effort is doing the writing, but if it’s something you enjoy and are willing to try out… could be fun. Or maybe all those essays and book resumes you wrote for school could be helpful. Remember all those ideas you wrote down? Write down 10 book ideas. Choose the top 3 and then get started on your book! More ka-ching.
I love writing, especially fiction. And although I’ve never done it as a passive income (I DO NOT consider blogging passive, nopety no), I’ve written plenty of short stories and articles as a freelancer. Fun but I really was trading time for money. Next time I’ll go with passive income.
4. Online Courses
This really only applies as a student if you have a more developed or curated skill that you feel could be taught to others. Adultier adults in the workforce will probably have more experience and knowledge in their area, so you really gotta think of something you could teach as a college student. This can be an instrument, a social skill or some quirky trick. You then create a course and sell it. Boom, more ka-chinging.
Course sites such as Udemy let you put up your course and charge people to take it. I know some people have great success once having put in the initial effort.
I actually once tried making a course on ‘How to Complete a Rubik’s cube’ on Fiverr. Results: My brother tried it and didn’t get very far. It was on the site for an entire day.
This one is the Grandaddy of Passive income. It’s literally putting away your money and watching it grow (yes you can do this as a student). In my How to start investing in college (US) post I explain how you can invest in index funds to get started. Personally, I find these to be the best way to get started with investing, especially as a student. However you also have mutual fund investing, individual stock picking and peer to peer lending.
Many of these asset classes are used as retirement vehicles, meaning you put away the money only to be taken out in 40+ years. But if you do this well, you can earn some passive income in your working years. Check out The College Investor for more info.
6. Teach what you’re studying
You probably know by now that one of the best methods of studying your subject is teaching it to others. How about turning it into some income as well? Although you could consider this a job and not passive income, the fact that you gain something other than money does make it a pretty sweet deal.
I did do a lot of tutoring but it was teaching English as a foreign language, so wasn’t too beneficial to me in the long run (except now I know what the present continuous is).
My very favourite, and maybe not very passive (but definitely fun) income stream is simply experimenting with money. Have a separate bank account where you start off with a certain amount of money (I started with £40), and then use that money to experiment. This can be to try out different side hustles, try a bit of investing or learn a bit more about finance. I’ve used it for: matched betting, starting my online shop and for a few blog expenses. Feeling nervous about starting with investing? Use your experiment money first to see what happens.
I started with £40 for matched betting and now have over £100. Not much but I can say that I’ve learnt a lot on the way. And if it all disappears I know it’s fine. And if it grows? Even better!
Which passive income stream do you see yourself earning?
Earning a passive income is not difficult, especially as a student with some extra time and energy. The reason why not everyone does it? It takes a lot of initial effort and there’s a certain risk factor: what if I put all this effort and nothing comes out of it? It’s a fear we all have, but necessary to earn big money and be financial free, risks will be everywhere. But that is the beauty of financial independence.
Another thing you may have noticed that’s in common with most of these passive income streams: mastering the skill of selling. Many of these passive income streams involve making a product and then marketing it (which is why my poor chokers failed). But you see, once you learn how to sell, the world is your oyster. You can literally create the most useless chair in the world, but if you market it well I bet you would still get some sales.