We recently compiled a list of the 20 passive income ideas for young adults and in this article, we will talk about the best passive income idea for young adults.
The rise of passive income streams has become an important global trend in recent years. According to a 2024 Bankrate survey, over one-third (36%) of US adults earn extra money through side hustles. This phenomenon is particularly common among younger generations as 48% of Gen Z and 44% of Millennials engage in side hustles. On average, side hustlers make $891 per month in 2024.
Despite inflation cooling, many Americans still find it challenging to sustain their lifestyles on a single income. More than a quarter of side hustlers (28%) earn over $500 monthly from their side gigs, indicating the important role these additional jobs play in financial stability. Interestingly, the gender gap persists, with men earning an average of $1,034 per month from side hustles compared to $735 for women.
The trend towards side hustles also confirms a shift in financial planning and lifestyle. A huge portion of side hustlers (52%) have started their additional jobs in the past two years. Moreover, nearly one-third (32%) believe they will always need a side hustle to make ends meet.
How to Passively Make $2000 a month with Amazon.com, Inc and Etsy, Inc?
Amazon.com, Inc (NASDAQ:AMZN) provides several avenues for generating passive income by capitalizing on its vast ecommerce infrastructure. First, Amazon.com, Inc (NASDAQ:AMZN)’s Affiliate Program enables individuals to earn commissions by promoting products. By joining the Amazon Associates program, users can generate affiliate links to share on websites, blogs, or social media. When someone purchases through these links, the affiliate earns a percentage of the sale, typically between 1% and 10%, depending on the product category. Creating high-quality content to drive traffic and conversions is essential for success, as the program requires a minimum of 3 sales within 180 days to maintain the account.
Moreover, Amazon.com, Inc (NASDAQ:AMZN)’s Fulfillment by Amazon (FBA) program allows users to sell products without handling storage or shipping. Sellers identify high-demand products, source them from suppliers, and send them to Amazon.com, Inc (NASDAQ:AMZN)’s fulfillment centers. Amazon.com, Inc (NASDAQ:AMZN) then handles storage, packaging, and shipping. This model is quite popular because it eliminates the need for large inventory storage. In 2023, over 60% of Amazon.com, Inc (NASDAQ:AMZN)’s third-party sellers used FBA.
Additionally, Amazon.com, Inc (NASDAQ:AMZN) Audible offers another passive income stream. By joining the Amazon Audible affiliate program, users can earn $10 for each new Audible membership they drive through their unique links.
On the other hand, generating passive income on Etsy Inc (NASDAQ:ETSY) can be achieved through digital products, which require minimal ongoing effort. For instance, one can create a collection of high-quality prints and list them on Etsy Inc (NASDAQ:ETSY). Customers purchase and download these prints which allows one to earn money repeatedly from a single creation. With Etsy Inc (NASDAQ:ETSY)’s large customer base, one could potentially earn $500 per week from selling just 50 prints at $10 each.
Does Passive Income Mean Effortless Income?
In the United States, passive income is often misunderstood. According to Census Bureau data, only 20% of American households earn passive income, with a median annual amount of $4,200. This income typically comes from dividends, interest, or rental properties. Despite the perception that passive income is effortless, many find it requires a high initial investment and ongoing effort, as seen in examples like rental property management or creating online courses.
A common misconception is that passive income is easy money. For instance, online stores or rental properties might seem like low-effort ventures but often demand substantial time and financial resources. As observed with Luca Alboretti’s experience, setting up an online store cost him $5,000 and countless hours, yet he only earned $300 in sales after a year. This explains that what is labelled as passive income often involves a considerable level of active work.
A young couple discussing their long-term investments over coffee in a modern cafe.
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Our Methodology Shows Affiliate Marketing is the Best Passive Income Idea for Young Adults
To list the best passive income ideas for young adults, we essentially tried to target ideas and avenues which were either a) simple b) involved minimal to no initial investment or c) were accessible to a large number of people. Thus, after identifying 30 such ways, we shortlisted 20 on the basis of consensus score for their friendliness for beginners gauged through our internet research. We have scored each idea out of 60 and a higher score indicates a higher level of simplicity and ease for the young. Our methodology revealed that affiliate marketing is indeed the best passive income idea for young adults in 2024.
The rise in the popularity of affiliate marketing can be attributed to the low barrier of entry and the potential for high earnings without the need for a high upfront investment. Platforms like TikTok, Instagram, and YouTube, which are predominantly used by younger demographics, offer ideal environments for affiliate marketing with their visual and engaging formats. The trend shows that 85% of weekly Pinterest users and 52% of customers are more likely to purchase a product featured in a YouTube product review video.
Once an affiliate link is shared on a platform, it can generate sales and commissions without continuous effort. This is particularly attractive for students and young professionals that are trying to supplement their income without interfering with their primary responsibilities. For instance, Instagram users with under 10,000 followers have seen a 35% increase in story reach rates which confirms that even those with smaller audiences can achieve significant engagement and earnings. All of these factors collectively explain why affiliate marketing is the best passive income idea for young adults.
To check out the extensive list of the passive income ideas for young adults, please visit 20 passive income ideas for young adults.
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Disclosure: None. 20 Passive Income Ideas for Young Adults is originally published at Insider Monkey.