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As you begin to step into the real world, you’ll start to gain an understanding of the importance of money, as well as how difficult it is to earn and keep it. You may even have a part-time job right now as a student!
But there’s a “shortcut” to earning money, even as a student. And that “shortcut” is passive income. In this post, I’ll be teaching you all about passive income and how to earn it.
If you’d like to learn how to make money while you sleep and keep earning money from the same source as you grow older, this guide is for you. Let’s get right into the post!
What is passive income?
First, what even is passive income?
You may have heard the phrase, “making money while you sleep” (in fact, I just mentioned it above!). Passive income is exactly that.
Passive income is a type of income that requires little to no regular effort to maintain. This means that once you’ve established your source of income and has it running (on its own), you’ll be able to completely ignore it for the most part, yet still earn money from it.
Passive vs. Active Income
Many students have part-time jobs as baristas, tutors, waiters, cashiers, etc. These are all sources of active income, in which you have to actually do stuff before you earn money. And if you stop working, you stop earning money.
Even though active income is usually easier to earn (usually requiring some repetitive physical labor), it is not a practical choice if you prefer freedom and– well– less work.
In addition, as a student, you have plenty of time available to invest in a source of passive income and let it grow over time. Passive income usually takes over a year to actually become profitable, and now is the perfect time to start.
Why should I earn passive income?
Even if you love your job in which you’re earning active income, it never hurts to have another source of income that brings in money on its own.
Building a source of passive income can help you save up to pay off debts, prepare to retire early (I know, retirement seems super far), and have a backup plan if your active-income job doesn’t work out for some reason.
“But I’m still a student…”
Do not limit yourself because of your age. Building passive income takes time, and it’s better to start early than late. Even if you have absolutely no experience with money-making, this is the perfect opportunity to learn.
Everyone starts from 0, so you might as well start early!
You may also be struggling with a busy schedule. But if you’re serious about building passive income, you’ll be able to find time to invest in it. In the beginning, the process will seem long and fruitless. But little by little, your income will grow and accumulate, and the work you have to do will decrease.
YOU’LL LOVE THIS POST: 20 Legit Ways To Make Money As A Student
How much money will I earn?
This varies from source to source, as well as from person to person. A blogger could make a lot more than an author, while also earning less than another blogger.
In addition, passive income will take time to build and earn. Unfortunately, it will likely take more than 6 months, and often more than a year, before you start seeing the amount of income you want to see.
If you’re not willing to put in the time and effort to work on a long-term project like this, then passive income is not the route for you.
Though passive income takes time to build, it can be rewarding in the long run. As a blogger, I’ve read numerous income reports from other bigger bloggers, and they’ve proven that it is possible to make over 6 figures in a single month, just from a blog.
Therefore, as long as you put in a lot of time and effort into growing your income source, it will eventually bring you income and even start growing on its own.
How do I earn passive income?
There are many, many ways to earn passive income. Some are easier than others, and others are more interesting or fun. Here is a big list of all the sources of passive income I can think of:
- Start a blog
- Start an affiliate marketing website
- Start a YouTube channel
- Sell digital planners
- Sell sheet music
- Sell digital icons
- Sell fonts
- Write and publish a book
- Create an online course
- Produce a song
- Investing in dividends (stocks)
- Create an app
- Sell stock photos
- Sell designs
- Sell licensing rights
Below, I’ll cover the 2 most popular choices (and the ones I am building myself!). I have experience with these, and I can give you first-hand tips that I know are effective.
Start a blog
Starting a blog in the modern day is incredibly easy and cheap. All you need to invest in is hosting and a domain, which are your blog’s “home on the internet” and its name.
I use Bluehost as the hosting service for my blog, and it is less than $4 a month– definitely the best choice for all the beginning bloggers out there. Bluehost also offers a free domain for the first year, so you don’t even have to worry about purchasing one.
Bloggers make money, not through writing, but through other sources like affiliate marketing, display advertising, selling products, and more. All these are made possible due to the amount of traffic a blog has (more traffic = more customers = more money).
Although starting a blog is easy, maintaining it and growing your traffic will take a lot of time and energy. A blogger has to post consistently, market it online, and it often takes many months before a blog starts gaining traffic. But once it does, it’s an easy source of money.
Display advertising can bring a surprisingly large amount of income. A blog with over 50,000 monthly sessions can earn over $600 a month. So once a blog’s traffic starts growing, its income (given the blog has ads) is guaranteed to grow with it.
If blogging sounds like your thing, check out this guide: How To Start A Profitable Blog As A Student. This is an extremely extensive post that covers everything from setting up your blog to marketing it online. If you plan to start a blog, this is the only post you’ll need to reference.
Sell digital products
Selling digital products is a whole category on its own. There are so many different things you can sell, and many of the things I listed above are part of it: digital planners, sheet music, stock photos, online courses, digital icons, fonts, eBooks, designs…
Since you don’t have to physically manufacture digital products over and over again and ship them to your customer, digital products are a great source of passive income.
The easiest things to produce and sell are likely digital planners, and designs. You can create digital planners on almost any design service– like Canva, Goodnotes, and Procreate– and sell them on Etsy. I used Canva to create this Ultimate 3-in-1 Student Planner (go check it out!), and still earn money from it today!
If you’re an artist, you can sell your digital designs online as well; the most popular platforms are RedBubble and Etsy. You can sell your designs as is (which is almost like selling licensing rights), or make them into prints for tote bags, mugs, etc.
There are many other things you can produce and sell super easily. Online courses come in as a close third on my list. If you have a skill you can teach (such as starting a blog, calligraphy, marketing on Instagram, drawing…), you can create a course on Teachable and sell it for money!
Before you start selling, be sure to check the terms and conditions, rates, seller agreements, etc on the platform you’re planning to use. Though you’re unlikely to come across scams, you should get an idea of how much you’ll earn if you sell through their platform (most keep a certain percentage of every sale you make).
Bonus: Budgeting Tips!
Now that you know what passive income is and how you can build it, it’s time to learn some actual budgeting practices. No matter how much money you’ve made, you want to be able to manage it responsibly!
Track your income and expenses
Just like how you track your habits and plans in order to be productive, you should track your income and expenses to always stay within your budget.
Your tracking system does not have to be complex. I use the table function in Notion to track my money flow, but it can also just be a notebook or a note on your phone.
Create a table or chart that includes columns for the date, amount, and other helpful information like purpose. Here’s what a sample tracker looks like:
Create a budgeting system
Create a system that you can (and will) follow in terms of spending and saving. For example, my system can be summarized in the following sentence:
- For every paycheck, I will the hundreds into savings and allow myself to spend the rest on other necessities and things I really.
Following this system, I save around $500 every month and have around $100 to spend. I usually end up spending less than that anyway, but it’s a great way to keep myself accountable and avoid spending too much.
Wait before you buy
I’ve found that sometimes, even with my budgeting system in mind, I can buy things too impulsively. As necessary as the item seems at the time, I could turn out to regret it later.
If this sounds like you, simply force yourself to wait before you buy. Think logically– not emotionally– about the necessity of the item and whether this is the best time and price to buy it at.
The best method is to wait at least 2 days before you buy something (that’s not an essential item like food). Ask your friends for their opinions, check the reviews on the item, and even list out the pros and cons of buying it if you feel the need to.
Simply waiting before you click buy can save you a lot of money and regret.
Conclusion
I hope this post helped you understand passive income and get an idea of what sort of project you can take on to start building it! Leave a comment with what you’re going to do with the information you learned from this post!
If you liked this post and would like to read more, check out these recent posts:
- How To Set Up Your Planner For Maximum Productivity
- 8 Daily Habits Of Highly Successful Students
- 9 Free Apps Every Online Student Needs In 2021
