Earning passive income is the perfect solution for college students because both time and money are scarce. Passive income is money you earn that doesn’t require a lot of “work” to make the money. Passive income is income that you can make when you are not working. The goal is to try and make as much money as you sleep as when you are awake.
If you are looking for the flexibility that online and work-from-home jobs offer, The Best Online And Work From Home Jobs For College Students are a great resource.
Here are my top 5 passive income ideas for students. Let’s jump right in…
1. Open A High-Yield Savings Account
One of the first and most simple things you can do to earn passive income is to open a saving account, but not just any savings account. High-yield online savings accounts are the perfect way to earn passive income through the interest off the money you are saving. It’s not a lot but slow and steady is the way to become wealthy. If you have a little extra money every month, I recommend putting it in a high-yield savings account.
You get almost no interest from your savings account at your local bank. If you have a savings account at the same bank as your checking account, close it immediately.
Online savings accounts are convenient. You can link them up to your checking and other accounts. If you have an extra $10 or $100 transfer it over to your high-yield savings account so it can start earning compound interest. Compound interest is one of the best forms of passive income.
Presently, my two favorite high-yield online savings accounts are Ally and Barclays. Both of these banks have no minimum balance to open. At the time of writing this post, Ally has an APY rate of 3.65% and Barclays has an APY rate of 3.8%, which is very competitive. I fully expect these rates to go up. Go make a deposit and start earning some passive income via compound interest!
2. Get Cash Back on Purchases You’re Already Making
A great way to make money through passive income is by utilizing apps and websites that offer cash back on purchases. We all shop so why not get a little money back when we do? Many different cashback reward sites will allow you to earn passive income when you shop. After signing up, you don’t have to do anything other than shop. Each of these apps and websites gives you different ways to earn cashback so see which will work with the way you shop.
Ibotta is a free cashback reward web and mobile app that gives you real cash for everyday purchases when you shop. They provide thousands of ways for consumers to earn cash on their purchases by partnering with more than 2,700 brands and retailers. Whether you’re buying groceries, clothing, electronics, or wine and beer, Ibotta will pay you cash for your purchases. In fact, Ibotta has paid out over $1.2 billion in cash rewards to more than 40 million users since its founding in 2012.
Rakuten has helped shape the way people shop online, offering Cash Back, deals, and shopping rewards on the world’s largest selection of products and services. To date, 17 million members in the U.S. have earned over $3.7B in Cash Back at their favorite stores.
Always start your shopping with the Rakuten app, browser extension, or at rakuten.com. Choose from over 3,500 stores. Just shop like you normally would. Your Cash Back adds up fast. Don’t worry they will email you when it’s added to your account. Get a Cash Back payment every 3 months by check or PayPal.
BeFrugal offers cashback for online purchases at over 5,000 stores and guarantees that our rates are the highest. They feature coupons and deals for over 50,000 stores, including all of the largest 500 online stores in the USA. To ensure the best experience, they offer both email and live chat customer service, all based out of USA offices.
TopCashback is completely free to use. You’ll find great cashback rates on everything such as airport parking, hotel bookings, and car rentals, as well as your favorite fashion, electronics, and home brands. Browse over 4,400 retailers to start saving money.
Withdrawing your cashback is easy and you can do it in multiple ways, such as to your bank account, PayPal account, or as a gift card, which can include a bonus of up to 5%. Some of the most popular pay-out methods include a Virtual Visa Prepaid Card, and gift cards, such as Amazon, Walmart, Target, and Disney among dozens of others.
3. Sell Your Class Notes For Cash
The third on our list of passive income ideas for students is selling your notes. If you are a great notetaker your notes may be worth money. There are plenty of students who are looking for good notes and are willing to pay for them. So, when the semester is over don’t throw your notes away instead turn your college notes into passive income.
There are several online note-selling sites that will pay you for your lecture notes. Each of these sites will have different requirements for your notes so be sure to read them. Here are my top picks for note-selling websites.
4. Open And Contribute To A Roth IRA
I recommend opening up a Roth IRA (Individual Retirement Account) because it is super easy to do and one of the best ways to save money and create a passive income. Just like your high-yield savings account, your passive income will come from compound interest. This is how you make money while you sleep.
I know it sounds a little intimidating, but it’s not and you don’t need a lot of money to get one going.
A Roth IRA is a retirement savings account that allows you to pay taxes on the money you put into it upfront. Therefore, the money you invest grows tax-free. That means when you are ready to retire and have 1 million dollars in it, that 1 million is all yours. You don’t have to pay taxes on it when you withdraw it.
The younger you are when you open your IRA, the greater your saving potential because you get that tax-free compounding interest for a longer period. Let’s open a Roth IRA. Vanguard has a great Roth IRA account. They have what is called a “Target Retirement Fund”. This means all you do is pick the year you will retire (typically the year you turn 65) and that’s it, Vanguard does the rest. To start, you’ll need $1,000 to open a Vanguard Target Retirement Fund. Once it’s open you can fund it whenever you have the money.
5. Rent Out A Room For Passive Income
If you have an extra room in your house, condo, or apartment, or even an empty space above your garage or in your basement, you can rent it out for a specific amount of time and earn some passive income. Renting out a room might be better than committing to a roommate. A roommate is long-term and they will have more privileges than someone renting for a brief period. Besides, you may not want someone around all the time therefore, scheduling in time here and there might be the perfect fit for you.
People like travel nurses, those on business, or someone who is in a transition from place to place may need a room just for a brief time. These are the perfect people to rent a room to. Typically, they are professionals and they are gone for most of the day.
Sometimes word of mouth is all you need to rent out a room. You can post when the room is available on your college message boards or even social media. However, if you are looking for something a little more consistent an online platform like Airbnb will allow you to list your room and then connect you with possible renters. It’s worth noting that Vrbo will not let you rent a shared space at this time.
I hope I have given you a little inspiration and sparked a few additional ideas on how you as students can earn some passive income. If you are looking to learn how to invest all that passive income, How A College Student Should Start Investing, is a great place to start.