9 LEGIT Passive Income Ideas for Young Adults ($5k per month)

Let’s be real—the prevalence of social media has changed how we perceive the world around us. The content we consume rarely highlights the traditional nine-to-five, but rather, the dreamy lifestyle of traveling the world on passive income.

This exposure is prompting people to challenge the norm around how they earn a living. They’re diving into side hustles, exploring passive income options, and pushing for flexible and remote work.

But here’s the thing—the earlier you learn how to generate passive income, the better. As a young adult, time is on your side, allowing you to create and build profitable, passive income streams that grow over time.

To get you started, here are nine passive income ideas you can start as a young adult.

What is Passive Income?

Passive income is money you earn without actively working for it—sounds sweet, right? Think of passive income like a tree. Once you plant the seed (the initial investment), water it (the initial upkeep to make things profitable), the tree grows. After that, there isn’t much you need to do to receive the fruits (money) every season.

A common myth is that passive income requires no work whatsoever, but this isn’t the reality. Creating a passive income stream often requires substantial initial effort before it becomes self-sustaining and truly passive.

13 Passive Income Ideas You Can Start Today

1. Use Cash Back Apps ($10 to $20/month)

Cash back apps are an excellent passive income stream for young adults, primarily because they’re easy-to-use and require minimal effort. These apps allow you to earn dollars, points, or other rewards in exchange for making in-store or online purchases.

For example, to earn with Rakuten, you’d navigate to the website you’d like to shop from, then activate the offer that appears on-screen. The cash back you earn will be deposited into your account, which you can then withdraw and spend as you please.

Apps like Fetch and Receipt Hog work a little differently. After making a purchase in-store, you’d scan your receipt into the app to earn points. You can later redeem these points for gift cards, transfers to your bank account, or via PayPal. Based on our research, you can earn around $10 to $20 per month in cash back by leveraging these platforms.

The one downside to cash back apps is that they don’t become more passive as time goes. You’ll always need to scan your receipts in or activate an offer before making a purchase. That said, it’s quite simple and isn’t time-consuming.

2. Open a High Yield Savings Account ($100 per year)

High yield savings accounts (HYSAs) work much like traditional savings accounts but with a twist—they earn you more money. In traditional savings accounts, you’re able to earn interest on the money that sits in your account. However, the rates are often very low, sometimes around 0.46% APY.

In a high yield savings account, you’ll see much higher rates—like 4.5% APY. Here’s what this looks like on a balance of $2,500:

• Traditional Savings Account at 0.46% APY: $12 in interest per year
• HYSA at 4.40% APY: $110 per year in interest

While $110 per year isn’t going to make you rich, interest you earn in a HYSA is completely passive. Check out banks like Ally, Marcus by Goldman Sachs, and Capital One to start earning interest on your savings.

3. Launch an Etsy Store (Varies)

If you have some creative flair, consider launching an Etsy print-on-demand (POD) store. With POD, you create unique designs and place them on products like t-shirts, mugs, candles, and posters. When a customer purchases the item, a third-party company will print and ship the product on your behalf.

This means you don’t need to purchase or maintain inventory, which keeps setup costs low. Because someone else is printing and shipping your products, you can generate income while sleeping, studying, or hanging out with friends.

That said, initial setup time and ongoing customer service management is required. If your shop is successful, you could earn thousands per month.

4. Rent Out Your Car ($2,500 per month)

Turo is an online marketplace that allows you to rent out your car to others. If you live near an airport, train station, or other tourist-packed area, this might be a profitable endeavor.

If we do a rough estimate, one Chevy Equinox host in Boston made around $1,900 in revenue minimum—we can’t be sure how long each rental was. While it’s also unclear how long this host has been on the platform, $1,900 in revenue isn’t bad regardless. According to Zip Recruiter, the average Turo host makes around $2,500 per month.

Keep in mind that this isn’t fully passive. You’ll need to respond to customer inquiries on Turo, hand over the keys, and keep the vehicle clean for the next guest. That said, it doesn’t require a ton of effort, so it’s still a sweet gig.

5. Rent Out Your Driveway ($1,000 per month)

If you don’t own a car or live in a populated enough area to profit on Turo, try Vanly. Vanly is a platform that allows hosts to rent out their driveways, parking spots, and land to van-lifers that need a safe place to park for the night.

It likely won’t be the most consistent income—I mean, how often are van-lifers in your area? However, if you live near a mountain or popular destination for campers, it’s worth giving Vanly a try. On average, hosts earn around $1,000 per month, according to Vanly.

6. Rent Out a Parking Space, Bedroom, or Shed ($294 per hour)

Neighbor allows you to rent out unused storage space in your home. This could be an empty garage, basement, spare room, driveway, or even an unpaved section of land.

The premise is that locals need affordable storage options for items like RVs, furniture, and boats. Hosts, like you, are often more than happy to offer up their space in exchange for some extra cash. This creates a win-win for both hosts and customers.

Again, this isn’t completely passive. You’ll need to respond to customer inquiries, and you may need to be present when the customer visits your home to access their items. That said, Neighbor claims hosts spend an average of 45 minutes per month managing their listings and earn an average of $294 per hour—not bad.

7. Rent Out Your Backyard to Local Pups (Up to $3,000 per month)

If you’re less of a people person and more of a dog person, we don’t blame you. There are other ways to turn a big backyard into a profitable side hustle.

Sniffspot is like Airbnb, but for dogs. You rent out your yard for dog owners who need a safe space for their pets to play. While you’ll need to maintain the yard and communicate with customers, it isn’t too time-consuming. Plus, according to Sniffspot, hosts can earn up to $3,000 per month.

8. Monetize a YouTube Channel (Varies)

We’ll keep it real—creating and monetizing a YouTube channel takes work. However, once your channel has a decent audience, you’re able to earn Adsense, which is passive income generated from the advertisements automatically placed on your videos.

If you’re not cool with showing your face online, create a channel that shares lofi jazz music for focused work, meditation audios, or tutorials using AI video generators. According to Social Blade’s YouTube income calculator, a channel with 50,000 daily views could earn up to $6,000 per month.

9. Invest in Real Estate (Varies)

If you’re a beginner investor, this might not be for you. However, if you have a solid portfolio and invest often, this could be an additional way to earn passive income.

Fundrise is an online platform that allows you to invest in real estate projects without buying a mortgage or managing the project yourself. Unlike other real estate investments, Fundrise has a low minimum investment, making it more accessible to less-established investors.

As the property appreciates in value or earns an income, you receive a cut. This happens in the background without requiring you to lift a finger—or paint a wall, talk to a tenant, or fix a dishwasher.

Frequently Asked Questions:

What is passive income and how does it work?

Passive income involves earnings derived from a venture in which a person is not actively involved. Typically, it requires an initial investment and ongoing maintenance, after which the revenue starts flowing without daily effort. Common examples include rental income, earnings from business partnerships, or investments in stocks and bonds.

Can young adults really benefit from passive income streams?

Absolutely. For young adults, starting early with passive income strategies can compound their earnings and provide financial security earlier in life. It's a practical way to build wealth, especially when balancing time between studies and part-time work.

What are some simple passive income ideas suitable for young adults?

Young adults can start with low-maintenance passive income ideas like using cash back apps, opening a high-yield savings account, or investing in dividend-paying stocks. These options require minimal initial effort but can start generating income relatively quickly.

How can creating digital products be a source of passive income?

Digital products such as eBooks, courses, or printables involve upfront work but can generate income repeatedly without the need for inventory or shipping. Once the product is created and listed online, it can be sold multiple times, making it a quintessential form of passive income.

Is investing in real estate a viable option for passive income for young adults?

Real estate can be a lucrative source of passive income, but it usually requires more capital and risk management. Young adults may start with real estate investment trusts (REITs) or platforms like Fundrise that allow lower entry points and less hands-on management compared to traditional real estate investments.