How to make passive income as a teenager: 5 ideas

Having a job can be fun and rewarding, but there’s no getting around the fact that you’re trading your time for money. In most jobs, you have to be actively involved in the everyday work to get your paycheck. That active participation means the income is active income. 

But what if you could get payouts for your hard work over and over again without having to do the work again? Putting in an initial investment of time, money, or labor and reaping ongoing rewards is the idea behind passive income. 

In this blog we’ll tell you what passive income streams are and give you some of the best ideas for how to make passive income as a teenager. 

What is passive income?

Passive income is money you earn from an asset you own, rather than ongoing work you do. This could come from renting out possessions, a dividend payout from a stock, owning a business that runs without you, or even writing a blog post that makes ad revenue as people view it. 

Generating passive income usually requires some upfront work and/or expense. The work can come in the form of: 

• Creating the asset

• Earning enough money from a part-time job or side hustle to buy the asset

• Researching high-quality passive income opportunities

• Hiring employees to help you build or market your idea

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Once you own an income-generating asset, you can use the extra cash to build your portfolio. Just like compounding interest, you can roll the extra money you collect into new passive income ideas. You can also expand the ones that are already working. By developing multiple income streams, some people can eventually replace a full-time job. 

So, what are the best passive income ideas that can help pad your bank account?

How to make passive income as a teenager

Figuring out how to make money with passive income streams takes careful consideration. While there are some simple and low-risk methods, many take upfront work or involve putting your money at risk. If you’re trying to figure out a good place to start, consider your interests, knowledge, and existing skills as you read this list for ideas.  

Greenlight tip: Remember to check-in with a parent and get approval before you start.

1. Compound interest 🏦

Putting your money in an FDIC-insured interest-bearing savings account or checking account is probably the easiest way to earn passive income. While you may not make a lot of money, the interest compounds over time without any work from you. How much passive income you can make will depend on your account’s interest rates.

With Greenlight, you can earn up to 5%* on your savings depending on the plan you choose. 

2. Investing in the stock market 📈

If you have a little more appetite for risk and are willing to do some research, building a well-diversified portfolio could offer you higher returns. Through the stock market, you can invest in many types of assets that can act as income sources, like dividend stocks, mutual funds, ETFs, and real estate investment trusts (REITs).

Greenlight’s Max and Infinity plans give you access to a high-quality investing platform. With fractional shares, families can invest with as little as one dollar, and parents are sent notifications to approve trades before they are submitted. 

Remember, investing in the stock market does carry risk, and you can lose money. 

3. Content creation 🎥

You can also generate income from creating content — such as videos, blog posts, or social media posts. If you can make great content that gets attention, you can get paid to show ads.

As a content creator, you will put in time upfront to produce content. But once it’s created, it will continually attract attention over time. The content can either sell a product or advertise other businesses.

Types of content marketing include:

• YouTube channel: Make YouTube videos that display advertising or sponsored content. 

• Podcasts: A long-form podcast is a great way to attract sponsors and advertisers willing to pay you to get in front of your audience.

• Blogs: Bloggers create written content that can be monetized with ad platforms like Google AdSense. They will serve the ads and pay you for views and clicks.

• Social media: If you attract a large and active following on apps like Instagram and TikTok, you can attract sponsors who will pay you to display their products. 

Content marketing can be really powerful because every piece of content you create is an asset that can multiply your efforts. A social media post can alert people to your blog, which can display a YouTube video, etc. 

Plus, the more quality content you create, the more search engines and algorithms will show your content to more people. It all builds on itself and opens up more potential passive revenue. 

4. Digital products 📱

Digital products don’t need to be physically manufactured or shipped. Once you create them, they can be replicated over and over again and delivered to a customer right over the internet. That means if you make a popular digital product, everytime someone finds it and buys it, you get paid passively. 

Some examples of digital products teens can create and sell for passive income are:

• Online courses: If you have a skill you could create a course and sell it on a platform like Teachable or Udemy.

• Apps and video games: If you can code, you can create apps and games for mobile. It can be a paid app or a free app with ads. 

• Ebooks: If you have a story or know a lot about something, you can write and publish a book. You can sell it on a website, your social media, or even make a Kindle version for Amazon.

• Digital artwork and patterns: If you are an artist, platforms like Etsy allow you to upload and sell your artwork as a printable. 

• Stock photography: Are you good behind a camera? You can sell stock photos on sites like Shutterstock. 

5. Affiliate marketing 📣

With affiliate marketing, you advertise a product for another company. This could be as simple as including links to products in your social media or blog posts. Your goal is to get potential customers to use your link to go to the website that sells the product. The business selling the product takes care of payment, customer service, and delivery. In return, you get a cut of the profit. 

Greenlight tip: Remember to check-in with a parent and get approval before diving into any affiliate marketing work.

Find passive income streams that are right for you

Now you know how to make passive income as a teenager. Whether you earn compound interest, invest with the help of a parent, or create content or digital products, there are lots of ways you can make extra money with minimal ongoing work. 

And the Greenlight app can help! Our app was made just for you — with tools to save, budget, and learn valuable personal finance skills. Start earning passively now with cash back to savings and saving rewards. You can also learn how to invest and work with your parents to buy fractional shares. 

Ready to learn about the world of money? Sign up for Greenlight today!

*Greenlight + Invest families can earn monthly rewards of 1% per annum, Greenlight Core and Greenlight Select families can earn 2% per annum, Greenlight Max families can earn 3% per annum, and Greenlight Infinity families can earn 5% per annum on an average daily savings balance of up to $5,000 per family. Only Greenlight Max and Infinity families can earn 1% cash back on spending monthly. To qualify, the Primary Account must be in Good Standing and have a verified ACH funding account. See Greenlight Terms of Service for details. Subject to change at any time.