There are two ways to increase the amount of money you have over time. One way is to increase your earning power. The other way is to save more. Earning power consists of both active and passive income.
Active income is the money you get when you perform a job and get paid for it. The income you get from full-time employment and freelancing falls under this.
On the other hand, passive income comes from an income-producing asset that can make money for you even when you’re not investing time in it. However, don’t be fooled into thinking there’s no work involved! Often, we need to build the foundation before the money can start compounding by itself.
So, here are 3 ways any student can earn passive income!
1. Creating a blog or a YouTube channel
If you’re good with your words and enjoy writing to an audience, you can consider starting a blog. Blog monetisation comes in the form of people clicking on your ads, sales commissions of a product you’re advertising, and selling your product and services on your blog. I recommend starting on WordPress as it is one of the best blogging sites to monetise your blog.
If you’re more of a speaker who likes to make their thoughts heard, you can consider starting a YouTube channel and making money through ads! The barrier to entry is low, and it’s possible to become viral if you’re genuinely funny and entertaining, especially since the Singapore YouTuber scene is so tiny. However, this often goes hand-in-hand with being a social media influencer, so make sure your Instagram photos show all your best angles!
Of course, neither of these options is easy. They both require time, energy, and even some luck when it comes to attracting an audience. However, when the readers and viewers start pouring in, and the fans start accumulating, you can expect a regular stream of income that continues even when you’re not blogging or streaming!
Maybe you’re not the creative type, or you’d instead do something with all that money you already have. In that case, investing is the way to go! Some people would suggest that you park all your money in a high-interest savings account or a fixed deposit account because there’s zero risk of losing your money. However, the interest rates in Singapore banks are meagre. I once played $2000 into a fixed deposit account, and it only netted me $7 over two years. So, I wouldn’t say it’s worth it.
You’d earn more if you invested in stocks, mutual funds, bonds, crypto, etc. Though, that’s presuming you have the prerequisite financial knowledge about how these financial markets work. If you’re interested in letting your money do the work for you, it’d be wise to invest in yourself first by learning how the stock market works. There are a lot of resources out there! I started with Rayner Teo’s YouTube guide on the stock market. You can also read my other article here on three different trading strategies written for fledging traders.
3. Starting an Online Store
Another option is to sell your preloved or handmade things on Carousell to make a quick buck every month. I did this in JC, and I regularly earned about $500-$1000 a month selling preloved anime merchandise in brand new condition and flipping retail goods from Taobao.
If you’re an artist, you can also sell your handmade jewellery, keychains, or art on online handmade marketplaces like Etsy and Redbubble. I enjoy browsing Etsy because there are lots of creative handmade items there that belong in different niches! Don’t be afraid to experiment with your designs!
Of course, there is still some degree of work involved particularly in having to communicate and meet up with the customer. If you’re selling your own products, there’s also effort in designing and manufacturing those very products. Though your business can grow passively as you put up more and more listings and leave them there, there’s still some active work that has to be done in managing your store, so make sure you’re up for that!
Some people may make passive income sound like a get-rich scheme where all you have to do is sit down and watch your money multiply, but the truth of the matter is that there will always be some degree of effort required when it comes to making money.
As students, we have limited income so it’s important to plan what capital we’re willing to part with. For example, if you’re buying a domain name for your blog, you’ll have to part with some money depending on the fees of that particular site. If you’re starting up an online store, you’ll have to take into account the prices of the products you bought before selling them and the amount it’ll cost to mail them or for the bus trip to meet the buyer.
But so long as you’re wise and willing to learn, passive income can be yours for the taking!