Passive Income Strategies from College to Retirement

January 20, 20226 min read
Passive Income Strategies from College to Retirement
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As much as it might sound like a pipedream, the idea of making money while you sleep is quite real. Real estate investors refer to it as “mailbox money” because all you have to do to get it is walk out to your mailbox. This, of course, raises the question of what you need to do to get your mailbox primed to receive that money in the first place. That’s where these passive income strategies from college to retirement come into play. 

What is Passive Income?

The phrase passive income applies to any money you get for which you did not have to work continually (which is active income). In other words, it’s money you accrue without punching a clock to earn an hourly wage or working every day to justify the continued payment of your salary. Simply put, passive income is derived from an investment you make which subsequently generates ongoing returns. By the way, that investment can be made in the form of cash or time, as you will see below. 

An important thing to recognize about passive income is it tends to start as a trickle before it becomes a stream. Therefore you need to start early in life and reinvest consistently to create passive income upon which you can rely in retirement. 

The good news for college students is you can also create nice short-term passive income for yourself along the way. So let’s take a look at some ways to earn passive income for college students and others that can provide passive income for retirement. 

Passive Income Ideas for College Students

1. Create a YouTube Channel

YouTube has democratized television so that anyone with a passion for a particular subject matter can create video content and earn residual income from views of it. Odds are, if you like something a lot, others do too. All sorts of people are making money talking about the things they love, whether it’s the latest tech, fashion, makeup, cooking or whatever. The possibilities are limited only by the number of people on the internet. 

2. Rent Your Textbooks

One of the most overlooked costs of a college education is the price of textbooks. Publishers know they have a captive audience and book prices are often reflected in this fact.  A number of companies have established programs in which students can get paid from letting other students use their books when they’ve completed a course, rather than selling them back to the campus bookstore at a significant loss. 

3. Sell Class Notes

Take good notes of every lecture and sell them on to students taking the class in the future. You can also make a good business selling your notes to students who are in the class with you. Some people miss classes, others just don’t take good notes. Either way, there’s an opportunity to create a passive income stream. Type them up nicely and distribute them via email. Invest in a server and allow students to download the materials after providing a credit card number if it really takes off. You can even hire other students to take notes in classes you don’t attend and pay them royalties when their notes are purchased.  

4. Turn Your Car into a Mobile Billboard

Companies like Carvertise, Nickelytics and Wrapify will pay you to place their advertisers’ messages on your car. However, there are scam companies out there as well, so you need to choose carefully. Signs you’re dealing with a legitimate organization include a thorough application process, readily accessible contact information and prominently displayed physical addresses. Honest companies also have strict standards you must meet to be considered. Moreover, they’ll wrap your car for free, rather than charging you a fee to do it. Compensation is spelled out up front, as is the duration of campaigns. 

5. Produce a Blog

Similar to idea number one above, your passion for a particular topic can be monetized and set up to pay you on an ongoing basis. The key is to find a popular niche and create content others will find valuable. Monetizing your blog can be accomplished with ads, affiliate programs and hosting sponsored content. In all honesty, this undertaking is pretty labor intensive up front, but get it right and that investment can pay significant long-term dividends. 

Passive Income Ideas for Retirement

The key to ensuring a strong passive income stream in retirement is to start well before you retire — the younger the better. In fact, many of the ideas listed above for college students, such as creating a YouTube Channel, producing a blog and mobile advertising can carry on throughout the rest of your career and well into your retirement years. The other two can be turned into ongoing business concerns by hiring students and putting management teams in place to keep them going at scale. With that said, here are some of the more traditional methods of creating passive income for retirement. 

1. Real Estate 

Many of the world’s greatest fortunes have been built on real estate. People will always need someplace to live and you can profit by providing it. That’s just the tip of the proverbial iceberg though. In addition to owning rental properties, you can invest in a real estate investment trust (REIT) which can spread your dollars and the risk across a multiplicity of properties. The concept of Crowdfunding has also been applied to real estate, in that you can invest in a project with a number of other people and benefit financially. These are just a few of a number of ways to generate a passive income in real estate

2. Participate in a 401(k) Plan

Most employers switched from traditional pension plans to employee-financed 401(k) plans back in the 1980s. This shifted the burden of planning for your retirement years from your company to yourself. Today considered one of the three legs of the stool that represents your retirement income (along with Social Security and savings), participating in the 401(k) plan your employer offers is a must — and even more so if the firm offers matching funds because that’s free money. 

Without going into too much detail, a 401(k) plan diverts a portion of your annual income into a savings and investment account before the dollars are taxed. These funds are invested according to your tolerance for risk. The proceeds from those investments are reinvested as the account grows over the years. Started early in your career, such an account can give you a nest egg from which to draw monthly passive income in retirement if you contribute to it and invest it intelligently.

3. Traditional Investments

Investing in the financial markets is a proven way to grow your money if started early in life and done consistently. High dividend stocks, annuities and bonds all have the potential to generate passive income you can enjoy in retirement, with the understanding that all investing also carries with it the risk of loss. The key is consistency and faith. Investing a set number of dollars each month and having the temerity to hold on to your investments during the inevitable downswings can find you positioned to enjoy a nice retirement passive income stream. 

4. Alternative Investments

Alternatives represent an opportunity to diversify your portfolio while simultaneously providing an opportunity to earn passive income. Yieldstreet offers a broad range of such investments across a number of alternative asset classes including art finance, real estate, commercial finance, legal finance, and more. 

With target yields typically between 3% and 18%, depending upon the investment, these opportunities previously were available exclusively to institutional investors and high net worth individuals. Yieldstreet has made it possible for retail investors to participate as well. 

Certain Yieldstreet offerings feature short durations and minimums as low as $10000. Even better, many of these investments are backed by collateral, which provides a measure of security for your capital. Alternative investing with Yieldstreet may be a smart way to supplement your passive income stream, regardless of where you are in life.

The Passive Income Mistake to Avoid

As you may have gleaned from the ideas above, passive and effortless are mutually exclusive. You will have to put forth some effort to get that passive income stream flowing. This is true whether creating passive income for college students, or setting yourself up for retirement passive income. Of course, any and all investments take time and effort to check in on.