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Passive Investments for Busy Students

in Rants

This article is not investing advice and should be used for informational purposes.

It’s no secret that higher education is expensive. But it’s also true that students are extremely busy. As a student, you are probably busy with classes, studying, and internships. You may not have time to monitor the stock market and invest in individual stocks or funds. However, there are many passive investment options available that can fit into your schedule. Not only can this help pay down your student debt, but you can also carry these passive investments into future financial freedom.

What Makes a Good Passive Investment?

“Passive” is the key word here. The best passive investments are “set it and forget it” type investments where you can set up the investment once and then not have to worry about it again until it’s time to collect. The goal is to find an investment that will grow over time without much effort on your part. Mutual funds, CDs, and high-yield savings accounts are classic examples.

Monetizing something you’re already doing, such as getting sponsorships for an existing YouTube channel, isn’t quite “passive,” but it follows the most important rule of passive investing: you’re not going far out of your way to generate the income stream.

This is different than getting a job to pay your way through school. Side hustles like freelancing and consulting don’t count as passive, since as soon as you stop actively working, you stop earning money.

Take a Look at REITs

Many investors swear by real estate for a number of reasons. First, it is a tangible asset that can be used as collateral for loans and other lines of credit. Second, it is a relatively stable asset, meaning that its value is not likely to fluctuate dramatically in the short term. Third, real estate is a non-renewable resource, which means that its supply is limited and its value is likely to increase over time. (As you may have heard—”Buy land, they’re not making it anymore.”) Finally, real estate can generate rental income, which can provide a steady source of income for investors. For all these reasons, real estate is an attractive option for those looking to invest their money.

However, being a landlord is time-consuming. Being a landlord sounds like a great way to make some extra money, but is it really a viable path for a busy student? You’ll need to be available to your tenants 24/7 in case there’s an emergency. This is, of course, assuming you have tenants already—you’ll need to spend considerable time and effort marketing your property and vetting potential tenants to keep vacancies down.

Additionally, being a landlord means that you’re running a business, which means even more time and energy spent on recordkeeping, taxes, and more. You’ll also be responsible for buying the property in the first place (keep in mind that mortgage lenders tend to want higher down payments for homes that aren’t your primary residence) as well as repairs and upkeep, which might be a bit of a stretch for your school budget.

The answer? Real estate investment trusts, or REITs. You basically get all the benefits of investing in real estate, such as asset appreciation, regular dividend payments, and general stability, but without a high monetary barrier to entry, without having to manage things yourself, and without the risks of direct ownership, such as finding yourself unable to sell a physical asset. You basically buy shares in a real-estate-specific mutual fund.

Sell Digital Products

These can take on a massive variety of forms, but the important thing to note with digital products is that there is no inventory, there are no storage costs, and you only have to create it once to sell it infinitely. Here are a few types of digital products to give you an idea of how versatile this option can be:

Online Courses

Are you an expert in a particular subject? Do you have a skill that others would like to learn? Whether it’s using your experience in class to explain how to survive law school cold calls or leveraging your hobbies by demonstrating how to best paint DnD miniatures, the internet is big enough that if you make it, your audience will come.

This can include written materials, audio recordings, video lectures, and anything else that will help your students learn. Once you’ve created your course and found a platform to sell it, such as Udemy, Thinkific, and Skillshare, you’re ready to start selling. With a little effort in marketing your course, you can reach a global audience and start generating income from your knowledge.

Stock Photography and Digital Art

If you have an art-related hobby, you can combine your stress relief and your desire to minimize your school debt.

Selling stock photography is a great way for photographers to earn additional income. Stock image sites allow photographers to list their images for sale, and earn royalties each time someone downloads one of their photos. This can be a great stream of passive income, as once the photos are uploaded, there is no further work required. With how advanced smartphone cameras can be, you might not even have to invest in a separate camera.

Sites like Redbubble use user-submitted artwork for print-on-demand services, including products like prints, t-shirts, stickers, and more. All you have to do is upload one of your pieces, and the print-on-demand service takes care of printing and shipping. Some sites take care of marketing for you through their own online marketplace, while others allow you to create a brand through your own eCommerce website.

Monetizing Your Social Media

Do you have a blog that gets decent traffic? Consider advertising sponsored posts or becoming an affiliate. Affiliate marketing is a type of online advertising in which a company pays commissions to affiliates for promoting their products or services. For a blog, you’d include links to products or services in the content and earn a commission on every purchase made through these links.

Do you have a YouTube channel? You probably already know about sponsored videos and ad revenue. However, if you have a hobby conducive to creating a channel, consider starting one. The key here is to have a topic that you can create videos for on a consistent schedule for a long period of time so that you can grow your audience. This might be video gaming, cat videos, or, going back to online courses, informational videos. As long as there’s an audience, their views can earn you money. If you start a Patreon, you can offer members perks that are low-cost to you, such as early access to videos, in exchange for their subscription.

Instagram lets you get in on the action too. If you can consistently post quality content on a focused niche, you can attract sponsors who will pay you to publish sponsored content.

Make Money By Lending Money

Peer-to-peer (P2P) lending is a type of lending where individuals can borrow and lend money without going through a traditional financial institution. P2P lending platforms match borrowers with investors who are willing to fund their loans. These platforms allow investors to choose which loans they want to invest in and set the interest rate they’re willing to receive. Borrowers typically pay an origination fee to the platform, as well as interest and principal payments to the investors that funded their loan.

P2P lending can be a good option for passive investors looking for higher returns than they would earn from traditional investments like savings accounts or government bonds. While there is some risk involved, P2P lending platforms typically perform extensive credit checks on borrowers and provide investors with information about each loan so they can make informed investment decisions. By selecting loans with low risks, investors can earn solid returns while helping others achieve their financial goals. Riskier investments, however, can land higher yields, so it’s up to you to determine your ideal risk vs. reward.

Currently, peer-to-peer lending is a niche market, with major players like Lending Club pivoting to more traditional lending, but there are still plenty of platforms that support peer-to-peer lending

Earn Money While Focusing On Your Studies

When it comes to making money while in school, there are a variety of options to choose from. Passive investments such as real estate investment trusts (REITs) allow you to invest your money and let the returns grow over time. If you have some skills in content creation, selling online content can be a great way to make things once and sell them repeatedly for passive income. Finally, peer-to-peer lending can offer high returns but also carries some risk, so be sure to do your due diligence and invest wisely.

With a little bit of research and careful consideration, you can invest your money wisely and make money while focusing on your studies.

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