After studying the habits of hundreds of millionaires, Tom Corley found that in March 2023, more than 65% of self-made millionaires had at least 3 streams of income. These millionaires would generally reinvest the proceeds from one stream of income into building another. Over time, this financial leverage compounds, allowing savvy savers and investors to accrue significant wealth.
Warren Buffett, for example, needed over 30 years in the workforce to reach billionaire status. In the 30 years after he made his first billion, however, Buffett managed to net nearly $60 billion more. While Buffett is clearly a generational talent, one of his key advantages in building wealth was starting young.
14 ideas to help you build wealth and reach your financial goals in no time.
If you are motivated to reach financial freedom and want to know how to create multiple streams of income in your 20s, you’re already ahead of the pack.
14. Offer Peer-To-Peer Loans
Peer-to-peer lending platforms have become increasingly popular in recent years as a way to earn passive income. By skipping the middleman, investors are able to earn much more attractive returns than a traditional savings account would pay.
Prosper, for example, offers products like home improvement loans, healthcare financing, and debt consolidation loans. With their auto-invest feature, historical returns have varied from approximately 3.4% to 10.9%.
Like with any loan, there is the risk of default from the borrower. However, the minimum investment amount is just $25. This means that with a relatively small portfolio, most people can diversify across a number of loan types and risk levels, as assessed by Prosper.
13. Become A Freelancer
One of the best ways to create a second income stream is freelancing in your free time. Sites like Fiverr, Freelancer.com, and Upwork offer a great starting point without any upfront investment.
To land Upwork jobs and kickstart your freelancing career, you can offer services such as content writing, graphic design, web development, and more. Leverage the skills you use in your day job to help solopreneurs and small businesses with their day-to-day challenges. This opportunity allows you to work on your own schedule and build a client base that can provide you with consistent work.
While the extra income is a key step toward building multiple income streams, the experience of pitching clients and providing a quality service is equally important. These skills often provide the platform for you to negotiate higher rates and create additional online businesses.
12. Develop An Agency
Starting an agency is a great way to leverage your existing skillset, and can make for a natural next step after freelancing. With a complementary team around you, your agency can land larger clients and take on bigger projects for more money.
Agencies typically operate in a specific vertical. However, they serve as a more holistic partner than freelancers do. By consulting and providing solutions, rather than fulfilling one-off tasks, agencies generate recurring revenue. Over the course of a few years, agency owners may even be able to operationalize the business enough to not need to participate in daily execution. At this point, your agency may become a highly profitable and largely passive income stream.
11. Start A Blog
Blogs, an often overlooked business category, have the potential to provide a stable income stream if you hone the right skills. Like many steady income sources, however, the challenge in building a blog lies in the upfront work.
Starting a successful blog requires building an audience from scratch. With authorities on nearly every topic all over the internet, it is crucial to find a unique angle to distinguish yourself. After publishing valuable content on many topics in your niche, begin attracting visitors to your website by guest posting to build backlinks and authority.
As you earn readers, monetize your blog with advertisements, affiliate links, or relevant physical or digital products like an e-book. These different income streams will take time to build out, but they tend to be very durable. Once you have developed an audience, simply maintain their trust to continue enjoying the extra income.
10. Become An Influencer
Much like starting a blog, becoming an influencer is all about building an audience. Choose a social media platform that suits your skill set and preferences. This can be Twitter, Facebook, Instagram, YouTube, TikTok, or any other major platform.
Think about the type of content you can create and where your ideal audience is already spending time. If you’re a thought leader on tech and cryptocurrency, Twitter or LinkedIn may be the best place to start. Or if you love testing out makeup products or performing sketch comedy, Instagram Reels or TikTok may be your launching pad.
Then, create and share content on a regular basis. Don’t be shy! While you want to produce high-quality content, the most important thing is to be consistent. Once you have built up a following, brands will find you to develop an advertising relationship. They may request sponsored posts or offer you custom affiliate links.
If you are willing to invest even more time and energy into your career as an influencer, consider launching your own branded products. Putting money on the line certainly entails more risk. However, the potential upside of managing your own business is also larger. If you find product-market fit and can advertise directly to your audience, you can create multiple income streams on platforms like Amazon, Etsy, Shopify, and more.
9. Sell An Online Course
If you have a unique skill set, monetize it with an online course. Online courses are incredible ways to make extra money because you can create them once and then sell them over and over again. In this way, courses represent one of the best passive income streams on the internet.
You may think that only mega-successful people can create courses, but that’s not the case. Websites like Maven and Udemy thrive off of obscure courses on everything from survival skills to using Google Sheets to playing the Ukulele. No matter what your talent – there’s an audience willing to pay money to learn from you.
To get started, consider what you already know. How can you package your knowledge into an online course? And how can you make it interactive and engaging?
Once you have an outline, create the course content with a combination of video, audio, and text. This can be as simple as recording yourself speaking into the camera, presenting in front of a PowerPoint, or demonstrating with annotations.
After publishing your course, allow the course platform to drive organic sales. Or you can turbocharge your new income stream with email marketing, or paid social media ads to get the word out.
8. Get Crafty On Etsy
Do you like making things with your hands? Consider turning your hobby into an income stream by selling your products on Etsy. As an online marketplace for handmade and vintage items, Etsy is a fantastic platform for selling arts and crafts of all kinds.
The best part about selling on Etsy is that you can start small and scale your side hustle as you find success. Start by experimenting with items like jewelry, home decor, or even pet supplies. Then, as you hone in on what’s selling well, invest more time and money into product development.
Once you have accumulated positive reviews and a following of loyal customers, you can enjoy the extra cash from your online business or further invest in brand building.
7. Sell Digital Assets
Another great way to make money online is by selling digital assets. If you’re a creative type with a strong visual portfolio, consider becoming a stock photographer or graphic designer. From vector images to stock photos and even stock videos, many websites enable you to monetize your creative work.
Websites like Shutterstock and Alamy will pay you a cut of each sale when someone licenses one of your assets. After the initial work of creating and uploading your portfolio, you can sit back and watch the royalties roll in – without having to do any extra work. This makes digital assets an excellent passive income stream.
If you find success in selling content, build multiple streams of income from your skillset by teaching others how to do the same. Create an online course or training program that takes people from zero to income generation, and you will have two new ways to earn money passively.
6. Launch A Shopify Store
If you’re ready to build a full-fledged ecommerce website, Shopify is the most popular platform to do so. With a thriving app store, creating a customized storefront and sales funnel is simple. From dropshipping trending products to selling print-on-demand apparel to self-fulfilling custom goods, ecommerce is a growing industry with immense opportunity.
To get started, research an underserved niche and the type of products you could sell within it. Then, set up your Shopify store and start listing your products, complete with high-quality photos and SEO-optimized descriptions. Promote your store on social media and as you make sales, reinvest that income stream into additional marketing and branding.
Before you know it, you’ll have a profitable ecommerce business that brings in money at all hours of the day.
5. Perform Amazon Arbitrage
If you are looking for a low-risk way to build multiple income streams, Amazon arbitrage could be the perfect addition to your plan. Amazon arbitrage involves becoming an Amazon reseller, finding products at a discount, and then selling them on Amazon for a higher price. Amazon is the simplest place to generate online sales because 89% of shoppers are more likely to buy from Amazon than any other ecommerce website.
To get started, first download the Amazon Seller App. After scanning a product’s barcode, the app will show you its selling price on Amazon and your projected profit. With that information, you can decide whether it’s worth your while to buy the product, ship it to Amazon FBA, and lock in your earnings.
While Amazon arbitrage won’t make you rich overnight, it can be a great way to earn money in your free time. Browse discount stores, thrift shops, closing sales, and more to find products you can easily flip for a profit.
4. Rent Out Your Home Or Car
Create an additional income stream by cashing in on any underutilized resources you already own. The sharing economy has made it easy to earn passive income by renting out your house, car, pool, or even sports equipment.
To turn your home into a side hustle, sign up for Airbnb and list your spare bedroom, guest house, or the entire place. When you land bookings, manage the rental process from start to finish yourself to maximize your margins. Or, pay a fixed percentage to a property management company for a more passive income stream.
Ensure your guests enjoy a seamless experience by leaving a welcome book with wifi details and local recommendations. These kinds of small, thoughtful touches can leave a lasting impression on guests and help generate reviews, future bookings, and additional revenue.
If you have an extra car that spends more time in the garage than on the road, sign up for a platform like Turo. The Airbnb of cars, Turo is a marketplace that allows people to rent out personal vehicles for extra money. Automate the pickup and drop-off process with a lockbox and your car can quickly become another one of your passive income sources.
3. Start A Home Services Business
Online business may be all the rage, but don’t overlook the home services industry. It can pay to get your hands dirty and compete in the real world. From pressure washing to landscaping to moving services, there’s an opportunity to start a service business in just about any niche.
The easiest way to begin is by identifying a need in your local community. Stroll around a few neighborhoods and create a complete list of all the potential services you have the right skills to offer. Then, call existing service providers to get a sense of each market’s competitiveness.
Keep a close eye on what you may be able to do differently or better than your potential competitors. Consider offering direct online booking, attentive customer service over the phone, and immediate quotes. If these services aren’t commonly offered or if the providers in a given market are fully booked, use their weakness to your advantage.
Be sure to perform top-notch work and provide high-quality customer service. Encourage customers to leave you a review on Google My Business and refer other clients to you in exchange for a future discount.
2. Invest In Dividend Stocks
If you have the available capital, dividend investing provides the simplest form of passive income available.
Dividends are cash payments made to shareholders, usually every quarter. Dividend yield gives investors an idea of how much income to expect from an investment. For example, a 2% dividend yield implies that for every $100 invested into the company, shareholders will receive $2 in dividends per year.
Consider the Dividend Kings. This is a list of stocks that have increased their dividend for at least 50 consecutive years. And, it’s a great place to start evaluating potential investments. Most qualifying companies pay around 1% to 3% annually. This means generating a truly passive income stream of $10,000 per year requires an initial investment of $333,333 to $1,000,000.
Rather than withdrawing dividend payments, however, many dividend investors opt to generate compound interest on their dividends by automatically reinvesting them. Retirement accounts, like a traditional or Roth IRA, are also a great home for income-generating investments. But before investing, speak with a financial adviser to determine what is best for you and your future.
1. Invest In Real Estate
Next to dividend investing, real estate investing is likely the next most passive form of income. As you search for how to create multiple streams of income in your 20s, consider investing in rental properties and other forms of real estate.
While real estate does require an upfront investment, much of the asset can be debt-financed. Once the rental property is acquired and filled with tenants, rental income is passive and predictable. To build multiple income streams, simply repeat this process as quickly as your capital allows you to do so.
One of the most popular ways to accelerate this process and create multiple income streams quickly is by performing value-add renovations. Simple fixes like improved lighting and painting or adding a washer and dryer can create significant value. This may allow you to increase rent and even refinance the property and take a portion of your initial investment back out.
Add an additional side hustle to your real estate business by filming the process from start to finish. Turn your game plan, before and after shots, and any challenges you face into YouTube videos. Upload these videos to an educational YouTube channel and you will slowly build an audience as well.
If you’re wondering how to create multiple streams of income in your 20s, the best way to start is by evaluating your current situation. How much money do you have available to invest? How much time can you reasonably commit each week to work on a side hustle? And, how much risk are you willing to take on to earn money?
Once you understand your personal circumstances, select your first additional income stream. If you have lots of undeployed capital, consider investing in dividend stocks or real estate. If you have free time but no available capital, perhaps become a freelance writer. After making money and developing copywriting or content marketing skills, you can always build an online business or sell a course.
No matter where you begin, remember to reinvest your earnings and continue to develop other forms of passive income. As you patiently compound your money and your income streams, you’ll be well on your way to financial freedom.
Frequently Asked Questions
To make extra money in your 20s, consider starting a business or side hustle. From selling homemade crafts on Etsy to dropshipping on Shopify, there is no shortage of opportunity in the world of ecommerce. Alternatively, you can make money online as a freelance assistant, writer, or marketer. To earn even more money, team up with other freelancers and start an agency.
To create multiple streams of income, you will need to invest time and energy into building businesses. Operationalize each new business until it runs without your full attention and provides semi-passive income. Take this capital and begin investing in real estate and financial products, like dividend stocks, that produce regular income.
The average millionaire reportedly has seven streams of income. Building multiple sources of income creates a form of diversification. This strategy allows savvy investors to weather any financial storm, continue building their wealth, and retire early knowing that their income streams will continue to pay for their lifestyle.