Young Adults Seek Out Info on Passive Income Streams More Than Most Other Types of Financial Strategy. Here's Why

In what may be a sign of the times, younger adults are showing a remarkable interest in investing. Online brokerages and investing apps have put the stock market into everyone's pocket, and people are taking advantage.

But long-term retirement funds and traditional investing aren't at the top of their minds. According to an MIT AgeLab and Transamerica study, more younger adults report being interested in information about passive income streams (29.4%) than in saving for retirement (23.7%).

As to why this is the case, well, it seems like that's fairly easy to understand once you know how passive income works.

Passive income 101

Basically, passive income streams are sources of income that earn money without requiring a ton of active involvement from you. Here are a few examples of passive income streams:

• High-yield savings accounts
• Small business investments
• Dividend stocks
• Rental property
• Royalties
• Affiliate sales

This isn't to say there's no effort involved. Most passive income streams require some -- alright, sometimes a lot of -- upfront effort to establish. But, once they're earning, they have the potential to earn indefinitely.

Low-effort money and diversification

So, in summary, passive income streams make you money without much effort once established. This alone is enough to make me interested in passive income, but there's also another aspect to consider: diversification.

Every expert who talks about how to invest and how to build wealth will throw around the word "diversification" quite a bit. That's because it's important. A diversified portfolio is one that can weather bumps in the road better than a portfolio that's too heavily invested in a single asset or security.

Passive income streams add extra diversification to your income, offering additional ways to make money in times of both feast and famine. Taking advantage of multiple passive income streams is even better, giving you a broader safety net than a single salary could provide.

Sign me up! (aka how to get started)

Alright, you're in. How should you get started? That depends entirely on your existing assets and skills.

Making money from your money

If you have some short-term savings sitting around, make sure it's in a high-yield savings account. The best accounts are earning 5% or more right now, which is a pretty great return.

Pro tip: If we're talking about your emergency fund, consider a high-yield money market account for the extra accessibility.

Savings you have beyond your emergency fund can be used to make money in other ways, too. Bonds or CDs can offer decent returns. And investing in stocks that pay dividends can generate quarterly income as businesses pay out to investors.

Making money from your time and skills

If you have some on-demand skills and the ability to teach others, then you could create digital content. Informational courses, videos, and books can all be sold to interested customers through a variety of different marketplaces.

Similarly, you could set up a blog or YouTube channel and earn that sweet affiliate income. Your art can even make you money. Upload photos or videos to sites for sale, or add your designs to print-on-demand outlets.

Keep in mind that these types of income sources do best when you spend a bit of time on marketing. That said, you can still manage a bit of marketing without dedicating too much time to it.

A world of (passive) opportunities

There are a ton of ways to set up passive income sources if you have the money, time, or skills. And that upfront effort can potentially pay off for the rest of your life. So perhaps we should all join that almost 30% of younger adults and start learning more about passive income.