Now I Get It: See how Gen Z became the passive-income generation

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It used to be only the very wealthy that had money rolling in, in exchange for little to no effort.

It typically came from land that had lain with the family since the largesse of some distant king; or, in modern times, through family business holdings and stock options.

Two things have made Gen Z the passive-income generation: the ease-of-business offered by the combination of smartphones and social media; and the severe need to hustle.

It’s an odd dichotomy: never has it never been easier to juggle more than one job, launch a creative business or find a niche and position oneself in it; and yet, sadly, it has also become more or less essential to do so, as Gen Z comes of working age amid crises and change, soaring inflation, and cycles of job loss.

A passive income, in this world, is defined as anything with a no to low barrier for entry.

OnlyFans is an example. Photos and videos of feet (and other things; though sexual content is prohibited in India) are proving to be an unlikely 21st-century passive-income stream.

There is also art, with advisory services offering to build and manage a portfolio, in the same way a banker might manage one’s money.

With a lot less money but a bit more effort, digital content — ranging from commercial photography to pre-recorded courses (on fitness routines or life hacks, corporate speak, etiquette or math) — are acting as passive-income streams for young people, says Shankha Basu, associate professor of marketing at Leeds University Business School.

Creating one’s own commercial art can be effective too, he adds. This market is essentially made up of pay-to-download templates for personalisable products ranging from planners and wall art to activity sheets, games and the somehow-ever-popular indie T-shirts.

“Using art or photography or social media to earn passive income is also a way for this generation to ‘find themselves’, and I see this at play in many of my students who are in their early 20s,” Basu says.

The pandemic proved to be a tipping point, he adds. “People realised that, to their full-time employers, they were largely dispensable. And a lot of Gen Z (people born between 1997 and 2012) started working during or right after the first phase of the pandemic. They saw the crushing economic blow it dealt their seniors, despite years of hard work. This, coupled with the ease allowed by social media, and the growing pressure to have a side hustle, has made it more vital for young people to have different types of income.”

The idea of money has changed; so has the idea of work, Basu adds. “Work is still a part of this generation’s identity, but this is a generation whose job no longer defines them.”

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