A money savvy young woman has shared how she managed to accumulate £75,000 in savings by the age of 24.
Mia McGrath regularly shares financial advice and tips online to help others improve their money habits. She is a self-proclaimed “financially responsible 24-year-old.”
The finance guru recently posted a video on TikTok about five ways she makes passive income and makes her money go further. These include earning cash through interest and dividends.
In the video she said: “These are the five ways I make passive income. Making passive income is everyone’s dream, not having to work and making money in your sleep.”
Below are Mia’s methods of making passive income.
Cashback
Her first way of making money passively is through cashback. She explained: “When I spend, I get cashback with the banking app that I use which is Chase and now I literally can’t go back to using a regular debit card with zero rewards, because what’s the point? I may as well get rewarded for spending.
“So far, I think I’ve earned over £200 from just spending what I would have spent on any other card.” Cashback is a rewards programme where customers can earn back a percentage of the money they spend while shopping.
Chase allows its customers to earn 1% cashback – up to £15 a month – on everyday debit card purchases in shops and online for the first 12 months. This amounts to up to £180 a year.
Interest on savings
Mia added: “Number two is interest on my savings. At the moment I’m earning 4.9% when I keep my savings on Trading 212. I’m getting paid £1.30 a day for my ISA and 99p a day for my invest account.
“This means I’m making almost £70 every single month from doing very little. If I start growing, this it means that it can start covering things like bills.”
An Individual Savings Account (ISA) is a tax-efficient way to save and invest money and you could save up to £20,000 each year tax-free. There are four different kinds of ISA: a cash ISA, a stocks and shares ISA, a lifetime ISA and an innovative finance ISA.
Dividends
The third way Mia makes passive income is through dividends. She said this is when you invest in dividend paying stocks.
Mia added: “When you invest in individual stocks it is riskier than investing in say ETF (exchange-traded fund) which is a basket of stocks but I have most of my money in ETFs and these are actually dividend-paying ETFs but the dividends I get from these individual stocks are very small at the moment but I know that over a long period of time with regular contributions they will grow and snowball into massive amounts.” Dividends are the percentage of a company’s earnings that is paid to its shareholders as their share of the profits, and they can be paid in cash or additional shares.
Digital products
Moving on, Mia continued: “Number four is through digital products. This is something that I’ve only got into recently which is surprising because I’ve been doing TikTok now for like seven months but for me this includes making budget trackers and PDFs and stuff but for other niches it could be different.” Digital products are goods that exist in a digital format and can be sold online such as e-books, music and online courses.
Affiliates
The fifth way Mia makes passive income is affiliate income but she admitted that this one “isn’t truly passive” as it relies on her making content. She explained that when someone online uses her link she gets commission from this.
As Mia has been “making content now for ages”, the affiliate income is “kind of working for itself in the background” as she has “so much content out there that is driving people to my link in bio.” Mia concluded her TikTok video by sharing that she would love to invest in property in the future and her goal with passive income is to “create so many different sources” that she doesn’t have to rely on a single one.
Mia’s post has received 88,000 views, 5,676 likes and more than 50 comments. One user said: “These are great income sources!” Another added: “Brilliant Mia, so helpful.”
