I just wanted to say how nice it is to see such a positive exchange between strangers on the Internet. Seriously, not only was this article (list) motivating and well-drafted, the tiny little community of readers truly were a pleasant crescendo I found to be the cause of an inward smile. Thank you, everyone, and good luck to you all with your passive income efforts!! 🙂
I've got a $185,000 CD generating 3% interest coming due. Although the return is low, it's guaranteed. The CD gave me the confidence to invest more aggressively in risk over the years. My online interest income has come down since I aggressively deployed some capital at the beginning of the year and again during the February market correction. You'll see these figures in my quarterly investment-income update.
I have had a LC account for almost 2 years. Invested 5k. A lot of very small loans. Unfortunately I had to invest though Folio FN. The fees reduce your return. Now, they are not even allowing that. My interest and return of principal are not being reinvested. I talked with LC and they are working on it for my state. Even if I can obtain access to the prime portfolio, I would only place 10 percent of my cash here and would reinvest for at least 3 years. I am still concerned about what would happen when a recession hits.
Although YouTube has been around for years, it is gaining in popularity as more people “cut the cord” on their cable TV service. There are plenty of people who are polished and have production quality that rivals many of the movies or TV shows that I watch. However, the vast majority are people just like you and me. Don’t be shy. Trust me, no matter what kind of content you publish, there are people way worse. And you will get better, just give it time.
Great job, note the home upsizing works only in appreciating housing markets (I’ve done a similar this in CA but it was 7 years same home to gain almost 500k profit which is around the govt cap for tax-free home profits. What a gift! Thanks booming economy and generous govt taxation on home profits). Those proceeds bought our next house cash and invested the remainder in domestic stock (which has been equally profitable).
became $1,000,000 during an 18 year period (about 3x better than Berkshire Hathaway). Five – ten shares, or more, invested in a ROTH Ira and held *consistently* come h..l or highwater, with dividends and splits reinvested, may provide you a very pleasant surprise in 20 years or so. Asset Managers often do better than the assets they manage. Eaton Vance (EV) and T. Rowe Price (TROW) also did exceedingly well over a 25 year period.
As interest rates have been going down over the past 30 years, bond prices have continued to go up. With the 10-year yield (risk free rate) at roughly 2.55%, and the Fed Funds rate at 1.5% (two more 0.25% hikes are expected in 2018), it’s hard to see interest rates declining much further. That said, long term interest rates can stay low for a long time. Just look at Japanese interest rates, which are negative (inflation is higher than nominal interest rate).
A month later, the direct deposit hit my account. The next month brought another. I found myself greatly motivated to keep learning real estate, to understand what some of the terminology meant and the different ways to invest. Now that there was some money on the line, I became more interested than ever. Next thing you know, I had invested nearly $100,000 in total in various crowdfunding ventures.
You can find dividend stocks using Google Finance Stock Screener which is free to use. Set the search criteria for the P/E Ratio, and Dividend yield (shown as a percentage) criteria. You can set minimum and maximum values; in the dividend yield box, set it between 2 and 100. This will search for stocks that pay dividends worth between 2-100% of the current stock price.
There are three main categories of income: active income, passive income and portfolio income. Passive income has been a relatively loosely used term in recent years. Colloquially, it’s been used to define money being earned regularly with little or no effort on the part of the person receiving it. Popular types of passive income include real estate, peer-to-peer (P2P) lending and dividend stocks. Proponents of earning passive income tend to be boosters of a work-from-home and be-your-own-boss professional lifestyle. The type of earnings people usually associate with this are gains on stocks, interest, retirement pay, lottery winnings, online work and capital gains.
If you are unable to search actual sales through the assessor, you can use properties currently listed for sale in the MLS. The problem here is that the asking price may not be a true reflection of what the property is really worth. You’ll want to be even more skeptical of high- and low-values in this list and I would discount all prices by at least 5% to find market value.
For Tim, that was learning and writing a series of books, which he’s truly passionate about. For me, that’s traveling, learning, and working on startups that are “high risk” or have a long road to generating revenue. For you, maybe it’s spending time with your kids and not having to take overtime when it’s offered to you. In any case, the goal is to spend as little time as possible to cover your basic needs; if you want to spend more time to make more money, that’s always an option — but you want it to be an option, not a necessity.
That strategy seems waaaayyyy less risky than actively picking stocks of supposedly “reliable” stocks that issue dividends, which could be cut at any time due to shifting industry trends and company performance. Dividend investing feels like an overly complex old-school way of investing that doesn’t have a very strong intellectual basis compared to index investing.
Once your audience has grown and you have validation that you’re offering them value, there are many ways to create passive income. You could sell digital products like ebooks or courses, take up affiliate marketing in which you promote other company’s products and earn a commission when you sell that item to your audience, build a community and charge people to be a part of it, create software and sell that, among other avenues. Ask your audience directly what would serve them best, or look at what they’re saying on Twitter, Facebook or other websites, to find out what problems they have and how you could help solve them.
The challenge I’m facing and, I know it’s a good problem, is that the SF real estate has shot up about 35% in the last couple years. I’m sure you’re experiencing the same thing! So as the net worth is rising, the yield on the total portfolio is going down. Right now, it seems the only way to increase the passive income will be to raise the rent in December and to invest some of that cash in stocks, which I’m nervous to do in this market. Current allocation:
Real estate investing falls somewhere in the middle compared to the other strategies we’ve reviewed in the passive income series. The time commitment involved isn’t as strenuous as blogging but is much more continuous than income investing. Start up costs are much higher than blogging or online stores but the benefit of loans gives it more leverage than investing in stocks or bonds.
Like I mentioned earlier, coming in late in the game can be an advantage if you listen, learn and provide solutions for what seems to be missing. Even coming into a market with a minimal viable product, you’ll have the advantage of being able to get deep into the customer experience to shape your product or service to what it should be, again, all based on what you’re able to measure and learn.
Passive income is earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable. However, it is often treated differently by the Internal Revenue Service (IRS). Portfolio income is considered passive income by some analysts, so dividends and interest would therefore be considered passive.
Book sales ($36,000 a year): Sales of How to Engineer Your Layoff" continue to be steady. I expect book sales to rise once the economy starts to soften and people get more nervous about their jobs. It's always best to be ahead of the curve when it comes to a layoff by negotiating first. Further, if you are planning to quit your job, then there is no downside in trying to engineer your layoff so you can get WARN Act pay for several months, a severance check, deferred compensation, and healthcare.
Do you know of a successful business that needs capital for expansion? If so, you can become something of a small-time angel investor and provide that needed capital. But rather than offering a loan to a business owner, you instead take an equity position in the business. In this way, the business owner will handle the day-to-day operations, while you will act as a silent partner who also participates in the profits of the business.
Investing in real estate: Investing in real estate offers more passive income cash potential - but more risk - than investing in stocks or bonds. You'll need substantial amounts of cash to invest in buying a home -- it usually takes 20% down to land a good home mortgage loan. But history shows that home prices usually rise over time, so buying home a for $200,000 and selling it for $250,000 over a five-year time period, for example, is a reasonable expectation when investing in real estate.
Peer-to-peer lending means loaning money to other people. Specifically, you lend money to people who don’t qualify for traditional financing. Companies like Lending Club and Prosper offer returns in the range of 4-10%, which are a lot higher than a typical saving account. You will be able to select the right investment for you, based on your risk assessment strategy.
Greg Johnson is a personal finance and frugal travel expert who leveraged his online business to quit his 9-5 job, spend more time with his family, and travel the world. With his wife Holly, Greg co-owns two websites – Club Thrifty and Travel Blue Book. The couple has also co-authored a book, Zero Down Your Debt: Reclaim Your Income and Build a Life You'll Love. Find him on Instagram, Facebook, and Twitter @ClubThrifty.
Based on my initial experience of passive income, I feel real that real estate is best vehicle to build long-term investment. I live in Los Angeles and was able to cash flow my first rental property. What are you thoughts about starting out to build a passive income portfolio? I have utilized Lendingclub, online savings, and a small dividend/bond portfolio.
However, if I sorted through the data, grouped it into specific subjects, created a simple website, did the Internet marketing necessary to bring the website to the attention of other newbies and sold the re-packaged data (which would now be my own product because I’ve applied process to it), I could save other people from such overwhelm AND make some income for my impoverished self.
Logan is a CPA with a Masters Degree in Taxation from the University of Southern California. He has been featured in publications such as Debt.com. He has nearly 10 years of public accounting experience, including 5 with professional services firm Ernst & Young where he consulted with multinational companies and high net worth individuals on their tax situations. He launched Money Done Right in 2017 to communicate modern ideas on earning, saving, and investing money.
Personally, my experience with Amazon thus far has been good - a few of my short eBooks generate steady passive income on weekly basis with zero additional effort from my side. One thing to note though - Amazon pays 70% royalty on each eBook sold only if your eBook is priced between $2.99 to $9.99. Less than or higher than that pricing structure, the royalty decreases to 35%.of your book’s listed price.
Quick question. I’m 21 years old and currently working full time (50 hours a week averaging about 12 dollars an hour. I was working 35 making enough to get by and save a little, but I read your post on the notion of working more than 40 to get ahead and decided a third job was best while I’m getting residency to get lower- instate tuition at OSU. So props, you had a direct influence on my life.)
At some point in every value chain, value has to be created by a real human. No argument there. However, who says that a human has to deliver that value? Some very smart humans put in the work to create Google, but for the most part, they don’t have to do any work to deliver value to you, whether it’s search results or GMail or Maps. Your landlord put in a lot of work to afford the apartment you live in, to remodel it, and even to find you as a tenant. But now, he doesn’t have to do any work to deliver value to you: you wake up every morning in the apartment whether or not he works.
Skillshare is more of a social learning platform where you can teach real-world skills. The range of skills that you can teach is only limited by your imagination - from board game strategies, garment construction, cooking tutorials, travel hacking, and relationship tips. I even saw a course on how to build a grown man's wardrobe. Creating a class on Skillshare is free. For each student who enrolls, Skillshare takes a 30% fee (Similar to Udemy). You are also provided a unique teacher referral link that lowers the fee to 15% for students who enroll via your referral. Note that all online courses on Skillshare go through an approval process based on specific criteria. https://image.slidesharecdn.com/passiveincomepromoslideshow-171117120611/95/passive-income-pros-and-cons-1-638.jpg?cb
Self-publishing has the potential to be a very lucrative source of income. However, it does involve both an investment of your time and finances. It’s very important that you get the right help from the beginning. There are many considerations that may be outside of your expertise. Rory Carruthers, a sought-after book development, book launch, and book marketing consultant, says that six-figure launches require careful orchestration and planning. “Bestsellers aren’t just born out of great talent. They are also a product of thought-out marketing and well-orchestrated book launch campaign. It’s no longer enough to just write a good text. You need to think one step ahead and warm up your audience to the book even before you finish the first draft,” he said.
2. You clearly have plenty of money already. Just more padding in your already cushy nest. This is not the story for a lot of people. Your title should be “How to become richer than you already are without working.” But, actually the investment one is the only one that would make money without actual WORK. Running rental properties is a lot of work, and so is running a business, or even a blog. Sooooo…..while there might be some truth to this, I think it’s mostly grass that looks greener because it’s on the other side of the fence.
Self Publishing is mainstream today. When you purchase an eBook off of Amazon there’s a pretty good chance you’re buying a self-published book. Self-publishing is also ridiculously easy. I tried this a few years ago and couldn’t believe how simple the process was. To self-publish a book you’ll first need to write and edit it, create a cover, and then upload to a program such as Amazon’s Kindle Direct Publishing. Don’t expect instant success though. There will need to be a lot of upfront marketing before you can turn this into a passive income stream.
This world is a dangerous place to live, not because of the good people that often act in irrational and/or criminally wrongdoing ways within the confines of their individual minds, core or enterprise groups, but because of the good people that don’t do anything about it (like reveal the truth through education like Financial Samauri is doing!). Albert Einstein and Art Kleiner’s “Who Really Matters.”
Speaking from our own experience, you can’t be a passive McDonald’s franchisee. Every McDonald’s potential franchisee will need to complete at least thousands of hours of training before he/she would be approved to acquire a franchise and only if he/she has the financial resources to acquire a franchise. It could take years before one would get a single store franchise. Until the franchisee eventually has acquired multiple stores and established his/her own management team, the franchisee would have to put his/her nose to the grindstone and work his/her ass off every day. I won’t call it a passive investment by any stretch of imagination.
Can you expound on the use of publicly-traded REITs as a passive income source? I’m 31 years old. No children. No wife. No dependents. (I am the closest thing to Ebenezer Scrooge you’ll ever see). My monthly expenses amount to less than $2,000 per month (most of which go to pay student loans) . I have a decent job making over $55K per year. I also have a $60K inheritance coming my way in a few weeks. I am absolutely crazy about achieving absolute financial independence, which for me would require a passive income of over $2000/month to cover my living expenses. I could achieve that in a mere couple of years if I were to save excessively and dump my savings (and inheritance) into a Mortgage REIT via the stock market, most of which are shelling out above 10% returns in dividend payments. Is this a good strategy for me? Or am I being too hasty and assuming too much risk?
Now, if you choose to deliver part or all of your course in video format, you can use professional video hosting sites like Wistia or Vimeo. Beside giving you the option of removing the hosting company’s logo, these services also provide analytics which can show you how effective your video is at holding your audience’s attention. Alternatively, you can use litmos, a learning management system that enables you to create an online course with your own branding, domain name, and landing page. There is no percentage cut taken from your revenue like Udemy. Instead there is a monthly fee for their service.
You can’t start charging right off the bat without your audience knowing anything about the value you offer (though you could still indirectly earn money from them with the right ads). “The best way to go in terms of a long-term passive income business [is] delivering value and information for free, and therefore establishing expertise, knowledge and trust with your audience,” says Flynn.
Instead of working in the service framework, passive income necessitates that we build (or otherwise acquire) something that inherently contains value, which can then be easily and repeatedly transferred to others with little or no work. Plain and simple, we have to create or buy valuable assets, preferably ones that deliver their value automatically. There are a lot of ways to do this, but they all fall into the 3 categories above, and realistically, a lot of them look like different flavors of the same thing.