If you pay your bills with a credit card make sure it offers cash back rewards. You can let your rewards accrue for a while and possibly put the easy money you earned toward another passive income venture! (Be sure that the card you select doesn’t have an annual fee or you might be cancelling out your rewards). Check out this list of the best Cashback Rewards Cards.
For those willing to take on the task of managing a property, real estate can be a powerful semi-passive income stream due to the combination of rental and principal value appreciation. But to generate passive income from real estate, you either have to rent out a room in your house, rent out your entire house and rent elsewhere (seems counterproductive), or buy a rental property. It’s important to realize that owning your primary residence means you are neutral the real estate market. Renting means you are short the real estate market, and only after buying two or more properties are you actually long real estate.
You are also free to choose a fund that is based on any index that you want. For example, there are index funds set up for just about every market sector there is — energy, precious metals, banking, emerging markets — you name it. All you have to do is decide that you want to participate, then contribute money and sit back and relax. Your stock portfolio will then be on automatic pilot.
Peerstreet – This residual income option is slightly different, helping you earn money using real estate backed loans instead of the property itself. By helping fund the loan, you’ll earn a percentage of the interest rate charged to the borrower. Most loans are short-term, generally lasting between 6 and 24 months. You can build your own portfolio by choosing the exact loans you’d like to fund, or Peerstreet will choose the loans for you. Again, you need to be an accredited investor, although the minimum investment here is just $1,000.
I have a total of three CDs left. There is no way in hell I’m selling them after holding them for 4+ years so far to take the penalty. The CDs are for 7 years. That would be completely counterproductive. As a result, I feel very stuck with ever getting my CD money back if I wanted to. If the CDs were for just 1 or 2 years, I agree, it doesn’t matter as much. But combine a 7 year term with 4%+ interest is too painful to give up.
I have already come up with 50 ways that a management company can screw you for profit without you ever knowing(or not finding out for awhile). Did you have an inspection before you made an offer on the property? Do you have a picture of the property you bought? How do you know if that picture shows the house you actually own? or if it even hows the ‘current’ state of the house you own?
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.
What’s also really important to realize here is that when I took the exam I was teaching people to study for, I didn’t get a perfect score. In fact, I didn’t even get close to a perfect score. I passed. But I also knew a lot about this exam—way more than somebody who was just getting started diving into studying for it. And it was because of that, because I was just a few steps ahead of them, that they trusted me to help them with that information. To support this, I provided a lot of great free value to help them along the way. I engaged in conversations and interacted in comments sections and on forums. Most of all, I just really cared about those people, because I struggled big-time with that exam myself.
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!! 🙂
Thank you for being a part of this community. Thank you for reading. I hope that I can continue to encourage, support, and motivate you to achieve your life goals. And if I’m not, let me know how I can better do so. There are so many different platforms to connect with me – on Facebook, Instagram, and Twitter, but I tend to respond fastest through one of these methods:
In real estate, your passive opportunities are in private lending and rental properties. Private lending commonly involves lending funds to a real estate investor or business in exchange for a set return and length of time. (Full disclosure: I am co-partner of a turnkey investment company.) Turnkey rental properties allow the investor to be as hands-off as they like. This means a turnkey company purchases, rehabs, tenants and manages the property. To truly make this a passive investment, turnkey companies do all the work for you.
Awesome article…if this does not give somebody a clear roadmap, they probably were never going to get there in the first place! I’m kind of like you trying to figure out where to place “new” money and maturing CD’s in this low interest environment. Rates have to go up eventually…I dream of the days again where you can build a laddered bond portfolio paying 8%. I plan for a 5.5% blended rate of return, with big downside protection.
Knowing the approximate value of a property is only the first step to getting a good deal. Never be afraid to ask for a lower price and be an aggressive negotiator. The worst thing you can do is rush into a purchase or get bullied into one and pay too much. Successful real estate investing is a very long-term investment. You are going to be holding rental income property for decades so you better be happy with the price you paid.
However, until we get another reset in valuations (I’m calculating a 40% to 50% correction is justified ), I’ve moved largely to the sidelines. Beginning in July 2013, I began slowly reducing equity exposure and am now sitting firm at 40% with the balance in various forms of 5 yr cd’s and short duration bonds. This is down from over 60% when I ramped up to take advantage of the March 2009 lows.
What if there was a way for you to effectively make money while you sleep? Sounds like a dream come true, right? Even for the biggest workaholics, there are only so many hours in a day. If only you could get paid multiple times for something you did once—that’s exactly how passive income works! Thanks to technology, the potential to create multiple income streams is even easier than ever before. We’re no longer held back by the limitations of a traditional 9-to-5 job, and financial freedom is at our fingertips. Even if you already work a full-time job you can still improve your financial health with passive income.
"What makes business work is creating value. If you're going into the business with the intention of not creating value, but of having it magically provide money for you, then you often make really bad choices. The business that you're investing in or creating doesn't tend to be creating value for its customers or for anyone. So it doesn't tend to spit off the cash you're hoping it will. So many times I've seen people pursue passive income, and end up having active losses instead. They just spend a lot of time and money trying to push responsibilities off on other people and having it not work."
I personally haven’t tried any of the below methods so I can't speak from experience to how they work. In my mind, the most lucrative way is through building a REAL business online and providing your visitors with great value. However, after some thought, I decided to include these here because, quite often, the biggest roadblock for many is a mental one: believing that making money online is possible. From my experience, once you have made your first dollar, or even your first cent online, the world is suddenly a different color.
For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR.
I just sold my 80th ebay item and things sure are different. Now, I don’t wait for my money because I have a card. I know exactly what to do upon choosing an item to sell which takes me 1/10th the listing time. I’ve developed an eye for items that sell on Ebay through osmosis. THE POINT OF MY COMMENT IS …… if you want to make money online remember one thing, you best be ready to work! Work Work Work! Because through those efforts you will have an intimate understanding opposed to a theoretical (or “TALKATIVE/CONVERSATION) Understanding….
It’s not just the little guys like me who are being squeezed by the constant updates. Even YouTube’s top creators have expressed frustration with changes to the YouTube monetization platform. It’s constantly changing and evolving, so you must be willing to adapt. Plus, it helps having a blog so you’re not relying on a single platform or your income.
I’m somewhat embarassingly reminded of Harry Potter and the concept of “Horcruxes” here, in that the goal is to find a piece of your value, and impart it into an inanimate object or product, Voldemort Style (did I really just make a Harry Potter reference?) Anyways, whatever. If you want passive income, you have to think about the value you rent out or own. Or, you need to buy something valuable that other people would like to use (I love the idea of a 3D Printer). Then put it into something that can be sold or rented more passively. Maybe you have a car that sits in the driveway, or a vacation home that is empty half the time. Maybe you just have some funny jokes you could put into a YouTube video and run ads on. At some point, you have to “transfer” the value into something that can work for you — that something is an asset.
Who cares? I don’t care one bit about building a “successful company” with most of my passive projects. That’s for my active projects — and I’ve done that when I converted them into active projects. For passive income, I can build products and automated services that are useful enough that people want to buy and use them. My Magento modules and Udemy course had 5 star ratings despite being passive. I knew back then that I could probably sell 2x as many copies of each if I made it my full time job — but I chose note to. I realized that if I could have more fun, get more fulfillment, and make more money out of other passive activities, and that’s why I don’t care that my passive businesses are small and nichey. Again, though, converting one of them into an active business has made it much more successful — so I would just remind you that they aren’t mutually exclusive, and if anything, having a Passive Income side business or 2 let’s you try out a few different waters before you dive in to any one.
The most liquid of the private investments are investing in equity or credit hedge funds, real estate funds, and private company funds. There will usually be 6 month – 3 year lockup periods. The least liquid of the private investments are when you invest directly into private companies yourself. You might not be able to get your money out for 5-10 years, depending on the success of the company and upcoming liquidity events.
As todays business world becomes more and more web focused, creating passive income streams online should be one of your main focuses when building a business in the new economy – whether you’re doing this on your own, or with the help of virtual assistants that manage your blog, or even handle the marketing of your site – you’ve got to love making money while you sleep!
From what he describes, creating passive income definitely does not sound easy. It requires a serious ramp-up -- often requires 80- to 100-hour workweeks in the beginning, says Flynn. But once up and running, and depending on the content, some sites take fairly minimal maintenance. Green Exam Academy, the LEED exam study site he launched in 2008, takes just him four to five hours a month to maintain but brings in $250,000 annually.