Unfortunately, I can’t answer that conclusively one way or the other. It all depends on you, what you like to do, your work ethic, personality, etc. If you are a good writer perhaps you could write a book and make money that way. Or, you could start your own website and do affiliate marketing. Just because you are young it doesn’t mean you can’t make money doing at least a few of these ideas. I wish you luck in your money making efforts!
There are dozens of ways to generate passive income. However, the option you select has to do with two metrics: time and money. Either you have a lot of time or a lot of money. Most people usually don't have both. But, if you have a lot of money, generating passive income almost instantly is easy. You can buy up some real estate and begin enjoying rental income. Or, you can invest in a dividend fund or some other investment vehicle that will begin generating a steady income for you.
Another great way to get started is to identify an area of interest you have. For instance, Robert Duff has been successful in building passive income by selling books on Amazon. Then, go out and start talking to people. Ask them, “What are you struggling with right now? What are your biggest pains? What’s something you wish existed that doesn’t?” That’ll give you some ideas about where to get started.
The term affiliate marketing has taken a bad rap over the years, primarily because people are abusing just how easy this is to do. Internet marketers are finding products they don’t even use because they come with a sweet commission, and are spamming everyone until they either buy, or unsubscribe. This is also known as the dark side of affiliate marketing. https://charliepage.com/wp-content/uploads/2017/10/How-To-Create-True-Passive-Income-1.png
Most credit card companies offer sign-up bonuses to entice you to open a credit account with them. As long as you don’t spend money just to hit the minimum balance and always pay your balance on time, this can have a minimal impact on your credit score while earning you hundreds – or even thousands – of dollars a year. Some of the best travel credit cards offer 100,000 points to new accounts when you meet reasonable spending requirements.
Even if you don’t have the skills right now, it’s possible to develop them. Envato Tuts+ has a load of great courses that teach you how to make WordPress themes, Photoshop actions and so on. If you invest a few months into learning the necessary skills, you might well be able to carve out a spot for yourself in the Envato Market or in our new curated website Envato Elements.
A good portion of my stock allocation is in growth stocks and structured notes that pay no dividends. The dividend income that comes from stocks is primarily from S&P 500 index exchange-traded funds. Although this is a passive-income report, as I'm still relatively young I'm more interested in building a large financial nut through principal appreciation rather than through dividend investing. As an entrepreneur, I can't help but have a growth mindset.
Here’s the truth: a successful business is something that successfully solves a problem. And that business can make more money in two ways: solving more people’s problems, or solving bigger problems. The cool thing about the EP Model is that sometimes these products don’t even have to be yours. You can generate income by recommending other people’s or companies’ services or products. This is called affiliate marketing. It’s actually how I’ve made most of my money since I started in 2008.
We usually think of Craigslist as a place to buy and trade random stuff, but Craigslist can actually be a great opportunity to sell your services online to an active and engaged audience. Simply check the “jobs” section and “gigs” section for specific cities and see if anything matches your skills. The great thing about Craigslist is that it is one of the highest converting traffic sources on the internet (think active buyers) which can mean more opportunities at higher pay.
Yes, good point about not blatantly copying other people’s hard work. I should have said in my original post that I would NEVER do that. I have eight years’ of University education behind me which resulted in three degrees, including a Masters. If I learned one thing at college, it is that plagiarism is, as you say, SO not cool. Not the done thing. I plan to give full attribution to the originating author and paste a link to their website on my website so my subscribers can follow up the data with the source if they choose to.
I had the same experience when my name’s frequency on the call schedule dropped for reasons that no one would discuss and were not easily discerned except by those in the know (who were staying mum). I went and found another job…. and I wish that I had found something with passive income – it’s been several years now that I’ve been working 2-3 part time jobs and I’m trying to figure out what my other thing is going to be… still working on that, but I am thankful that there are others out there discussing side gigs and alternatives to medicine.
Real-estate crowdfunding ($9,600 a year): Once I sold my SF rental, it was natural to reinvest some of the proceeds into real-estate crowdfunding to keep sector exposure. I didn't invest a lot in some of my favorite real-estate investment trusts because I felt a rising interest-rate environment would be a stronger headwind for REITs. But if I could be more surgical with my real-estate investments by identifying specific investments in stronger employment-growth markets, I thought I could do better.
Active income, on the other hand, involves earning money in exchange for a service. It could be a salary, an hourly wage, commissions, or tips. It’s essentially a trade of your time for a fixed dollar amount. Most people choose to live this way, and there’s nothing inherently wrong with that, as long as you understand that there will be a limit to how much money you can realistically earn.
Investing in coins and collectibles: Buffalo nickels and Spiderman comic books are good examples of coins and collectibles that can rise in value, and thus offer opportunity for passive income investors. You'll need to get up to speed on the value of any coin or collectible under consideration, but once you do so, you're on the way to price appreciation on a commodity you'll be paying a lower price to buy, and will garner a higher price when you sell.
If you can max out your 401k or max out your IRA and then save an additional 20%+ of your after-tax, after-retirement contribution, good things really start to happen. If one is looking for earlier financial independence, such as retiring in their 40s or early 50s, it may be a good idea to skew towards more after-tax savings and investments given one has to wait until 59.5 to withdraw from their 401k or IRA penalty-free.
Consider refinancing your mortgage if you haven’t done so in a while before interest rates go up further. Or consider leveraging cheap money responsibly to acquire hard assets. LendingTree Mortgage has one of the largest lending networks online, and they will contact you immediately with their offers. You want lenders competing for your business, and get hard quotes so you can pit them against each other.
And real estate does more than just track inflation – it throws off income (which is important to some people and useful to most). And while your underlying asset is appreciating, the income also grows as rents increase over time. And if you make smart and well-timed purchases, both rents and asset values can increase at well above the rate of inflation.
Starting a blog is one of the most popular side hustles to earn online income. This is because whether you have 10 people or 10 million reading your content, the amount of your effort to write an article is the same. Websites have low start-up costs and you can literally buy your domain, launch your site and have a few pages created in less than an hour. You won’t start making money right away, but you will be building towards that first $1 of income.
However, this comes back to the old discussion of pain versus pleasure. We will always do more to avoid pain than we will to gain pleasure. When our backs are against the wall, we act. When they're not, we relax. The truth is that the pain-versus-pleasure paradigm only operates in the short term. We'll only avoid pain in the here and now. Often not in the long term.
Start-up costs can be prohibitive if you do not have the credit score for a loan or other financing options. Loan standards have loosened since the financial crisis and most can get some type of financing. The use of financing eats into cash flow during the early years but the strategy turns into a viable income stream after you start paying off properties.
For someone my age, I have an extremely low risk portfolio of mutual funds, foreign currency, and bonds. It’s made a bit more risky by my recent exposure to cryptocurrency, but that’s the only “high risk” activity going on here. Nothing exciting, but it pays some nice dividends and beats the hell out of keeping money in a savings account. This is a way for me to hedge against the risk I incur by angel investing in startups.
Affiliate marketing is the practice of partnering with a company (becoming their affiliate) to receive a commission on a product. This method of generating income works the best for those with blogs and websites. Even then, it takes a long time to build up before it becomes passive. If you want to get started with affiliate marketing check out this great list of affiliate marketing programs.
However, I think for those who are willing to do what it takes, the sky is the absolute limit. As an example, I’m trying to take a page out of FinancialSamauri’s book and create an online personal finance and investing blog. It is an enormous undertaking, and as a new blogger, there is a seemingly endless amount of work to be done. That said, I hope that one day I can not only generate some passive income from the hours of work I have put and will put into the project, but I hope to be able to help OTHERS reach their financial goals.
Stock dividends: Some stocks, especially stocks from big corporate standouts, pay dividends to shareholders based on the number of shares they own, and the percentage of the stock price on the dividend date. For example, if a company pays out 3% on a stock that's trading at $100 per share, you'll earn $3 for every share of that stock you own. Add it up and that can be good take-home pay as a passive investment.
Crowdfunded real estate companies like Fundrise are similar to today’s peer-to-peer lending companies. Like Lending Club and Prosper, they offer a platform that matches real estate investors with investment choices. They help people looking to invest money in real estate in a passive manner. Also, investors can avoid bargaining with sellers. No need to get involved in the transfer of ownership and management of those properties either.
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If you go this route, be prepared to put in quite a bit of work up front. All of these products need to be created, tested and perfected for sale. The good news is that your initial investment will pay off multiple times. Also, there aren’t any production costs as you aren’t making any physical products. But you will still need to devote some time to product development and subsequent marketing, meaning that your work schedule may need to be trimmed a bit.
There is a specific tax definition of passive income, known as “passive activity” to the Internal Revenue Service. Passive income is any income you make without actively working or are materially involved. The IRS defines it as any rental activity or any business in which the taxpayer does not “materially participate.” Nonpassive activities, or active activities, are businesses in which the taxpayer works on a regular, continuous, and substantial basis.
They also launched an incredible Retirement Planning Calculator that pulls in real data from your linked accounts to run a Monte Carlo simulation model to output the most likely results of your financial future. I strongly suggest you run your own numbers, play around with the income and expense variables, and see how you stack up. It’s all free and easy to use.
Another option: Consider starting your own real estate investment group. This is a great way to team together with other small investors, either via pooling your money together or simply by learning from eachother. According to Joseph Hogue, CFA from PeerFinance101.com, “The common bond in all real estate investing groups is that you help each other compete against the big money players to get the best returns.”
I see you include rental income, e-book sales and P2P loans as part of your passive income. Do you not consider your other internet income as passive? Is that why it’s not in the chart? Or did you not include it because you would rather not reveal it at this point? (I apologize if this question was already answered – I didn’t read through all the comments, and it’s been about a week since I actually read this post via Feedly on my phone)
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.
You can try and start another travel blog, but every twenty-something who’s visited South East Asia has one; the market is so saturated that it will be very difficult for you to stand out and start making money. Instead, if you find something you’re interested in that is underserved, you’re far more likely to be able to carve out a space. You’ve a far greater chance of making money with a blog for vintage BMW owners than another generic Thailand travel guide.
Some good writing here! I am a realtor myself and frequently get in touch with clients that consider buying a realty estate a conservative of investing. I once heard of a transport company in Vienna, Austria, which focused their entire profit on buying eventually every house available in the downtown for about 80 years. That must be some of a passive income!
Creating passive income is the key to retiring, especially retiring early. If you want to retire early with the stock market you will have to save a huge amount of money, because that money has to last so long and retirement calculators depend on you using your investment to fund your life. With passive income you will have income coming in as long as you own the investment, without every eating away at the principle invested. Creating passive income may take more work than investing in the stock market, but I think it is well worth the extra effort!