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.
Yet none of these people I've talked to who have this temporarily successful lifestyle seem very happy. They actually seem kind of restless and lost. I've had conversations with several of them to help them determine "what the purpose of their life is" now that they have some amount of money coming in from some little passive venture they don't even care about that much. It all feels empty to them.
I wish I had more time to put into real estate. Given the run up since 2012, I may even be interested in selling my condo that I currently rent out. I need to get it appraised to really see what it’s worth, but I think conservatively it’s gone up ~50%, although rent is probably only up ~10% or so. I am bullish on rents going up in the future… mostly in line with inflation, or perhaps even slightly faster due to constricted credit and personal income growth which should provide a solid supply of renters. At this point, I just don’t want to manage the property. I’ll probably look into a property manager as my time is likely worth turning it into a nearly passive investment.
There is a big misconception about rentals & people thinking that it’s passive.. rental income is far from passive. Many people flock to buy rentals as a way to “retire rich” but realize shortly thereafter that it really isn’t that easy or true.. Ask me how i know. I have bought a lot of houses from tired and burnout landlords. Luckily, there are better options out there.
Case Schiller only tracks price appreciation of RE. RE as rental investment vehicle is measured primarily on rental yield or cap rate or some other measure. Price appreciation in that scenario is only a secondary means of growth, and arguably should be ignored as a predictor of returns when deciding on whether or not to invest in rentals. More important key performance indicators for rentals are net operating income and cash ROI. Appreciation, if it occurs, is a bonus.
Developing passive income is different. With the exception of one of my passive income streams (cryptocurrency mining), all of the others require real, hard work. Truly, I understand the barriers for people getting into building alternative income streams. I would say that most people WANT passive income, but truly aren’t willing to put in the blood, sweat, and tears to make it happen.
In order to build an audience, you need to have a platform. You need to have something worth following and sharing; something that’s valuable to others. And that, of course, takes time. That’s not to say you can’t build a huge audience in a short amount of time. But as much as we hear about the people who’ve succeeding at doing this, we don’t hear about the millions of others who are struggling every day to get just a few more fans and followers.
In the real estate market, the one of best ways to generate passive income is by investing in turnkey rental properties that are ready to rent with and are managed by property management companies. In theory, the process is relatively simple. You either research properties or have people you trust do it, find ones that are in good condition and preferably in good areas, pay a reputable contractor to perform any repairs and ensure the property is in its best possible condition, and then hire a trusted property management company to handle the administrative tasks, including collecting rent, documenting and paying for maintenance and repairs, and sending money to you.
Wow! What an awesome list! My favorite is the stock photography because I love photography. I have had some success there, particularly with one photo I make some decent income from. I think the key with stock photography is finding a shot that is high demand. Then, find a new unique way to frame that shot. This is the reason my St. Louis Arch photo is a top 10 on both ShutterStock and iStockPhoto. Thanks for the awesome ideas above!
What is refer-a-friend? Essentially, you make money for using a service and telling others how great it is. Most of the times, you’ll get a unique link that you can share with friends directly or throughout social media. Whenever anybody clicks your link and signs up and/or makes a purchase, you’ll get a bonus. The bonus can be in the form of cold hard cash or an account credit.
I’ve been into home décor lately and I had to turn to Etsy to find exactly what I wanted. I ended up purchasing digital files of the artwork I wanted printed out! The seller had made a bunch of wall art, digitized, and listed it on Etsy for instant download. There are other popular digital files on Etsy as well such as monthly planners. If you’re into graphic design this could be an amazing passive income idea for you.
My favorite type of semi-passive income was rental property because it was a tangible asset that provided reliable income. As I grew older, my interest in rental property waned because I no longer had the patience and time to deal with maintenance issues and tenants. Online real estate became more attractive, along with tax-free municipal-bond income once rates started to rise.
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.
Unfortunately, I was never great with finances growing up. In fact, I had only recently rid myself of some serious credit card debt that had followed me from college and through a good deal of residency. I had poor spending habits and treated my investments like gambling – trying to hit the home run every time. Unfortunately, I struck out quite a bit.
Nah you misunderstood me. I’m working 50 hours a week now to get residency and only taking a couple of classes. I’ll be working 10-20 hours a week when I go back to schoool full time a year from now. I tried working 35 hours and school full time but got burned out last year so no more of that. My grades are so-so. I got a 3.7gpa in all my GE’s and really on a conservative basis planning to remain around there which would mean 1 B for every 2 A’s. To get residency realistically I got to earn 300 dollars in taxable income a week for a year, and in the meantime am allowed to go to school part time given the fact that I can pay for school with the money I have earned within the period I began to establish residency, so no outside cash because my bank accounts will be audited at the end of the year.
Thanks for asking. https://passiveincomemd.com/what-is-passive-income/ gives a good summary of the definition I use. But in brief, it’s income that isn’t proportional to the time you physically put into acquiring it. It doesn’t mean it’s not without work or effort. It’s just that most of the work is done up front and it continues to pay off long after that initial effort. Real estate fits into that box. There’s definitely a spectrum but compared to what we do as doctors, where our compensation is directly linked to our time, most of these things are quite passive.
4) Treat Passive Income Like A Game. The only real way to begin your multiple passive income journey is when you are making active income. The initial funding has to come from somewhere. Hence, treat passive income as a game that has various levels. If you fail to achieve one level, it’s not the end of the world since you still have active income and can restart. Furthermore, a game is meant to be played with integrity. Using shortcuts (non passive income streams), someone else’s income as a supplement (spouse), or one-offs (capital gains) does not count. The primary purpose of any game is to bring enjoyment to the player and beat the boss.