Before you buy any property, an inspection by a professional and independent home inspector is essential. Even if your potential purchase has just undergone a beautiful renovation, you must find out if the wiring and plumbing are all up to code. In most areas, it’s illegal to operate a rental property with any code violations. A top-quality inspector will be able to estimate the remaining life of the roof, HVAC system, and hot water supply, as well as find any defects in the structure, such as dry-rot in the attic.

One of the great things about generating passive income via rental properties is the ability to buy properties throughout the country instead of just in your generally locality. Because you will hire others to manage, maintain, and repair the property, you don’t have to be in the same location and can maintain passive ownership from virtually anywhere. That gives you the ability to better choose rental markets where you stand the best chance of profiting the most due to lower local and state property and business taxes.

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.
Roofstock – Investing in rental properties is one of those passive income ideas that can be extremely intimidating, especially when it comes to finding tenants. Roofstock lets you buy properties with as little as 20% down that already have tenants living in them. That means you start getting paid from the first day of your investment. You don’t even have to physically visit the properties!
Crowdfunding is a newer way to invest, having emerged onto the scene just within the last few years. Most people have heard of sites like Kickstarter and GoFundMe, and a very similar concept exists for real estate. Developers are always looking to raise capital to fund their projects. Through the various online platforms, investors have access to these projects and can choose to invest in both residential and commercial properties. See the List of My Favorite Crowdfunding Sites. https://www.listenmoneymatters.com/wp-content/uploads/2017/08/buy-online-business.jpg
Your articles are so in-depth and helpful, I’ve never seen anything quite like it. I am a 22-yr old finishing my last semester of college, studying Computer Science and Psychology. I’m in a really good place with my finances (2k savings, no student debt, only expenses essentially rent, groceries, and utilities) and I want to get ahead financially so I can pay my parents back and save up a lot.
One of the easiest ways to get exposure to dividend stocks is to buy ETFs like DVY, VYM, and NOBL or index funds. You can also pay an algorithmic advisor like Wealthfront to automatically invest your money for you at a low fee. In the long run, it is very hard to outperform any index, therefore, the key is to pay the lowest fees possible while being invested in the market. Wealthfront charges $0 in fees for the first $15,000 and only 0.25% for any money over $10,000. Invest your idle money cheaply, instead of letting it lose purchasing power due to inflation. The key is to invest regularly.

I came across your site and I love it! My husband and I work in corporate America and I own a consulting/coaching business. I have a goal to gross 1 MIL within the next 10 years I’ll be 40 then. How can I begin now? How do I find a millionaire mentor? We live in Philadelphia, PA all of our friends and family are mostly employed some with small businesses however i have huge goals I am working so hard to become a full time entrepreneur. Seems like everyone we know are all on the same level and I fear we’ll stay here of we don’t meet someone willing to show us how to level up. Any suggestions?

P2P lending is the practice of loaning money to borrowers who typically don’t qualify for traditional loans. As the lender you have the ability to choose the borrowers and are able to spread your investment amount out to mitigate your risk. The most popular peer to peer lending platform is Lending Club. You can read our full lending club review here: Lending Club Review.

Your articles are so in-depth and helpful, I’ve never seen anything quite like it. I am a 22-yr old finishing my last semester of college, studying Computer Science and Psychology. I’m in a really good place with my finances (2k savings, no student debt, only expenses essentially rent, groceries, and utilities) and I want to get ahead financially so I can pay my parents back and save up a lot.


Your articles are so in-depth and helpful, I’ve never seen anything quite like it. I am a 22-yr old finishing my last semester of college, studying Computer Science and Psychology. I’m in a really good place with my finances (2k savings, no student debt, only expenses essentially rent, groceries, and utilities) and I want to get ahead financially so I can pay my parents back and save up a lot.
Hi Logan, thanks for perfect article on passive income theme! I am a newbie in this passive income thing but everything I read here seems obvious to me. Why not create a passive income, right? So I started googling about making passive income via internet because I like things connected to the web and I think that this will be a huge thing (it already is) and I found this article which seems that is probably very new but in the ebook there are great informations about passive income, at least in my POV (newbie POV). Is this a legit website or can it actually work? I want to expand on that because my 9 – 5 s*cks… Here is the URL: https://cashwithoutjob.online
Michael Ellsberg is the author of The Education of Millionaires: It’s Not What You Think, and It’s Not Too Late, which is launching from Penguin/Portfolio in September. It’s a bootstrapper’s guide to investing in your own human capital at any age. Michael sends manifestos, recommendations, tips, and other exclusive content to his private email list, which you can join at www.ellsberg.com. Connect with him on Twitter @MichaelEllsberg and on Facebook.
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.
Question: You mention receiving $200k of passive income a year, but your chart shows half of that coming from real estate holdings, and reading between the lines it appears that you hold mortgages against those holdings. Then you conclude that $200k/yr of passive income should be enough to live comfortably anywhere in the world. So are you subtracting your real estate expenses (taxes, insurance, mortgage payments, maintenance, remote property management company fees, etc.) when you report your passive income from those properties? Really I think it’s the net (after taxes and everything) that tells us what is left over to “spend” on living, right? When I set up my spreadsheet to retire early at age 47, I calculated the after-tax income I would need to live. Then I compared that to my income streams (estimating tax on the taxable income streams) to measure the surplus/shortfall. Also some good advice from GoCurryCracker: If you can minimize your taxes so you’re in the 15% tax bracket, you can possibly receive tax-free long term capital gains. I agree with your philosophy that time is more important than money as we age. I am not sure I agree with a philosophy that is fixated on needing such a large income, and would rather minimize taxes if it’s all the same on the happiness meter. Furthermore, having 20 plus income sources in the name of diversification adds stress and requires more management (TIME!). I think this is fine for those of us while young, as we have the energy to work hard. But as time becomes more important, the extra headache of managing, planning, and buying/selling our assets becomes a resented hindrance on par with the resentment we felt when working for an employer and fighting traffic each day to go to a job we hated. Every thing we own in actuality owns us, by virtue of its demands on our time and affections, and that includes investments. It also includes our home, and is a good reason for downsizing. As long as we have food on our table, a roof over our heads, and clothes on our bodies, what more do we need? I think we need to consider freeing ourselves from the weight of the chains of managing too many ventures. Personally, I plan on investing in no more than 5 simultaneous ventures ever, with the exception of some IRAs that I just plan to let sit for the next 20 years (and therefore no thought or anxiety required). 

Inspired by you, I started a tax/personal finance a month ago. I figured if it works out, it will create a good side income for me. If not, at least I can use the blog to build my brand as a tax lawyer. Other than that, my current investment portfolio is heavily focused on index funds because of its historical performance and tax & cost efficiency. Right now my dividends income every year is about $14,000. I also have a good amount of unrealized capital gains every year from my investment, though I don’t count the capital gains as my passive income as they are paper gains, at least for now.
Leverage: With the stock market, you invest your retirement savings or cash on hand. The same is true for private lending. You can leverage rental properties four-to-one, sometimes five-to-one, meaning your $50,000 investment can buy you $200,000-250,000 in real estate. In a rising market, this is a good thing and will maximize your cash on cash return.
Hi Sam! I loved your sentence, “There’s so much information in my head that I need to write it down or else I might explode.” That’s exactly how I feel! I never thought of myself as a writer, and especially not a blogger, but recently I’ve started dabbling in it and it feels so nice to get everything out! I’m dedicated to helping others succeed with personal finances, and there are plenty of “how-to” sites, but it’s important to get people thinking and motivated to prepare, plan, and save!
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).

This is mostly passive once you have it all set up, but it does take a lot of work at the beginning. Real estate investing also requires occasional maintenance. Currently, we invest in a couple of rental properties and earn about $500 profit from each per month. You can read more about my rental properties at MoneySmartLife.com: How and Why I Became a Landlord.


That depends what you call a “good” lifestyle. Could I rent yachts and get bottle service every weekend living off my passive income? No way. Could I travel 10–15 weeks a year and live in central Tel Aviv with money to spare? Definitely. I was able to earn low 6 figures completely passively. But if you want to make boatloads of money, and step up to the 7-figure territory, then yes, you’re going to need a combination. If, however, you want time to pursue your passions and have a moderate amount of fun, you can definitely sustain yourself with passive income.
Creating a membership site is a powerful way to generate online income and scale a service-based business. By having members pay a monthly (or other periodic) fee to get access to a password-protected area where exclusive content is made available, you can transform a site into a RECURRING income-generating business and bring a regular flow of income from the same customer base.
When I purchase an existing online business, I look for cash flow over the past year and where the money comes from. I want the sources to be more passive so that it does not take a lot of my time. Also, typically I will make an offer that is 18 – 24 months of profit so that I know that I will get my money back within the next two years. I hope that helps!
One day I thought to myself ‘This is BS! SURELY there must be other people out there in CyberLand who also need this info. I’ve spent money on subscribing to email product, purchased e-books and also downloaded lots of information which is provided by suppliers for free. However, it takes a ludicrous amount of my precious time reading the content, deciding whether it is worth saving or not, creating folders on specific subject matters, storing the data in those subject folders and it’s all eating away at my productive time. I’m NOT productive because I spend around 70% of each supposed-to-be business day just going through all this freaking content! If I packaged it up to on-sell to other people in a super-user-friendly way, surely I could make money to support myself so I can actually get on with my REAL job of building the website-with-blog I WANT to create on a subject dear to my heart?” (This subject happens to be astrology, about which I know a great deal as I have practised it professionally since 1998.)
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.
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….
Use your base to build your audience, and when you’re starting out, take advantage of the fact that you don’t have a big following to give more personalized help to your first fans. “The people who are starting out — that’s their advantage,” says Flynn. “They have the opportunity to speak directly with those people few coming their way to find out what their problems are and give them the special treatment that bigger brands might not be able to do.”

I like the way you have listed the ways to earn extra income and was quite surprise that you did not make mention of network marketing, which is a way to make extra income without quitting your regular, though most people view mlm as a pyramid scheme but the real pyramid scheme is a regular 9 to 5, because you can only have one president of a company at any given time and network marketing business model to promote product that can be used is really cheap to join and can offer a substantial extra income or what do you think?
Tenants usually move out before the court date but you may have to pay for a removal by the sheriff. All these fees and time delays add up and you can see why it is important to check tenant applicants in the first place. Having a formal eviction procedure will help avoid procrastinating the process and missing out on several months’ worth of rent trying to get tenants evicted.
When you invest in a dividend-paying stock, you are buying a share of the company and you literally become part-owner of that business. As the company grows and generates extra cash that it doesn’t necessarily want to re-invest, it might decide to return some of the extra cash to the shareholders in the form of dividends. And because you own a fraction of the company, you will receive a portion of the cash!

If you’d prefer to skip the startup phase, you might want to buy a blog that’s already built and earning revenue. This is actually pretty easy to do as a lot of people start blogs, and then get bored with them. Getting a blog going is a labor-intensive process, and it’s not uncommon for people to give up before they’ve reached their full potential.
The organizing principle behind this grouping, appropriate economic units, is relatively simple: if the activities are located in the same geographic area; if the activities have similarities in the types of business; or if the activities are somehow interdependent, for instance, if they have the same customers, employees or use a single set of books for accounting.
Hire someone else to manage existing income streams. If you've built up a couple of solid passive income streams and want to move on to others, consider hiring someone to manage them for you. Obviously, this will only work if your income from these streams exceeds the amount you would have to pay someone to manage them. However, this is the way to truly passive income, because with someone else managing it, you're literally earning money by doing nothing.
There are many comments about it being impossible to break into real estate with little money, or needing help from the bank of mommy and daddy. It is possible. I bought my first property, a multifamily, 6 months after graduating college, with a garbage job I got 3 months before and barely 7k in the bank. It’s now two years later and I’ve purchased a second this summer. Regarding management, I self-manage like most ‘small time’ landlords. Unless you own a massive apartment buidling, there’s no need to professional managment. Like another comment mentioned, I’ve only ever gotten heating issues or other minor things, for which I have a handyman to take care of. Aside from that, it’s fairly passive IMO. Dividend investing doesn’t require 100k either. It’s just an example the author used. I invest un securities with dividends ranging from 2-12%, and hedge/balance according to risk. Higher dividend % isn’t always better, but there are some good deals you can find. I think the key is to realize that you don’t need to stick to just one form of passive investment. Sure, 10 properties sounds daunting, and a $1M portfolio seems impossible, but you can combine both, as well as other passive income strategies. And ofc, the more risk you are willing to take on, the higher the potential reward (and loss). I day/swing trade, but wouldn’t advise this. It’s also not passive, I spend a massive amount of time researching and analyzing the technicals, but it’s worth it for now, as I’m fairly consistnet with profits. I have not tried blogging, and am not sure I’d be any good at it. I dabbled in ecommerce but found it was too time consuimg, but I know people who were able to quit their 9-5s from ecommerce. I’m sure no matter how much debt you have (i have 30k unsecured debt) or how little you think you make, there is a way to start investing today, even if it’s starting small.

I've now only got an SF rental condo and a Lake Tahoe vacation rental in my real-estate-rental portfolio. Although I miss my old house, I certainly don't miss paying $23,000 a year in property taxes and another mortgage, and dealing with leaks and managing terrible tenants. I drove by the other day and couldn't believe how much noisier and busier the street was than where I currently live. I wouldn't be comfortable raising my son there.
Let’s continue the vintage BMW idea. Old cars obviously require quite a lot of maintenance. Many people will buy a “fixer upper” with the intention of spending their spare time repairing and restoring it. There’s a very obvious market here: a guide to restoring different BMW models. Depending on your knowledge, you could produce detailed guides for the three or four most popular models and sell them. Not everyone restoring a car will buy them, but some probably will.
Passive income is a great tool for building retirement income faster, paying off debts, and, ultimately, retiring early and comfortably. If you have passive income during your retirement years, you potentially could live as well as you did during your peak earning years. Passive income is money you earn without doing actual labor. Often times, it comes from investments, such as in rental properties, stocks, bonds, annuities, and other investments.
Dividend Income: Dividend income is wonderful because it is completely passive and is taxed at only 15% if you are in the 25%, 28%, 33%, and 35% income tax bracket. If you are in the 39.6% income tax bracket you will pay a 20% tax on your dividends. My dividend income portfolio mainly consist of dividend equity and bond ETFs such as DVY, VYM, MUB, TLT, and IEF. Total stock and bond income is a little over $100,000 a year due to a heavy accumulation of stocks and municipal bonds after selling my house.

Do you want to earn $100, $1000 — or even more — on the side? You can start earning extra income today with the help of this list of ideas I’ve put together. Spend an hour or two each day working on items that are practical for you, and you can build alternative income sources to help you improve your financial situation  While many of the items on this list are passive income ideas, not all of them are. Some items require you to actively work for success.
I actually spent a year and a half working as an affiliate marketer (mostly selling drumming related products – lessons, kits ect). 5 years on and one of my one page sites (which I’ve not touched) still nets me about $150 a month. I won’t be retiring off that but only really now appreciate the reverse pyramid approach to entrepreneurship (working for nothing initially but later being paid without effort!)
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.

I wouldn't think of a high yield savings account as a source of passive income but your savings should be getting something (less like Seinfeld syndication residuals and more like a commercial jingle residuals!). It won't make you rich but it's nice if your baseline, risk-free rate of return on cash is 1% or more. The best high yield savings accounts (or money market accounts) offer higher interest rate and there is absolutely no risk. CIT Bank currently leads the pack with the highest interest rate.

Writing an e-book is very popular among bloggers, as many have noted that “it's just a bunch of blog posts put together!” You will not only have to make an investment of time and energy to create the e-book, but market it correctly. However, if marketed correctly (through blogging affiliates in your niche, for example), you could have residual sales that last a very long time.
That $200,000 a year might sound like a lot to you, but the median home price in San Francisco is roughly $1.6 million or almost eight times our annual passive income. For a family of three in 2018, the Department of Housing and Urban Development declared that income of $105,700 or below was "low income." Therefore, I consider us firmly in the middle class.
Part of providing value is building trust. Don’t link to things that aren’t of good quality or people won’t trust your recommendations. The other part of making an audience is consistency. It matters less how often you post than how consistently. If you only have time to do one post a month, that post should come out on the same date and time each month.
I use a property manager to handle my rental properties. Most months, my only involvement is checking my bank account to verify I received my checks, then making a payment to the mortgage company. If you don’t have enough money to buy a rental property, you can get started investing in real estate by buying a REIT stock or investing through platforms that let you buy a partial interest in a building.
In order to generate $10,000 in Net Operating Profit After Tax (NOPAT) through a rental property, you must own a $50,000 property with an unheard of 20% net rental yield, a $100,000 property with a rare 10% net rental yield, or a more realistic $200,000 property with a 5% net rental yield. When I say net rental yield, I’m talking about rental income minus all expenses, including a mortgage, operating expenses, insurance, and property taxes.
So many readers have asked me “How do you invest your money?”.  And so I’ve shared my thoughts on building a smartly diversified portfolio for long term returns.  Of course, this is great when you have a large capital base and 30-40 year time horizon.  For example if you are compounding at just 5-10% but doing it over 40 years and from a large starting base, plus you are topping it up monthly with new funds, you can enjoy ridiculous returns.

John has a daily (yes, daily) podcast where he features an interview with a successful entrepreneur. Now, John enjoys many hundreds of thousands of downloads per month, he’s written a book, has products and has opened up a ton of opportunities for sponsorships and partnerships that wouldn’t have come otherwise. He’s not the first person to have a show dedicated to interviewing rock star entrepreneurs—not even close—but he’s definitely the fastest to see these kinds of results.
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