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.
Passive income is attractive because it frees up your time so you can focus on the things you actually enjoy. If a doctor wants to earn the same amount of money and enjoy the same lifestyle year after year, they must continue to work the same number of hours at the same pay rate—or more, to keep up with inflation. Although such a career can provide a very comfortable lifestyle, it requires far too much sacrifice unless you truly enjoy the daily grind of your chosen profession. Additionally, once you decide to retire, or find yourself unable to work any longer, your income will cease to exist unless you have some form of passive income.
Being successful in generating passive income from real estate requires doing a great deal of homework beforehand so that you don’t wind up buying a money pit. A money pit will eat up all of your potential rental income and cost even more for constant repairs and make it harder to keep your rental units full. You can avoid them by doing your footwork and making your money when you buy.
Not really. I love my speed reading courses, I’m passionate about them. I loved working on apps to help small businesses kick more ass. Sure, it’s not as “sexy” as running a full time startup with dozens of employees, but that’s not the point. The point is to make enough money to be able to take risks and do what I want. Plus, if I’ve proven anything, it’s that you can turn these projects into full time if they become interesting enough to you.
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:
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?
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.

Real estate has another perk: Tax law in the US (and most countries) has been written by landowners. There are some ridiculous loopholes, like the ability to deduct expenses (and maybe even some interest) as a cost of doing business. Also, you can sell the property and buy another one without paying taxes. I won’t go into detail here, but Real Estate is my favorite form of passive income, and it makes up over 50% of my portfolio. See the next section for a breakdown.


Hello, I have just started my own blog this week. I too have read a lot of Rich Dad Poor Dad’s books and the 4 Hour Work Week and am hoping to be on the same path as you. I love your blog! Everything looks great. I am still learning— so much to figure out! My blog is bettybordeauxdoesitall.com. I have to be anonymous because of my job. Thanks for the inspiration and best you!
As an struggling young Engineer (back in the Carter era) I bought anything I could renovate then rent to justify paying the 18% interest. I never took vacations but worked on my properties all in the pursuit of passive income. I drove junk for many years & many months I just got by on credit cards. My friends & colleagues were amused by my ‘stupidity’ but most are still working to make enough for retirement.
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:
Another benefit of investing in rental properties is the loan pay down. If you obtain a loan to buy the property, each month your tenants are paying off part of the loan. Once the mortgage on the property has been paid off, your cash flow will increase dramatically, allowing your mediocre investment to skyrocket into a full-fledged retirement program.
Those who choose to focus on passive income will need either family money, funds from investors, or the nerve to borrow large sums by taking on debt to fund the purchase of assets. Consider someone who takes out substantial bank loans to build an apartment building or buy rental houses. Although this can turn a very small amount of equity into a large cash flow stream, it is not without risk. When using borrowed money, the margin of safety is much smaller because you can’t absorb the same degree of setback before defaulting and finding you balance sheet obliterated.
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.

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
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.

Though it can take a while to build up enough cash to put a 20% down payment on an investment property (the typical lender minimum), they can snowball fairly quickly. The key here is to correctly project income and expenses in order to calculate cash flow (the free cash you can put in your pocket after all associated property expenses have been paid). However you have to be sure to include the cost of a property manager in your calculations unless you want to manage the property yourself. Even with a property manager, you may be required to make large repair decisions every now and then – so while this is not a 100% passive activity, you are not directly trading your time for money like traditional employment.

Dividends made sense 40 years ago as a relatively simple rule of thumb, but after all the work done by John Bogle with index investing, and academics with Monte Carlo sims and the 4% rule, dividend investing just isn’t the simplest, cleanest way to invest or receive passive income anymore. It’s actually significantly more risky compared to index investing, because dividend companies are a much smaller share of the total global economy compared to the broader indices.
Remember, a successful business solves people’s problems. At first, you’re going to have to do the legwork and put in the time. But it’s about building something now so you can reap the benefits later, with the help of software, tools, automation, and people you hire. In this way, you can then turn this business that solves people’s problems into something that generates passive income for you!
2. This article isn’t intended to be about making $50k per year from $0 to start with. This is intended to show different ways that it’s possible to generate $50k in passive income. As for your rental property comment, check out RealtyShares or other similar companies. You can be a rental property owner without having to run the business. You can be a limited partner and just invest in real estate, and leave the actual work to the general partner. Basically, there are options to make $50k without working, but like the first paragraph says – front load your life!
Lending Club went public in 2014 and is now worth about $1.7B. They advertise P2P lending returns of over 7% for well-diversified portfolios of over 100 notes. I’ve personally been able to achieve a 7.4% annual return over the past two years in a completely passive way by investing in A and AA notes. Others have achieved a 10% annual return through relatively minimum effort.
Rentals, just like stocks, throw off cash. With rentals we call that cash “rent”, and with stocks we call it dividends. A significant difference however is that the S&P 500 has appreciated at ~6% per year (above inflation) for the last 100 years…..Real Estate has had almost 0 growth above inflation. So are rents higher than dividends? Maybe, maybe not. But unless you got one heck of a deal, the delta in rent over dividends will have a very tough time making up for the 6% per year difference in appreciation.
Thanks for the info…I kind of figured it is really not that expensive to live if you are not an extravagant person. I could definitely figure out how to funnel expenses through a part time business…I think I keep thinking along the lines that I’m going to be paying the same tax rate after retirement, but reality is you could get pretty lean and mean if one focused on it. On a scale of 1-10 with 10 being utter panic mode, how worried are you about your “pile” lasting through a 50 year retirement now that you are a couple years into it?
Get paid to take surveys at home by signing up with one or more survey websites. All you do is answer questions and voilà, you get paid. Another way to earn extra income is to participate in focus groups. Companies hire focus groups as a way to test out a new product before it hits the market. Why? Because they need to make sure it will make money; they want a high return on their investment. Surveys and focus groups may not make you a millionaire overnight, but you can earn hundreds of dollars each month by giving your opinion on products and services.
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:

​Udemy is an online platform that lets its user take video courses on a wide array of subjects. Instead of being a consumer on Udemy you can instead be a producer, create your own video course, and allow users to purchase it. This is a fantastic option if you are highly knowledgeable in a specific subject matter. This can also be a great way to turn traditional tutoring into a passive income stream!


Investing in rental properties: Another form of real estate investment, rental investments (i.e. becoming a landlord) could steer you down the passive income path of steady monthly rent checks that you can use to pay off a mortgage loan on the rental property. After the mortgage is paid off, those monthly checks go right into your bank account -- potentially for years to come. 
If you need cash flow, and the dividend doesn’t meet your needs, sell a little appreciated stock. (or keep a CD ladder rolling and leave your stock alone). At the risk of repeating myself, whether you take cash out of your portfolio in the form of “rent”, dividend, interest, cap gain, laddered CD…., etc. The arithmetic doesn’t change. You are still taking cash out of your portfolio. I’m just pointing out that we shouldn’t let the tail wag the dog. IOW, the primary goal is to grow the long term value of your portfolio, after tax. Period. All other goals are secondary.

However, investing in passive income streams isn't as easy as it looks. Most online passive income strategies, such as e-commerce, are effective and profitable only after you have built up a substantial following. And they take a lot of time, and sometimes, money, to make them work, unlike passive investing in low-cost index and other funds in the stock market.
If there’s one thing I’ve realized, it’s that I’m not alone. There are so many physicians who are not at an optimal place with their jobs and are unhappy with medicine in general. Physician burnout is a hot topic these days. According to the experts, a good deal of that comes from the loss of physician autonomy and relationship with the patient, but I believe a good amount of it also comes from the increasing financial pressures heaped on physicians (decreasing reimbursements, rising student loan debt, increased standard of living, and more).

I would like to feature your video(s) on my site, especially the one where you are talking about living and working in the Philippines. Could you log in and become a member of my site and possibly post some content there. I will upgrade you to an editor or something higher to add your own posts and videos. My site is mainly an informational site on the subject of Retiring Philippines. I want to place your video on the main page where everyone will see it. My blog in on a page called “Blog” I need help finding ways to make money here,can you help with that? And I sure would like to meet you some time since you are so close to me.

I also have my issues like everyone else does. For one, no one could ever accuse me or my wife of being frugal. However, when we do spend, we’ve become better at spending with intention, making sure it adds value to our lives in meaningful ways. This is why we’re happy to live where we live (in a high cost of living area), we like to take nice trips, and enjoy eating good food. We definitely live more, but we also focus on giving much more than we used to. All of this has been made possible by our multiple streams of income.
In expensive cities like San Francisco and New York City, net rental yields can fall as low as 2%. This is a sign that there is a lot of liquidity buying property for property appreciation, and not so much for income generation. This is a riskier proposition than buying property based on rental income. In inexpensive cities, such as those in the Midwest, net rental yields can easily be in the range of 8% – 12%, although appreciation may be slower.

Some people take it automated well before the year is up. When it converts, it converts. If you target the right people and you're able to create the right message that appeals to your audience, you might just hit a home run. An automated webinar often involves the creation of a webinar funnel. That includes, not only the webinar, but also the email sequences, and possibly a self-liquidating offer, and maybe some done-for-your services and up-sells.
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.
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.


I agree mostly with the real estate advice. I’m looking for ways to take advantage of the condo I own to get up the rent from ~$0.90/ft to the $1.2-1.5/ft that seems more like the range in the same area. I’d have to put in a bit of capital (probably 10k on the low end for just the basics up to 40k if I wanted to remodel the kitchen and 2 bathrooms up to par with the area), so the return is likely there if those upgrades warrant $1.30/ft (given the unit is larger than most 2br/2ba in the area).
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.
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