Investment properties: An investment property is one purchased with the sole purpose of earning revenue. It could be a commercial space you’ll lease out or a residential rental unit. Not only will this type of investment provide potential appreciation and tax benefits over the long term, but it can also provide residual income in the form of monthly rent (after expenses).
Creating a product to sell is decidedly active, not passive. And selling other people’s products is active too when you have to build your own store and maintain inventory. However, if you use dropshipping, all you have to do is set up a store and drive was web traffic to it. Everything else is handled by another company and you walk away with a share of the profits.
On the other hand, blogging income is somewhat passive. We’re in Hawaii this week and the blogging income should keep rolling in. I’ll check the site once in a while, but I’ll log just a few hours this week. One week off won’t make any difference in the income especially since I have the posts scheduled. One week is just too short to make a difference.
Creating passive or residual income is the ultimate investment dream for many, and it can be achieved via real estate. In fact, savvy investors have been using real estate as a way to create residual income for decades. What exactly is residual income? Simply put, it is income that continues to be generated after the initial effort has been expended.
In addition to the obvious — increasing your monthly income — many people develop specific investment plans for their monthly residuals. Popular strategies include allocating monthly residuals to a retirement account, a down payment on a home, education expenses and an emergency fund. Your strategy should include establishing a reserve for income taxes if you receive residuals in full, without withheld taxes. This prevents unwelcome surprises at tax time.
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While I don’t have any direct experience with it, I know it can be quite profitable, especially in niches where you have high profit margins and low shipping costs. Vitamins and cosmetics, for example, are two popular drop shipping industries. Anyone can theoretically start a “store” and have dozens or even hundreds of products to offer within a matter of days.
Use affiliate links every time you can and not just for the obvious stuff but for everything you mention that can be found on Amazon. Have a recipe that uses salt? Link to that (see this example). You can link to the actual name of the product or use type: “I like to use this salt” so people actually click on the link to see what it is. I wouldn’t use this method on all links but I do use it especially when I’m listing several items.
Index funds provide you with a way to invest in the stock market that is completely passive. For example, if you invest money in an index fund that is based on the S&P 500 Index, you will be invested in the general market, without having to concern yourself with choosing investments, rebalancing your portfolio, or knowing when to sell or buy individual companies. All that will be handled by the fund which will base the fund portfolio on the makeup of the underlying index.
Now that I know what it’s feels like to create something from nothing and get paid to pursue my passions? I’m creating new products left and right! Coming up next is a line of products for the moms in my community who are simply searching for the best way to earn money from home, whether it’s blogging or not. I can’t wait to unveil this product line on my blog…stay tuned! 🙂
Other than investing in mutual funds, resources and stocks, there are three main industries that will pay a residual income. They are insurance, investment brokerage and network marketing. Further breaking this down, there is really only one industry that will allow you to continue working where you are working, while developing a residual income part time and that is the network marketing industry.
So below is a list of my favorite books with a small description of each. I hope to have full-length reviews of each of these on my site soon. I also added a little section – a “to-read” list of books that have been highly recommended by others and I plan to read in the next few months. Feel free to add some suggestions down in the comments as well.
About Blog An engineer tinkering with passive income. I’m Jalpan Dave and my interest in money, investing and entrepreneurship goes back to when I was 13 years old. I started this blog to share my journey and experience with anyone who may benefit from it. I also want to document my journey as I build a stream of income from all 4 categories (paper assets, real estate, business and commodities).
I read from the publishing blogs that having a great cover and a great book summary on Amazon was critical. So I worked with Matt Chase, who is an amazingly talented artist/designer, to have the cover designed. People love the cover and I think it’s a huge differentiator for my book. You can reach out to him at http://chasematt.com/ if you’re interested in working with him.
I would not have read this post now if I could’ve slept. I’m glad I read it though because I have heard how easy and fast you can make “passive” income and not have to work many times. I am not one to spend on a lot of programs but I am finally realizing how much work is involved in getting to a point where you only work a few hours a week and make a good living.
I wonder what the avg number of hours/week (over a year) would be for something to be considered “passive income”. To me, it’d be under an hour a week. If I was able to earn money from something with that time investment, the hour a week would be mostly a time investment in checking on things that it’s still working and setting the course back on track.
That’s why I have invested to create a WP plugin, which gives a dead-simple way to create detailed Amazon product reviews for my blog RIGHT from Amazon product page: I find a product I like, I click a button, and … voilà — a draft post with a new product review is scheduled for publishing on my site. I can jump in to the administrative side to add some personal note, or I can move to the next product which piques my interest. Its akin to Facebook “like”, but instead of posting to my FB wall, I effortlesly get new content for my blog. Neat, huh?
I have posts that are heavily linked to Amazon and some that aren’t to keep things balanced out. My heavily linked posts are product guides or stuff I was searching for my kids. Some examples are: Non-toxic high chair, 20 non-toxic teething toys, and Gift for 2-3 year olds. My blog is “green” so a lot of my posts are about non-toxic products since this is what I personally look for.
You need to decide which machines you want to run, get the necessary licenses to operate them (you're selling items so you need to get sales licenses and whatnot from your state), buy the machines and a truck for the items in the machines, find a supplier of the products, and then finally you can secure locations. Finally, you need to service them periodically or hire someone to service them.
After some long chats, I learned I need a schedule. So now I know when to work, and everyone else knows when it’s my time to work: It’s after the kids go to bed. Things will change everyone once in a while — if I have a big project coming up, for example, like during the recent launch of my podcast player, I was asking my wife, can you watch the kids longer?
The Passive Income Portfolio takes you on an across-the-board journey, spanning multiple industries, toward generating and sustaining passive income. This cogently written piece of work takes you to the heart of creating Passive Income and does it brilliantly with its tiered approach that builds-up the process of generating residual income streams in a structured lucid style. The author dexterously juggles targeted income generating strategies with acute business and financial insights and real life illustrations in a compelling and easy to read format. The subject is covered with ample breadth and compelling profundity using a step-by-step approach. As you roll through the pages and bask in the insights, you will not only witness a change in your mindset but also come across direct go-to resources that you can use to begin implementing the theories mentioned herein. A complete reference book, this is a must read for all the passive income aficionados who want to bite into real substance. http://www.thepassiveincomeportfolio.com/