As a private lender, you can lend to anyone in your social circle. For example, many home rehabbers need access to a source of capital they can tap into very quickly in order to fund the initial purchase of their properties. You can partner with a rehabber who uses your capital for a short-term in exchange for an interest rate that is mutually agreed upon.

​Self Publishing is mainstream today. When you purchase an eBook off of Amazon there’s a pretty good chance you’re buying a self-published book. Self-publishing is also ridiculously easy. I tried this a few years ago and couldn’t believe how simple the process was. To self-publish a book you’ll first need to write and edit it, create a cover, and then upload to a program such as Amazon’s Kindle Direct Publishing. Don’t expect instant success though. There will need to be a lot of upfront marketing before you can turn this into a passive income stream.


REITs provide an easy way to get real estate exposure in your portfolio but it is crucial that you avoid asset class overlap.  Since many stock and index funds include REIT companies, having a separate allocation to REITs in a portfolio may create double counting.  Certain fund managers strip out REIT companies from their equity investments to avoid this issue.  One example is Dimensional Fund Advisors.  For those who want real estate exposure without the hassle of being a landlord, purchasing REITs may be the way to go.
Under the new rules, the active income a business is allowed to claim at the small business amount is tied to the business’ passive income. Businesses with less than $50,000 in annual passive income can claim the full $500,000 at the 9% small business rate. The amount eligible for the small business rate shrinks by $5 for every $1 over $50,000 that a business makes in passive income, until it eventually reaches zero.
You can’t start charging right off the bat without your audience knowing anything about the value you offer (though you could still indirectly earn money from them with the right ads). “The best way to go in terms of a long-term passive income business [is] delivering value and information for free, and therefore establishing expertise, knowledge and trust with your audience,” says Flynn.
We pitched to an angel investor group. They were very excited about the idea but wanted to know who amongst us (doctor, accountant, salesman) was doing the coding. When they heard we were outsourcing it, the wind went out of their sails immediately. They did want to meet with us again once we brought a coder on board but that person proved elusive to find. Coders in our area are looking for the steady paycheck, not willing to gamble on a startup.
Do you know what the single biggest threat to your financial well-being is? The answer is your own brain. They’re people who listened to the Unshakeable by Tony Robbins’ audiobook along with having read the book and they still might become victims to a form of financial self-sabotage. The thing is, for a lot of us, losing all our money and everything we own, especially in one shot, feels a lot like dying. That’s why 80% of success is psychology and the other 20% is mechanics.
This is an overly simplified example and leaves out depreciation, etc., but you get the idea. In addition, we used a 40% salary calculation which might be different in your situation. Regardless, the apples to apples comparison shows a nice little savings of $1,692. As mentioned in a previous chapter, the arrangement also allows you to have different partners in each entity allowing you to expand ownership in the operating entity while retaining full ownership in the leased asset (building).

On the other hand my goals are to invest so I can continue to work a JOB as long as possible, but not depend on income from my JOB. I have some kind of sickness, I like to work and get huge satisfaction from contracting hvac. However I no longer need to work in the ghetto, or take on work to pay the bills, allowing me to pick and chose the projects I like to do.

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Peer-to-peer lending ($1,440 a year): I've lost interest in P2P lending since returns started coming down. You would think that returns would start going up with a rise in interest rates, but I'm not really seeing this yet. Prosper missed its window for an initial public offering in 2015-16, and LendingClub is just chugging along. I hate it when people default on their debt obligations, which is why I haven't invested large sums of money in P2P. That said, I'm still earning a respectable 7% a year in P2P, which is much better than the stock market is doing so far in 2018!
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.”
Fulfillment by Amazon (FBA) is another model that has been gaining popularity in recent months. The major difference from the model that I described above is that instead of shipping it to a warehouse, you ship it directly to Amazon. For a cut of the money on each sale (and they also charge storage costs), they package it all up and send out your order. You make less money than doing it yourself, however once set up, it does have the hands-off factor going for it.
CreateSpace Independent Publishing Platform makes beautiful passive incomes with classic and higher-grade materials. You do nt need anything special in order to set up a successful passive income stream, you just need to commit yourself to the process and see the process through to completion. The passive income is important to stay the course, however, and to keep in mind that the ends are certainly going to justify the means. With 4.3 rating and more than 200 buyers, the CreateSpace Independent Publishing Platform top 10 passive incomes stands as the best choice.

The more I deal with ungrateful patients and have to be away from my family due to work, the more I become a huge fan of passive income. Every 6 months when I get a check for my UpToDate sections I worked on 4-5 years ago that only require periodic minor updates, I’m always reminded how nice passive income is. Rental properties are great too, but I completely agree that you must do your homework. There are a lot of bad rental properties that will not only fail to provide passive income, but can cost a great deal out of your own pocket.
Alright few of them are okay but not all of them are abble to get money if you are not in USA and well Im not so its kinda bad that its not possible to do it. I dont know so far Im new at this but I have heard so far that FluzFluz is okay I dont know exact numbers how much you can get it but I like the Idea that you can get the money from purchases and as well from others so If someone is interested you can check it out maybe you will find it interseting.
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.
The ideas that follow are not truly “passive income,” in that they require a significant amount of effort. However, I’m defining the term loosely and considering anything where one hour of work does not equal one hour of pay as passive income. The idea is that you put the work in up-front and then reap the benefits down the road. Read on for my top 10 passive income ideas!
​If you pay your bills with a credit card make sure it offers cash back rewards. You can let your rewards accrue for a while and possibly put the easy money you earned toward another passive income venture! (Be sure that the card you select doesn’t have an annual fee or you might be cancelling out your rewards). Check out this list of the best Cashback Rewards Cards.

You actively participated in a rental real estate activity if you (and your spouse) owned at least 10% of the rental property and you made management decisions or arranged for others to provide services (such as repairs) in a significant and bona fide sense. Management decisions that may count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and other similar decisions.


Get Paid To Shop: The Shopkick app is a free mobile app that pays you walk into stores, link your credit card, scan barcodes in stores, shop online, refer friends and more. Convert points into gift cards and other cash prizes. This app makes shopping fun, and you even get a 250-point bonus when you sign-up as a new member. The best part? It's 100% FREE to join.
The biggest surprise is real estate being second to last on my Passive Income Ranking List because I’ve written that real estate is my favorite investment class to build wealth. Physical real estate doesn’t stack up well against the other passive income sources due to the lack of liquidity and constant maintenance of tenants and property. The returns can be huge due to rising rental income AND principal over time, much like dividend investing. If you are a “proactive passive income earner” like myself, then real estate is great.
With $200,000 a year in passive income, I would have enough income to provide for a family of up to four in San Francisco, given we bought a modest home in 2014. Now that we have a son, I'm happy to say that $200,000 indeed does seem like enough, especially if we can win the public-school lottery to avoid paying $20,000 to $50,000 a year in private-school tuition.
Passive income is the Holy Grail for online marketers. It's automatic. Effortless. But, not at first. In the beginning, it's grueling. I liken this to doing the most amount of work for the least initial return. However, over time, as your passive income begins to increase, your reliance on an active income plummets. That's when the real magic starts to happen.

You could also make some passive income with medium involvement by investing in dividend stocks. This means you buy stocks that pay out dividends. You’ll have to do your research to find the best dividend stocks. That way, you can ensure that your dividend payouts will last for a while. Similarly, you could simply open a high yield savings account or build a CD ladder. Again, you’ll have to do your research to find the right ones and keep an eye on the accounts to make it a successful source of income.
Creating original content that other people love can be very rewarding to you from a personal growth perspective (people value something you have created) and from a financial perspective (people are willing to pay you for it).  You create something once, but keep getting paid a royalty for it long after you completed it.  Music is a nice example.  You write/perform the song once, and then sell it online.  Each time someone downloads your song you are paid a percentage of that sale, what a nice way to generate passive income!
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:
Also, financial freedom is different for every person – that’s where lifestyle design comes in. If you determine that you need $4,000 or $8,000/month (your financial limit, as you called it) to allow you to never have to work again and live the kind of life you want, then you have achieved financial freedom through lifestyle design when your passive investments produce that income. It’s a very straight forward concept, and tons of investors have proved it’s doable.
Ebooks are one of my favorite sources of passive income. Now, you can do this the simple way and just publish it on Amazon's KDP. Or, you can go all out and build yourself a book funnel. Book funnels are powerful, but they won't be fully passive. For example, if you do a free-plus-shipping offer for your ebook (converting it into a physical book), you'll need to create some one-time offers (i.e. extra training) and up-sells (i.e. an audiobook). But, a book funnel can be very powerful.
What I find most interesting is the fact that I had never considered options like LendingTree or realityshares for other income sources. Investing in property has been too much of bad luck for people that I know personally, so I am interesting in getting involved in a situation where I would have to be dealing with maintenance issues or tenants. There are services for you to do that, but I had not come across any that didn’t eat most if not all of the earnings. Then again, I live in the NY area. Investing in the midwest would not be reasonably possible for me, directly, but reading about realityshares is something I am going to look into further. That might be a real possibility.

The IRS defines depreciation losses as “allowances for exhaustion, wear and tear (including obsolescence) of property.” According to their website, “You begin to depreciate your rental property when you place it in service. You can recover some or all of your original acquisition cost and the cost of improvements by using Form 4562, Depreciation and Amortization, (to report depreciation) beginning in the year your rental property is first placed in service, and beginning in any year you make improvements or add furnishings.”
This article is great, defining the differences and emphasizing the advantages of passive income. I believe it might be helpful to list some of the tax advantages of passive income vs active income as well. These include and are not limited to: cash-flow, being able to claim depreciation, deductable loan interest, tax free refinancing and deferred taxes on sale of property via 1031 exchanges. It’s the difference between 50% taxed income and potential tax free income.
I just found your site & so far I like what I see. I am 50 years old & will be retiring at the end of Jan 2019. I turn 51 the following month. I will have a pension income of $60,000 per year & an additional $5,400 from a survivors benefit. I was able to save $200,000 in a deferred comp program through my employer & wish to know what to do to generate a passive income? I can leave it in the plan which will generate about 3.5% or invest it. My concern is the tax liability of taking out a large sum from that fund & leaving me less to invest. I do have an opportunity to invest in a bar/restaurant with family (my main concern) that currently generates $120,000 annually for an absentee owner. It would be a 3 way partnership if I did that. I do like your idea of creating my own product such a blog with a goal of $12,000 to $18,000 passive income I feel that may be my best option. Any thoughts or advice would be greatly appreciated.
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.

In the case of an activity with respect to which any deductions or credits are disallowed for a taxable year (the loss activity), the disallowed deductions are allocated among your activities for the next tax year in a manner that reasonably reflects the extent to which each activity continues the loss activity. The disallowed deductions or credits allocated to an activity under the preceding sentence are treated as deductions or credits from the activity for the next tax year. For more information, see Regulations section 1.469-1(f)(4).
Thanks for writing this Mr. Samurai. I just got over the student loan hump but I feel pretty good about it at 27 having a graduate degree and being 100% debt free. Now that I’m on the other side it is good for my brain to absorb some of your knowledge regarding passive income investments. I love gleaning wisdom from older folks who have been there and done that. Mentors rock!
If you have a small amount of money and you want to create passive income, but you don’t know anything about investment, try to read some blogs about the stock market. Do not go to a financial advisor, they will take you a lot of money, and if you don’t want to invest 100k, it’s better to try that by yourself. You can read Rich Dad Poor Dad to get a necessary explication about the financial world.
Generally, to determine if activities form an appropriate economic unit, you must consider all the relevant facts and circumstances. You can use any reasonable method of applying the relevant facts and circumstances in grouping activities. The following factors have the greatest weight in determining whether activities form an appropriate economic unit. All of the factors don’t have to apply to treat more than one activity as a single activity. The factors that you should consider are:
I have a total of three CDs left. There is no way in hell I’m selling them after holding them for 4+ years so far to take the penalty. The CDs are for 7 years. That would be completely counterproductive. As a result, I feel very stuck with ever getting my CD money back if I wanted to. If the CDs were for just 1 or 2 years, I agree, it doesn’t matter as much. But combine a 7 year term with 4%+ interest is too painful to give up.
Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours; it never has short crops nor droughts; it never pays taxes; it buys no food; it wears no clothes; it is unhoused and without home and so has no repairs, no replacements, no shingling, plumbing, painting, or whitewashing; it has neither wife, children, father, mother, nor kinfolk to watch over and care for; it has no expense of living; it has neither weddings nor births nor deaths; it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.
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. 

As a general rule, the passive activity loss rules are applied at the individual level. Although Internal Revenue Code Section 469 was enacted to discourage abusive tax shelters, its impact extends far beyond shelters to virtually every business or rental activity whether reported on Schedules C, F, or E, as well as to flow through income and losses from partnerships, S- Corporations, and trusts. Generally, the law does not apply to regular C-Corporations although it does have limited application to closely held corporations.
Employees and self-employed people have to pay federal income tax on earnings related to work, but the government also imposes income tax on various sources of passive income. Passive income or unearned income describes income that does not require active work, such as interest credited to savings accounts and investment income. The federal income tax rate on unearned income varies from one type of passive income to another. Note that the tax rate for passive income will differ for the 2018 tax year, as the new tax bill signed in December, 2017 changes some of these provisions.
This is why we can retire in our 40s. we currently have four streams of income (my salary, husband salary, husband pension and our passive portfolio income which is outside of all our employer retirement accounts). our passive portfolio income is surpassed what most people are aiming for their retirement portfolios. And we don’t sell anything…this is just our dividend income annually. Passive income is the key to flexibility. No employer necessary.

I just started out with Affiliate Marketing (idea # 8) and it is not as easy as people make out to be. For me, the hardest part so far, is learning Search Engine Optimization (SEO) and driving traffic to my website. I’m only 3 months into it, but I am confident that the site will begin to generate some incom., I have to give it 6-9 months, so we’ll see.
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