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Book sales ($36,000 a year): Sales of How to Engineer Your Layoff" continue to be steady. I expect book sales to rise once the economy starts to soften and people get more nervous about their jobs. It's always best to be ahead of the curve when it comes to a layoff by negotiating first. Further, if you are planning to quit your job, then there is no downside in trying to engineer your layoff so you can get WARN Act pay for several months, a severance check, deferred compensation, and healthcare.
The Lake Tahoe property continues to be 100% managed by a property-management company. It feels amazing not to have to do anything. I can't wait to bring up my boy this coming winter to play in the snow! I could go up this winter, but I want him to be able to walk and run comfortably before he goes. I've been dreaming of this moment for over 10 years now. The income from the property is highly dependent on how much it snows. Summer income is always very strong.
The most liquid of the private investments are investing in equity or credit hedge funds, real estate funds, and private company funds. There will usually be 6 month – 3 year lockup periods. The least liquid of the private investments are when you invest directly into private companies yourself. You might not be able to get your money out for 5-10 years, depending on the success of the company and upcoming liquidity events.
Our favorite platform for this is RealtyMogul because you get the flexibility to invest as little as $1,000, but can also participate in REITs and private placements – typically not offered to the public. Investors can fund real estate loans to gain passive income or buy an equity share in a property for potential appreciation. Their platform is open to both accredited and non-accredited investors.
This publication discusses two sets of rules that may limit the amount of your deductible loss from a trade, business, rental, or other income-producing activity. The first part of the publication discusses the passive activity rules. The second part discusses the at-risk rules. However, when you figure your allowable losses from any activity, you must apply the at-risk rules before the passive activity rules.

I am 30 years old and am retired. Previously, I made a modest salary as an Army officer. I own three duplexes and a quadplex in central Texas (10 rental units in all), and each of the properties provide me with net rental yields in excess of 15%. The last deal is actually an infinite return as my partner paid the down payment in return for a 50/50 split on a property that would otherwise provide a net rental yield of 18%. The above net rental yields also factor in an excellent property management team who manages my properties while I pursue other investment opportunities. To date, I have never interacted with any of my tenants nor have I ever had to personally deal with any maintenance issues.

If you have anything in excess, like house space, cars or even your driveway, you can consider renting out. Since you already own these items, you wouldn’t have to go around buying new things. Simply list these things somewhere, like a room on Airbnb, to get started. You will probably have to put in some time and money for the upkeep, but otherwise it’s a pretty passive venture.
Similar to making a website or blog, but more passive, is creating an online course. If you have a specific skill you know you can teach and that others want to learn, you can easily create an online course. Sites like Udemy can help you do this. It requires some work to make it, but after that, users simply need to sign up for the course and pay a fee.
I live in NYC where I never thought buying rental property would be possible, but am looking into buying rental property in the Midwest where it cash flows and have someone manage it for me (turnkey real estate investing I guess some would call it). I agree with what Mike said about leverage and tax advantages, but I’m still a newbie to real estate investing so I can’t so how it will go. I have a very small amount in P2P…I’m at around 6.3% It’s okay but I don’t know how liquid it is and it still is relatively new…I’d prefer investing in the stock market.
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.
Solomon Poretsky has been writing since 1996 and has been published in a number of trade publications including the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." He holds a Bachelor of Arts, cum laude, from Columbia University and has extensive experience in the fields of financial services, real estate and technology.
Another common way to earn passive income is to invest in real estate. This does involve some hefty investment on your part to get started, though, since real estate doesn’t come cheap. The goal is to earn enough back by renting out the property to not only cover your original investment, but to also turn a profit. Keep in mind that similar to letting your room through Airbnb, this venture may require some time and money to maintain. Plus, you will have to rely on others and tenants to keep the property in good shape.
For those of you who don’t want to come up with a $220,000 downpayment and a $900,000 mortgage to buy the median home in SF or NYC, who don’t want to deal with tenants or remodeling, and who wants to not do any work after the investment is made, check out Fundrise. They are my favorite real estate crowdsourcing company founded in 2012 and based in Washington DC. They are pioneers in the eREIT product offering and they’re raising an Opportunity Fund to take advantage of new tax favorable laws.
Keep in mind, many questions can be answered on IRS.gov without visiting an IRS Tax Assistance Center (TAC). Go to IRS.gov/LetUsHelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide service by appointment so you’ll know in advance that you can get the service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find the nearest TAC, check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

In February 2007, Pat Flynn was working at an architecture firm making $38,000 a year. He mulled boosting his earning power by getting an architecture license, but the process would likely take six to eight years. When he heard about getting a credential in sustainable design and environmentally friendly building called Leadership in Energy and Environmental Design (LEED), he decided to go for that, as no one in his department had it. The one problem? The exam was so challenging, just one-third of test-takers passed.
The K-1 stated that the income was from a trade or business and included self-employment tax. Dr. Hardy's ownership interest in MBJ was not grouped with his medical practice activity, and the grouping regulations were not considered. In 2008, their CPA determined that the income from MBJ was passive and started to report it accordingly. He determined this because he learned that Dr. Hardy was not involved in any management of MBJ and was not liable for the debts of the company. He did not amend the 2006 and 2007 returns because he believed the difference was immaterial. In 2008 through 2010 the Hardy’s reported the MBJ income as passive and claimed an allowed loss.
We are going to start with 1.5 years of all spending needs in cash. We will draw 1800 to 1900 per month. We will add to this from the index funds by taking a portion of the gains in good years to supplement. This is the total return portion of the equation. Obviously, if stocks decrease drastically over a 5 year period, then I would have to reload by selling some of the ETF holdings.
Peer-to-Peer Lending: Earn up to 10% in returns by lending individuals, organizations and small companies who don't qualify for traditional financing through peer-to-peer lending platforms like Lending Club. You can lend $100, $1,000, or more to borrowers who meet lending platform financial standards. Like a bank, you'll earn interest on the loan - often at higher returns than banks usually get.
Secondly, analyze all of the features of your app. Is there anything you can remove? Is this the most simplified version of your initial app idea? Chances are that you can still remove some features. Leave only the essential features of the app. This is very important. You will get your app out to market faster. Which means you will get feedback for your app earlier to improve it and tweak it to meet customer needs. Also, development will be cheaper. It’s better to keep costs down, since you don’t know if your app will be a hit yet.
You may already know there is a difference and you may know generally what that difference is, but it’s likely you don’t truly grasp the implications of those differences. For the record, there is nothing wrong with either of them. But if you want to maximize your returns down the road, you do want to make sure you really do have a solid feel for how these two differ.
The Hardy’s used a partner and tax director at an accounting firm with more than 40 years of experience to prepare and file their tax returns. In 2006 and 2007, the Hardy’s reported their income from MBJ as non-passive based on the CPA's professional judgment. They claimed a total disallowed loss and he determined that the income was non-passive based on MBJ's Schedule K-1 that it distributed to Hardy.

First, ask yourself if your app idea is feasible. Will it make money? This information is completely free and available on every single app store. Browse the “Top Grossing” section of any category. Check the rankings. These rankings show you the market demand. It’s not rocket science, but this isn’t the first step that most people take. Do you already see your app idea? Don’t be discouraged if you do. This is the best way to see and know if that idea is making money. If your app idea is ranked in the top grossing, even better. Do you see less than 5 version of that app idea? Then you have a good shot in this market!
Since David may never be coming back to this site, If anyone other than David can point me in the right direction, Id greatly appreciate it. I live in Chicago, and I need to buy a quality rental to hold long term somewhere but I have no idea where, and I really don’t want to buy in Chicago. Chicago is insanely corrupt and in HUGE debt. I cant leave Chicago in the near term, I take care of an aging parent, and if I left, my salary would drop by 50%. Id still like to diversify into a rental property.. but I feel that if I just call up a stranger, they’d attempt to sell me their best pig with lipstick, and pressure me to jump on the deal before someone else ‘stole’ it. I have no problem hiring a property inspector from a different city, but don’t want to waste hundreds of dollars if the agent is steering us towards crap property after crap property. I’m looking for broad advice. Any constructive reply appreciated. Thanks guys.
I have already come up with 50 ways that a management company can screw you for profit without you ever knowing(or not finding out for awhile). Did you have an inspection before you made an offer on the property? Do you have a picture of the property you bought? How do you know if that picture shows the house you actually own? or if it even hows the ‘current’ state of the house you own?
The main idea behind the new passive income rules is to create a system that taxes businesses proportionally to their overall size and income amount. If you’re mostly dealing with smaller startups and family-run businesses, these new passive income rules will probably have little effect, and may even allow companies more freedom to grow their business.
Investing in a business: Another good way to generate passive income is to invest in a business --even a small one -- in return for a percentage of the profits - just like Shark Tank, only smaller. Lending $10,000 to a local business that, for example, is working on a mobile app for Apple phones could lead to a passive income-generated share of the profits when that mobile app starts selling like hot cakes.
One of his favorite tools is Personal Capital, which enables him to manage his finances in just 15-minutes each month. If you sign up and link up an investment account with $1,000+ within 40 days, you get a $20 Amazon gift card. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.
Real estate crowdfunding presents a middle-ground solution. Investors have their choice of equity or debt investments in both commercial and residential properties. Unlike a REIT, the investor gets the tax advantages of direct ownership, including the depreciation deduction without any of the added responsibilities that go along with owning a property.
A great source of passive income is advertising dollars from other businesses and people.  If you have a website, blog, or strong social media following, other businesses will start to take notice.  A trick I have learned in this space is that it is much less expensive and faster to go where people already are then to try and create it yourself.  But, if you create it yourself, then others will come to you.  This is how you turn you blog, etc. into passive income.  Let’s say your blog has 300,000 visitors a month, that’s quite the following!  Other businesses and people looking to advertise a product or service would rather come to you and pay you to have their advertising on your blog.  This is less expensive for them since you have already created an audience for them, and great for you since they are paying you for this audience. 
Passive income differs from active income which is defined as any earned income including all the taxable income and wages the earner get from working. Linear active income refers to one constantly needed to stay active to maintain the stream of income, and once an individual chooses to stop working the income will also stop, examples of active income include wages, self-employment income, martial participation in s corp, partnership.[4] portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties.[5]
If you buy T-bills worth of N500,000 at 10 per cent discount rate, CBN will debit your account with N450,000, leaving a balance of N50,000. This means that your interest of N50,000 has been paid to you upfront. When your investment matures, you are still paid your N500,000.This shows that you were actually paid N550,000 for your investment of N500,000. (Source)
In terms of the returns, peer-to-peer lending can be profitable, particularly for investors who are willing to take on more risk. Loans pay a certain amount of interest to investors, with the highest rates associated with borrowers who are deemed the biggest credit risk. Returns typically range from 5% to 12%, and there's very little the investor has to do beyond funding the loan.
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.
Build an investment portfolio that pays out dividends (Stocks / Bonds / Mutual Funds). Dividends are payouts that companies give to their investors as a portion of their earnings. They’re often paid out quarterly. If you’ve already got an investment portfolio, it’s time to take a good look at which stocks, bonds, or mutual funds you own. You’ll see consistent returns from the ones that pay dividends. This is a fantastic way to earn passive income. Invest once and watch the returns pile up.
“There is no such thing as 100% passive income,” says Flynn. “Even with real estate you still have to manage your properties, or even with the stock market, which is potentially passive income, you still have to manage your portfolio. With online business, there is no such thing as 100% passive income — and this is coming from a guy with a blog called SmartPassiveIncome.com. The definition of passive income is ‘building these businesses of automation,’ but in order to keep them automated and keep that trust going with your audience on top of that, you do have to keep it up every once in a while — so a lot of time upfront and a little time after. But there is alway time involved.”
However, you should pick a niche and blog about that. If you're launching a money related blog, maybe it'll be about how to make money in real estate or simply how to make money online. Pick the niche and stick to it. If it's a diet and fitness related blog, maybe the niche is the Ketogenic diet, the Atkins diet or some other form of diet or fitness.

Next, make sure to know the difference between “Top Grossing” and “Top Paid”. They are both very different rankings. “Top Grossing” is what you use to study what is making the most money. “Top Paid” is more so for trending. More downloads doesn’t necessarily mean more revenue. Personally, I study both. However, “Top Grossing” is better at giving you an idea of revenue potential.
A Real Estate Investment Trust (REIT) provides individuals with the opportunity to invest relatively small amounts of money alongside other investors. By pooling resources, a group can take on bigger projects with bigger returns. And the risk of loss is spread across multiple investors, and depending on the size of the REIT, multiple investment properties.

Perhaps a coworker purposefully tries to make your life miserable because they resent your success. Maybe you get passed over for a promotion and a raise because you weren’t vocal enough about your abilities, and mistakenly thought you worked in a meritocracy. Or maybe you have a new boss who decides to clean house and hire her own people. Whatever the case may be, you will eventually tire.
Passive income is also not subjected to self-employment taxes. But similar to portfolio income, it might be subject to the Net Investment Income tax. So, if you own a rental house, the income generated from the rental house is considered passive income. As a side note, taxpayers used to label themselves as Real Estate Professionals under IRS definition to allow passive losses to be deducted; now we are seeing the same label to avoid Net Investment Income tax on rental income.
Mike, I don’t consider the income from FS to be passive, as I’m spending time commenting to you right now. But since 75% of my traffic comes from search, the most traffic I would probably lose is 25% for probably a year. And then my search word rankings would probably slowly fade given frequency of posting new content is one of the search algo variables.
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.
You must file a written statement with your original income tax return for the tax year in which you regroup the activities. The statement must provide the names, addresses, and EINs, if applicable, for the activities that are being regrouped. If two or more activities are being regrouped into a single activity, the statement must contain a declaration that the regrouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. In addition, the statement must contain an explanation of the material change in the facts and circumstances that made the original grouping clearly inappropriate.
I think you should use Financial Samurai to raise your passive income. You’ve already proven that you writing 3 articles a week is enough to not only sustain the site but grow it. Why not have more guest writers post articles? Since you started with the extra post each week I’m guessing traffic is above your normal growth rate. Leverage that up with more posts and my bet traffic will continue to grow.
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
​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.
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