Role of “real estate professional” can be well played by a non-working or stay-at-home spouse. If you’ve got one who’s willing of course. 🙂 Under current tax law, with a spouse/real estate professional materially participating in the rental property activities, the 3.8% Medicare tax (discussed in Section 1) can be entirely avoided. So, while there is a bit of burden in meeting the requirements, this could be a great play for a Doc and a real estate professional spouse who want to take unlimited real estate losses against regular earned income AND shelter any gains from the additional 3.8% tax.
Consider withdrawing sufficient corporate funds to maximize your RRSP and TFSA contributions, rather than leaving the funds inside the corporation for investment. Given sufficient time, RRSP and TFSA investing would generally outperform corporate investing when earnings come from interest, eligible dividends, annual capital gains, or a balanced portfolio. And removing funds that would otherwise be invested within the corporation could reduce future AAII.

If you don’t care about lifestyle design, you can just stay at your current job, right? With financial freedom, you can do whatever you want. You can actually start forming lifestyle design before you are financially free too, just like I have. Even though I spend the majority of my time working on my company, I have positioned myself to be completely on my own schedule, I work whenever I want to for as much or as little time as I want, I sleep in most days, I live at the beach, I can stop working in the middle of the day to go have lunch with a friend, go to the gym, walk the dogs or, shoot, stop working completely for the day and do whatever I want instead! Hiking, snowboarding, surfing, margaritas, whatever.
If you don’t care about lifestyle design, you can just stay at your current job, right? With financial freedom, you can do whatever you want. You can actually start forming lifestyle design before you are financially free too, just like I have. Even though I spend the majority of my time working on my company, I have positioned myself to be completely on my own schedule, I work whenever I want to for as much or as little time as I want, I sleep in most days, I live at the beach, I can stop working in the middle of the day to go have lunch with a friend, go to the gym, walk the dogs or, shoot, stop working completely for the day and do whatever I want instead! Hiking, snowboarding, surfing, margaritas, whatever.

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.
No one should turn down wind farming’s ultimate passive income for the next 30 or more years … even 60 years when there is a positive cash flow on the sum total of all base payments when computing inflation for the next 60 years based on the previous 60 years, as long as the next era’s energy resource is not perfected (at which time they would not renew the option for the second 30 years).

Nonetheless, there is still benefit to capturing the losses on a tax return.  When you sell a primary residence, up to $500,000 of capital gain for a married couple ($250,000 for a single person) may be excluded.  Unfortunately, rental properties are not awarded this gain exclusion.  Instead, any losses that the property generates over the years can be accumulated and offset with the gain upon disposition.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
Any loss that’s allowable in a particular year reduces your at-risk investment (but not below zero) as of the beginning of the next tax year and in all succeeding tax years for that activity. If you have a loss that’s more than your at-risk amount, the loss disallowed won’t be allowed in later years unless you increase your at-risk amount. Losses that are suspended because they’re greater than your investment that’s at risk are treated as a deduction for the activity in the following year. Consequently, if your amount at risk increases in later years, you may deduct previously suspended losses to the extent that the increases in your amount at risk exceed your losses in later years. However, your deduction of suspended losses may be limited by the passive loss rules.
That said, from time to time I enjoy writing about some of the “other roads to Dublin.” Fancy investments are interesting and sometimes have different risks and rewards when compared with a basic index fund portfolio. Entrepreneurship has changed my life and that of many other physicians. Early financial independence opens all kinds of other doorways in your life. So in a blog about all things financial for high earners, from time to time I write about these other subjects. Today is one of those days.
Unfortunately, I can’t answer that conclusively one way or the other. It all depends on you, what you like to do, your work ethic, personality, etc. If you are a good writer perhaps you could write a book and make money that way. Or, you could start your own website and do affiliate marketing. Just because you are young it doesn’t mean you can’t make money doing at least a few of these ideas. I wish you luck in your money making efforts!
Finally, I imagine the biggest debate with my ranking is Creating Your Own Product as the #1 passive income source. If most people have never created their own product, then it’s easy to give it a thumbs down. There won’t be much complaint about Private Equity Investing being in last place because most people are not accredited investors. But given I believe that plenty of people can create their own product if they try, pushback is inevitable because a lot of people simply don’t try!
One customer says – “There are ways to set up passive income streams, however, and author stephen tracey has written a fantastic guide to online passive income sources with author stephen tracey passive income online secrets. “.They strongly agree that the passive income sources that don’t require an upfront investment, at least nothing more than pocket change.
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.

Finding an outstanding development team is critical for success. Don’t just go for the lowest and cheapest price. You need a balance of budget and quality. From personal experience, I’ve had the best luck with developers from Romania. That is my number one pick. When you post a job on Upwork.com, everyone will be promising you world. Do not fall for a development team that does not have good feedback and return clients. Return clients are one of the most important. This means their client was willing to return to them for more work after their job finished! That says something.
Build a list in a particular niche and tell them stories. Create a bond. Build a relationship with them. It's important. Then, when you've created a bit of culture, start marketing affiliate products or services to them that you think they might like. Just be sure that you personally vet out whatever it is that you're selling to avoid complaints if the product or service falls short.

Diverse income streams are a cornerstone of wealth creation. For busy entrepreneurs, putting all of your eggs in a single basket – even if that basket is your startup – is a bad idea. As you begin to generate revenue, place at least 10% of your revenue into an investment fund. I personally leverage mutual funds to provide consistent returns of the stock market while minimizing my risks associated with the volatility of individual stocks.
The PPACA Medicare tax is a dangerous tax IMHO. It is an entirely new kind of tax. It is small and in jeopardy of going away but I predict it won’t. If it goes away it won’t be for long and it will grow over time – like most taxes. 3.8% is a starting point. This one has the added political appeal of “taxing the rich” and “unearned income” that makes it more palatable to the electorate.

Those who meet the IRS' definition of a real estate professional have their real estate investments treated as active income. To meet this definition, you must spend at least 750 hours per year working in the real estate industry. Paid employees who own at least 5 percent of a real estate business also are considered a professional. If you are a full-time developer for your own account or a full-time real estate agent paid only on commission, you are a real estate professional. In these two instances, you can use losses from your investments to offset income you make in other real estate business activities.

In theory, and keeping it at the highest most basic level, financial freedom means you have to do no work in order to receive income. So once you are financially free, you no longer have to worry about money. What does that look like to you? Maybe you are like me and plan to do a lot of traveling, take up new hobbies, take random college courses to learn new things (for fun, not because I have to), spend epic amounts of time snowboarding and playing in the woods, and as always, sleeping in. Or maybe you are the polar opposite and plan to wake up early and hang out on your couch all day and watch TV.

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.


Not everyone likes to purchase passive income for their daily usage , but the amazon top 10 passive incomes would be an anomoly. The passive income is thought as a stream of income gained with little effort generally, and passive income is known as progressive passive income when there is usually little effort needed from the average person receiving the passive income to be able to grow the blast of income. It takes some ongoing build up front and some maintenance on the way, but in the event that you plant passive income seeds that match your climate you may bring in a nice harvest. And, the amazon top 10 passive incomes is present, and thousands of people already are making money passively.


Real estate crowdsourcing allows you to surgically invest as little as $5,000 into a residential or commercial real estate project for potentially 8 – 15% annual returns based off historical data. Such returns are much better than the average private equity, CD, bond market, P2P lending, and dividend investing returns. With P2P lending, borrowers can sometimes default and leave you with nothing. At least with real estate crowdsource investing, there’s a physical asset that’s backing your investment.
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]
Good suggestions. I have many of these. One word about the “app” idea. I had a great idea related to personal taxes that I tried to get off the ground with my accountant as a partner. I would say it’s difficult to do this unless you have a coder on your team. Hiring someone is not really viable financially unless the app is simple. When we finally got the quote for a coder to write what we wanted (and after doing lots of mock ups ourselves and getting a demo for investors) the estimate was about 750k just to really get started.
If you inherited property from a decedent who died in 2010, special rules may apply if the executor of the estate files Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. For more information, see Pub. 4895, Tax Treatment of Property Acquired from a Decedent Dying in 2010, which is available at IRS.gov/pub/irs-prior/p4895--2011.pdf.

Another great aspect of passive income is that it is often completely scalable. Consider my book. If I sell 10 copies of it, I might get $100. If I sell 100 copies of it, I might get $1000. How much additional work did it take for me to sell those extra 90 books? Zero. And there’s nothing keeping me from selling 1,000 or even 10,000 copies of the book. A website is the same way. No limit on the eyeballs that can view it (as long as I keep upgrading the hosting plan!) Shares of stock are the same way. Owning 100,000 shares is no more work than owning 10 shares. If you’re a real estate investor, once you get your “system” in place (agent, insurance guy, attorney, accountant, property manager, repairman etc) it may not take you much more work at all to own ten properties than to own one. Maybe you do speaking gigs and charge $50 a head. Is it any more work to speak to 500 instead of 50? Not really. Leveraging your money is great, but leveraging your time through scalability is even better.

Passive income bluntly is income that would continue to generate if you died. Morbid. How about this? Passive income is income that would continue to generate if you decided to do nothing and sunbathe on some beach. That sounds better. Passive income includes rental income, royalties and income from businesses or investment partnerships / multi-member LLCs where you do not materially participate.
I prefer assets that make me a high return for the lowest amount of work possible (semi-passive involvement). And assets that pay me in several unique ways. Cash flow is only one way RE makes money for me. I also get principal reductions, appreciation, tax advantages (depreciation), and I control the rental increases on a yearly basis. Plus a majority of the capital is provided by the secondary market on 30 year fixed low interest rate debt.
If you are not a real estate professional but oversee your rental real estate, your revenue qualifies as a different type of passive income and you might be able to claim a portion of any losses against active income. As of the 2018 tax season, you can write off up to $25,000 a year in rental real estate losses if your Adjusted Gross Income is $100,000 or less. If your AGI is over the threshold, the size of the loss you can claim goes down by 50 cents for every dollar of income. At an AGI of $150,000, you no longer can take the passive loss against other income.
Social Security retirement benefits may or may not be taxable depending on your annual income. If your annual income is more than $34,000 as a single taxpayer or $44,000 as a joint filer, up to 85 percent of your Social Security may be included in your ordinary income and taxed at your normal income tax rate. If your income is under $25,000 as a single taxpayer or $32,000 as a joint filer, you don't pay tax on Social Security benefits. If your income is between $25,000 and $34,000 as a single filer or $32,000 and $44,000 as a joint filer, up to 50 percent of your benefits are taxable.
Another thing that belongs firmly at the top of passive income ideas lists is affiliate marketing, where you earn a commission for each product or service that you recommend. My new focus these days is on Amazon affiliate websites. The idea is that you talk about, or review products that you can find on Amazon. People visit your website, click on some of your Amazon affiliate links, buy a product on Amazon and you get a commission for any sales, not only for that specific product but for anything they buy within a 24-hour period.
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