Great breakout of some common items that are (mostly) accessible to individuals. My biggest issue with p2p is the ordinary interest it generates and the ordinary tax that we have to pay. That really takes a bite out of the returns. Fortunately, I opened an IRA with one of the providers to juice the return with zero additional risk. 6-8% nominal returns over a long period of time will make me very happy. It should end up as 5-7% of the portfolio anyway, so nothing too significant.

Because you’re publishing an eBook rather than a physical book, the costs are minimal. And you don’t have to print 1,000 copies of your book hoping someone will buy it. Instead, you can write your book, create a fancy cover for $5 using Fiverr and publish through services like Amazon Kindle Direct Publishing. Amazon will handle everything for you, then take a percentage of the revenue you generate.
I love real estate investing, but it requires a lot of upfront capital plus you are going to have to learn to love your tenants (see point 6 below)! Crowdfunded real estate investing gives you a way to still invest in the real estate market, without having to necessarily put in a lot of money upfront. It’s definitely a much more passive investment than owning a flat or a house!
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).
This one may seem simple, but that’s only because it is. If you were to move your savings from a traditional, brick-and-mortar bank with a low-interest rate and into a high-yield savings account online, over time you can make a surprising amount of extra cash. Online banks are FDIC-insured just like the traditional brick-and-mortar institutions, so your money is just as safe.
Wow! What an awesome list! My favorite is the stock photography because I love photography. I have had some success there, particularly with one photo I make some decent income from. I think the key with stock photography is finding a shot that is high demand. Then, find a new unique way to frame that shot. This is the reason my St. Louis Arch photo is a top 10 on both ShutterStock and iStockPhoto. Thanks for the awesome ideas above!
Despite some ups and downs in recent years, real estate continues to be a preferred choice for investors who want to generate long-term returns. Investing in a rental property, for example, is one way to produce a regular source of income. At the outset, an investor may be required to put up a 20% down payment to buy the property, but that may not be a barrier for someone who's already saving regularly. Once reliable tenants are installed, there's very little left to do except wait for the rent checks to begin rolling in.
For those willing to take on the task of managing a property, real estate can be a powerful semi-passive income stream due to the combination of rental and principal value appreciation. But to generate passive income from real estate, you either have to rent out a room in your house, rent out your entire house and rent elsewhere (seems counterproductive), or buy a rental property. It’s important to realize that owning your primary residence means you are neutral the real estate market. Renting means you are short the real estate market, and only after buying two or more properties are you actually long real estate.
​I’ve been into home décor lately and I had to turn to Etsy to find exactly what I wanted. I ended up purchasing digital files of the artwork I wanted printed out! The seller had made a bunch of wall art, digitized, and listed it on Etsy for instant download. There are other popular digital files on Etsy as well such as monthly planners. If you’re into graphic design this could be an amazing passive income idea for you.
Case Schiller only tracks price appreciation of RE. RE as rental investment vehicle is measured primarily on rental yield or cap rate or some other measure. Price appreciation in that scenario is only a secondary means of growth, and arguably should be ignored as a predictor of returns when deciding on whether or not to invest in rentals. More important key performance indicators for rentals are net operating income and cash ROI. Appreciation, if it occurs, is a bonus.
When you invest in a dividend-paying stock, you are buying a share of the company and you literally become part-owner of that business. As the company grows and generates extra cash that it doesn’t necessarily want to re-invest, it might decide to return some of the extra cash to the shareholders in the form of dividends. And because you own a fraction of the company, you will receive a portion of the cash!

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The same analysis would apply to a situation where a CCPC carrying on a real estate property realizes a capital gain upon the sale of one of its rental properties. The RDTOH generated from the capital gain, would now be refunded to the corporation only upon the payment of a dividend that is not an Eligible Dividend sourced from the passive income. As a result, the additional 4% personal income tax cannot be postponed at the individual level while having at the same time the corporation benefit from the RDTOH refund.
I truly believe generating $10,000 a year online can be done by anybody who is willing to dedicate at least two years to their online endeavors. Here is a snapshot of what a real blogger makes through his website and because of his website. Roughly $150,000 a year is semi-passive income followed by another $186,000 a year in active income found through his site. Check out my guide on how to start your own blog here.
More good news. The LLC’s activities are considered self-rental activities which means that you are creating a transaction with yourself. Provided that this arrangement is at market rates, the IRS accepts this relationship. Moreover, the self-rental income is not considered passive and therefore not subjected to the Net Investment Income Tax calculations.
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:
​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!
I've got a $185,000 CD generating 3% interest coming due. Although the return is low, it's guaranteed. The CD gave me the confidence to invest more aggressively in risk over the years. My online interest income has come down since I aggressively deployed some capital at the beginning of the year and again during the February market correction. You'll see these figures in my quarterly investment-income update.
Next, you’ll want to design the simplest form of your app. The minimum viable product. The bare bones version with only the essentials. This is key for successfully creating app passive income. First, start with creating a wireframe. This is just a blueprint of your app’s features. The first screen will be the opening screen or home screen of your app. From here, you will branch out to the different screens and features of your app. Remember, be very descriptive. This is what you are going to give to your graphic designer and development team.

Having an extra house, condo or apartment is potentially quite lucrative, especially if  what the tenant pays covers your mortgage, taxes, insurance, etc. Someone else is basically building your pool of wealth because in 10 or 20 years, you’ll have this $100,000+ asset that is paid off. You can sell it for a large chunk of cash, or keep renting it out and have a nice, steady stream of income. The major problem is that managing this isn’t exactly passive, unless you hire a rental management company who generally take one month’s rent out of the year in exchange for doing this.


Nonpassive: Businesses in which the taxpayer materially participates. Also, salaries, guaranteed payments, 1099 commission income and portfolio or investment income are deemed to be nonpassive. Portfolio income includes interest income, dividends, royalties, gains and losses on stocks, pensions, lottery winnings, and any other property held for investment
This KB article is an excerpt from our book which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles, click on the fancy buttons below or visit our webpage which provides more information at-
Domain names cannot be replicated. If one is taken, the only recourse would be to approach the owner to discuss a sale. While there are other variations you could choose, sometimes owning a certain domain (especially if it is attached to your business) can be worth the premium. Often, people will scout out domain names that are still available, buy them, and then sit on them in order to sell them down the road. Depending on who may want the domain down the road, you could sell it for a large markup.
The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $54,000 or less, persons with disabilities, and limited-English-speaking taxpayers who need help preparing their own tax returns. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.

Hardy struggled to find space at the hospitals to conduct his procedures. Due to this difficulty, Hardy considered opening his own surgery center. He purchased land and developed plans to build this surgery center; however, before construction started, MBJ representatives approached Hardy to ask him about becoming a member. Mr. Hardy concluded that becoming a member/manager of an established surgery center was a better business decision than building his own surgery center due to the cost of construction, staffing, certifying, and operating the center.
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.
My grandfather knows how to cook because he is old he have in mind a lot of unique recipes from his childhood. He created a Youtube channel and explain how to make some of the recipes he know. Some of his video has 500K views, and are getting new views every day. If you read the book Rich Dad Poor Dad, you will understand better what I’m about to explain. You can see Youtube as your primary income, then you will work a full time job. But you also can use Youtube as a passive income. You will make less money but you won’t need to post a video every single day. Just create ‘Assets’, take your videos as assets, more you will have more money you will make.
Kate, a single taxpayer, has $70,000 in wages, $15,000 income from a limited partnership, a $26,000 loss from rental real estate activities in which she actively participated, and isn’t subject to the modified adjusted gross income phaseout rule. She can use $15,000 of her $26,000 loss to offset her $15,000 passive income from the partnership. She actively participated in her rental real estate activities, so she can use the remaining $11,000 rental real estate loss to offset $11,000 of her nonpassive income (wages).
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.
Basically, people looking to borrow money will make a listing on the site. Those borrowers are then placed into a category and given a “rating” based on their credit history and rate. You, as an investor, will contribute money to these loans and then be paid back at the predetermined rate of interest. Invest and see those monthly interest payments deposited into your account.
I hope you remember me for my good qualities and not my bad ones because I have plenty of both. As far as the tax bill, I’ll have a podcast coming up on it but probably won’t do a post until it’s law and probably not until well into the new year. I’m sure I’ll offend all of my listeners with the podcast and the post, both those who think the tax system should be more progressive and those who think it should be less progressive.
To save time and effort, a person can group two or more of their passive activities into one larger activity, provided they form an "appropriate economic unit." When a taxpayer does this, instead of having to provide material participation in multiple activities, they only have to provide it for the activity as a whole. In addition, if a person includes multiple activities into one group and has to dispose of one of those activities, they’ve only done away with part of a larger activity as opposed to all of a smaller one. 

The IRS requires REITs to pay out at least 90% of its income to shareholders.  Thus, REITs tend to be higher yield since a large fraction of the earnings come out as dividends, which may be beneficial for certain income oriented investors.  The flipside is the tax cost for investing in REITs since income must be distributed and as a holder the taxes flow through to you.
Start an affiliate marketing website: This passive income model works for individuals who already own a bog or website. Here, your business goal is to contact companies and offer to tout their products and services, usually for a fee or a commission, based on the number of page views you get. Studies show that more people spend time online and less watching TV or reading the newspaper. Take advantage of that leverage and earn income from the tens of thousands of companies who want to reach an audience - maybe your audience. Either reach out to companies directly or go through a site like ClickBank, which offers affiliate marketing opportunities.
5 months ago, I decided to create my own online business. I was really exacted because It was always my dream to earn cash by working from home to be able to unite my family and to retire my father that had been working as a security far away from home. My family and I only used to see him three times a year. I would like to change it, and online business gave me a possibility to make my dream to become real. I really was committed to giving all my self to succeed in building a successful online business. As a matter of fact, I failed to do it on my own. I was so disappointed because it seems that I was born to fail. It was 22nd June at night, I was hearing a motivational speech, so one of the guys said,” Copy what successful people’s strategy as your own, and you will get the same result that they have”. That opened my mind because that was the secret, I did not realize that there are a lot of people in this marketing a year. So, I took some online courses from gurus. Following their steps. right now where am I? I am now a successful online business of 22 years old trying to retire his father. I really thank people a lot that have the mindset to share this priceless information in this blog. Indeed, thank you.

Self-publishing belongs firmly at the top of any passive income ideas list. Amazon, with Kindle Direct Publishing (electronic version) and CreateSpace (print on demand version) dominates the self-publishing world. It’s both good and bad. Good in that they’re quite generous with their commission rates (usually 70%). Bad in that they can change their policies at any time to be less favourable for authors and there is nowhere else for us to go. That’s not entirely true. There are a few other options, but none of them are as good as Amazon!
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.
Real estate investors don’t get to enjoy that lower qualified dividends rate on their passive income, but they get something almost as good- depreciation. Now I’m of the school of thought that you get to take depreciation mostly because buildings and appliances really do depreciate, but even so, it gets pretty favorable tax treatment, particularly for a high earner. Depreciating your property allows you to defer taxes on them until you sell the property and the depreciation is recaptured. That deferral by itself is very useful, particularly if it allows you to defer it until such a time as you are in a lower bracket. You can also avoid that recapture completely by doing 1031 exchanges from one property to another until the owner dies and gets that step-up in basis at death. But wait, there’s more. That recapture tax rate maxes out at 25%, even if you’re in the 39.6% tax bracket.
When you invest in a dividend-paying stock, you are buying a share of the company and you literally become part-owner of that business. As the company grows and generates extra cash that it doesn’t necessarily want to re-invest, it might decide to return some of the extra cash to the shareholders in the form of dividends. And because you own a fraction of the company, you will receive a portion of the cash!

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.
The Tax Court had to decide whether the Hardy’s properly reported Dr. Hardy's income from MBJ as passive, and if so, whether they could deduct a passive activity loss carryover from previous years. It also had to determine whether the Hardy’s overpaid their self-employment tax. Finally, it had to decide if they were liable for the accuracy-related penalties.
Secondly – and this is just quibbling – I’d change that risk score. The risk of private equity is incredibly high and should be considerably riskier than bonds! You are providing a typically very large amount of capital to one business that you agree to have no control over, and the success or failure of that business over a locked, predefined term determines your return. And in the few deals I’ve negotiated for clients, my experience has been that there are often management fees, performance fees, etc. that may cut into your potential gains, anyway. You’re putting a lot of eggs in one basket, and promising an omelet or two to the management no matter what. You really need to be confident that you found the next Uber before you take this giant risk!
Any passive activity losses (but not credits) that haven’t been allowed (including current year losses) generally are allowed in full in the tax year you dispose of your entire interest in the passive (or former passive) activity. However, for the losses to be allowed, you must dispose of your entire interest in the activity in a transaction in which all realized gain or loss is recognized. Also, the person acquiring the interest from you must not be related to you.
According to Congressional Budget Office figures from 2011, the top 1 percent of taxpayers pay an average of 29.5 percent, those in the percentiles from 81 percent to 99 percent pay 22.8 percent, those from 21 percent through 80 percent pay 15.1 percent, and the bottom 20 percent pay 4.7 percent. Those numbers, of course, don’t include the 49.5 percent of Americans who pay no federal income tax at all.
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How will this new framework for refundable taxes impact the real estate environment? Well, given that refundable taxes apply in respect of CCPCs only, this new regime will not affect the foreign pension funds, public corporations or tax-exempt entities investing in real estate in Canada. The new regime will also not impact CCPCs that retain their profits within the corporation instead of distributing them to their individuals nor will it impact CCPCs that earn pure active business income or pure passive investment income. Instead, these measures will affect CCPCs accumulating profits from both active business income and passive income and paying these profits out to their individual shareholders.
That strategy seems waaaayyyy less risky than actively picking stocks of supposedly “reliable” stocks that issue dividends, which could be cut at any time due to shifting industry trends and company performance. Dividend investing feels like an overly complex old-school way of investing that doesn’t have a very strong intellectual basis compared to index investing.
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.
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.

Take for example a situation where a CCPC earns rental income from its real estate properties which for this example qualifies as passive investment income and provides, at the same time, property management services that are characterized as active income. Under the current regime, a portion of the high corporate income tax paid by the corporation of 50% on its rental operations is accumulated in its RDTOH and will be refunded by the government only upon the payment of a dividend by the corporation to its individual shareholder. Given that an Eligible Dividend paid out of the property management services are taxed at a lower rate than would be a dividend paid out of the rental income, being a dividend that is not an Eligible Dividend, the company would decide to pay the Eligible Dividend and recover the RDTOH generated from its passive income. The profits generated from the rental operations could be paid to the shareholder the following year or two for example as a dividend that is not an Eligible Dividend, thus providing for a deferral of that additional 4% personal income tax.


Obviously, these are much higher than you’re going to get with most other investments. What’s more is that you can choose a plan that matches your investment strategy, whether your goal is Supplemental Income, Balanced Investing, or Long-term Growth. You can also look at different real estate projects and choose for yourself which ones to invest in.
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