Creating Passive Income
There are probably more ways to create and improve your passive income than you can count. I’ve tried quite a few myself. In this short article I want the share a few of my best ideas. Ideas that I’ve tried and been successful with and some that didn’t produce what I intended.
Perhaps the easiest and most hassle free income producer I’ve ever done is simply by a high dividend stock and collect my dividend four times a year and that was it. It’s nice not to have hassles with your passive income and I always pick companies that raise there dividend every year. So if they raise it by 10% my income doubles every 7 years. Nothing sexy here and it takes to long to build a large income because there is no leverage and you’re not getting paid for creativity. I call this the slow route.
The next area involves real estate. We’ve all heard about creating passive income with real estate. Obviously you can use other people’s money and other people’s time if you hire a property manager, which I always do. I don’t fix toilets. Here’s my short list of ideas that I’ve found doable by almost anyone:
Mobile home parks single family homes duplexes – two flats if your up north in the big cities. Small strip centers mini-Storage small apartment buildings
I find the mobile home parks very profitable. I’ve had people living in mine and ask me to buy there home because they needed the money, and they offered it to me at a great price. I’ve also had abandoned homes that I’ve remolded and re-sold and carried the paper on the home. Believe it or not, I’ve picked up mobile homes for around $ 5,000 and resold them for $ 375 a month for 5 years including the lot rent. That’s a 90% annual return. Hard to beat on a passive investment.
On the other hand I personally have not had tremendous cash flow from duplexes. I guess I didn’t buy cheap enough. At the same time they have been great net worth builders.
The only strip center I’ve owned, I was the developer with two other guys and we still own it. Developing real estate is a whole other world. Unless you just love it I would be careful. We were lucky and have survived the downturn of 2008 and 2009.
Network marketing is a great way to build passive income if you don’t have alot of capital. While it will take some capital it is very small compared to buying equities(dividend stocks) and real estate. The difference here your investment of time or sweat equity is the big difference. And since most people have more time than money, I think it is a good place to start. Treat it like a business, pick a quality company. You also must become a pro, and your hard work will pay off. After a few years many people make multiple 6-figures with little work. I’ve had a better return on this than anything I’ve ever done. Of course I had to put in the sweat equity. The risk is multiple times less than developing a shopping center. Trust me on that one, I’m speaking from experience.
Of course, if your very creative and talented and can write or create something unique you can collect royalties. I wish I could do this but so far I’ve done it in more traditional ways. But I haven’t had a job in almost 20 years. Not to bad I guess, but I’m still waiting for that great song to pop into my head.
David Cronan is the author and founder of http://www.asyouthinkyoubecome.com