Passive income is earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved. As with active income, passive income is usually taxable. However, it is often treated differently by the Internal Revenue Service (IRS). Portfolio income is considered passive income by some analysts, so dividends and interest would therefore be considered passive.
Take good pictures. Some of the options below don’t require you to actually take the picture and sell the product, but for the ones that do, make sure you take a clear picture that makes your product stand out from the others. If you’re going to be taking a lot of pictures, set up a small “studio-like” area in your home with a backdrop and proper lighting to really make your pictures come across as professional. And of course, you’ll want a good camera too.
This is a level of FI that I’ve been trying to achieve since I was 30 years old. I decided back then that an individual income of ~$200,000 – $250,000 and a household income of ~$300,000 was the ideal income for maximum happiness. With such income, you can live a comfortable life raising a family of up to four anywhere in the world. Given I’ve spent my post college life living in Manhattan and San Francisco, it was only natural to arrive at much higher income levels than the US household median. Remember, half the country live in more expensive coastal cities.
More than half a billion products are sold on Amazon every month, making it an incredible opportunity to make money online. But, like everything else that involves making money online, you have to do quite a bit of work to earn it. One option on Amazon is to find products that are already made and buy and sell them at a discount. For example, you could research generic products such as clocks, keychains and mugs to attach to your brand.
All of these are great ideas to earn a little more spending (or saving) money! I agree that investing in real estate can be passive, but it also depends where you invest in! If you invest in real estate in a college town (which has many pros and can give you a nice deal of money), in my opinion it doesn’t tend to be passive! College students (even the more responsible ones) tend to cause wear and tear, making your job as a landlord non-passive.
With two babies, and deserted by my husband, I had no choice but to work for myself. At the beginning it was hard. However, I soon realized that this was the best thing to have ever happened to me. I struggled with EVERYTHING to begin with, but as I mastered new skills I began making a good living without even leaving the comfort of my own home. Now I wouldn’t change my lifestyle for the world.
I want to thank you for the great article. I was looking online for some inspiration to re-ignite my side-hustle and breathe some new life into my existing efforts. Your ideas here are fabulous and I’ve made notes on seven of them. I already have a lot of the concepts started, but you have given me the spark I was looking for to keep moving forward. Thanks for the help!
As for Sam’s levels, this is the reason I started to pursue more sources of passive income. I wanted to at least partially break the chain of being tied totally to a market return. I am nowhere near Sam’s league in terms of assets or passive income but it now represents a decent amount of our total income. I worry less about market returns and more about the viability of the income stream persisting. I use 3 fintech platforms for real estate which represents about 12% of my overall portfolio, a closed end fund designed for income, a high quality MLP and at this time a boatload of cash since I think bonds represent a bad value.
No problem and good luck. His book is what started my quest for early retirement – although the investment advice is a bit dated. Another couple who are in the same camp are Billy and Akaisha Kaderli. Again, these are sort of the grandparents of the movement. Although in their 60’s now, they retired at 38 with $500k or so. They also spend a large portion of their time overseas – mostly southeast Asia. Both the Terhorsts and Kaderlis focus on expense management to achieve a full life of travel and fun. The Kaderlis have also written several books avaiable on their website – unfortunately, not for free. They tend to do more interviews so they would be a podcast option too.
Even if you have no desire to stop working, I still believe that financial freedom is beneficial. At the very least, saving enough to reach “temporary freedom” can provide peace of mind. There is always a possibility that your job could be eliminated, or your life circumstances change, or any number of concerns that might be partially remedied by financial freedom.
Clearly, there's a lot of demand on Amazon, and if any product is going to sell, it's going to sell well on Amazon. But the goal here is to source the right products that will easily sell at the world's largest online retailer. Generally, products between $10 and $50 sell very well here. Just be sure to do the right market research before jumping on this bandwagon.
financial freedom careers
Thanks for the post. Not to be negative, but want to stress importance of not “waiting” for FI. My parents have a passive income of about 500K/year and have had some health issues popping up recently. My dad lost his hearing in one ear and my mom is having a lot of trouble with her vision. Although having $$ makes dealing with some of these issues easier, it is important to remember how valuable your health is, because suddenly money doesn’t seem so important.
Create a writer website or blog. A website not only demonstrates your technical ability, but it also creates an online hub that allows clients to connect to you. Keep the design of your website clean and uncluttered. Include examples of your work that demonstrate the kind of writing you do. Make the samples easy to find and to read, and make it easy for visitors to figure out how to contact you..
Not only will this multiply the money you’re bringing in in a serious way, but it protects you against any sudden changes in the market or in your business. Remember that old saying about putting all your eggs in one basket? A few hours a week committed to just one or two of the following opportunities will put you in a much stronger position to be financially safe and independent.
If you are generating $250,000 – $300,000 in passive income without having to work, life is good, really good. At my peak in 1H2017, I got to about ~$220,000 in annualized passive income, but then ended up slashing ~$60,000 from the top after selling my rental house to simplify life. Therefore, I’ve still got a long ways to go, especially now that I have a son to raise.
If you have a fondness and talent for taking pictures you can make extra money online by becoming a stock photographer and selling your images to a stock photo company like ShutterStock or iStockPhoto. You’ll get royalties every time someone licenses an image you’ve submitted. To really be successful, build your own photography website to be able to showcase your portfolio and start getting higher-paid private corporate work.
Tutor students. Many families prefer the flexibility of using an online tutor. Depending on your background, you could be simply helping a child with homework or providing college-level support. You need to have your own computer and high speed internet. Experience required differs among companies. Some require “strong experience,” while others require a specific educational background. However, most companies do require a college degree.
financial freedom book tour
Working part time after FI is a great way to supplement your FI savings and is something I’m considering as well (see semiretirement). There are many fun jobs I can think of that I would enjoy doing part time so I may pick up some part-time work after leaving my full-time job this year. We’ll see though…it’s possible I’ll enjoy being jobless even more than I expect I will :)
According to decades of extensive research by Thomas J. Stanley, Ph.D., author of “The Millionaire Next Door,” the grades one earns in school have no correlation with the economic wealth and success other than in the medical and legal professions. That's not to say education isn't important—it is! More than 90 percent of American millionaires did, in fact, graduate with an undergraduate degree.
If you have 20 years left to live and only require $60,000 a year, having $1,200,000 can also be considered enough even if you make zero return. The only problem is that your purchasing power will decline by ~2% a year due to inflation. The other problem is that you don’t know exactly how many years you have left to live. Therefore, it’s always better to have more rather than less.