Passive Income Ideas
I’ve been playing with the new “Niche Refinery” tool inside of The Keyword Academy and found some new keywords for this blog – I shouldn’t have to tell you which one I am targeting today. Its not worth a million dollars or anything – but the current top ranking posts for “passive income ideas” – all leave a whole lot to be desired. As usual content really doesn’t matter that much – its all about using the keywords in the right place and domain authority in the Case of the current top ranker’s – so I figure with a bit content – and some backlinks I too may get to page #1 and provide some useful information.
What is Passive Income ?
Passive income is income you receive which is not related to how you spent you day – well that’s my definition of it anyway! I might have spent the last week doing this (I wish!)
Snorkeling, Turquoise Bay, Exmouth, Western Australia
but meanwhile I made over NZ$2000 – passive income. That income happened with no discernable activity on my part – I don’t think I made any decisions to with last week – but the invoices paying me showed up today – being the first of the month and all.
Passive Income Ideas – Its the Business Model That Matters
Many people will ask how did I make that passive income last week – the answer is property investment. Now not all property investors have themselves a passive income business – we do – we hire professional property managers and have never met any of our current tenants – none of whom know that we spent the last 3 years out of the country. Now it doesn’t make us a fortune – there are a few mortgages involved – but we have had a good capital gain – more than can be said for the stuff in the share market!
The point is -you will find endless arguments of whether an asset class is a passive income or not – the question should be – do you want it to be? Neither my partner nor I enjoy fixing plumbing or dealing with tenants – so our residential property is set up so we don’t have to, we chose to do it that way. Alternatively I know people who have created themselves a full-time job looking after their tenants and their property – neither approach is wrong just different.
Top 5 Passive Income Ideas – If You Do It Right
- Property investment – its been my top earner to date so I have to put it #1. In New Zealand its tax efficient and low risk. The downside of course is that its only low risk if you have 50% or more equity. Its only passive if you pay someone to manage and maintain properties for you.
- Bank Deposits. Yeah really – I can earn over 6% on New Zealand bank deposits and over 5% on call in Australia. I pay no advisor fees, I do pay tax – its the best cash rates in the world (well anywhere in the world that you have good chance of getting your money back)- anyone around here who pays advisers to put them into a money market “product” is nuts. Overseas investors should think about it – obviously you will carry an exchange risk (which is far from trivial) – but banks in this part of the world do not fail.
- Stocks/Shares/Managed Funds/ whatever you call them. Primarily I use these for capital gain rather than passive income – but I know this works differently overseas. Again if you chose to be a day trader this will be far from passive income – if you chose the right advisor long term stock picks- should work for you.
- Develop a business which doesn’t require you to work all the hours of the day to make you money. Tim Ferris’s Four Work Week is the ultimate guide to this approach. Most entrepreneurs desperately need to work IN their businesses – Tim points out how you can arrange the business so it pays you without you doing much work at all. You still need to set the business up – but potentially it can cost a lot less than using the first 3 approaches to passive income
- Marry a rich partner – well there is some work up front but … – unfortunately no personal experience on this one! Fundamentally if you have enough capital you should never have to work for an income again – money doesn’t fix your life – but it does give you choices.
Those are pretty much the only ways of generating passive income – but as I said above you can still get it wrong – and end up working full-time on a so-called passive income stream .Which brings me to irony of this post – I write about developing passive income online here – I am trying to develop niche sites which will pay me passive income on a regular basis. Its definitely possible – but I haven’t got it to the scale that I relax yet. Passive income is about timing sometimes -working hard for a few years so you can take the rest of your life off…. And please no one tell me that freelance writing is a great way to make passive income – tips like that are worth what you paid for them!
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Hi Lis – this is not really a comment so you may wish to move it somehwere else – but I am trying to alert people not to sign up to Ehow – there is a big stink at the moment as they have been not paying writers what they are owed
I put this up on Griz’s blog – the links give the full story
- lots of people use Ehow to make money writing articles and I was considering signing up myself – but not any more !
Take a look at this unholy pile of Cow Poo – ehow not paying writers and UK ehow not paying US writers/ by unfortunate Ehow contributors !
It seems Ehow is going to list on the stockmarket too (they make millions – but it seems a large part of that is made by not paying their writers) You might like to take a look (or start another storm !)
VicW
6%? Wow Lissie I’m going to have to look into that ASAP. I’m pretty sure we earn like 0.5% over here…
Remember the Forex risk Court – but if you are planning a holiday down under … NZ bank or Ozzie bank
Freelance writing passive?! lol! Are people really that daft? I worked longer hours as a freelance writer than just about anything else I’ve done (well, apart from working on my own sites, but that feels different somehow – not so much like ‘work’!)
Nice post anyhow. I like the idea of living off investment income more than just about anything else – that’s my ultimate aim. I like IM, but don’t really see it as a lifetime thing necessarily – too unpredictable.
That’s what inspired the post cat several of the top Passive Income tips posts – had freelance wiriting right near the top! Obviously written by people who have never tried it!
Let’s see, I’m no good in Proprety investment, thus I don’t have much bank deposits to shout about which leaves me no avenues to dabble in stocks or to develop any business for that matter.
Thus I am left with the last option.
Marry a rich partner.
Which I, unfortunately, did not.
Maybe I should I should start look for a rich mistress instead.
oopos costsa – you gonna have to figure out how to make money online instead!
I been playing with shares for a few years now. For awhile I was doing day trading and while it started well I ended up losing a fair bit. My biggest mistake was dealing in highly speculative shares.
I’ve learned from that mistake and am slowly clawing my way back. I’ve found that as long as I choose the right shares the dividends can be a lot more than any interest I would have earned from a bank, especially if they are fully franked.
Which is how Australia shares generally work Sire -its a bit different in NZ – we don’t have the equivalent of franking to start with – so most NZ shares are growth (or not …) Seriously though I am getting 6% on call at CBA at the moment – that’s pertty darn good for risk free
Yes it is. They are paying dividend next week on their shares, and it’s looking to be around the $1.40 mark which is only about 3% but if you’re in and out in a week that’s pretty good for a weeks work. I’m also hoping to make a few extra dollars as I bought in pretty low, so I’m hoping more around the 12-15% mark. Fingers crossed.
6% is a good interest rate – think yourself you aren’t in the bankrupt UK! 0.5% official Bank of England interest rate, in reality most banks etc offer much less!
I like marrying the rich partner! Guess it is too late for me so I can cross that one off the list. 6%? WOW!
Great post and so true, passive income is the best kind. I’m retired in the USA so Social Security is passive for me, but not enough to live on. But I added another $1,100 a month by purchasing a building for my business while I was working and leased it to my own company. The company paid it off and now I get the proceeds from selling it. Then I started clicking ads for a penny and stored up enough to invest in high risk offshore funds that is paying me another $1,000 a month and it keeps growing, passively.
I must admit, when I saw the title of this post I expected it to be the same ‘ole stuff you see everywhere else – make money with online surveys and the like. Boy, was I pleasantly surprised. You gave some good tips, I especially like #5…oops, I mean #4
Thanks for commenting Kathleen – I got bored with all the same stupid posts as well – like when was work passive income – and filling in surveys definitly sounds like work to me! Sure its more flexible than going to a job – but its still work!
Yeah #5 appeals – but he’s probably have replaced me for a younger model anyways by now!
Lis, you post has me dusting off Tim Ferris’ book. I bought it a while back, but it went straight into the bookshelf like many of the other books I buy. Going to have to crack the binding this weekend! I think outsourcing is an important step, allowing me to concentrate on more critical aspects of my business.
I like the idea of passive income, just bringing in money when you’re not actually having to work for it. I keep seeing ways of doing just that but I still haven’t got round to seeing it through and getting on with it. I own a couple of domains that I haven’t even been using for the last five or six years and I really should get on with it and do something with them.