I think the holy grail of financial freedom is having so many passive income. This way you will never worry about your financial needs because everything is taken care of your assets. You will have all the your time in the world and visit all places you dream about. You have your time and money. This is the dream of most people which only few ever achieved.
6) Always Remember That Everything Is Relative. The best way to determine worthwhile passive income streams is by comparing the likely return (IRR) with the current risk-free rate of return. If I round up, the 10 year bond yield is at 3%. Any new venture should thoroughly beat 3% otherwise you are wasting your efforts since you can earn 3% doing nothing.
In which socio-economic neighborhoods do you want to buy? I know real estate investors that have done very well buying and renting in lower-income neighborhoods. For me, it was a huge mistake. I fell into the trap of thinking, “I can buy a house for about half the cost as what I would pay in a better neighborhood.Even if I get slightly lower rent, say 70% as much, I’m still making a higher return.”Wrong!The money you lose on tenant turnover, unpaid rent and repairs far outweighs any benefit to buying property at a discount. Now, I always recommend to investors to never buy a house somewhere they wouldn’t want to live. If the business does poorly, you may end up living in one of your homes.
Though it requires a huge up-front investment (well, at least 20%), real estate is awesome, because it’s (usually) pretty stable, and it’s a triple-whammy: you make money by leveraging a bank’s money, you can rent it out with almost no work at all day-to-day, and the value of the underlying asset INCREASES. This is why so many people flock to AirBNB to rent out their apartments when they’re going on vacation, too. It’s pretty passive, you don’t have to own the asset, and you just hand over keys and hire a cleaner before/after. The value of your apartment is untouched. By contrast, imagine buying a plane and renting it out to people for tours — you pay tons of money to maintain it, and after 20 years, it’s value is almost nothing. The exception is if you can manage depreciation and somewhat automate the value-delivery. If you have an expensive tool (like a 3D printer) and charge people to come over to your house and print things on your 3D printer, it’s pretty passive for you to answer emails and open the door, so I give it a “Semi to yes” for passivity.

Like many, I was first really turned on to the idea of passive income by Tim Ferriss. In The Four Hour Work Week, he describes the system he developed with BrainQuicken, where the marketing, shipping, reordering, banking, and even customer service of the company was on complete auto-pilot. I found this idea intoxicating. The idea that Tim could travel the world learning to tango and staying on private islands while money just accumulated in his bank account seemed like some strange fiction — surely, this isn’t how people actually live, is it?


Writing an e-book is very popular among bloggers, as many have noted that “it's just a bunch of blog posts put together!” You will not only have to make an investment of time and energy to create the e-book, but market it correctly. However, if marketed correctly (through blogging affiliates in your niche, for example), you could have residual sales that last a very long time.
What if there was a way for you to effectively make money while you sleep? Sounds like a dream come true, right? Even for the biggest workaholics, there are only so many hours in a day. If only you could get paid multiple times for something you did once—that’s exactly how passive income works! Thanks to technology, the potential to create multiple income streams is even easier than ever before. We’re no longer held back by the limitations of a traditional 9-to-5 job, and financial freedom is at our fingertips. Even if you already work a full-time job you can still improve your financial health with passive income.
We’ve discussed how to get started building passive income for financial freedom in a previous post. Now I’d like to rank the various passive income streams based on risk, return, and feasibility. The rankings are somewhat subjective, but they are born from my own real life experiences attempting to generate multiple types of passive income sources over the past 16 years.
Now that you’ve chosen your market, find a way to start sharing your message, whether it’s a blog or podcast or Youtube channel, or whatever platform makes the most sense for your target market. Flynn says this is where you’ll start to build a fan base — and collect subscriber emails. You don’t need to get the whole world to follow you to make this work out financially. Wired cofounder Kevin Kelly wrote an article about 1,000 True Fans, which basically says that if you have 1,000 people paying you $100 a year, that’s a $100,000 a year. “You don’t need to serve everybody,”  says Flynn.
A REIT is a company that owns, operates or finances real estate and allows anyone to invest in portfolios of real estate assets, the same way as stocks: you can purchase individual stock or exchange-traded fund (ETF). You can then earn a share of the income produced through the real estate investment without having to own, manage or finance a property.
Earn rental income. One of the more common ways that people earn passive income is by buying and then renting out property. These can be homes, apartments, land, or even individual rooms within your home. To do so, you'll have to find a property to rent out, determine a fair rental price by looking at comparable properties in your area, and then act as a landlord for your renters. You can convert this income source into truly passive income by hiring a manager to act as a landlord for you. However, this may not be economically feasible until you have several rental properties.[1]
One of the best ways to build wealth is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts on their Dashboard so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where my spending is going.
3) Create A Plan. Mark Spitz once said, “If you fail to prepare, you’re prepared to fail.” You must create a system where you are saving X amount of money every month, investing Y amount every month, and working on Z project until completion. Things will be slow going at first, but once you save a little bit of money you will start to build momentum. Eventually you will find synergies between your work, your hobbies, and your skills which will translate into viable income streams.
Hello from the UK! Fundrise and Wealthfront are only available to US residents it seems :(. Any other readers from the UK here? The only thing I have managed to do from Sam’s list is getting a fixed rate bond (CBS is having a 5-year fixed rate at 2.01% – not great but the best I could find ). Don’t know if the FIRE movement will ever take off here but would love to trade tips/ideas on how to reach FI and have the freedom to consider alternative rythms to living.
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).
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.
A) Live, breathe, eat, and sleep this activity that is their passion. It's what they most care about. There's no way they'd give up this active, creative endeavor for a life of reclining on a beach chair. They cannot wait to wake up another day and spend another full day, from dawn to dusk, engaging in this project, building and creating things within this realm, giving this gift to the world. And, my guess is these people...
With $200,000 a year in passive income, I would have enough income to provide for a family of up to four in San Francisco, given we bought a modest home in 2014. Now that we have a son, I'm happy to say that $200,000 indeed does seem like enough, especially if we can win the public-school lottery to avoid paying $20,000 to $50,000 a year in private-school tuition.
Courses are similar to guides but they’re easier to produce for some subjects, especially tech subjects. If you’ve got a computer, a decent microphone and some screen recording software, it’s pretty easy to create high quality courses. You can sell your course through your own site or you can use a marketplace like Udemy to do all the heavy lifting. 

In 2017, I ended up deploying roughly $611,000 into stocks and $604,327 into municipal bonds. The stock allocation should boost dividend income by about $12,500 a year, and the municipal-bond portion should boost income by about $18,000 a year after tax ($26,000 pre-tax). Therefore, total passive income gets an about $38,500 lift, which recovers over half of my $60,000 loss from selling the house.
Money from dividends, for example, are taxed at a lower rate than money from a job. A business owner who works in the company she or he founded would have to pay more self-employment payroll taxes compared to someone who merely had a passive interest in the same limited liability company who would pay only income taxes. In other words, the same income earned actively would be taxed at a higher rate than if it were earned passively.
My favorite type of semi-passive income was rental property because it was a tangible asset that provided reliable income. As I grew older, my interest in rental property waned because I no longer had the patience and time to deal with maintenance issues and tenants. Online real estate became more attractive, along with tax-free municipal-bond income once rates started to rise.
This is the best post I’ve seen on passive income streams. I’m similar to you in that I worked in IBanking for a few years but wanted out. My approach is a little different, instead of starting with the CD’s, I’m trying to build up my net worth with riskier asset classes such as stocks and real estate to get the benefit of compounding. Then, as I approach my retirement year goal, I’ll start moving them into CD and bond ladders. In theory at least, it’s best to have the highest net worth just before retirement, then convert them to risk free passive income. You’re method is more patient and probably more practical than mine. I guess I’m willing to take more risks.
Creating a membership site is a powerful way to generate online income and scale a service-based business. By having members pay a monthly (or other periodic) fee to get access to a password-protected area where exclusive content is made available, you can transform a site into a RECURRING income-generating business and bring a regular flow of income from the same customer base.
eBay is, of course, the biggest and most popular auction and shopping site out there. You pay a small insertion fee to list your product (starting from 10 cents) and a small portion of the selling price (10%) if your item sells. Currently, insertion fees for your first 50 listings per calendar month are free. Also, if you are planning to sell on regular basis, you may want to consider setting up an Ebay store. Among other things, this will allow you to list your products at reduced rates.
Good plan Chloe though I would say include some equity REITs in your real estate investing strategy as well. Mortgage REITs only offer cash flow while equity REITs offer price returns as well, which may be taxed at a lower rate. Real estate crowdfunding is a great new way to invest in real estate and can really help diversify a portfolio. Good luck building to your passive income.
Affiliate marketing. If you have a blog or website, you can earn a commission when visitors click on a link, or purchase something you advertise or recommend on your website, either on Amazon or another participating vendor. The cost to maintain your blog should be about $10 for the domain name, plus about $100 annually for hosting, says Michael Alexis, growth marketer and consultant in New York.
The age old argument of total return versus income has been, incorrectly imo, categorized as an either or proposition. We are going to do both. Right now I have a lot cash in an on line money market. I also have investments in 2 passive Index funds in a taxable account. We then have substantial 401ks/IRA’s which we won’t touch for at least 10 years. My wife will continue to max out her sep and we will continue to invest in the index funds although with a smaller amount. We have already factored that in. I looked at how to cut into the monthly deficit. Here is what I observed.

One of the most important assets you have is your credit score. By taking care of it and pursuing the steps to improve your credit score, a world of opportunity can open up for you. If you need a loan to buy that rental property or some quick funding through a business credit card, a good credit score will help you get approved so you can build passive income.


In which socio-economic neighborhoods do you want to buy? I know real estate investors that have done very well buying and renting in lower-income neighborhoods. For me, it was a huge mistake. I fell into the trap of thinking, “I can buy a house for about half the cost as what I would pay in a better neighborhood.Even if I get slightly lower rent, say 70% as much, I’m still making a higher return.”Wrong!The money you lose on tenant turnover, unpaid rent and repairs far outweighs any benefit to buying property at a discount. Now, I always recommend to investors to never buy a house somewhere they wouldn’t want to live. If the business does poorly, you may end up living in one of your homes.
2 You are talking podcasts and a lady who commented above made the point people love to LISTEN to information. The data I have contains some videos, but they’re not podcasts as such. (Hmmm, maybe I’d better find out exactly what a podcast IS.) Do you think it would be worth my time to conduct this exercise as the vast majority of data I have is written information. If I’m too bloody exhausted after reading info to enact it, maybe my target audience – Net marketing and SME absolute beginners – would be too exhausted also? I’d hate to waste any more time and money than I already have.
I will share what we did, because it’s an incredible success story. We used an existing tax loophole where if you sell your primary residence (after having lived there at least two years) you get to keep your profit tax-free. So, we stair-stepped. We bought house after house, at least two years apart, used the profit money to pay down on the next house (so on and so forth, yadda yadda) building up equity as we went along… and now, we own a $600,000 house debt-free. And now we are using our paid-off home as leverage to borrow money to buy commercial buildings to rent out. I like commercial because it’s a BUSINESS transaction… kids, pets, other wear and tear that you see with residential rentals is nonexistent. People take care of their business space much better than residential. You have to be in a good area for renting out commercial – a thriving business community – to make this work. But that’s how we “made it”, and though it took 15 years, we will have residual income to take care of us when we’re old enough to retire. People made fun of us for moving so much, but who’s laughing now? 😉 Oh, and our child only had to change schools once (and we wanted to anyway) because we stayed in the same general area as we moved around. We were careful not to disrupt his life too much.
Investing in rental properties is an effective way to earn passive income. But it often requires more work than people expect. If you don’t take the time to learn how to make it a profitable venture, you could lose your investment and then some, says John H. Graves, an Accredited Investment Fiduciary (AIF) in the Los Angeles area and author of “The 7% Solution: You Can Afford a Comfortable Retirement.”
Stock dividends: Some stocks, especially stocks from big corporate standouts, pay dividends to shareholders based on the number of shares they own, and the percentage of the stock price on the dividend date. For example, if a company pays out 3% on a stock that's trading at $100 per share, you'll earn $3 for every share of that stock you own. Add it up and that can be good take-home pay as a passive investment.
Another way to generate passive income is to invest and be a silent partner in a business. This is very risky, but with risk comes the potential for high returns. For example, several years ago both Lyft and Uber were looking for private investors to invest in their companies. Today, they are worth billions - but you as an investor would only reap that benefit if they go public via an IPO, or get acquired. So, it's risky.
Starting a blog is one of the most popular side hustles to earn online income. This is because whether you have 10 people or 10 million reading your content, the amount of your effort to write an article is the same. Websites have low start-up costs and you can literally buy your domain, launch your site and have a few pages created in less than an hour. You won’t start making money right away, but you will be building towards that first $1 of income.
I don’t really know much about those…I should take a look from a diversification standpoint. If you don’t mind me asking, what do you target for your net effective tax rate on your passive income? Also, I’m sure you’ve probably covered this somewhere, but how do you deal with healthcare? One more dumb question…have you found that you spend more or less money than you anticipated once you retired?
Publishing a book isn’t just a way to create a new stream of income. It’s also a powerful way to build your authority and credibility. Imagine all the educational content you have created through your blog posts, presentations, articles and videos combined with the know-how that you have yet to share. Those insights can be used to create a powerful book (or more!) to attract customers and earn some extra money.
Self-publishing has the potential to be a very lucrative source of income. However, it does involve both an investment of your time and finances. It’s very important that you get the right help from the beginning. There are many considerations that may be outside of your expertise. Rory Carruthers, a sought-after book development, book launch, and book marketing consultant, says that six-figure launches require careful orchestration and planning. “Bestsellers aren’t just born out of great talent. They are also a product of thought-out marketing and well-orchestrated book launch campaign. It’s no longer enough to just write a good text. You need to think one step ahead and warm up your audience to the book even before you finish the first draft,” he said.
I really enjoyed how you listed all of the reasons to build passive income streams as well as the framework. You also made an interesting point about freelance writing on how the more skilled writers want to keep posts for their own website. Good insight because freelance writing is something I’ve been looking into for income recently. Also, it’s amazing what you’ve been able to accomplish with your blog over the past 6 years. It’s so motivational to see the success of Financial Samurai. I’m not in a place to afford any consulting, but, I wish I could pick your brain or get mentored by a successful blogger such as yourself…Not trying to blow smoke lol. It would just be so great to have someone who’s done it provide guidance around the direction of the blog, ways to earn, and on the general concept. Always enjoy your posts. Thanks for sharing :)
A perfect example of the Active Problem Solving + Automation concept is in my online courses I’ve created over the years, or my free webinars I’ve created more recently Each of my online courses and webinars are targeted to help people with specific problems, whether that’s in the area of affiliate marketing, podcasting, building a brand, and so forth. I am always improving upon the courses, but they are also evergreen for my audience.
Skillshare is more of a social learning platform where you can teach real-world skills. The range of skills that you can teach is only limited by your imagination - from board game strategies, garment construction, cooking tutorials, travel hacking, and relationship tips. I even saw a course on how to build a grown man's wardrobe. Creating a class on Skillshare is free. For each student who enrolls, Skillshare takes a 30% fee (Similar to Udemy). You are also provided a unique teacher referral link that lowers the fee to 15% for students who enroll via your referral. Note that all online courses on Skillshare go through an approval process based on specific criteria. https://image.slidesharecdn.com/passiveincomepromoslideshow-171117120611/95/passive-income-pros-and-cons-1-638.jpg?cb
That $200,000 a year might sound like a lot to you, but the median home price in San Francisco is roughly $1.6 million or almost eight times our annual passive income. For a family of three in 2018, the Department of Housing and Urban Development declared that income of $105,700 or below was "low income." Therefore, I consider us firmly in the middle class.
Do you want to rent commercial or residential properties? I started my professional career as a commercial RE agent before starting residential investing. Buying and renting out commercial space like office, industrial and retail will generally yield a lower return but will also involve far fewer headaches. The drawback to commercial space is that it costs much more to buy one property.
While compiling this list, I did my best to avoid scams, and stick with practical ideas that work. I have tried many (but not all) of these ideas. Some of these helped me earned a few dollars here and there, but there are some that helped me earn extra money on the side every single day — and some are still providing me with revenue! Note that not all ideas will fit your skills and abilities. What works for you depends on your abilities and your current financial situation.

Now, if you choose to deliver part or all of your course in video format, you can use professional video hosting sites like Wistia or Vimeo. Beside giving you the option of removing the hosting company’s logo, these services also provide analytics which can show you how effective your video is at holding your audience’s attention. Alternatively, you can use litmos, a learning management system that enables you to create an online course with your own branding, domain name, and landing page. There is no percentage cut taken from your revenue like Udemy. Instead there is a monthly fee for their service.


Passive income is an incredible tool that everyone should include in their retirement plans. With traditional investing you have to rely on the stock market to increase your investments over time. The longer you have your money invested, the more your money will grow. The stock market does not produce passive income, except in the form of dividends. Most dividends are extremely small and produce small returns on investment. The bulk of stock market returns come from an increase in stock market prices. The only way to realize those increase in value is to sell stock. Retirement calculators that use the stock market as an investment plan on you running out of money when you die because you have to sell all your investments to keep bringing money in.

A perfect example of the Active Problem Solving + Automation concept is in my online courses I’ve created over the years, or my free webinars I’ve created more recently Each of my online courses and webinars are targeted to help people with specific problems, whether that’s in the area of affiliate marketing, podcasting, building a brand, and so forth. I am always improving upon the courses, but they are also evergreen for my audience.

As we’ll discuss, passive income opportunities are usually limited-time only, and honestly, over half of what you try won’t work. Diversification is your friend. Having many sources of income — at least 7 including your “day job” — is an important hedging strategy. Personally, I have been working at it for a long time, and I’ve had many failures in trying to build my portfolio. I’ve done a few apps for BlackBerry (come on, it was 2009), contemplated writing a book, started a bunch of blogs and forums, and joined countless affiliate programs. Here are the ones that are currently working right now.
Returns on real estate investing vary and you don’t want to get into the business based on an estimated return but on your own calculation of what is possible for your local market and for specific properties. I have seen pretty common averages between 8% and 12% a year for single-family residential rentals with cash flow accounting for between 0% and 6% of the return.
But two months later, with the economy slowing down after the financial crisis, his firm began laying people off, and Flynn was informed that after his current projects were finished, he also would be out of a job. At the same time, he couldn’t help but notice that in the LEED exam forums he had frequented, people were referring to him as an expert and directing questions his way. He began to think he might capitalize on that.
This company mainly focuses online business and internet marketing products, but there are also other products ranging from health and fitness to travel. One of the great things about DigiResults is that both vendors and affiliates get paid at the point of sale, and not a month or two later like most affiliate marketplaces. I’ve been using their system and so far it’s one of my favorites.

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 am still working on my passive income, however I like multiple income streams even more. My favorite is capital gains because it is one of the lowest rates. One of the best passive income streams is a pension/Social Security. As I near retirement, I like the concept of it supporting my needs and my 401k supporting my wants. In addition, my brokerage accounts are all at capital gains rates. Don’t misunderstand, I am still working on adding more because I like multiple income streams!
We usually think of Craigslist as a place to buy and trade random stuff, but Craigslist can actually be a great opportunity to sell your services online to an active and engaged audience. Simply check the “jobs” section and “gigs” section for specific cities and see if anything matches your skills. The great thing about Craigslist is that it is one of the highest converting traffic sources on the internet (think active buyers) which can mean more opportunities at higher pay. 
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