Rental properties are defined as passive income with a couple of exceptions. If you’re a real estate professional, any rental income you’re making counts as active income. If you’re “self-renting,” meaning that you own a space and are renting it out to a corporation or partnership where you conduct business, that does not constitute passive income unless that lease had been signed before 1988, in which case you’ve been grandfathered into having that income being defined as passive. According to the IRS’s Passive Activity and At-Risk Rules, “It doesn’t matter whether or not the use is under a lease, a service contract, or some other arrangement.”
Ebooks are one of my favorite sources of passive income. Now, you can do this the simple way and just publish it on Amazon's KDP. Or, you can go all out and build yourself a book funnel. Book funnels are powerful, but they won't be fully passive. For example, if you do a free-plus-shipping offer for your ebook (converting it into a physical book), you'll need to create some one-time offers (i.e. extra training) and up-sells (i.e. an audiobook). But, a book funnel can be very powerful.
how make passive income
Earning passive income is great but it can be tough in the beginning to see how amazing passive income is. Usually your contributions dwarf your passive income at first. This can make it seem like earning passive income isn’t worth while. But if you stick with it then all of a sudden it starts to snowball. After about 3-5 years your passive income will start to equal 1-2 months of regular contributions. This is where things really start to pick up speed!
EQ Bank Savings Plus Account 2.45%*-This is one of the highest rates in Canada. There are no fees, no minimum balance, you get UNLIMITED FREE INTERAC e-TRANSFERS® (my usual bank charges me over $2 each e-transfer!). There is no physical branch, it is all done online. It is a trademark of Equitable Bank, which is a Canadian bank that has over $23 billion assets under management. The maximum balance is $200,000, which is a good problem to have if you have more than that to plunk in a savings account 😉 (they recently increased it from $100,000). Rates are of course subject to change without notice, so better act fast. Here’s my review of EQ Bank, I recently signed up.
Reinvest your earnings. You can grow your portfolio even more by reinvesting your dividends. This means that when you receive a dividend payment, instead of keeping the money, you use it to purchase more shares in the company. Consider doing this every time you receive a dividend until you need to live on the passive returns (perhaps at retirement). Your equity and in turn your dividend payments will continue to build during this time.
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don't forget to subscribe for blog updates and a free dividend yield spreadsheet. Enroll in the 22,000+ word Young Money Bootcamp eCourse. Follow me on Twitter, Instagram, or Pinterest! Thank you for stopping by and hope to see you again soon!
Andrew Fiebert is a thirty-something soon-to-be father of twins, a self-professed data nerd, and has worked as a Data Engineer for Barclays Capital and iHeartRadio. He's spent the past six years growing LMM into a multi-six-figure business with over 500 hours of free personal finance education that reaches over 1 million people every month. Andrew has a B.S. in Computer Science and has been featured in Quartz, Forbes, Business Insider, and The Telegraph.
passive income opportunities
Great job, note the home upsizing works only in appreciating housing markets (I’ve done a similar this in CA but it was 7 years same home to gain almost 500k profit which is around the govt cap for tax-free home profits. What a gift! Thanks booming economy and generous govt taxation on home profits). Those proceeds bought our next house cash and invested the remainder in domestic stock (which has been equally profitable).
passive income generators
Where investing is a wealth-building strategy that has been around forever, the second passive income option on this list is fairly new. Affiliate marketing is an income idea that requires you to have a website or platform you can use to promote other companies, or “affiliates.” When someone uses your affiliate link to purchase a product or sign up for a service, you get paid.
Calculate dividend yield. Dividend yield can help you calculate the return you'll receive from your dividend-earning stock. It is calculated by simply dividing the annual dividend payout per share by the price per share. So, a stock that costs $50 and returns $3 in dividends each year would have a dividend yield of $3/$50, or 6 percent. This would be a great dividend yield, as the average company on the S&P 500 returns 2-3 percent.
Wealthsimple is the largest robo-advisor company in Canada, and it has over $1.9 billion assets under management. It is backed by Power Financial Corporation and was created right here in Canada (Toronto), thanks to the founder and CEO of Wealthsimple, Michael Katchen (who was only 29 years old when he got $37 million in funding from Power Financial to start up Wealthsimple).
Are dividends passive income?
I’ve downloaded it and have had it for just over a year and my payout (by cheque, mailed to my home) has been $46.85. The cheque comes very promptly. I’d say it’s pretty passive. In fact, I actually like going through my grocery receipts to check out if there’s anything I can claim with Checkout 51. I know $46.85 is nothing to write home about but it’s still better than $0!!
passive income at home
How much does a website cost monthly?
I don’t look at Checkout 51 before I go grocery shopping. I just do it after I grocery shop so that I don’t get influenced by their product coupons. A lot of the coupons are for non-produce goods, but for certain things like diapers, it really saves money because I can stack my coupons (e.g. $2.00 print out coupon, and then another $3.00 from Checkout 51 for a total of $5 off the economy box of diapers).
What makes a successful website?
I actually went back to the post and looked closer. Out of the first 13 ways listed, only one requires that you have house. None of the rest require you to have a house or a car. Of course, there are 11 more ideas in addition to those first 13 and some of those do require you to start with an investment. However, there’s nearly always a way to create passive income if you are willing to put in the time and work involved. If you do not find something that works for you in this post, check out our other posts. If you’re constantly on the lookout for ways to create passive income I’m betting you will find a way that works for you. Be diligent and I bet you can do it, even in South Africa. Good luck!
But, it took me a while to get to that point. Where I once worked in my financial planning office on most days, I started by testing things out with a few days per month away from the office at first. From there, I began working remotely 2-3 days per week, then 4-5 days per week, and so on. Eventually, I was able to run my business remotely without ever having to show up for work.