Never let a job steal your life, use your salary to invest in passive income so that passive income replaces your salary.
Here are 7 popular ways to create passive income:
Nothing is ever 100% passive upfront, everything requires some effort to set up. Here are 7 passive income streams you can set up:
• REITs
• Real Estate
• Renting Space
• Digital Products
• Dividend Stocks
• Affiliate Marketing
• Covered Call Options
Let's discuss each:
1) Real Estate
Borrow money from a bank to purchase property and have tenants help pay the mortgage
Over 30 years, the property appreciates, the mortgage gets paid off, and it becomes cash-flowing
Outsource the parts of running it to a property manager to make it 100% passive.
2) REITs:
A REIT (Real Estate Investment Trust) allows you to invest in real estate without the need to own property.
This decade, the average annual return on REITs was ~10%.
A REIT is a company that owns & manages real estate (commercial buildings, apartments, hotels, etc).
You can find REITs for every sector, such as real estate in:
• Malls
• Retail
• Storage
• Casinos
• Industrial
• Healthcare
• Cell Towers
• Apartments
• Data Centers
REITs offer a way to invest in real estate without the hassle of being a landlord.
3) Dividend Stocks:
Dividends are payments to investors, who own shares in a company
Companies pay dividends from company profits
If you consistently invest in dividend stocks you can create passive income over time
When you receive dividends, you can reinvest them Highest Dividend-Paying Stocks in the S&P 500:
• 13.2% - Pioneer $PXD
• 8.0% - Altria $MO
• 8.0% - Devon Energy $DVN
• 7.0% - Verizon $VZ
• 6.9% - AT&T $T
• 6.5% - Schlumberger $SLB
• 3.7% - Johnson & Johnson $JNJ
• 3.6% - Procter & Gamble $PG
• 3.5% - $IBM
4) Covered Call Options:
By writing covered calls, you profit from the premium you receive
You write (sell) a covered call option that earns a premium (from the buyer of the option)
This strategy generates income while you participate in long-term price appreciation
5) Digital Products (Courses/ eBooks):
Digital products are a great source of passive income, you have the freedom to create and sell a product from anywhere in the World.
Leverage the worldwide audience of Amazon to put your product in front of millions.
6) Affiliate Marketing:
Affiliate marketing is recommending a product or service and earning a commission when someone uses your referral to buy it.
Promoting products or services through your social media can generate commissions from the sales that you make.
7) Renting Space:
You can rent out storage space with many storage rental platforms like Neighbor, Peerspace, or StoreAtMyHouse.
Different types of spaces can be rented out, such as storage spaces, parking spaces, garages, spare rooms, or outdoor spaces for events.
Use 5-9 to replace your 9-5.
If you can work 8+ hours a day for someone else, you can use your evenings to work on a side-hustle, side business or learn new skills to create passive income.
You work for active income, but passive income works for you.
Invest in assets so that they replace your liabilities over time.
First, your passive income will cover your phone bill,
then it will cover your car payment,
then it will cover your mortgage,
then it will cover your salary.
Active income is temporary but passive income is forever! These threads take time to write, so if you found it helpful, please share.
Credit: Andrew Lokenauth
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