Beating Broke

Quick and Easy Passive Income Ideas

September 28, 2011 By Shane Ede 13 Comments

Building passive income streams can be hard work. They usually take a significant amount of work and/or money to set up before they can really become a full-fledged passive income stream. It’s part of the argument over whether they really are “passive” or not. Obviously, as with anything, the more work or money you put into your passive income ideas the better the resulting passive income streams will be. But, when you’re first getting started, there are several ways you can set up some small passive income streams that will provide with different forms of passive income.

Here’s a few passive income ideas.

Blogging – As a blogger, myself, this one is one of the first ones I usually suggest. To be sure, it’s not for everyone, but it can set up a rather nice passive income stream. Blogging is work, but a well set up blog, with some content, could eventually be left alone to collect traffic, and Google adsense checks. The initial work is a bit heavier, but the maintenance while setting it up can be as little as a few hours a week.
Cash Back Cards – Some might argue that this isn’t really a passive income stream, but I think that it can be. Using a tax free cash back card to pay for bills/things that you would normally buy anyways makes the cash back an added bonus. The only added work is to immediately pay the balance for the things that you’ve bought, and the cash back becomes an extra stream of income that you earned by buying things you would have anyways. I have a coworker that does this and makes $500-$600 a year.
Peer-to-peer lending – I’ve written before about my portfolio on LendingClub, and how, with very minimal maintenance, I’m slowly building a passive income stream that earns me money. As my portfolio grows, and I reinvest the interest, the interest income from the portfolio grows with it. Eventually, if I keep with it, I could have a compound interest passive income machine, built with less than $20 and 20 minutes a month.

Those are just a few quick and easy passive income ideas to build passive income streams. They don’t require a lot of work to get started and maintain, but they will provide for extra income that you can use to build them further, or to help beat broke.
photo credit: alancleaver_2000

What is Passive Income

September 26, 2011 By Shane Ede 11 Comments

One of the terms that is always circulating the personal finance area is the term “Passive Income”. What is passive income? Why do we keep talking about it? How do we get it?

What is Passive Income

Passive Income is income that you don’t have to actively work to attain. Residual income like royalties on a book, dividends on dividend stocks, and interest earned are all examples of different kinds of passive income. Some would argue that the work you have to put into all of those to write the book, purchase the stocks, or earn the money to make the interest make those less than passive, but in my definition, any income you earn that is new income, even if it is earned off of old income that wasn’t passive, is passive.

Why Passive Income

The reason that we all want passive income is pretty self-explanatory. It’s additional income that you don’t output any work for. You purchase the stocks, and the company just sends you a dividend check every quarter. You write a book, and then the publisher sends you a check based on it’s sales. You deposit your money, and it accrues interest. Beyond that initial setup, you do no work to continue the income stream.

How to Make Passive Income

The how of passive income is usually where people hit the brakes. You see, when people think passive income, they immediately think “easy money”. But, the truth of it is that there is nothing “easy” about it. You do have to put in the work to set it up. Some passive income ideas are easier to set up than others. If you’ve already got the money, you can pretty easily set up a passive income interest stream. Or a dividend stock income stream. But, unless you’ve already written several books, you’ll still have to write the book to set up the royalty stream.

The more passive income streams you have, the less work you have to do to maintain the level of income you have. With some hard work to set them up, you can stop thinking about side income jobs, and thinking about how you’ll spend your “passive” time building more passive income streams. It isn’t easy, but it can be very rewarding once you’ve got the streams all set up and working for you. And, even if you have to do a little bit of minimal maintenance once in a while, you’ll still be earning far more for your time than you would on any non-passive income stream.

photo credit: alancleaver_2000

Sell! Sell! Sell!

September 23, 2011 By Shane Ede 16 Comments

Goodness! Did you see what the markets did yesterday? Down almost 400 points! If you haven’t already, you had better join the rest of the world in getting out while you still can. The era of easy gains in the stock market and guaranteed returns has officially ended, and it isn’t pretty. It’s time to let go of the bull market ideals. Do you know what happens to a bull in a room full of bears? Here. Let me show you.

Seriously. Those bears are going to eat you alive! Sell everything you got now. Take it out in gold, and head for the hills. Don’t forget the canned supplies and vegetable seeds for after the apocalypse that will follow! Quit your job, pack your family up, and head for North Dakota. We’ve got plenty of oil field jobs available. (see: Bakken formation) And with a bunch of liquid black gold running over your fingers, you won’t need to worry about the crashing stock market anyways!

Ok, obviously, this whole post is a little bit tongue-in-cheek, with the exception of the North Dakota part. We really do have plenty of oil field jobs available. Best economy in the U.S.A., in fact. And, even if the post weren’t tongue-in-cheek, and you took it seriously, you really, really, should talk to a financial professional before making any thing resembling a sell everything move. The whole post was all for the enjoyment of myself, MoneyMamba, and others who felt that there would be a whole plethora of posts by our colleagues touting the benefits of dollar cost averaging and long term views on the stock market. They may be right, but sometimes you just have to poke a little fun. 😉

Despite my best efforts, I don’t know everything about finances, stock markets in particular, so please don’t construe this as advice. It isn’t.

photo credit: VirtualErn