Comments on: Passive Income Idea With A Spin

By: DvDad

DvDad — Tue, 13 Oct 2009 21:36:52 +0000

I love passive income. Especially income that qualifies for the 15% maximum tax rate on capital gains. Earned income can be taxed at a much higher rate (currently I think it can be as high as 36%). Passive income happens whether you are sitting on the beach, sleeping, or doing nothing. It doesn’t retire or get fired (although it can get clobbered in the market).

By: Squeaky

Squeaky — Mon, 17 Aug 2009 19:14:27 +0000

Other things that could create passive or residual income after the first initial investment of time or assets…

- Intellectual property that has been published (a novel, a song, anything that pays a royalty if someone else uses it)
- Patents that have been licensed
- Investment real estate (or an unused room in your house)
- Leasable land (probably a type of investment real estate)
- Dividend-producing stock

Anything capable of producing significant income requires a lot of up-front effort to either get the content to market in a profitable way, or to accumulate the assets needed to purchase the income producing investment. It’s probably reasonable to say that the bigger the payoff, the more up-front effort is required. One to three years of solid effort looks like a minimum.

I notice that the up-front effort is going to be unpaid. Nobody gets paid to write a textbook, compose a song and then successfully market it, write a patent application and push it through the system, etc. There are costs associated with a lot of those activities in the form of filing fees or agent fees, and then there’s an opportunity cost. With IP the passive income doesn’t start right away. A person who needs an immediate return on labor would have to pursue non-passive income such as a side job.

I’ve heard some financial gurus such as Robert Kiyosaki talk about generating passive income as though it’s somehow easy to do. In reality it’s a lot of work. If it were easy, odds are everyone would have done it already.

By: Craig

Craig — Mon, 17 Aug 2009 19:01:30 +0000

I like your approach and believe blogging is more active than passive but it is difficult to grow and make money although you are doing a great job at it. The passive is difficult, maybe renting a house would be great or creating something to sell.

By: Sherin

Sherin — Mon, 17 Aug 2009 17:17:32 +0000

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By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Mon, 17 Aug 2009 16:58:17 +0000

The multiple income streams concept is a good idea even putting aside the notion of building for future wealth (of course, all the better if you can accomplish this).

There isn’t sufficient predictability these days in a full time job, side hustle or investment portfolio. But putting the three together creates a much stronger whole, and a much more reliable future.

If you have a solid side hustle plus a passive income, you’d probably spend a lot less time worrying over losing your full time job. Not to mention that salary on the full time replacement wouldn’t be so critical.

By: Saving Savy Pinkey

Saving Savy Pinkey — Mon, 17 Aug 2009 16:37:13 +0000

I completely agree with you. Along with my day time job, I eventually teach some students at an institute since I am a technical person on weekends.
I am still looking for some regular part time income. Whatever I get extra income, I keep investing it in some fixed deposits and mutual funds. But now it is in very less number. Can you suggest me some other ways?

By: DDFD at Defensive-Entrepreneurship.com

DDFD at Defensive-Entrepreneurship.com — Mon, 17 Aug 2009 16:13:55 +0000

Great post! I too am a big fan of multiple income streams.

I have been the victim of a layoff despite meeting and exceeding annual goals and objectives. My side gigs have saved me a few times.

Everyone should develop side gigs– before they need them. My site is dedicated to developing side businesses.

By: mary ann

mary ann — Mon, 17 Aug 2009 13:36:06 +0000

for 24 years we ran a retail balloon/floral store in a strip center that has 21 units each indivually owned (a condo type thing)-working 60 hrs a week during slow periods-usually more. over the years we purchased 10 of these units(7 are free and clear now), which allowed us to walk away when I was 55, and DH was 58. commercial rentals are alot less trouble -no unclogging toilets in the wee hours!
also, i have two side hustles i do not recall mentioned on PF blogs; my friend and i deliver flowers for a local florist during holidays-valentines, easter, mothers day etc. we go together because we have fun, but would make more $ by ourselves. this is good for a team, one can drive, one jump out and deliver-parent/teen, hushand/wife. often local florists need extra help during these rushes.
my other side hustle- i landed a very part-time job as a merchandiser for hallmark cards in several groceries stores. the good thing about this is a merchandiser works their own schedule,
many also hold a fulltime job, or moms can be home when the kids are.

By: Peter

Peter — Mon, 17 Aug 2009 13:11:20 +0000

I was fortunate enough to buy a four unit rental property as my first home four years ago (live in one, rent out the other three). Rents nearly cover all my monthly expenses.

My advice is to not be afraid. Whenever this subject comes I always hear about the ‘what ifs’. Educate yourself and do it. It can be a lot of work but the benefits are huge.

By: Mrs. White

Mrs. White — Mon, 17 Aug 2009 11:43:28 +0000

In our home, we always have several things going on. It is good to be productive and creative in a variety of ways.