Around 4K years ago, in a kingdom in ancient Mesopotamia. There was a guy named Arkad
who was poor like he could barely put food on the table. To escape poverty, he worked hard;
however, when he received the payment for his service,
he lived very frugally and lent most of his income to a shield maker,
who then paid interest on the loan. Instead of spending that interest to move to a bigger place,
he kept living frugally, and lent that interest to another shield maker, thus growing his wealth even
more. After repeating this process for years, his wealth grew so big that he did not have
to work again since his money was working for him, so he ended up the richest man in Babylon.
Of course, you cant lend money to a shield maker because that shield maker probably has a credit
card or would rather go to a bank than look for you. But that story illustrates the power of
passive income. Nothing is more powerful than when your money makes more money. It saves your time,
effort and provides you with financial support to pay all of your bills, but very few people
achieve that milestone where their money works for them and not the other way around.
Chasing money is not a bad idea, but chasing money your entire life isn't also a great idea
because you need time for other things in your life. That’s why I try my best to create
as many sources of income as possible. But most importantly, make them as efficient as possible.
The most famous passive income source is rental income. You have a property that's rented out,
and the tenant keeps sending you a check every month. Since real estate is not cheap, that check
could be big enough to pay all of your bills. But what if you don't have the money to buy real
estate? Of course, you don't need hundreds of thousands of dollars to buy a property.
All that you need is enough for the downpayment. The rest will be covered by your tenant.
Even if the property doesn't generate income in the first year or so, it will in the future
once rent prices rise year after year. But real estate isn't the only place
where you can build passive income. In the 21, there are far more tools than most people know,
so in this video, I want to share with you some real passive income ideas that you can
implement right now! And most importantly, you don't need a lot of money to start!
Vending Machines
When we talk about passive income, we never mention vending machines because they don't
sound as exciting as real estate, for example, but if you think about it, it's that kind of an
asset that provides a constant stream of income and requires minimum effort if you automate it.
There were 5 million vending machines in the U.S. in 2015. These 5 million vending machines
produce an average of $20 billion in sales each year. But most vending machines earn
around 5 dollars a week because it's not an easy business like any other business. Even if your
property is placed in a bad neighborhood, it will probably turn into a liability.
But, a well-placed vending machine can earn far more than that, potentially exceeding $100 per
week or even hundreds of dollars per day.
The challenge is to pick the right place and sell the right products. If you place it somewhere
where there aren't many people, it is going to be one of those machines that earn 5 dollars a week.
But if it's in a highly visible location where it will regularly attract buyers,
that's when you can expect a few hundred dollars from it every week. It requires a lot of work in
the beginning but minimum management later. Isn't that the meaning of passive income?
Before getting into this space, I highly recommend everyone to study it further because you have to
understand what kind of products sells the best? What vending machines turn the highest profits?
And what type of locations attract more buyers?
2. At number 2, we have - print on demand business.
10 years ago, this business was impossible. It just became mainstream recently, so it still has a
lot of room to grow. You know, some businesses are so old that it's nearly impossible to get in and
succeed because they are so crowded, but that's not the case with print-on-demand businesses.
The global market for the custom T-shirt printing industry is expected to cross
10 billion USD by 2025.
T-shirts are cheap to source, have universal appeal, and are relatively simple to customize,
but it's a competitive field since there aren't many barriers to entry. If you want
to compete with Tesla, you need tenths of billions of dollars to build electric cars,
but if you want to start selling in-demand t-shirts, you need nothing except a good idea
because there are multiple platforms that take care of everything starting from delivery to
management. Your job is to design and sell.
Whenever I see someone wearing a t-shirt with something cool written on it. I want one as
well. So if you have good taste, you can spend some time designing cool t-shorts on Teespring,
Printful, or any other platform. And run some ads. If you people find your designs desirable,
it will turn into passive income where you can keep selling your shirt with minimal effort.
You can come up with a new design every 3-4 months to sell another t-shirt to your existing clients.
3. REITs or real estate investment trust
REITs are popular among investors who want to invest in real estate but don't want to deal
with management. Of course, renting a property is great, but it requires some management,
so there are firms such as American Tower or Brandywine Realty Trust that invest in
office buildings, for example, in Philadelphia, Washington, D.C., and Austin. REITs are traded
in the stock market like any other company, but usually, they offer a much higher dividend rate.
For example, Brandywine Realty Trust offers a 5.5 percent dividend rate, that's is incredibly high.
But you have to understand that their stock price doesn't increase much. Most of the money you are
going to make is from dividends. There are a lot of different REITs. Some of them invest in
commercial properties, others in residential areas, some just own land across the country,
and so on. The high dividend yield is what makes them a good passive income candidate,
but be carefree with them because if you invest in the wrong REIT, you might lose your investment
at the cost of high dividend, so pay attention to how the Trust has been performing over the years.
4. Rent a room on Airbnb
If you have an extra room in your house that you do not use much, renting it on Airbnb is the way
to go. With Airbnb, you will most likely rent it twice higher than renting it on a long-term basis.
Of course, Airbnb means a lot of management because you need to clean the room,
make sure it has all the necessities before every new guest comes in
but nevertheless, its a great source of income. And since your guest is going to stay in the
next room, your guest won't ruin your room. Some people even take a mortgage
and let Airbnb tenants pay off their mortgage. It's a great way to build wealth over time.
Of course, with covid, it has become much more difficult,
but I have no doubt that things will get back to normal because we humans are social
creatures. We can't just be isolated. We want to travel, we want to see new places,
we want to move around, we have been doing that since the beginning of human existence.
5. Invest in a small business as a silent partner When we talk about starting a business, we usually
mean starting a huge business but there are plenty of small businesses that could be very profitable
such as a corner shop or a barbershop. Of course, running a corner shop is a full-time job,
but it could be turned into a passive income if you join the business as a silent partner.
In business, there is a concept called - silent partner, where you don't deal with the day-to-day
management of the business but rather play more of an advisory role. These types of businesses do
not need huge capital, and their business model is pretty simple. You don't have to be a genius
to find out how to start a profitable corner shop, just take a look at what others have done.
You might go 50/50 with someone else who is going to run the business
on day to day basis and will get a fixed salary for it, but you are going to have a constant
stream of income. , But its important to make sure your numbers work out on paper at least
before starting anything in this field because it is an investment eventually.
I didn't include traditional passive
income sources because we have talked about them in previous videos, but if you think about it,
there are far more options than most people think about at first thought. And now it's your turn to
let me know what's your favorite passive income source. Let me know in the comments below.
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