the quickest way to start making passive income today is by investing and
contrary to popular belief it doesn't take a ton of money to do it in this
video I'm gonna share with you five ways to invest $1,000 so that you can start
collecting dividends profits and interest in your sleep building a
passive income stream takes one of two things it takes time or it takes money
and frankly the second option is a lot easier than the first and you can get
started with as little as $1,000 what is up everyone I'm rose and welcome back to
my channel the number one place for financial education empowerment and
inspiration today I want to talk to you about passive income passive income is
true freedom it's everybody's dream in fact it's the one thing that
differentiates wealthy people from non wealthy people I first started realizing
the importance of passive income in my mid-20s when I wanted to leave my job at
the time and I thought how great it would be if I could just quit my job but
still collect a paycheck I know as if right that's the thing with income that
you actively have to earn such as a paycheck when you stopped working the
money stops coming in there's just no way around it that's why over the last
few years I've been very passionate about building passive income streams
everything from starting a business to real estate to options trading to
investing and what I'm realizing is that there is no such thing as an easy way to
earn passive income if you ever see an ad where someone's trying to sell you on
some sort of magical program that's gonna teach you how to make ten thousand
dollars of passive income with no money and no effort it's a total scam you know
that's not how life works otherwise everybody would be doing it you either
have to put in your time or you have to put in your money if you put in your
time you could maybe start a business or start a YouTube channel and these are
all things that could turn into huge passive income streams but I guarantee
you'll have to put a ton of time into it the quickest way to start making passive
income today is by investing contrary to popular belief it doesn't
take a ton of money to do it the first way to start making passive income with
$1000 is to invest it in a REIT or a real estate investment trust when you
buy a REIT you become a shareholder of a company that owns income-producing real
estate a REIT is basically a stock but its stock in a company whose business is
specifically owning and operating real estate REITs are legally required to pay
out ninety percent of its income to you in the form of shareholder dividends and
because the value of real estate also tends to go up over time owning a wreath
can give you a nice combination of passive income and long-term capital
appreciation compared to making a down payment and buying a property investing
in a REIT is a much less capital intensive way to own real estate and
there are many REITs out there that you can buy with less
than $1000 for example this PG Simon Property Group is one very well-known
REIT that owns shopping malls and retail property throughout the United States if
you look it up on Google you can see that SPG right now pays a dividend yield
of 5.8 two percent that means that if you buy one thousand dollars worth of
SPG right now you'll get fifty eight dollars and twenty cents deposited to
your account every year in reality dividends are actually paid quarterly
usually so you'll get fifty eight twenty divided over four quarters which is
about fourteen dollars and 55 cents every three months now I know that fifty
eight dollars and twenty cents of passive income a year isn't exactly
life-changing but you have to keep in mind that the vast majority of people
don't make any passive income at all like not even a single cent and I don't
know about you but 58 dollars and 20 cents is a lot better than zero passive
income back when I bought my first stock ever as a teenager I had no idea what I
was doing but getting my first dividend payment was a really powerful experience
I'm pretty sure it was just a couple of cents but still getting your first
dividend payment is a feeling that you never forget once you make passive
income a part of your identity no matter how small that first payment
is you can always increase the amount that you invest and just keep growing
your dividend streams from there that being said there is one passive income
investment I want to tell you about where I made my $1,000 back in just one
month and continued to make passive income off of that so stay tuned for
that story because it's coming up soon okay and the next passive income
investment idea that I have for you is to invest in a municipal bond fund first
of all what is a municipal bond municipal bonds are loans that you make
to local governments in order to help them fund public projects like building
new schools hospitals and highways what's awesome about municipal bonds is
that they're generally quite safe because it's a bond and bonds are known
to be safer than stocks and they are tax-free that means that any interest
payments you receive as a municipal bond investor is gonna be 100% free of
federal taxes and if you're a resident of the state that issues the bond that
you bought it's also gonna be free of state and city taxes if you live in an
expensive city like New York City where federal state and city taxes combined
can go as high as 40 percent total municipal bonds is a pretty sweet deal
to invest in municipal bonds you can buy them individually or you can buy a bunch
of them packaged together as a municipal bond fund
I like the bond fund option better because if you get unlucky and you pick
the wrong bond if you were to go the individual bond route then there's
always a risk that the borrower won't be able to pay you back investing in a
municipal bond fund eliminates this risk because your investment will be
diversified across many different borrowers if you live in NYC one
municipal bond fund that pays a nice yield is the Blackrock New York
municipal ops fund or ma MKX at the moment this fund yields 1.7 3%
that doesn't sound like a lot but this is 1.73 percent of tax-free income that
means that if your total tax rate is 40 percent you would need to find
investments that yield at least 2.8 to get the same after-tax income as this
new york city municipal bond fund so if you're looking for a super safe way to
make passive income with $1000 investing in municipal bond funds can put up to 17
dollars and 30 cents of tax-free income in your pocket every year or at least
that's the case with this bond fund the third way to start investing for passive
income with $1000 is to buy dividend stocks this is gonna probably yield a
little more passive income than the previous municipal bond fund option but
of course buying dividend stocks come with their pros and cons one example of
a dividend stock right now is gracie's which at the moment pays a dividend
yield of nine point nine five percent that's almost 10 percent pretty high
that means that with $1,000 worth of Macy's stock you can collect almost $100
in dividends just for owning that stock of course the catch is that there's
always investment risk with dividend stocks
unlike bonds where you're collecting interest and then you're essentially
contractually guaranteed the return of your principal back with dividend stocks
you'll get those dividends but if the company goes bankrupt or just you know
goes under you're not gonna get your original investment back so there's a
lot of companies out there that pay quarterly dividends so on the outside
they give the appearance of being financially stable but if you dig a
little deeper into their books you may find that the company is actually
struggling sometimes companies like these would be better off not paying
dividends at all and instead reinvesting it back into the business
I looked into Macy's a little bit to see what's going on there and just with a
quick glance I can tell that even though they're paying a high dividend at a
almost ten percent dividend yield I can tell that this company is in trouble
over the last few years you can see that Macy's revenue has been declining
steadily so it's a downward trend and normally that's not a problem in and of
itself because the company can always also reduce its expenses so
declining revenue is accompanied with declining expenses then the company
essentially remains in the same position as before profit wise but what we can
see here is that Macy's operating margin in other words its profit margin has
also been steadily declining what this tells me is that Macy's revenue is going
down but its expenses are not going down they're staying constant and after doing
a little digging I realized that Macy's is locked into a lot of long-term leases
at those major shopping mall locations so they're basically locked into high
fixed costs even though their sales are falling it doesn't take a genius to
realize that that is gonna be a problem so that just goes to show Macy's is an
example of a high dividend stock that isn't necessarily a good idea to invest
in because if the company is in trouble you'll get the dividends but again you
might not get your principle back so while I love dividend stocks I don't
recommend buying stocks just to get its dividend you should always do your own
research on the company to make sure that it has good financials and then
it's actually a good stock to own for example Apple is a company that pays a
really good dividend and it's quarterly and according to Warren Buffett because
it's the top holding in his portfolio seems like a good stock to own so if
you're going to dividend stock route you always want to buy quality stocks that
also pay a good dividend of course looking for good stocks can be a lot of
work and that is why this next passive income investment idea that I have for
you might be a more attractive option my next idea for you is to invest in index
funds the whole point of an index fund is to not have to do any of that work of
researching individual companies like we were talking about with Macy's and you
don't have to look at financial statements if you're a beginner at
investing owning index funds is a safer way to collect dividends then owning
individual stocks I've been investing in index funds for a couple years now
and there is nothing that I love more than seeing those dividend payments roll
in and what's cool about this is that I set it up so that my dividends get
reinvested automatically rather than spending my dividends even though it is
passive income I keep it all in my brokerage account and then I just used
those dividends to buy more shares of the index funds this means that every
month my dividend payments get bigger and bigger even though I'm not putting
any additional money in because I'm accumulating more and more shares of my
investments through dividend reinvestment right now an S&P 500 index
fund yields about 1.7 6% in dividends that means that on a $1000 investment
you'll make $17.60 per year in passive income again that isn't a life-changing
amount of money but it's still $17.60 that you didn't lift a finger to earn
it's money that gets deposited to your account even if you sleep until noon
every day and also you have to remember that when you invest in a good stock
market index fund you'll also get a long-term capital appreciation long-term
growth is the number one reason I invest in index funds and to me the passive
income in other words the dividends is really just the cherry on top okay and
last but not least the fifth $1,000 passive income investment idea I have
for you is to Airbnb your bedroom or your apartment this is the $1,000
investment that I mentioned earlier where I made back my $1,000 in just one
month back when I was living in New York City I was living in a really nice big
two-bedroom apartment with a roommate and we had a huge living room that
neither of us ever used so what we did was we hired a company to put up a
temporary wall to turn that living room into an extra bedroom the wall costs 980
dollars to install we got some free used furniture from a friend so with less
than a $1,000 investment we had this cute little room up and running to
advertise on Airbnb we had a good location in Brooklyn so we started
getting bookings immediately and then we made back the $1,000 in the
first month and over the course of the next two years we made over $20,000 from
that Airbnb now running an Airbnb isn't an entirely passive but once I got the
system down it only took about an hour or so of my time per week that's about
as passive as it gets I had a bunch of standard host responses that I would
just copy and paste when guests messaged me with questions and since we were
already living in the apartment and the Airbnb was just an extra bedroom
whenever we did cleaning and laundry for the Airbnb it was really just a part of
our regular household chores stuff that we would do anyway running an air B&B
out of your house is actually a really low cost easy way to become a landlord
and then you start making that passive rental income okay so that's it for my
five passive income investment ideas that you can start with one thousand
dollars or less let me know in the comments which of these you're gonna try
or if you have any other ideas I'd love to hear them as well please like this
video if you liked it and hit that subscribe button because I post new
videos here every Wednesday thank you so much for watching and I'll see you next
week same time same place remember to invest early and often and
to boldly and courageously go after the life that you want I'll talk to you
again soon