How to invest $1500 to generate passive income?

[theonlyguy]

I've saved up $1500 and want to generate some passive income.

I unfortunately don't have much time outside my current work schedule to develop it myself. As of now, I'm thinking of getting a ghostwriter to write some articles, a webmaster to create a basic website, and a Virtual Assistant to do some marketing of the site in order to promote affiliate programs. Over time I'm willing to invest more. Has anyone here done something like this before?

That's just one idea--I'm open to anything. Ideas? How would you get started with $1500 to create passive income?

[Lucas]

I think the best way would be for you to develop a product and then use a website to sell that product. Not using any of your own time may make the inital investment cost more than $1500, however.

What do you do for a living right now?

[Frans]

With only $1500 to invest, I suggest to participate in an investment fund.

Originally Posted by Lucas

I think the best way would be for you to develop a product and then use a website to sell that product.

The beauty of investing is that you don't need to worry about developing or selling products: by investing in a company you let your money work for you.
You pay other people to do the developing and the selling and when things turn out right, you harvest the fruits of their labor.
By becoming an investor in Microsoft, even Bill G. works for you.

[Ilya]

$1500 is an awkward sum of money.
It is way too small to start business using someone's time. At the same time it is excessive if you spend your time but use the free tools (for example to start an internet business). You'll need about $10 for domain and nothing else. $100 will allow you to splurge on hosting, maybe a professional logo. After that, the costs will skyrocket and quickly eat up your savings with no money back guarantee.

If you know that you are going to start a business soon, you may want to keep your money close in case your business thrives and will be able to give you a return on investment on that money. For example, if you sell something, you might need the money for buying advertisement. But only after you make some sales for free.

Your decision to start a business should not depend on the availability of $1500. Also if it is going to be your first business, I wouldn't expect you to need the money for the first 6 months or so.

With all that in mind, I'd suggest the following options
1. Invest the money into education. Identify some area of your life where you feel you need to know something or to gain more skills in order to move forward. Try to go to a seminar, rather than to an internet-based education, or e-book. Unfortunately, most of the current paid internet resources provide very low value for money in terms of skill building. The information however you can find for free.
2. I had a financial advice here, but edited it out. instead read point 3.
3. Don't trust anyone online to give you financial advice and go find a good financial adviser with all the credentials and licenses that he must have in order to practice in your country. I'm not such an adviser. It may very well be the case that you will be better off paying off part of your debt or keeping the money as an emergency fund. Any sound financial advice can only be given after the careful professional analysis of your current situation.

In any case, saving $1500 is a great achievement in the modern consumerist world. Congratulation. Keep doing whatever you did to save the money, invest wisely and very soon you will be financially free. Good luck, theonlyguy!

[Lucas]

Originally Posted by Frans

With only $1500 to invest, I suggest to participate in an investment fund.



The beauty of investing is that you don't need to worry about developing or selling products: by investing in a company you let your money work for you.
You pay other people to do the developing and the selling and when things turn out right, you harvest the fruits of their labor.
By becoming an investor in Microsoft, even Bill G. works for you.

I can agree with that. What kind of investing would you suggest that he do with that money? How long do you think it would take in those places to liberate him of his time based job? Do you think an investment fund is enough leverage to do this?

[Frans]

Originally Posted by Lucas

What kind of investing would you suggest that he do with that money?

I realize that in some places $1500 is a lot of money, but if you want to invest that money yourself, you must be very competent (or lucky) to pick the right investment opportunity.

If you participate in an investment fund, the risks are spread over many investments.
You can choose to invest in companies in a certain geographic region, you can pick a preferred theme (for example, start-ups in the ecological branch) and you can even define the level of risk you want to take.
With an investment fund, you can even invest in third-world companies.
I don't know how you can do this without an investment fund.

Originally Posted by Lucas

How long do you think it would take in those places to liberate him of his time based job? Do you think an investment fund is enough leverage to do this?

With an investment of $1500 you won't be "liberated of a time based job", but that wasn't the question of the starter of this thread.
I can only speak for myself, but it is my experience that if you have $1500, you can better put it in an investment fund than to put it to your bank account (or to start a new business).

[Lucas]

Originally Posted by Frans

I realize that in some places $1500 is a lot of money, but if you want to invest that money yourself, you must be very competent (or lucky) to pick the right investment opportunity.

If you participate in an investment fund, the risks are spread over many investments.
You can choose to invest in companies in a certain geographic region, you can pick a preferred theme (for example, start-ups in the ecological branch) and you can even define the level of risk you want to take.
With an investment fund, you can even invest in third-world companies.
I don't know how you can do this without an investment fund.

What kind of returns do you get in investment funds? What if someone is not comfortable turning their money over to someone else to make money for them? I know I am not, haha. If I put my money into a fund that doesn't work, or loses money, I would not feel as responsible as if I started a new business. That's me though!

With an investment of $1500 you won't be "liberated of a time based job", but that wasn't the question of the starter of this thread.
I can only speak for myself, but it is my experience that if you have $1500, you can better put it in an investment fund than to put it to your bank account (or to start a new business).

You are right, I guess I imposed my values upon the thread. I personally see that as the number one reason for creating passive income. How many businesses have you started? What did they cost and how long did it take for them to become profitable?

[Ninja]

How about using the internet? Let's say you are a good digital artist and you already own programs like Painer and Photoshop, or feel comfortable using less 'bulked up' programs (like OpenCanvas) or freeware that will only charge you a small fee when used for business purposes. You could invest about $100 in a program, and a few bucks (let's say 50... and that's overdoing it just to be sure) for hosting.

Startup expenses: 150 dollars, plus 50 for unforseen fees and to make a nice round number 'cuz I'm lazy like that. ammounts to 200 dollars.

Everything after is free, since the internet isn't going to charge you for painting a picture and selling that.

Once you have enough images you think you can sell, you'll still have 1300 dollars to spend on a service that makes products of your art (posters, mugs, magnets, T-shirts, cards...), buy advertising space on Google or other sites, repairs to your computer...

Same goes for writing books: think you got what it takes to be an author? Spend a few bucks on some good how-to books and lessons (if you even need those), write a book and try to sell it! An agent will ask for a commision, but only if the book is indeed sold and they then take a share of the profit (never EVER pay an agent! I can't stress this enough! If an agent wants you to pay fees, it's a scam!). Your total expenses? Educational material (optional), a computer (which you probably already have, unless you're posting from a library), and wordprocessing software (which can also be found for free!).

You don't need a big wad of cash to start making passive income

[ixmatus]

$1500 isn't nearly enough for a professionally done eCommerce website. I would charge +/- $1500 just for the design, not including the programming.

Other people are cheaper though, I suppose, but my opinion on the matter is that you should direct the money towards investment.

[Ninja]

Originally Posted by ixmatus

$1500 isn't nearly enough for a professionally done eCommerce website. I would charge +/- $1500 just for the design, not including the programming.

Other people are cheaper though, I suppose, but my opinion on the matter is that you should direct the money towards investment.

Or maybe he could do both? Invest the money first to make more money and then use that to finance a professionally done website?

[ixmatus]

@ninja:

I figured that was kind of implied anyway.

[Ninja]

Originally Posted by ixmatus

@ninja:

I figured that was kind of implied anyway.

There's implying and there's painting yourself purple and smacking the person in the face. The latter is much more fun

[webwhiting]

Hello,

I would look for books on how to start a business on a shoe string or low cost ways to start your business. There is a wealth of free information out here and also amongst these post if you take the time to research. Being too busy to start your business is not a good thing you will need time. There are passive income sites and you can find them through a google search. You will also want to check out StumbleUpon » Welcome to StumbleUpon

Infodocktor

[webwhiting]

Hello,

I would look for books on how to start a business on a shoe string or low cost ways to start your business. There is a wealth of free information out here and also amongst these post if you take the time to research. Being too busy to start your business is not a good thing you will need time. There are passive income sites and you can find them through a google search. You will also want to check out StumbleUpon » Welcome to StumbleUpon

Infodocktor

[theonlyguy]

Thanks for all these amazingly thoughtful replies. I just got the chance to read through them all. I obviously don't have the time to effectively run a business, and I realize that now. I'll likely invest it in something safe and relatively liquid, continue saving as much as possible, and plan a course of action for next year when my current work projects end. At that point I'll have more time to build passive income. Thanks again to everyone here!

I don't mean this to be a thread killer by the way. Please keep discussing if you have more ideas, I'm always interested in hearing what people have to say on this topic.

[Lucas]

Originally Posted by theonlyguy

Thanks for all these amazingly thoughtful replies. I just got the chance to read through them all. I obviously don't have the time to effectively run a business, and I realize that now. I'll likely invest it in something safe and relatively liquid, continue saving as much as possible, and plan a course of action for next year when my current work projects end. At that point I'll have more time to build passive income. Thanks again to everyone here!

I don't mean this to be a thread killer by the way. Please keep discussing if you have more ideas, I'm always interested in hearing what people have to say on this topic.

I find that if you want something like starting a part time business on the side, or even developing an idea that you can monetize, that you have to make time for it, or else you will never get around to it as you wait for there to be free time.

It's work projects now, but then next year it will be something else. Not only that, but all that time you were "waiting", you could have been building!

[Ninja]

How about investing in an index tracker? You'll have a diversified portfolio without having to buy different stocks manually and wasting transaction costs, but without the high "management fees" of a mutual funds.

[joelyle]

I believe that is best invest to be made. The rewards are exponential.

[Ninja]

Originally Posted by joelyle

I believe that is best invest to be made. The rewards are exponential.

Any reccomendations for which tracker to pick? I'm saving up for doing some investing myself (that is, I want to save enough money so I can invest without having to make a profit of 40% just to cover transaction fees...). I live in the Netherlands, so I should probably not invest the brunt of my future fortune in an American or other non-European tracker, due to currency difference and all that jazz. I'm a bit wary of the dollar and I don't like the looks of the Japanese yen either. But I don't want to throw everything in one Dutch/European tracker because Murphy's Law dictates that the minute I place that order, non-European economies will suddenly go through the roof. A little diversity would be nice

P.S. Sorry for hijacking the thread there for a moment

[ixmatus]

There's quite a bit of gloom and doom regarding the [US] dollar, people saying it is going to 'stay down' this time.

I personally think it is all hog wash and feel that within the next two years if the US Citizenship has bounced out of their political apathy and elected a president worthy of leading the USA, the economy will stabilize.

[plug]
Ron Paul
[/plug]

If that is the case, a diverse portfolio wouldn't hurt; allowing you to make a little money or lose a little money without it being a drastic effect upon the whole.

How much diversification is enough? Many financial planners recommend no more than 10 percent in a single holding. Portfolio managers often may limit a single holding in a portfolio to 5 percent and trim appropriately when necessary.

@ninja:

Painting your face purple? What about blue, like Braveheart?

[Ninja]

I personally think the dollar is on its last legs. It's a basic rule of money: of you keep spending more than you earn, you'll eventually run into trouble. Once other countries get tired of financing America's ballooning debt, the dollar is going to crash. It's a matter of time.

[Spiritual]

I think the only thing that currently keeps the USA standing is the big support group and the nationalistic nature of most inhabitants.

I would really like to see other countries pulling their support away from The USA and see what happens. American government is to busy telling others how to lead a succesful country, while being completely ignorant and hypocritical about own internal issues.

[mlbr23]

I'm for the internet business idea.

Investing takes some know-how too and you either get someone to do it for you (and she might take part of your capital as her commission) or you have to do the research yourself (with no guarantee that your investment will see returns let alone passive income).

The best and simplest way forward is to build an opt-in email list of leads.

Pick something you're passionate about, a hobby in which people are crazy enough to fork out their hard-earned money for.

If you can't think of any passion that you have which could potentially make you money, just pick anything that is relatively easy to 'pick up' and not something that you'd hate. Ideally, something that requires minimal technical know-how.

Invest in an email marketing system like GetResponse. It's less than $20 per month. You don't need a website. A BlogSpot blog would suffice.

Find some products related to your chosen niche and join affiliate programs that pay you per lead or per sale of said products.

A good place to find cheap infoproducts based on lucrative niches that pay you 100% affiliate commissions (anywhere between $7 to $9 per sale - because of the low price, sales conversion rates are high) would be 7DollarOffers.com. Another popular destination is ClickBank.com.

If your niche happens to have products or services that pay you monthly commissions because of the monthly fees they charge customers, that'd be great too.

What you are going to do is affiliate marketing on autopilot until you can get passive income.

Your available tools will be the opt-in email list of leads you're going to build with your email marketing software service and your free blogspot blog.

Pay a tech-savvy kid in your neighbourhood to install an opt-in form on your blog and have it set up.

What are you going to put on your blog? Articles reviewing products in your chosen niche. Of course, these products must be those that pay you commissions if your recommendations yield a sale.

Don't worry. You don't have to write the articles yourself if you don't want to. Unless you are truly passionate about the niche you've chosen and writing about it gives you pleasure, of course.

What you want is to write enough articles on your blog until it achieves critical mass that it attracts natural search engine traffic.

If you don't want to write, you can get ghostwriters. I don't recommend elance.com or guru.com. Go to forums such as DigitalPoint or the WarriorForum and ask around for good writers.

Invest about $400 out of your $1,500 on a lifetime membership to ArticleMarketer.com. What you want to do is submit all your articles to their article distribution service to maximise search engine traffic to your blog (and to your opt-in list).

Oh yes, your automated email marketing series should include emails pointing your subscribers to the latest articles on your blog as well as your heartfelt recommendations for good products in your niche.

The advantage of this strategy is that you're making money doing something you love, without even doing all the hard work. You're using your money to leverage on the skills, time and effort of others.

For the first few weeks or months any income you'll earn will be active, not really passive. But if you stick it out, you'll come to the point where you'll only need to work 1 day in a week (to send out a product promotion by email) and your income for the next few months will be covered.

[theonlyguy]

Sounds like you've thought this strategy through and done it yourself. What have YOUR results been thus far?

Originally Posted by mlbr23

I'm for the internet business idea.

Investing takes some know-how too and you either get someone to do it for you (and she might take part of your capital as her commission) or you have to do the research yourself (with no guarantee that your investment will see returns let alone passive income).

The best and simplest way forward is to build an opt-in email list of leads.

Pick something you're passionate about, a hobby in which people are crazy enough to fork out their hard-earned money for.

If you can't think of any passion that you have which could potentially make you money, just pick anything that is relatively easy to 'pick up' and not something that you'd hate. Ideally, something that requires minimal technical know-how.

Invest in an email marketing system like GetResponse. It's less than $20 per month. You don't need a website. A BlogSpot blog would suffice.

Find some products related to your chosen niche and join affiliate programs that pay you per lead or per sale of said products.

A good place to find cheap infoproducts based on lucrative niches that pay you 100% affiliate commissions (anywhere between $7 to $9 per sale - because of the low price, sales conversion rates are high) would be 7DollarOffers.com. Another popular destination is ClickBank.com.

If your niche happens to have products or services that pay you monthly commissions because of the monthly fees they charge customers, that'd be great too.

What you are going to do is affiliate marketing on autopilot until you can get passive income.

Your available tools will be the opt-in email list of leads you're going to build with your email marketing software service and your free blogspot blog.

Pay a tech-savvy kid in your neighbourhood to install an opt-in form on your blog and have it set up.

What are you going to put on your blog? Articles reviewing products in your chosen niche. Of course, these products must be those that pay you commissions if your recommendations yield a sale.

Don't worry. You don't have to write the articles yourself if you don't want to. Unless you are truly passionate about the niche you've chosen and writing about it gives you pleasure, of course.

What you want is to write enough articles on your blog until it achieves critical mass that it attracts natural search engine traffic.

If you don't want to write, you can get ghostwriters. I don't recommend elance.com or guru.com. Go to forums such as DigitalPoint or the WarriorForum and ask around for good writers.

Invest about $400 out of your $1,500 on a lifetime membership to ArticleMarketer.com. What you want to do is submit all your articles to their article distribution service to maximise search engine traffic to your blog (and to your opt-in list).

Oh yes, your automated email marketing series should include emails pointing your subscribers to the latest articles on your blog as well as your heartfelt recommendations for good products in your niche.

The advantage of this strategy is that you're making money doing something you love, without even doing all the hard work. You're using your money to leverage on the skills, time and effort of others.

For the first few weeks or months any income you'll earn will be active, not really passive. But if you stick it out, you'll come to the point where you'll only need to work 1 day in a week (to send out a product promotion by email) and your income for the next few months will be covered.

[Groundless]

If you are going the mutual fund route you choices should be:

1. No-load mutual fund.
2. Relatively low risk
3. Possibly an index fund
4. If not an index here are samples of good choices right now:

• CGM Mutual (LOMMX)
• Matthews Asn Gr & In (MACSX)
• Fidelity Intl Disc (FIGRX)
• AmCentury Ulilities(BULIX)
• Janus Balanced(JABAX)
• PIMCO All Asset D (PASDX)

Or, invest in your education.

[hkalchemy]

Buy stock in a solid company with a proven history of making money and a clear competitive advantage. A safe and rising dividend is a good idea, too. I recommend certain bank stocks right now since they are very undervalued at present (though I won't name names - finding out is the fun bit!). Keep reinvesting the dividends and leave it. After 25 years at 12% you'll have $25,000. If you add another $500 a year for 25 years, you'll have $100,000. After 35 years you'll have $321,000.

Building wealth slowly and surely is best - don't blow your money on some hair brained scheme.

[feiyie]

There are some programs that need only a couple of hundred dollars to get started.. Could be a membership, an upgrade or something. With the remaining amount, you can buy some advertising for your business.