Passive Income

[InterfaceLeader]

Aside from blogging/advertising revenue and affiliate marketing, are there other passive income streams?

I read somewhere that millionaires have seven passive streams of income, and I have two...

I'm assuming that property/rent is one, and revenue from book sales is another, but I'm not in a position to take advantage of those right now.

[Acting Like Godot]

Advertising revenue from your blog would not be considered passive income. Unless you think you can write a couple of articles, and stop updating permanently, and yet readers will visit and visit again over an extended period of time, thereby contributing to your advertising revenue.

[InterfaceLeader]

What if I hire a writer and keep advertising revenue? That's passive.

Or, I write two hundred articles and set them to post automatically? That's passive.

Or, I write for one of the many article revenue share sites such as Helium? That's passive.

Just depends on how you approach it

[John P]

Originally Posted by Acting Like Godot

Advertising revenue from your blog would not be considered passive income. Unless you think you can write a couple of articles, and stop updating permanently, and yet readers will visit and visit again over an extended period of time, thereby contributing to your advertising revenue.

Advertising revenue from a blog is absolutely passive income. When you set up that system, you've decoupled your time from your wages - i.e., your blog will still pay you even when you're not working on it. That's the definition of passive income.

There is no such thing as "passive income" where you never have to do any work at all and people just pay you large sums of money.

[Herbalist]

Real estate. Shares (stocks?) and other paper . Business that you own, but don't work in it. Intellectual property (books, music, patents, video games).

That's 4.

[Herbalist]

Originally Posted by John P

There is no such thing as "passive income" where you never have to do any work at all and people just pay you large sums of money.

I disagree. You can always hire managers to do any work for you.

[prasunsen]

Other passive strings of income:

stocks, mutual funds, managed trading accounts, business

[Herbalist]

Originally Posted by prasunsen

Other passive strings of income:

stocks, mutual funds, managed trading accounts, business

What are managed trading accounts?

[1000feet]

Originally Posted by InterfaceLeader

Aside from blogging/advertising revenue and affiliate marketing, are there other passive income streams?

I read somewhere that millionaires have seven passive streams of income, and I have two...

I'm assuming that property/rent is one, and revenue from book sales is another, but I'm not in a position to take advantage of those right now.

Some millionaries may have seven "streams" of income and some may have seventy - that's something that really depends on the situation and what they did. It's possible to have seven streams of income and not be able to pay rent. I think there's a good chance that if you focused on one thing at a time, you might find that instead of seven streams of $50/month you can actually make that one thing generate real income. Then once that's going on its own you can move on to another or continue building on it to increase the income.

There's a lot of different ways to make passive income, but they usually fall into a few categories:

- Creating content and getting ongoing revenue from it, either by licensing or by publishing it yourself
- Finding some opportunity to make money, buying equipment or hiring people to make it happen without you, and letting it run
- Investing in someone else's business and getting part of their profits

These categories can be applied to almost anything to come up with ideas.

The closest you can really come to "passive" income is setting something up that gives you continuous revenue; to do that it sometimes takes a lot of work up front and you won't even know how much money it will make unless you have a lot of experience already. The easier it is to do, the less money you're likely to make.

[InterfaceLeader]

Originally Posted by 1000feet

Some millionaries may have seven "streams" of income and some may have seventy - that's something that really depends on the situation and what they did. It's possible to have seven streams of income and not be able to pay rent. I think there's a good chance that if you focused on one thing at a time, you might find that instead of seven streams of $50/month you can actually make that one thing generate real income. Then once that's going on its own you can move on to another or continue building on it to increase the income.

Ah, yes, I missed out the key word 'average' there.. as in "millionaires have on average seven streams..."

Anyway, yes, I agree. I'm looking for inspiration. I have dedicated most of my time to my first stream of income, and the second is something I work on-and-off, and am expecting to really shine in about six months to a year...

I'm trying to build up a third, fairly automated stream, though. Ideally something I can work on now, and have start paying off in around 3-4 months. I'm not after much, an extra $50 a month I can drop into savings would be nice actually The only thing is it can't be too time intensive. I have a couple of weekends coming up I can dedicate to it, but after that it will have to survive with minimal input.

Thanks for all the advice everyone. Stocks and shares scare me though :/ I don't really understand how they work.

I think I could invest in a business if I knew the person running it really well... and if it was a small-to-medium business. Hm.

Guess I shall have to go and brainstorm some more :P

[1000feet]

Investing should be one of the last things you look at for a stream of income (of course, when you start to get a bit of money you'll be looking at every opportunity based on the return it can get you). Easy investments lead to slow growth, which can be good over the long term. The few real highly profitable investments are hard to find and difficult to tell apart from the ones that will lose all your money.

Until you have a few hundred thousand at least it's hard to produce a real income just from investing. To get to that point you're better off investing your time and creativity to come up with something that's not being done well enough yet and do it right. There's lots of possibilities there that don't require you to put up a lot of money.

You really need things that are hard to do - they're usually not that bad but even a little difficulty or uncertainty scares of most of the competition

[Jonathan Mead]

You can always outsource all your work. Create a business and hire managers and assistants to do all the work for you. Set up systems to handle all possible events that could occur with instructions or trust that they will handle issues appropriately. Set a limit for the occurance of your intervention, start at $100 and move your way up as you build trust. There's ultimately the cost you're willing to pay for your intervention, your time. I don't think there's a complete removal of yourself from the system, but rather a spectrum of how much involvement you have in trading your time for money. You either trade all of it, a minute fraction, or somewhere in between.

[Acting Like Godot]

Originally Posted by John P

Advertising revenue from a blog is absolutely passive income.

It is not passive income, not any more than running a newspaper is passive income.

When you set up that system, you've decoupled your time from your wages - i.e., your blog will still pay you even when you're not working on it.

Your blog will not pay you if you do not constantly produce new content. For example, if Steve Pavlina quit blogging today, all his readers will eventually go away. His rankings and Internet visibility via Alexa, Technorati, Google etc would slip.

Quite quickly his advertising revenue from blogging would dwindle to zero.

Passive income really means that something like you have a million dollars and place it on a rolling fixed deposit. You earn, say, 2% per annum and so you get $20,000 per year doing nothing.

Another example of passive income is owning an extra property and you rent it out to a tenant. The guy rents it for 5 years and pays you $3,000 per month. That's passive income.

Another example of passive income is that you write a book that continues to sell well over many years, going into reprints etc, getting translated into different languages, selling into different countries. After the initial labour (of writing the book), the book brings in passive income.

Theoretically it may be possible for a blog to achieve the same - eg you write 50 articles and then you quit posting - but a large number of readers still visit for the next 3 years and contribute to your advertising revenue. That would be passive income. However, I haven't seen any blog like that yet.

[Acting Like Godot]

Originally Posted by John P

There is no such thing as "passive income" where you never have to do any work at all and people just pay you large sums of money.

I have an auntie who owns several residential properties and just collects rent. I don't think she's worked in the past 20 years.

She only accepts rental payments via automatic GIRO payment, so even the process of collecting rent is non-work for her.

[beel]

if you can get a forum going in the right niche, it's easy passive income as the users generate the content.

i would venture to say that steve could stop blogging all together and this site would continue generating income for years to come no problem. he would not lose his rankings or traffic, but he would probably not continue to grow.

[michael.shearer]

I totally disagree that Steve's blog would quickly lose revenue if he stopped blogging. I bet that a majority of his advertising earnings are from new visitors who are unfamiliar with his site layout and click on advertisements. Returning readers know the layout and where exactly to find Steve's content, most likely avoiding the ads.

People search the web and find the plethora of topics Steve has written about - he has high rankings for this variety of topics.

This blog is like a book - revenue would continue even if it was no longer being worked on.

[Acting Like Godot]

Originally Posted by michael.shearer

People search the web and find the plethora of topics Steve has written about - he has high rankings for this variety of topics.

You start losing your rankings when you stop updating your website / blog regularly.

The other point I want to make is that an inherent attraction of a popular blog is that, well, there's a living person and unique personality behind it (of course, the blogger has to be an interesting person). Readers keep coming back because they want to know what's happening next in his life.

If you're interested in interesting people, and you find Steve Pavlina an interesting person, BUT he stops blogging, then you might as well start writing the biographies of William Shakespeare, Adolf Hitler, Mahatma Gandhi, Louis Pasteur etc. All are also interesting people, and none produce any more new material about their lives.

[shirleywins]

Network marketing can be a great passive income generator. I have a couple of niche sites that generate income, 10 rental properties and a network marketing business. My network marketing business generates a 4 figure monthly residual/passive income. I do "work" a few hours a week so I don't really know what would happen if I just decided to not do anything ever again but I actually like doing it so I don't see why I would want to just not do it.

[John P]

Originally Posted by Acting Like Godot

It is not passive income, not any more than running a newspaper is passive income.

Your blog will not pay you if you do not constantly produce new content. For example, if Steve Pavlina quit blogging today, all his readers will eventually go away. His rankings and Internet visibility via Alexa, Technorati, Google etc would slip.

Quite quickly his advertising revenue from blogging would dwindle to zero.

Passive income really means that something like you have a million dollars and place it on a rolling fixed deposit. You earn, say, 2% per annum and so you get $20,000 per year doing nothing.

Another example of passive income is owning an extra property and you rent it out to a tenant. The guy rents it for 5 years and pays you $3,000 per month. That's passive income.

Another example of passive income is that you write a book that continues to sell well over many years, going into reprints etc, getting translated into different languages, selling into different countries. After the initial labour (of writing the book), the book brings in passive income.

Theoretically it may be possible for a blog to achieve the same - eg you write 50 articles and then you quit posting - but a large number of readers still visit for the next 3 years and contribute to your advertising revenue. That would be passive income. However, I haven't seen any blog like that yet.

I don't want to hijack the thread here, but I think this discussion is relevant to the topic at hand so I'll respond to this.

Like I said before, setting up a blog and getting advertising revenue from it is absolutely a passive income stream. What you have been suggesting in this thread does not exist - there is no system that can be set up to provide income that will continue indefinitely and never need maintenance. Saying that writing a blog is not passive income (since it requires you to continue to produce content) is incorrect and shows a lack of understanding about passive income. Let's look at some of your examples:

Writing a book - You get paid once when you write it and then get residuals from the sales. The residuals are passive income. However, they will trail off as fewer and fewer people buy your book. Doing some maintenance work (updating your book, rewriting sections, editing it to stay current) will keep the income stream flowing.

Owning rental property - People pay you to live/work in properties that you own. This is passive income. But if you do not perform maintenance work on your properties, you will soon have no tenants and your income stream will die.

Investing - You invest a large sum of money and collect part of the interest to live off of. This is passive income. However, if you do not review your investment strategy, buy and sell as needed, and keep an eye on how your investments are doing, it is very possible to lose everything you have invested.

All of the maintenance work mentioned can of course be done by a manager - editor/ghost writer, property manager, stockbroker, etc. - but the point is that in all of these systems (and in any system you can think of) work still needs to be done to maintain the system.

The definition of passive income is simply income that you receive independent of the time that you spend working on the system. It does not mean that you never have to work on the system ever again. Earned income, in contrast, is completely dependent on the time you spend to earn it. If you work in a typical job and earn wages or a salary, there will never come a point at which maintenance work is sufficient. You can't cut your hours in half and expect to continue to receive full pay.

On the other hand, take Steve's blog. He is at a point where he could perform maintenance work only and keep his income streams flowing. He could easily spend 30 minutes each Monday and write one article each week for the next 20 years and probably never see a significant dip in revenues. That is passive income.

[Buddy]

I agree with the previous poster and the key is outsourcing. Get your blog to be self funding and go onto another stream.

Buddy

[borntosucceed]

Passive income is great, I personally believe in the concept of Multiple Sources of Income. My sources are:

1) Property investment
2) Share investment
3) Having an online business
4) Network Marketing

There are advantages and disadvantages with all of them, one thing I learned you don't get much of an income without putting in some initial effort. With all them the more you work them the higher your income is.

The big advantage I see over a 9-5 job is you become your own boss and have a high degree of flexibility in choosing the hours you work. We just bought a share in a sailing yacht and I have the freedom to go sailing during the week and work on the weekend when a lot of the other owners go.

[eblight]

Great info thanks everyone for your imput.

[Acting Like Godot]

Originally Posted by John P

The definition of passive income is simply income that you receive independent of the time that you spend working on the system.

Well then, we just have different definitions then. In my industry (the banking & financial services industry), we do not generally use your definition of what passive income is.

According to your definition, I must be having a lot of passive income then. All my colleagues and I get paid a constant monthly salary, even though sometimes we work overtime and sometimes we leave at 5:30 pm sharp. The income we earn is independ