Thoughts - Best And Worst Passive Income Ideas?

Question

Passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work, these income streams start to build and are able to maintain themselves, bringing you consistent revenue without much effort on your part. ⁣

For example, if you are a writer interested in writing stories and newsletters, one of the best things about that is that, even when you’re at the gym, working, or sleeping, your writing can still be hard at work, raking in some extra income. The trick is knowing how to play the publishing game. To make a passive income as a writer, you’ll need to plan, have confidence, and have knowledge of your field. Then catch some sleep while your writing catches up!

Here are some passive income ideas for writers:

Create your own journal - You can create, upload, sell, package, and ship a customer-made journal on Blurb for nothing except a royalty on journals sold. They do all the work you collect the check.

Write fantasy short stories - Using Wattpad you can connect with 80 million readers and find ways to monetize your short stories.

Do a course - Udemy or Coursera allows you to easily do your own course and are the most used.

Newsletters - Essentially you create a newsletter on a niche you are curious about and put it behind a firewall. Subscribe to the Dispatch and a slew of other pay-walled newsletters that are all on Substack.

What are your best and worst Passive income ideas?

Alex Breshears · Answer

I'm going to tell you my favorite passive income idea is private lending. I get to work with active investors to help them fund deals, I don't get phone calls at 2am to fix thing, I don't have to pick out paint or carpet colors, it's just easy. There is some upfront work you have to do to vet the deal and the property, but in general, it can become very set it and forget it. My personal mantra is that I invest passively so I can live actively, and private lending allows me to do that!

Scott E. · Answer

A lot of the ideas that as thrown around as "passive" income ideas are not truly passive.

I started a YouTube channel a few years ago, for example. I publish 2 videos per week, and my channel earns me an average of $2,000 per month right now in ad revenue. If I stopped posting today, I would continue to earn income for the foreseeable future (possibly forever) but it would slowly taper off and get lower and lower every month as my videos get older and less relevant. The same thing generally holds true for journals, blogs, podcasts, amazon FBA, Shopify stores, etc.

In real estate, a rental property with a property manager is pretty passive. But still will require a little effort every month. A NNN commercial deal will get you even 1 step closer to true passive income, but even that will require a little effort every month.

Huy N. · Answer

I think anyone that is real estate would agree with me that nothing is passive in real estate - it's just a lot of work does not matter what niche you are in but the reward is there. I think the only trule passive income right now in 2024 is either 1. interest income from bank at the moment since they are paying 5%. dividend income from good stock, or good syndication deal that you are able to buy into,

Chris Seveney · Answer

Most used passive income spot is the stock market. It really depends on what you prefer, some prefer crypto currency (not me), I prefer private lending / mortgage notes and structured it in a way where there is no ordinary income taxation on it, so it is treated as a qualified dividends.

You can invest in anything / any type of business, it really is based on what YOU want to invest in. No right or wrong answer.

Sara Jones · Answer

Fractional ownership is a growing trend in passive income, especially in places like the UAE. It allows investors to buy shares of high-value assets like real estate or luxury items without full ownership.

Advantages of fractional ownership:

• Diversification: Spread your risk by owning fractions of various assets.
• Accessibility: High-value assets become accessible to more investors.
• Passive Income: Earn without actively managing the asset.
• Professional Management: Management companies handle maintenance and administration.
• Appreciation Potential: Assets can increase in value over time.

Natalie Bender · Answer

DSTs (Delaware Statutory Trusts) are as close to passive real estate investing as you can get while still holding real estate and claiming the same tax benefits.

DSTs function as investment vehicles that hold ownership of income-generating properties, granting investors fractional ownership in various types of commercial real estate such as apartments, self-storage facilities, build-for-rent properties, and NNN (triple net lease) properties. Opting for a DST allows investors to spread their investments across multiple high-quality properties, benefiting from the advantages of a 1031 exchange to defer capital gains tax. Additionally, this structure eliminates the need for active management, as the real estate assets within the DST are managed by the sponsoring entity.

As an investor your level of activity would include collecting monthly distributions, receive quarterly reports on investment, file taxes annually and exchange DST year 7-10 years (sometimes shorter depending on the market). DSTs are considered real estate securities and are offered to accredited investors only.

Due to the passive nature DSTs are not meant for every investor and it is important to seek education to see if a DST is best suitable for you.

Lane Kawaoka · Answer

Private lending is passive but in terms of taxes "ordinary income" and you cannot cancel out with passive losses that you get when you are an equity holder of real estate.

Scott E. · Answer

Thanks! All real estate content. Mainly real estate related current events happening all around the world. I don't think I'm allowed to link it here but you can find it in my biggerpockets profile.

Maranda Tucker · Answer

You make a great point. Nothing is truly passive! What is your youtube channel about??

Colton Hahn · Answer

Could look into syndications, there are ways to invest and get income or build appreciation entirely passive. That is an option to consider if your goal is to be entirely passive :)

Thoughts - Best And Worst Passive Income Ideas?

Thoughts - Best And Worst Passive Income Ideas?

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