How to Get Rich with Passive Income

The title might be a bit misleading, perhaps I should have written "How to Achieve Financial Independence with Passive Income" but I thought the title was too big and wanted to keep it short.

The rich part is open to debate. For some of you it might be getting $1,000,000 to your bank account while others just want to earn enough to quit the rat race and live comfortably. In short, you want work to live and not live to work.

I want to quit the rat race.

I'm going to give "real life" examples, and by real life I mean offline. There is tons of information available out there that teaches to make money online. This hub won't be about it.

What is passive income?

In a few words, passive income allows you make money, every month, without any active effort on your part. Most people don't bother with passive income because they are too lazy or simply believe you can only earn peanuts.

While only some people manage to earn a full-income with passive income, most people would be happy enough money to cover their monthly expenses: car payment, mortage, water, electricity, gas, food and so on.

But enough of mumbo-jumbo, let's start with some ways to make money.

Property Rental

Arguably, this is the best way to get wealthy at an early point of your life and there are tons of folks out there who don't even need to get a job. Personally, I know a young fellow who never got a job (and probaby never will) because of this bussiness.

Transform one of your unused rooms into a guest bedroom. If you live near a college this is money in the bank My aunt remodeled her son's bedroom and now every week she gets about $250.

Of course, instead of renting a room you could rent out apartements or a comdominium. The bad side of this is that you must constantly make sure everything is working fine. And most people don't want to do more work. Still, I tought it was important to mention that.

Time is Money – Deposits

I honestly don't understand why people don't place a small chunk of their earnings on a savings account. It's downright scary the amount of useless crap we buy during our lifetime. I see some of my friends blowing their salaries on crap they don't need and whine how they got crappy underpaying jobs. *Sigh*

When I started working, I made the habit of opening one of those saving accounts and dropped about $100 every month. Now, that account holds almost $20,000. What am I going to do with all that money? When I retire, I'm gonna blow it on cruises to exotic locations with my significant other. I'm one of those persons who don't fear the future, I embrace it.

Open a savings accounts, automatically move $100 dollars there every month and never touch that account. Let the high interests do all the work. There are all sorts of savings accounts, each with their restrictions in termos of withdrawal and minimum balances.

Of course, you will need a bit of will power and discipline but as most of things on life, it's just a matter of habit. Truth to be told, since the whole thing is automated, at one point I completely forgot I had that account. Just imagine of how much money I'll get in the next 20 or so years.

Another way to earn passive income is by investing in treasury bills (or bonds).

Stock Market

The art of buying low and selling high.

This is something I have yet to try. It's common knowledge the stock market is not for the faint of the hearth, especially now when we're in the middle of a recession. Some financial especialists claim the stock market outperforms the other investiment methods in the long run. I wish I could share some more useful advice about the stock market but at this point I simply don't have enough experience.

Note: I forgot to mention something: if you spend the majority of your time developing your investment portfolio, it ceases to be a passive income and becomes your job, which defeats the purpose of this article. If I start using the stock market, I want to earn just a bit of money with little-to-none effort. I rather own several income streams that net me $xxx every month than a big one. Don't place all your eggs in one basket.

Real Estate

Ok, now this one requires quite a bit of work. Buy a house, fix it, improve it and sell it for a nice profit. The success of this bussiness model depends on many variables: where the house is, how much money you are willing to invest, are there buyers, etc. Personally, I don't have interest in "flipping houses" but I don't know about you.

I'll add some more stuff later on.