There are so many books and seminars out there about passive income, but many of them are not very specific and address broad ideas and concepts more to get you excited about passive income, than tell you exactly how to do it. You’ll learn the most by networking, getting out there, and taking action.
One of the most profitable ways to create passive income is real estate investment. There are many ways to purchase property with no money out of pocket. The great thing about this form of investing is that it’s inexpensive and you get a very valuable asset for little more than a signature. However, you generally need pretty good credit which makes it an unrealistic option for many people. Also, if you go this route you’ll need to find tenants quickly and make sure the house you choose is a good choice. If your first investment property is also the first house you’ve ever purchased your in luck. Banks have many programs that favor first time home buyers and you’ll likely get a loan with low interest rates, because banks are eager to get people over the first time home buyer hump. Remember to carefully choose your investment property- never assume that you can make up for negative cash flow (meaning losing money when your property is not renting) with capital gains, or appreciation. Remember the idea is passive income- rent checks are everything! If you invest just for appreciation your speculating and are liable to get burned.
Another option for people eager to start building passive streams of income is a bulk candy business. The benefits of this method are impressive returns on investment and relatively low maintenance. Unfortunately they tend to be difficult to secure, and do require minimal initial investment (for the machines.) Often all you need to do to set your machine up is negotiate with restaurant or store owners- most of the time they’ll accept either a percentage or allow you to give a percentage to charity. A simple machine costs around $200, and costs $50 to fill. They cash flow around $25 monthly, so you can generally earn back your investment in around 6 months. Once this happens you can either pocket future profits as easy passive income or use it to buy more machines. While $25 in passive income doesn’t seem like much, it will be the more profit you make and the more machines you buy. If you don’t have enough money or good enough credit to invest in real estate, the bulk candy business can be a great starting point.
