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DeafJam73
LSU Fan
Baton Rouge
Member since Sep 2010
14815 posts

How do I build passive income?
I am a firm believer that having multiple streams of income is the best way to obtain financial security. Apart from getting another job, what can I realistically do to create that extra income?


Chasin The Tiger
LSU Fan
Lake Travis, TX
Member since Sep 2012
250 posts

re: How do I build passive income?
Real estate is probably the easiest.


DeafJam73
LSU Fan
Baton Rouge
Member since Sep 2010
14815 posts

re: How do I build passive income?
You mean buying property?


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tigersfan1989
LSU Fan
Louisiana
Member since Oct 2018
107 posts

re: How do I build passive income?
Is real estate really passive? I know some people who own real estate rentals who work their arse off.


Larry Gooseman
LSU Fan
Houston Heights
Member since Mar 2014
1770 posts
 Online 

re: How do I build passive income?
Syndicated real estate deals on multi family units. You’d have opportunity get quarterly dividend, but real payout would be upon sale of the asset.

This is closer to “passive” than owning/managing your own unit.


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30
bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
12104 posts
 Online 

re: How do I build passive income?
quote:

How do I build passive income?

LINK /


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nugget
LSU Fan
Member since Dec 2009
9185 posts
 Online 

re: How do I build passive income?
quote:

Is real estate really passive? I know some people who own real estate rentals who work their arse off.


It’s as passive or active as you make it. If you manage it yourself, it can be hard work. You can also have a management company do everything for you and it’s strictly an investment. I don’t deal with air conditioners other than putting gas in them, but almost everything else I do myself. I don’t understand how some people will pay an electrician $100 to go flip a breaker.


tigersfan1989
LSU Fan
Louisiana
Member since Oct 2018
107 posts

re: How do I build passive income?
Yes I've had a rental before and if you pay a management compnay and companies to come out and fix problems you are pretty much eating up any profits unless you're buying properties on a large sale ie apartment complexes.


mrgreenpants
Ohio State Fan
paisaland
Member since Mar 2018
273 posts

re: How do I build passive income?
nothing i'm writing here is novel..


1. business that does not need you
-goal is to work on the business(improve it)..not for it
2. real estate
3. income(dividend) producing stocks

goal is for each individual stream is to be able to cover your desired standard of living.

now, how one defines "passive" is a good question..
for me.. passive does not mean i get to sit on my butt and do nothing..

i'm definitely not a 4 hour work week guy.. even when living on a sailboat in the south caribe(attempting to relax).. i was still spending fulltime hours trading and managing rentals.



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61
baldona
Auburn Fan
Florida
Member since Feb 2016
10787 posts
 Online 

re: How do I build passive income?
quote:

You can also have a management company do everything for you and it’s strictly an investment.


If you truly let a management company do everything they most likely do a crappy job and be very expensive. Real estate is not nearly as passive as people make it out to be. You can be passive for a year or 2 or whatever, but you don’t own a home without it needing repairs and work. Real estate managers are there to make money for themselves not to watch your budget.

It’s still can be a mostly passive gig though.

Nothing is easier then the stock market. Finding a niche you enjoy investing in online is imo the best passive income. You can watch and learn and just make a handful of investments a year with options or what have you to make some extra money. There’s absolutely nothing to do anytime you want to pull out.


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nugget
LSU Fan
Member since Dec 2009
9185 posts
 Online 

re: How do I build passive income?
quote:

If you truly let a management company do everything they most likely do a crappy job and be very expensive. Real estate is not nearly as passive as people make it out to be. You can be passive for a year or 2 or whatever, but you don’t own a home without it needing repairs and work. Real estate managers are there to make money for themselves not to watch your budget.


If you’re investing in the other side of the United States, it’s going to be passive. I know people that have done very well with that. It really can be completely passive. Once I pay everything off, I will put it all in a management company and let them deal with it, assuming I don’t continue to scale. At that point, it will be worth it to me to let them keep their 8% and have an electrician charge me $100 to flip a breaker when I’m in the Greek isles.


StealthCalais11
LSU Fan
Lurker since 2007
Member since Aug 2011
11080 posts

re: How do I build passive income?
Cartel drug mule


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60
baldona
Auburn Fan
Florida
Member since Feb 2016
10787 posts
 Online 

re: How do I build passive income?
I agree and paid off properties are different. But we aren’t talking about someone experienced he was asking to get into real estate. I have some years I don’t do a damn thing for some properties. I have some tenants that call a plumber or whatever on their own.

But you have an HVAC issue, a client that buys a new washer and breaks the water valve shooting water all over, and a fridge go out and the next thing you know you’ve spent $5,000 in repairs and new parts. If I’m active I buy used fridge off Craigslist for $250, a management company buys a new one for $1500.

FWIW I’ve paid two plumbers in the past 6 months to replace water heater elements which is a 30-60 min job and both had planned appointments a day or two in advance and both charged me over $180 directly plus parts. I’m not trying to scare any new real estate investors but you need to have some decent capital in reserves for a couple of years for worst case scenarios.
This post was edited on 11/11 at 9:08 am


MrJimBeam
New Orleans Saints Fan
Member since Apr 2009
3342 posts
 Online 

re: How do I build passive income?
I'm with you on all these points. I think early on you have to be a little patient, too. You can't start running right off the bat unless you just have an unreal amount of capital or equity already built in from the get go. Starting from lets say 25k raw will be a slow process, but once you get going, if you do it right, eventually it could be a cash cow.


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DeafJam73
LSU Fan
Baton Rouge
Member since Sep 2010
14815 posts

re: How do I build passive income?
quote:

Nothing is easier then the stock market. Finding a niche you enjoy investing in online is imo the best passive income. You can watch and learn and just make a handful of investments a year with options or what have you to make some extra money. There’s absolutely nothing to do anytime you want to pull out.


I might be interested in this more. How would I go about learning about stocks? Would a simple etrade account be enough to start? I know a little bit about stocks, but not in depth knowledge.


jimbeam
USA Fan
University of LSU
Member since Oct 2011
57731 posts

re: How do I build passive income?
Buy a total market or SP500 fund and be done with it


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62
lynxcat
Rutgers Fan
Member since Jan 2008
20715 posts

re: How do I build passive income?
quote:

I am a firm believer that having multiple streams of income is the best way to obtain financial security. Apart from getting another job, what can I realistically do to create that extra income?



Answering this question is highly dependent on the amount of capital you have available and your cash flow / return requirements.

If you are $2M in capital, then put it in the stock market and collect quarterly dividends. Voila, passive income. The struggle is that you need large enough capital investment to get the scale on 3-4% dividends that the absolute dollars you receive each quarter are meaningful.

Real estate is the other but less passive with higher risk. However, it doesn't require as much capital and you can use leverage to your advantage.

Other ideas might be ice machines, ATMs, etc. but those are going to require some management.

If making large amounts of passive income was easy, then everyone would do it. Creating free time while still collecting income is a dream scenario but almost always requires a lot of TLC on the front-end.


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30
baldona
Auburn Fan
Florida
Member since Feb 2016
10787 posts
 Online 

re: How do I build passive income?
quote:


I might be interested in this more. How would I go about learning about stocks? Would a simple etrade account be enough to start? I know a little bit about stocks, but not in depth knowledge.


Ha, if I knew an easy method I wouldn’t tell you!

Open an account today. No time better, even if it’s $100 or whatever. Go buy something like a total stock market ETF, some Coca Cola stock, or something. Get started. Find a couple of books and educate yourself every day or every week. It’s the absolute easiest way to make more money once you have some money. You are your own boss, and absolutely nothing else to do.

Real estate is a great option but it takes time and patience. Acquiring your first good property is the hardest. Anyone can buy real estate, buying a good property and figuring out a system to find more good properties is the hard part and takes years generally.

Eta: there’s very few to none actual passive income options starting off now a days. The true way to get mostly passive income is by having a system or business that runs itself. But the beginning is almost always a lot of hard work until that system is proven.
This post was edited on 11/11 at 12:18 pm


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SouthMSReb
Ole Miss Fan
Member since Dec 2013
2598 posts

re: How do I build passive income?
quote:

I might be interested in this more. How would I go about learning about stocks? Would a simple etrade account be enough to start? I know a little bit about stocks, but not in depth knowledge.


If you're looking for passive income generated through holding stocks, you need to youtube PPCIan.


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Fat Bastard
Boston College Fan
Member since Mar 2009
44258 posts

re: How do I build passive income?
quote:

and if you pay a management compnay and companies to come out and fix problems you are pretty much eating up any profits unless you're buying properties on a large sale ie apartment complexes.






maintenance whether with or without a PM can eat away at cash flow. it is part of the game. my PM does not eat away at any of my profits because I bought right.

W R O N G on so many levels i won't even waste my time answering anymore as it has been laid out here AD INFINITUM in the past in many threads.

you might want to abstain from such ignorant generalized statements that have been debunked in the future.

This post was edited on 11/11 at 5:01 pm


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