Passive income strategies
Few people have the luxury of existing without trading their time for money to sustain their lifestyles. Whether you earn a living through employment or side hustles, you probably wish you had more time with your family. You often feel like you're missing the memorable moments you can't get back and want to find a better way.
Of course, you may not be able to submit your resignation letter today, or want to completely halt the growth of your business empire. However, there are ways to start generating passive income, allowing you to reduce the time you spend away from your loved ones. Some successful passive incomes involve investment, while others are ventures you build out to eventually generate income with less day-to-day involvement. Here are the details on a few passive cashflow strategies you can try.
Real estate investment trusts, or REITs, let you get into the real estate game in a hands-off way. You don't have to look for properties or manage them. Instead, you invest a portion of your money in companies that manage all the daily tasks for you. These companies select properties with projected favorable returns and handle all management work.
In exchange for your investment, you get passive income in the form of returns. It's typically dividends, but you could also see additional returns if you sell your shares. REITs can be traded as stocks, mutual funds, or exchange-traded funds. Finding them through brokerage sites and investment platforms can be as simple as searching for REIT in the fund's name. Nonetheless, you'll want to determine what type of REIT you're about to invest in.
Not only can performance vary, but so can overall risk. For instance, equity REITs are considered less risky than mortgage REITs. It's because equity REITs own the real estate, whereas mortgage REITs own the financing behind the properties. With higher risk comes the potential for higher dividends. If you want the best of both worlds, you can invest in hybrid REITs, which blend equity and mortgage ownership.
If you've ever thought about owning real estate to generate income, but don't want to be a landlord, REITs can be attractive. It's a way to share in the potential market gains without taking you away from precious family time. You can start small by investing in one or two promising funds. Plus, you can diversify your existing portfolio with the addition of a few REITs.
Own and drive a vehicle? You can turn it into more than a depreciating asset. Some companies pay drivers to display advertising on their vehicles, depending on where and how much they drive. You'll typically partner with an advertising agency that will place the advertising on your car. In exchange, you'll get payments, which are usually based on your mileage.
It's like getting a kickback for an activity you already do. Each time you go to work, run errands, or drive to a social gathering, you're generating passive income. In theory, you're not spending additional money since you'd incur this mileage anyway. Furthermore, you've already invested in your vehicle as a household expense. Your drives could also coincide with family time if you're going places together or handling drop-off or pick-up.
Lifestyle Investing expert, Justin Donald, talks about cashflow investing in terms of business strategy when he says, "Every entrepreneur wants a business that generates consistent, predictable cash flow. But most end up pouring time and money into typical marketing strategies, only to be left with frustration and inconsistent results instead of passive income and revenue."
Vehicle advertising is a way to flip this script. You're generating income from an activity you'd do anyway by leveraging an everyday household asset. It's not you pouring money into marketing. Instead, you're getting paid to market on behalf of others.
This passive cashflow strategy does require a bit more work upfront. But once you've got an established library of digital content, these assets can generate income 24/7. Examples include blogs, YouTube channels, e-books, designs, courses, templates, and even apps. If you've got a creative streak and knowledge to share, digital content can produce income in multiple ways.
A monetized YouTube channel can generate passive income through views and ads, but you can also bring in money from sponsorships. Combining affiliate marketing with your online content is another way to build passive income streams. By promoting a third-party's products or services, you earn a commission from shared links if someone makes a purchase from those links.
Some content creators leverage their digital assets to gain referrals for their businesses, sell their courses, or host live learning sessions for a fee. Not every viewer or reader will become a client, but as you build a following, you might also expand your clientele for a side hustle. Say you're a certified financial planner who is skilled in retirement investments. Publishing non-gated online content on retirement-related topics could generate leads for your services.
Publishing a combination of free and fee-based content is a strategy some use as well. For example, you could sell an e-book on ways to save enough for retirement starting at age 40 or 50. Simultaneously, you could repurpose portions of your book into short-form free videos with links to your book and financial planning services. Once you've put in the effort, your content can produce ongoing income similar to the residual checks an artist earns from prior work.
Balancing income generation with quality family time can become a challenge for many. It's not easy to put in time at work and find the energy to do much else. Truth be told, some people would rather find ways to reduce the time they spend at work. Instead, they want to increase the moments they have for living life.
Once you realize you don't always need a full-time job, you just need enough income for your lifestyle, the game changes. Passive cashflow strategies are ways to produce the income your family requires without sacrificing the moments you can't get back. It doesn't matter if you want to dip your toes in the water or dive right in. Establishing passive income streams can boost your independence and financial resilience, which can be worth more than their returns.
