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How in Hell's name can I make a Passive Income?

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Postby HouseMD » Sun Dec 01, 2013 6:50 pm

Hero wrote:
HouseMD wrote:Build up one million dollars in capital...


Really? It's that easy?

:roll:

Acquiring cash is -not- that difficult if you are willing to put in the time. Most people just aren't willing to push through and earn the credentials to do so, or lack the business skills to succeed in lieu of credentials. And technically if one's goal is to acquire enough capital to withdraw 2k a month at a 4% withdrawal rate, 600k would be a sufficient investment sum. 600k is not an impossible number to achieve in a few years. You just need to make wealth acquisition a priority in your life and go where the money is.

The only people I have ever known personally that lived off of passive income either built a business they later sold, then invested the money and lived on the interest, and people that had high paying jobs and poured their money into buying rental properties. The trouble with rental properties is that unless you own a decent portfolio and put 50% or so down, you won't be able to both hire a decent property management company (which you need for the investment to be truly passive) and generate positive cash flow. In my old city, property taxes alone run a mill rate of 74.29, or $1,543/mo on a 250k property. That is without a mortgage or utilities! Even in smaller towns with mill rates of around 35, you're still looking at $730/mo for a 250k property in taxes alone. Rental rates are around 1000-1200 a month for a single family home with no utilities provided, leaving you with 270-470 dollars to pay for a property management company (their cut is usually 10% of rent, but they often have a minimum portfolio size to work with you) and pay for any home repairs and your mortgage.

With this information considered the only real options are getting a high paying job and making as much income as you can while spending as little as you can, investing the money, and getting the hell out as soon as possible, or starting a successful business and selling out, which is way easier said than done. It might take 80 hour weeks for a few years on either path, but where there is a will, there is a way.
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Postby Cornfed » Sun Dec 01, 2013 7:33 pm

HouseMD wrote:Acquiring cash is -not- that difficult if you are willing to put in the time. Most people just aren't willing to push through and earn the credentials to do so, or lack the business skills to succeed in lieu of credentials. And technically if one's goal is to acquire enough capital to withdraw 2k a month at a 4% withdrawal rate, 600k would be a sufficient investment sum. 600k is not an impossible number to achieve in a few years. You just need to make wealth acquisition a priority in your life and go where the money is.

This would be the case if a stable situation could be guaranteed for years to come and you just needed to show up and pass exams and then show up to work. However, when whole industries can be automated, outsourced or rendered obsolete at the drop of a hat, or they can train a surplus of people and then cherrypick employees based on criteria beyond your control, or you can be fired, ruined by legal fees, medical expenses or whatever overnight, you are really talking about buying a very expensive lottery ticket.
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Postby HouseMD » Sun Dec 01, 2013 7:47 pm

Cornfed wrote:
HouseMD wrote:Acquiring cash is -not- that difficult if you are willing to put in the time. Most people just aren't willing to push through and earn the credentials to do so, or lack the business skills to succeed in lieu of credentials. And technically if one's goal is to acquire enough capital to withdraw 2k a month at a 4% withdrawal rate, 600k would be a sufficient investment sum. 600k is not an impossible number to achieve in a few years. You just need to make wealth acquisition a priority in your life and go where the money is.

This would be the case if a stable situation could be guaranteed for years to come and you just needed to show up and pass exams and then show up to work. However, when whole industries can be automated, outsourced or rendered obsolete at the drop of a hat, or they can train a surplus of people and then cherrypick employees based on criteria beyond your control, or you can be fired, ruined by legal fees, medical expenses or whatever overnight, you are really talking about buying a very expensive lottery ticket.

A very expensive lottery ticket with a 50 year success rate of 83.9% per firecalc if you can save the 600k is a hell of a lot better than no ticket at all. Pick stable industries with 2 year training programs (nursing, physician assistant, etc) or jobs with global demand like petro engineering if you're afraid of change. Worst case scenario you retrain or move out of country, respectively.

And if you can't pass the exams, that's on you. Either you didn't study hard enough or you aren't smart enough to be in the field in the first place.
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Postby Cornfed » Sun Dec 01, 2013 8:33 pm

HouseMD wrote:A very expensive lottery ticket with a 50 year success rate of 83.9% per firecalc if you can save the 600k is a hell of a lot better than no ticket at all. Pick stable industries with 2 year training programs (nursing, physician assistant, etc) or jobs with global demand like petro engineering if you're afraid of change.

That might be your best shot, but certainly no guarantee, as things can change on a dime. I know of several people who got burned by taking short courses that seemed to be a sure thing at the time they enrolled. Basically the jobs are all going away or having their pay rates slashed - we just don't know when exactly.
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Postby HouseMD » Sun Dec 01, 2013 8:38 pm

Cornfed wrote:
HouseMD wrote:A very expensive lottery ticket with a 50 year success rate of 83.9% per firecalc if you can save the 600k is a hell of a lot better than no ticket at all. Pick stable industries with 2 year training programs (nursing, physician assistant, etc) or jobs with global demand like petro engineering if you're afraid of change.

That might be your best shot, but certainly no guarantee, as things can change on a dime. I know of several people who got burned by taking short courses that seemed to be a sure thing at the time they enrolled. Basically the jobs are all going away or having their pay rates slashed - we just don't know when exactly.

Nothings a sure bet. They could socialize medicine tomorrow and cut my future wages in half. Life is a big game in the grandest sense, where great reward and great ruin can come to those who take the big risks. And you sure as hell can't win if you don't play.
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Re: How in Hell's name can I make a Passive Income?

Postby Devil Dog » Mon Dec 02, 2013 12:29 am

theprimebait wrote:atleast 2000 per month?I figured with the high taxation,renting costs,transport costs,and household costs,its better to live under 28.000 a yr here,than above it,UNLESS you're making 100,000 K Extra.

because our entire system basically makes you work hard,long hours,and takes it thru taxation.plus you lose all your government benefits if you make above a certain income.so higher rent for your home,higher prices for healthcare,aswell as transport to get to work.


youd actually-when all costs are due-be better off poor here,than middle class.lol work less,lower prices,all kinds of return money on your tax,and a host of benefits due to your poverty.meanwhile a middle class career person has to pay higher prices and work harder for it.lol and at the end he has LESS money for him/herself than me.lol

my question is,do you guys have any idea how to make a lower middle class income passively?not much.not even enough to raise a family.but just enough to still be ''poor''but live decentely?


thoughts?



Show us the numbers on that, unless of course you are just talking out your ass.
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Re: How in Hell's name can I make a Passive Income?

Postby Cornfed » Mon Dec 02, 2013 1:37 am

Devil Dog wrote:
theprimebait wrote:atleast 2000 per month?I figured with the high taxation,renting costs,transport costs,and household costs,its better to live under 28.000 a yr here,than above it,UNLESS you're making 100,000 K Extra.

because our entire system basically makes you work hard,long hours,and takes it thru taxation.plus you lose all your government benefits if you make above a certain income.so higher rent for your home,higher prices for healthcare,aswell as transport to get to work.


youd actually-when all costs are due-be better off poor here,than middle class.lol work less,lower prices,all kinds of return money on your tax,and a host of benefits due to your poverty.meanwhile a middle class career person has to pay higher prices and work harder for it.lol and at the end he has LESS money for him/herself than me.lol

my question is,do you guys have any idea how to make a lower middle class income passively?not much.not even enough to raise a family.but just enough to still be ''poor''but live decentely?


thoughts?



Show us the numbers on that, unless of course you are just talking out your a**.

It does happen. I knew a female with a full time job at reasonable wages who had got pregnant and was intending to go on welfare. She knew the alleged father, but they intended to live apart most of the time to collect the welfare. She had applied for a mortgage to buy a house while she was working but had been declined. The bank let her know that as soon as she was on welfare she would be accepted. Why?

There is almost no such thing as a secure job these days, but the welfare was regarded as being secure at the time. She would save a fortune is things like transport and clothing. She would have money coming in from the alleged father. Even though some of his child support would go to reimburse the state, she would still be ahead and there would be extras he would provide such as buying the kid presents for birthdays and Christmas, which adds up. If she still needed a pay raise she could just crank out another kid and name a richer guy as the father.

This was just before the housing boom, so if she did buy the house she wanted and sold it at the right time she would have made a fortune. The losers are often winners is this armpit of a society.
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Postby Rocky Top » Mon Dec 02, 2013 2:33 am

HouseMD wrote:Build up one million dollars in capital. Invest it and withdraw 4% at the end of each year and you should end up with roughly 2k/month after taxes for the rest of your life.


How much are you assuming he would earn in the interest on that $1 million?
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Postby mguy » Mon Dec 02, 2013 5:30 am

The_Adventurer wrote:
mguy wrote:From the looks of it, this is a tricky thing to catch. There is a learning curve with it. I find my white-collar job easier than this passive income bishness. But it is something that I want so I will grind..

The Adventurer,

Care to share how your make your inet income?


Johnny1975's link is a good start. Also, customers who bought that item bought one of the books that got me started, Makint a Living Without a Job. You are absolutely correct that your white collar job is easier, and it will certainly be that way for the first few years.

It seems like getting to $1000 per month is the first big hump, and you work so hard it might seem easier to give up and go back to the 9 to 5. That's why I went to the Philippines though. Even if I made $300 in a month, I had no reason to worry. I got a rice cooker, a 10kilo bag of rice, some eggs, meat and vegetables abd lived CHEAP. Freedom was THAT important to me.

The point is you BETTER really love what you're doing if you want to stick with it through the hard times. There will be plenty. Books like 4 Hour Work Week aren't really saying you only work four hours. It is that you love what you do so much, the other 100 hours feels like play.

As for how I make my money, I don't do even close to just one thing. I started out writing articles like GenYguy in his thread, which everyone who really wants to get out should read. I branched into doing ebooks, training videos, mobile comics, cartoons. I do art commissions, having done book covers, magazine illustrations and even portraits for people. I have made indie comics and cartoons to sell online in Japan, which has a great indie market. I also get paid to speak at events and sometimes schools to demo my techniques and tell my story. I have partnered with local studios to direct small projects like a game intro or commercial. I once even did a whole commercial for a company, where I shot it, did the graphics, music and voiceover all myself. Because I do it here, I can do it cheaper than they can get it done in the US.

I have a mailing list, just like Winston or Jamaican in China. Every inet marketer should have one. Sometimes I send out a message just about my thoughts or for inspiration and encouragement. Sometimes I put a product on sale and send that out. My training videos are the most passive. They sit there and sell, whether I am asleep or awake. Sometimes there is some customer service involved, if someone can't download or open something.

That's about it. I started small and slowly built over the last 5+ years.


Thanks adventurer. I think living in the Philippines or Third World country to work on your start-up is something that is not really talked about. Most do this for girls, but I think the lower costs is the biggest reason for me.

Do you mind telling us the progression of your income when you first got started and how many hours you worked?
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Postby HouseMD » Mon Dec 02, 2013 5:44 am

Rocky Top wrote:
HouseMD wrote:Build up one million dollars in capital. Invest it and withdraw 4% at the end of each year and you should end up with roughly 2k/month after taxes for the rest of your life.


How much are you assuming he would earn in the interest on that $1 million?

You would really only need 3% capital gains on 1 million dollars, plus another three percent to keep pace with inflation. So 6% cap gains total, netting you 28,300 dollars in withdrawals and 31,700 in increased capital each year. If you can't make at least 6 percent a year, you will dip into your reserves as inflation occurs. However, with a mix of dividend paying blue chips, moderate growth stocks, and bonds, 6% should be an easy goal.
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Postby xiongmao » Mon Dec 02, 2013 8:15 am

Even with being a geek and able to build my own websites from scratch, I've found making passive income to be very difficult.

Most of my success is down to being in continuous employment from December 2002 - February 2013. During that time I saved at least 20% of my income.

I got three oDesk gigs this year, but got sacked from two! The problem is you can spend 1000's of hours doing a good job and not bill the client for all your time (and thus work for peanuts), or you can bill them an appropriate amount for your time, which will cause them to go crazy because you're charging so much that they lose money on the project. In my case I got caught out by taking on the management of existing sites which had very tricky technical issues to sort out.

If you want to find a foreign wife then save enough cash to live somewhere for a couple of years. If you want to live abroad on a long term basis then look for work opportunities, of which there are many. I know a Japanese guy in Bangkok who found a job here in two weeks.
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Postby The_Adventurer » Mon Dec 02, 2013 10:34 am

mguy wrote:
Thanks adventurer. I think living in the Philippines or Third World country to work on your start-up is something that is not really talked about. Most do this for girls, but I think the lower costs is the biggest reason for me.

Do you mind telling us the progression of your income when you first got started and how many hours you worked?


Well, this will be something to try to remember.

In early 2008 I was making a few hundred per month. Being my first time in the Philippines, I did get caught up with the girls, though, and my income dropped. I busted my ass working every waking hour to put out an ebook. That had a big surge of several hundred in a week, got me out my pinch and then things stablized again.

In 2009 I started doing art commissions. That got me up to six or seven hundred per month, but sometimes it would still drop. Being tired of that, I busted my ass again, working every waking moment, and by end of summer I finally hit $1000 per month.

Immediately after that, I discovered training videos and was able to easily maintain the $1000 per month with a bit of slow growth. Early in 2010 I hit $2000 per month.

Later in 2010 my site went down and I lost a lot of my following. I was getting paid to travel and speak in China, so I wasn't too worried. I found another site to sell my videos. There is some indication they were ripping me off, but I will never know. It maintained at least around $1000 per month.

Mid 2011 I got my website issues sorted, went with a new provider and got all my videos back and up on my site. I lost some ground, so for the rest of year it was bust ass, every waking hour time again. By early 2012 I hit $3000 per month.

For Chinese New Year, I visited my girlfriend's home town. It was a beautiful place in the country, and super cheap, cheaper than Philippines actually. Yet, the quality of everything was very high. I thought if I live there it would be perfect!

Mid 2012 I went over all the expensive marketing course I bought while still back in America and started trying a number of those techniques again. By end of summer 2012, I hit $4000 per month, moved to her hometown and got married. I bought this tablet I am now writing on. It has a pen. I started drawing all the time and did almost NO WORK for the rest of the year.

I started 2013 back at $2000 per month. I continued to be lazy until about a month before our baby was due, then I busted ass and maybe hit $3000 or more. I wanted to get her a private room with her own bathroom in the hospital rather than one of those shared rooms with like 6 beds in there.

After the baby was born I never really worked hard again until last month. I haven't checked the numbers, but I suspect $3000 or more. I then worked myself to sickness and have been bedridden spending time on this forum the last few days. :)
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Postby Rocky Top » Mon Dec 02, 2013 11:28 pm

HouseMD wrote:
Rocky Top wrote:
HouseMD wrote:Build up one million dollars in capital. Invest it and withdraw 4% at the end of each year and you should end up with roughly 2k/month after taxes for the rest of your life.


How much are you assuming he would earn in the interest on that $1 million?

You would really only need 3% capital gains on 1 million dollars, plus another three percent to keep pace with inflation. So 6% cap gains total, netting you 28,300 dollars in withdrawals and 31,700 in increased capital each year. If you can't make at least 6 percent a year, you will dip into your reserves as inflation occurs. However, with a mix of dividend paying blue chips, moderate growth stocks, and bonds, 6% should be an easy goal.


You make collecting $1 million and getting 6% return every year look like it is a piece of cake. The average person even if they work hard and save everything they can without being frivolous will need 25-30 years to do that. Not saying that it isn't possible, because there are some people that are able to do it, but for most of us, we are trying hard enough to gain enough "active" income to just keep the lights on and food on the table. Then on top of raising $1 million, you have to be savvy enough to get 6% per year in an environment where interest rates are near 0% and the stock and bond market bubbles are just sitting there ready to burst.
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Postby Faus » Tue Dec 03, 2013 2:23 am

I love passive income but learning from my experience for the past 10 years or so, I have been burned so many times. That is why to eliminate these risks, I have to recruit people.
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Postby Winston » Tue Dec 03, 2013 2:57 am

This site has tons of good free information on building a passive income business:

http://www.smartpassiveincome.com

Btw, you can start by using proper grammar and punctuation. Put spaces between sentences and capitalize the first letter of every sentence. :P

The Adventurer,
Can you show us your site and training videos? How do you sell them? On your own site or a third party site?

Can you give us a breakdown of where your income comes from? Does it come from multiple sources?

This would be a good learning experience for us.
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