The funny thing about passive income is that, it is rarely actually completely passive, it takes a lot of work to start and get going. The whole goal of having passive income is to get to a point where you’re not trading your time for money. For example, let’s say you’re recording artists like Taylor Swift, every time you hear a Taylor Swift song play it in your department store or grocery store, she’s not literally there performing the song, but she’s getting paid on those royalties.
Although it’ll be nice to have Taylor sing at your local department store, the chances of that are probably one in a million, and the chances of you making a free passive income are virtually zero as well. There’s no such thing as free passive income. Whenever you do see a get-rich-quick type of scheme, don’t fall for that.
That’s kind of what passive income is to me. The more time that you spend upfront to get it going, the more that’s going to pay off for you in the long run. That’s really cool, it’s going to be like a money-making machine. In this article, we’ll be talking about passive income and how you can make $100 per day in seven different ways. Let’s get talking.
7 Ways To Make $100/Day In Passive Income
1. Capitalizing On What You Own
This isn’t going to be 100% completely passive, especially to start. Let’s say you own something like a house, a car, or maybe the rights to photos or music, or maybe you have some camera equipment that you can rent it out. If you have a spare bedroom, you can list it on the Airbnb platform. If you have a car that you don’t use often, Turo is a great place to rent your car out, it actually gives the same type of experience that Airbnb does but just that it’s for cars.
Let’s say you have a jeep, you can be renting it out for up to $100 per day. Some people have even gone as far as getting leases on cars just to Turo (rent) them out. Turo has a full list of cars that are the most profitable, plus they’ll even calculate them out for you on how quickly even on a monthly payment, which is pretty awesome.
Another option if you have a camera is to upload your photos to stock photography websites like Shutterstock, and you can get a passive income royalty whenever someone downloads your photo. Alternatively, you can just rent out your camera on websites like Sharegrid, which allows you to rent out your camera equipment. There’s a huge demand for this right now because of how expensive photography equipment is.
2. Stocks And Dividends
This can actually be a true form of passive income. A dividend is a portion of the profit that’s returned to you by the company that you invest in for just owning a share of their company. Let’s say you bought stock in Home Depot, and by the way, Home Depot is offering about a 2% dividend yield. That means for every $100 that you have invested in Home Depot, you can expect about $2 back per share that you own every single year.
To earn $100 per day through dividends, that’s about $36,500 per year. If a dividend on average pays between 2% – 5%, we’re going to need a lot of capital saved up. In fact, even at 5%, the minimum balance you’ll need is around $730,000. That’s not always easy. What I suggest is that you invest regularly and consistently. If you can take a portion of your paycheck every single month and suck it away in either stocks or dividends that are paying you a decent return, you could potentially get to this number a lot quicker than you imagined.
If it comes to be a little bit more feasible when you’re investing in something with a higher return, take for example, the S&P 500 index fund returns about 8% on average per year. If you invest $1000 into an S&P 500 index fund, that $1000 would be distributed among 500 US companies, weighted by how big those companies are. You’ll actually get 2% of Apple, 2% of Microsoft, 2% of Amazon, and on and on down the list of the 500 companies.
For example, if you invest $500 a month every year for about 29 years and you get an 8% return, that $500 a month will slowly get you to $730,000 in capital. The idea is that there’s a large community of people that believe they can save more of the difference between their income and their expenses, and invest it all into let’s say the S&P 500, and they can get to this magic number even faster.
The positive side here is that investing in index funds and dividend-paying stocks can actually be completely passive. A lot of people can just park their money into an index fund and basically forget it. This is one of the best ways to actually build wealth, so much so that Warren Buffet basically advocates it all the time for average investors.
If you’re interested in getting into dividend stocks or index funds, you can use brokerages like Fidelity, Robinhood, Webull, or Public.
3. Online Business
Out of all the options mentioned so far, I would say this is one is probably the hardest but actually going to be the easiest to get to $100 per day if you’re able to do it right. If you’re able to set the right systems in place, starting an online business can be completely hands-off, which is one of the great things about having an online business. For example, if you want to sell candles, you can order 1000 candles from a manufacturer and just ship them to a 3PL. A 3PL is a third-party fulfillment center, which will allow you to basically package and ship those products directly to customers without you having to be there.
This won’t take you 20+ years to basically generate about $100 per day passive income, you can get there much much faster. The problem is that it’s going to take a lot of work and learning upfront to get there. However, once you have those learning, setting up additional businesses to get $100 per day is going to be pretty easy. Affiliate marketing is something I often talk about on this blog, you can start it today and scale it up real quick. With affiliate marketing, your earning potential is unlimited. Check out the articles below to find out how.
4. Rental Real Estate (Getting Rental Income)
This is one of the assets that’s probably tough to get your hands on. But once you do get your hands on it, the numbers and maths behind it can be pretty compelling. For example, if you bought a house for $150,000 with a 20% down payment which is $30,000. After that initial investment, you could probably rent out that property for let’s say $1,250 per month which will bring you about $14,400 in rental income. You’ll have a mortgage of around $120,000 at a 3.1% interest rate which is about $510 per month in expenses. You probably cushion for other types of monthly expenses like taxes, insurance, maintenance, and maybe vacancy.
All those expenses might total around another $500 per month, which in addition to your mortgage will total your expenses to be $1010 per month. Since your rent is $1,250 that means that you’re profiting $240 per month on the rental income. Not only that, but you’re also going to be building a lot of equity in the house. And plus with the way the real estate prices look these days, you’re also going to be hopefully capturing a lot of appreciation over the next 10 to 20 years.
The biggest issue I see with rental or real estate is that it requires a large amount of capital to get started. In our example, it still took a $30,000 down payment, in addition, you’re going to have to have good credit and an ongoing income to support the mortgage payment. According to Morgan Stanley, “millionaire investors name the real estate as the most popular alternative asset class by a wide margin” this makes sense to me.
Real estate naturally provides some protection against inflation, because if there’s a lot of money being pumped into the economy, there’s a finite amount of land out there. If you do own some land, the prices of that land are going to appreciate as more money goes into the system. Making $100 per day with real estate is going to take some work, you’re going to have to acquire a lot of properties. But you can get to a place where you don’t even have to manage anything because you’re going to hire property managers to do it for you.
If you’re young and you’re getting into earning money and investing, owning a real estate rental property should be in your long-term sites. We want to own assets that are appreciating over time, real estate has certainly stood that test of time of appreciation. Most people actually say that it’s one of the best ways to be wealthy. Instead of buying depreciating assets like designer handbags or fancy cars, you want to invest in appreciating assets because those are the assets that are going to fund your passive lifestyle later on in life.
5. Real Estate Investment Trust (REIT)
If you want to get into real estate exposure but you don’t have enough money for rental real estate, you can buy a REIT. REITs are groups of investors that invest in commercial properties, and they collect rental income. You could have a REIT that’s focused on retail malls, for example, Simon Property Group owns a lot of malls. You can have a type of REIT that is focused on apartment buildings, or a REIT focused on health care facilities.
Legally, REITs are required to pay 90% of their income as dividends back to their shareholders. If you do own a REIT, then you’re going to be getting that dividend income. Some of the most popular REITs include Realty Income Corporation with a dividend yield of about 4.3%, and Simon Property Group as I mentioned earlier has a dividend yield of about 4.26%. By owning these REITs you’re also going to capture any appreciation on any underlying investment.
If you don’t want to be concentrated with just one REIT, you could buy a REIT ETF which is a collection of REITs in just one fund. For example Schwab’s US REIT ETF ticker symbol SCHH, or Vanguard’s popular VNQ ETF.
This is kind of new for passive income, and it all depends on your risk tolerance. These days there are websites like BlockFi and GEMINI which are offering you between 6% to 8% interest on your money. All you need to do is to move your cryptocurrency from your own accounts into your own account. According to BlockFI’s website, BlockFi generates interest on assets held in interest accounts by lending them to institutional and corporate borrowers. Basically, what they are doing is, they’re taking your cryptocurrency and lending it out to bigger financial institutions while trying to make a difference in the interest.
This is a varying level of risk depending on the website that you use and how much you trust them. Essentially, you’re sending your Bitcoin and Ethereum into their account and basically, they’re not FDIC INSURED. I brought this up as an option because I do know some friends of mine that are using these BlockFi or GEMINI interest accounts very actively.
Another thing you can do with your cryptocurrency, especially with Ethereum is that you can STAKE it for interest. Staking means you’re locking up your Ethereum for a period of one year in order to help support the operations of the blockchain. Basically, your Ethereum is helping to validate transactions on the Ethereum network, and as a result, you’re actually getting a reward, which is more Ethereum. The current rewards for staking of staking Ethereum are between 7% to 8%, and if the price of Ethereum goes up after one year, you are even better because you’re capturing that appreciation.
Staking is a fun way to earn passive income in my opinion, and also it’ll actually lock up your Ethereum so that emotionally going to just panic sell it off. Especially if you believe in the long-term prospects of cryptocurrency. I’ll try to write an in-depth article on staking, make sure you’re subscribed to my newsletter to get notified when it’s out. If you’ve not subscribed yet, then use this link. That’s one way of helping this blog. Click here to subscribe.
7. Online Community
This is one of the ways you can use to create a real passive income. Anyone can do it, as long as you have something of value or some sort of entertainment to provide on the internet at large. Even if it’s just a small platform, you could make a lot of money in passive income. There was a famous article written in 2008 by Kevin Kelly which was called 1000 True Fans, the 1000 true fans theory states that “in order to earn a full-time living, someone just needs a thousand fans paying about $10 per month”. That’ll be an actual salary of around $120,000. The question is, “am I able to create something of value that someone would want to pay $10 per month for”. That certainly depends, but with some creativity and ingenuity, you can actually do it.
A great example of this is Elon Stocks. This person realizes that every time Elon Musk tweeted about a stock or cryptocurrency, those assets would move at price. He creates a service that texts you every time Elon Musk tweets about something stock or cryptocurrency-related, and you’ll get that text immediately. For $10 per month, you can sign up for this service, and basically, the idea is that you can capitalize on any of the tweets that Elon Musk tweets about since you’re getting it right on time. I’m pretty sure that it’s just a bot that’s sending the texts whenever Elon Musk tweets, but this is a great example of passive income that someone sets up. At the very beginning, they put a lot of work upfront to create the bot, but as a result, they’re able to charge $10 per month for it.
When it comes to building a platform online, you want to be as creative as possible and kind of different ways that you can get somebody to you $10 per month for something. You can start a blog, YouTube channel, or go into affiliate marketing which is a very lucrative online business you can do and see results in a month or two. My aim is to inspire a lot of people to take action in their own personal financial lives, find out ways to earn money, grow that money, and be financially free. That inspires me a lot and it also helps me to do this job full time. So thank you guys for reading my articles and I certainly do appreciate it.
The idea of this article is that passive income takes a lot of upfront work, but if you’re able to consistently put in the work then those gains will compound over time. Now with that time, I know that you could get to $100 per day using any of the methods listed above. The other thing is that you don’t need to earn just $100 per day using one of these methods, you could try three or five of these different methods to get you to a net $100 per day in passive income. Try to diversify your income sources as much as you can because researchers actually pointed out that millionaires on average have around seven income sources. Happy Hustling!