Financial commentators like “Rich Dad Poor Dad” author Robert Kiyosaki and “Financial Samurai” blogger Sam Dogen agree: The key to becoming wealthy is passive income.
“The rich do not work for money,” Kiyosaki once said in an interview with MarketWatch. “If you act like a mule, chasing the carrot — the buck, the bonus, the paycheck, the commission, whatever you guys chase, you’re never going to ask the question: what are the rich working for? I work for assets.”
But how do you get the assets?
That’s what one Reddit user, jjake101, asked this weekend.
“What kind of things would it take to eventually get to $2k – $3k of passive income?” he asked. “Aside from something like buying a $1 million office block and renting it out?”
The ideas poured in: some unrealistic, some good, and some that just might be the key to stop living paycheck to paycheck.
One Redditor said a friend has made “a ludicrous amount of money” selling self-help books on Amazon
— the amount is in the six figures in just the last few years.
In a startling turn, that friend has “no credentials or experience” to write those, the Redditor said.
“So… he’s exactly like everyone else who writes self-help books,” another commenter weighed in.
“Writing ebooks is the best thing I’ve found so far,” a commenter named “ubspirit” said. “Got 50-60 ebooks out there at a few books each, and if you’re a good enough writer you can easily make $2kk a month.”
One Redditor, Jacob0050, said he makes about $185 a week — just from two drink and snack machines at a gym.
“If you can find a hot location for a snack and drink machine they’re worth it,” he said.
Of course, you have to own the machine first. They can cost up to $4,000, another commenter said, although you may be able to get a deal finding them on Craigslist.
And you don’t get to keep the full amount each snack is sold for, another said. You may have to give a portion of sales to the machine’s location owner — plus you may be responsible for loading and maintaining the machines. All of that might be more work than you bargained for, for a source of “passive” income.
Another Redditor, “Ettannatkonto,” said he makes about $1,000 a month from songs he wrote about 10 years ago.
Another weighed in to say he earns between $2,000 and $4,000 in royalties, mostly from the streaming service Spotify.
To make money that way, you have to have quite a few listeners: to make that much, the music producer has $200,000 listeners per month, he said. He makes music in a “smaller electronic genre” that has gained popularity in the last few years.
Apps, software or websites
Creating apps or software isn’t passive income at first. But after you create the product, you may be able to sell it without much maintenance going forward, “terracottatilefish” wrote.
If you can create a website that receives a lot of visitors, you may be able to make almost as much, “tealparadise” wrote.
“For about four years I received around $2,000/month income from crappy mobile apps on Windows,” “Tojuro” wrote. “It was the greatest effort-to-reward ratio I’ve ever had.”
“If you run a website and it gets popular (think of a forum or something) and you have ads on the side you can make a decent chunk of passive income,” “HeroDanny” wrote.
“I make $2,500 to $3,000 per month renting cheap cars out on Turo,” a car-sharing website, wrote the commenter “idcm.”
“A car I buy for $5k can make $600/month, and then you just pay insurance and do maintenance on the car,” idcm said.
Of course, you need the initial $5,000 to make that work. And it’s not completely passive. For example, idcm does most of the oil changes and maintenance themselves, he wrote. And you have to interact with the renters.
Another word of caution: You have to be careful about your break-even calculation. If you buy a car at a good price that will last, you won’t see much depreciation. “The trick comes by knowing how to select and maintain cars, which is definitely not for everyone,” idcm wrote.
A few bonus ideas
A few Redditors suggested more mainstream ideas, like real estate or stock-market investing.
One, “holy_hunk,” said he bought a mobile home park in 2011 for under $100,000.
And several gave investing advice, from real estate investment trusts (REITs) to bonds and mutual funds.
To be sure, anyone relying too heavily on the stock market would be pretty disappointed lately.
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Maria LaMagna covers personal finance for MarketWatch in New York.
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