Monthly passive income. It’s an ever popular topic. Jump on YouTube and you’ll see thousands of videos on the subject. Unfortunately, some of these systems get pretty over-the-top, or rely on highly improbable events.
Because of this, today’s article looks at several tried and true methods for developing monthly passive income.
1. E-commerce
(If You’re Willing To Do Some Work, Websites Are A Great Source Of Passive Income)
This covers blogging, dropshipping, eBooks, and pretty much anything else related to making money online.
E-commerce’s biggest advantage is it’s low start-up cost. For $100 or so you can buy a domain through BlueHost and have everything you need to launch a business. That’s how easy it is to get up and running.
Of course, there are drawbacks too.
Building up an audience takes time, and the low barrier of entry means more competition.
Still, I’d rank this as an excellent starting point in your quest to create monthly passive income.
2. Real Estate
This is the granddaddy of all wealth builders. When most people think passive income, they think about real estate.
Owning rental properties is a great investment, but takes huge commitments just to get started. First, property is expensive. Even buying a $200,000 house requires tens of thousands of dollars for your down payment.
And that’s just the beginning. You’ve got to find renters, maintain your property, and stay up to date on local ordinances.
That’s a lot of work, and a far cry from the passive income most people imagine.
The upside?
Your properties appreciate in value, often selling for hundreds of thousands of dollars more than their purchase price. Additionally, if you have enough apartments and rental units, you can outsource maintenance to a building manager.
If you’re interested in real estate, I’d highly suggest picking up a copy of Building Wealth One House At A Time and reading it cover to cover.
This book will give you a ton of insights into whether or not real estate is right for you.
3. Dividend Stocks (The Easiest Form Of Monthly Passive Income)
(Investing $2,000 A Month Creates A “Snowball Effect“)
This last strategy is a great way to build wealth. You buy shares of a company, and they pay you quarterly (or even monthly) just for holding their stock.
Traditionally speaking, most dividend stocks pay around 3% of a shares value each year. So if you buy one share for $100, you’re getting $3 in annual dividends. Some businesses pay more or less, but 3% is around the average point.
The best parts of dividend investing is the fact that you can select companies and funds which payout at different times of the year, allowing you to collect checks every single month.
This also helps compound your earnings on a monthly basis, or it creates a steady stream of usable passive income.
If you’re interested in dividend investing, I suggest reading the book Dividend Stocks For Dummies and checking out Sure Dividend. Both are terrific sources of information.
The Best Passive Income Combination
Real estate is definitely a great business, however its barrier of entry and time consuming nature make it tough to suggest. This is especially true if you want to travel, or don’t have the starting capital.
Because of this, I suggest focusing on e-commerce and dividend stocks.
Web hosting and a domain cost less than $200 through BlueHost. That’s a tiny investment compared to buying a house or apartment complex. Likewise, you can easily turn your site into a nice side stream of income.
Let’s say you write an eBook and sell one copy a day for $10. That’s $300 a month in passive income.
Now, let’s say you sell gym equipment (as an example) through an affiliate program. You get a $30 commission on every unit sold. At one sale a day you’re netting an extra $12,000 per year.
The money adds up fast.
Once you’ve got this income stream, reinvest it into dividend stocks.
If you’re buying $12,000 worth of stocks each year, you’re getting another $400 in annual dividend returns. That’s like free money on top of your existing passive income.