Let’s Talk About Passive Income

 

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Today, I want to talk about passive income and why I like it.  My definition of passive income is making continuous income with minimum or no effort on your part.  That’s just my general definition if I had to think about it.  Webster’s dictionary probably says something totally different, but this gives you a better idea of what I mean when I say passive income.

There are different ways to gain passive income so let’s look at some ideas…

From the stock investor perspective, they can gain passive income by investing in dividend producing stocks and mutual funds.  This requires minimum effort from the investor because all they really need to do is research the stock or fund they are interested in and then submit a purchase order.

The dividends are normally paid per share owned.  Most dividends aren’t a lot per share but the dividends can add up if you own a lot of shares.  Along with that, if you set up your portfolio to reinvest the dividends, your dividends are then helping to build your portfolio.

This is just a random example and is not to be taken as this is how much you should earn with dividends.  Let’s say, you normally invest $100 per month into your stock or mutual fund.  Now, let’s say, you earn $50 from dividends.  The next month, you will still invest $100 but with the dividend payments, it will actually be $150 to buy more shares.  Essentially, your money is starting to work for you.

Next, from a real estate investor perspective, they can earn passive income by buying a property and then renting it for more than their mortgage, taxes, and property management costs.  So, if their mortgage, taxes, and property management costs equal $500 a month, but they can rent the property for $700 a month, they make $200 a month in passive income.

All they did was research the property, buy the property, and hire a property manager.  Then the property manager is responsible for acquiring tenants, perhaps collecting rent, and maintaining the property.  The owner is responsible for collecting his or her passive income each month.

Both of those examples, stock investing and real estate investing, are good but I think it costs a lot of money to receive the passive income.  This is why I like Internet Marketing.  Let’s look at a simple example.

Let’s say you create a website, add content, and build traffic to the website.  You’ve monetized the site using Google Adsense.  With the traffic steadily coming in, you are making $100 per month.  How much money do you think it would cost to create this website, add content, and drive traffic?

Do you think it would cost as much as it would cost you to invest in dividend producing stocks to earn $100 passive income?

Do you think it would cost as much as it would cost you to buy real estate to earn $100 passive income?

Probably not even close to the same amount of money invested.  And that’s just one idea for earning passive income with internet marketing.

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