Generating passive income is a dream for many people out there who are looking to create flexibility outside of a 9-5 job or anyone who just wants extra income outside of their day job. Who wouldn’t want to create a stream of income that requires little to no work? Unfortunately, the passive income brochure often doesn’t match reality. There are several myths and misconceptions floating around about passive income.
By increasing your active/semi-active income (e.g., side-hustles), you can invest more in purely passive income (e.g., dividend-paying stock and bond ETFs). Also, before retirement, those dividends can be reinvested to generate even more dividends. It’s a virtuous circle. Thank you for this awesome article, Daniel.
I had a little laugh when the first point was "Start a side hustle" a.k.a. "get a 2nd job". I realize that you were going from least passive to most passive, but I don't think #1-3 should make any kind of passive list (with the exception being investing in a REIT). They would all require quite a bit of work either up front (content creation), or on-going (finding sellable products, product creation, property maintenance, tenant turnover, etc.).
As you mention in #4, the only truly passive income is boring, set it and forget it, investing.
If someone wants to get a second job to bring in more income then more power to them! I think that can be a great idea. But let's not kid ourselves by calling it passive income.
4 Great Ways To Generate Passive Income
Title is misleading...should be 3 ways to increase your active income and one way to increase your passive income.
By increasing your active/semi-active income (e.g., side-hustles), you can invest more in purely passive income (e.g., dividend-paying stock and bond ETFs). Also, before retirement, those dividends can be reinvested to generate even more dividends. It’s a virtuous circle. Thank you for this awesome article, Daniel.
I had a little laugh when the first point was "Start a side hustle" a.k.a. "get a 2nd job". I realize that you were going from least passive to most passive, but I don't think #1-3 should make any kind of passive list (with the exception being investing in a REIT). They would all require quite a bit of work either up front (content creation), or on-going (finding sellable products, product creation, property maintenance, tenant turnover, etc.).
As you mention in #4, the only truly passive income is boring, set it and forget it, investing.
If someone wants to get a second job to bring in more income then more power to them! I think that can be a great idea. But let's not kid ourselves by calling it passive income.
Love the data found in #2 - Create Content. Good work 👍🏼