If you want to earn an extra five-figure salary, you're going to have to get creative if you don't want to quit your current job for good.
That's because the typical path of most people is working long hours and earning less than they'd like while also taking on debt (student loans) or relying heavily on their employer for retirement savings.
But it doesn't have to be that way, especially when there are so many ways to generate passive income without quitting your day job completely. Here are eight ideas we've found over time to help turn any amount of profit into financial security.
When you look at the top earners online who are making hundreds of thousands per year with little effort, one common theme emerges — they use multiple streams of revenue. They leverage their efforts across several different products, services, and businesses. This gives them greater flexibility to pursue other opportunities as well as control over what happens next.
So how does someone go about creating this kind of "holy grail" lifestyle? The first thing you'll want to consider is which areas you enjoy spending your free time doing. For example, perhaps you love writing but hate editing? Or maybe you prefer designing websites from home instead of coding? Maybe you could create videos by yourself rather than paying freelancers to do it for you. And whatever interests you, think creatively about ways you might expand upon those passions. It pays to diversify!
Next, decide whether you'd actually like to run each business full-time. If not, find something else. You should also figure out whether having passive income means being able to keep your regular 9-5 schedule or sticking to a flexible 1099 model.
The key here is to understand where your true passion lies, figure out how to capitalize on it, and then build up additional sources of revenue. Don't worry too much about becoming rich overnight. Instead, focus on building a solid foundation of sustainable passive income through various avenues.
Once you've got some idea of what you're looking forward to pursuing further, here are three tips to follow along the way:
Know exactly what your goals are. Before diving headfirst into new ventures, take stock of your finances, including debts and assets. That will give you clarity regarding what kinds of investments you may wish to pursue. Also, remember that investing isn't necessarily passive income. So before committing fully, set aside enough funds to cover all expenses associated with these endeavors until profits begin rolling in consistently.
Have realistic expectations. Remember that while a lot of hard work goes into starting any business or project, it takes even longer to achieve success once everything has been built around a plan. Just because you made a certain amount of sales last quarter doesn't mean you'll hit earnings projections again this year. In fact, it probably won't happen unless you continue producing high quality content regularly. Stay determined but avoid getting discouraged.
Be prepared to fail fast and learn from mistakes. Everyone makes plenty of errors during experiments, regardless of success. But it's essential to recognize shortcomings early and address them accordingly. Otherwise, you risk wasting precious resources on projects that aren't profitable after all.
In addition, it helps to know that learning curves exist no matter what type of endeavor you choose. With luck, though, you'll eventually reach the point where you can stop actively managing things like marketing campaigns, product development, hiring employees, etc., and still reap great rewards. Once you've reached that stage, you only need to stay focused on what really matters — running the company itself.
For more information on how to become truly passive, check out our guide on turning your side hustle into a real career.
One popular method among entrepreneurs today is leveraging technology to generate passive income. There are dozens of ways to accomplish this goal, such as selling digital downloads directly from sites like Amazon, using affiliate links and promoting others' products, offering paid consulting sessions via Skype, hosting webinars, giving lectures, and publishing eBooks.
It definitely requires time and patience, but the payoff is worth it since you can scale up quickly once you master a few simple skills. However, it's important to note that passive income generation comes down to mastering two main concepts: SEO techniques and conversion rates.
You see, traffic alone doesn't guarantee conversions. Without proper optimization, potential customers may never stumble onto your website. To overcome this challenge, experts suggest that marketers try driving targeted prospects toward landing pages that offer value propositions instead of just putting ads everywhere.
To illustrate, say you own a local restaurant that offers catering service. Your ideal customer base would likely consist of bridesmaids planning parties for friends' weddings. Therefore, your best bet for converting visitors into orders would be to design a special menu item specifically for wedding receptions. People tend to trust recommendations given by close friends and family members above anything else. By providing relevant suggestions based on past experiences, you'll increase chances of them choosing your establishment over competitors.
Another reason why tech startups often struggle to succeed is due to poor user experience. Customers tend to abandon shopping carts halfway through checkout processes simply because they were overwhelmed by complex designs. Fortunately, there are solutions available to improve UX by adding simplicity and efficiency.
Here's another tip: Consider combining both offline and online tactics together to maximize results. This approach ensures that your brand reaches its target audience effectively, resulting in better ROI.
Regardless of what industry you operate within, we recommend researching market trends and keeping track of emerging technologies in advance. Then, formulate plans for future developments that will allow you to stand out from competition.
Most importantly, remember to treat every single person behind a computer screen as a legitimate prospect. Give them a positive impression of your brand and show off your ability to solve problems efficiently. Only then will they feel comfortable sharing personal details with you. After all, your reputation is crucial to growing your business.
There are countless ways to spend your spare time earning money. Some require very little investment, while others demand quite a bit. Regardless, the amount varies depending on the particular scenario involved.
Let's say you're interested in blogging. You can buy domain names, pay monthly subscriptions to premium WordPress themes, hire writers/editors, purchase ad space, etc. Obviously, none of these options involve buying physical goods and equipment upfront. Thus, they qualify as passive income.
On the other hand, if you intend to join a network marketing business, you must commit significant amounts of capital right away. Depending on the nature of your opportunity, signing up could cost anywhere between tens of thousands to millions of dollars. Even worse, commissions earned from recruiting are typically nonrefundable. As such, it's critical to thoroughly research MLM companies before jumping aboard.
Of course, the opposite holds true as well. Let's assume you already possess expertise related to a specific field and you want to open your own store. Most small brick-and-mortar shops require considerable startup costs and heavy labor involvement. On the flipside, however, you could opt to sell items online and automate processes whenever possible. This is known as dropshipping. Simply order inventory upfront, ship them out, and wait for payments to roll in.
Finally, if you're wondering how to turn $10,000 into $50,000, we highly encourage you to read our article outlining proven steps for increasing retail sales. Suffice it to say that successful retailers rely on continuous innovation and creativity to stay ahead of competition.
As mentioned earlier, anyone can turn a profit into passive income if he knows how to position his offerings properly. Although it largely depends on your skill sets and preferences, here are a couple of general guidelines to help kickstart your journey:
Start slow, grow big. Take advantage of low barriers to entry combined with scalable growth strategies. Choose niches that serve lots of individuals but don't attract too much competition yet.
Focus on one vertical. Instead of spreading yourself thin across numerous industries, concentrate on developing a strong foothold in one sector. Ideally, pick something you know inside and out.
Think outside the box. Identifying unique angles is paramount to succeeding online. When brainstorming, ask questions such as "how did Apple change the game?" or "what was Facebook originally supposed to do?".
Don't forget to experiment. Testing new approaches can lead to breakthroughs and increased effectiveness later on. While it's okay to play it safe sometimes, experimenting frequently allows you to identify holes in your strategy sooner. Plus, failing faster can motivate you to persist.
Lastly, always strive to provide exceptional value. Consumers expect nothing short of stellar service nowadays. Unless you're willing to step out of comfort zone, it's difficult to compete against bigger brands or rivals with deeper pockets.
Remember that marketing is ultimately a numbers game. Hence, it's imperative to test and measure constantly. Once your campaign starts showing signs of progress, stick with it and gradually optimize your performance. Above all, remain consistent and patient. Eventually, you'll reach a point where you can afford to delegate tasks. At this juncture, your passive stream of income will flourish under your watchful eye.
If you're wondering how to turn $50,000 into $100,000 in the next year or less, you've come to the right place! In this article we'll explore what you can do with a small investment and show you eight ways that anyone can create multiple streams of income from their current investments.
Let's get started...
There are so many things you could be doing if only you had an extra $50K lying around. You probably have about 10 ideas going through your head already. Some people want to spend it on new clothes, others would like to go back to school for further education (or maybe even retire), some wish they'd gotten married earlier or later, etc. The point is there's no one-size-fits-all approach, but rather lots of different options depending on where you currently stand.
Your first step will need to be figuring out which direction you want to take when investing your extra cash. If it's time to save, then you may be looking at long term retirement accounts such as 401ks and Roth IRAs. Maybe you just want to buy real estate for rental purposes or perhaps you think stocks might be better than bonds... all these decisions require a lot of research. Once you know what you want to do, we can help you figure out how to reach your goals using our proven strategies.
For example, here are four common questions that often arise from investors who don't yet understand how to use their extra cash effectively:
"I'm too young/old to buy property." It doesn't matter how old you are -- if you're smart, you won't wait until you "retire". There are plenty of other vehicles available for those wanting to own residential properties and earn monthly rentals. For instance, look into buying REOs (real estate owned) directly from banks after they foreclose on homes. Or consider joining forces with private lenders to purchase distressed loans and refinance them. Another option is leveraging hard assets via asset protection trusts. This strategy involves taking title over valuable items, including cars, boats, artwork, antiques, precious metals, etc., while still leaving the bulk of your assets intact.
"It seems expensive to open up my own brokerage account." Yes, it does seem pricey. But most brokers offer free educational materials and tools to guide beginners along the way. And remember, opening an online trading platform is actually much cheaper than hiring an advisor who charges thousands per month for his services. Also, check out our blog post detailing seven tips for starting off successfully in stock market trading without losing any money.
"My credit score isn't great." No worries. We've got solutions for everyone regardless of whether or not you have perfect credit. With our guidance, you'll learn everything necessary to build credit quickly and easily.
"I don't trust bankers/stockbrokers." That's understandable since Wall Street has been involved in shady practices before. However, today's banking system offers numerous positive alternatives to high interest rates and risky trades. One alternative is checking accounts offered by local credit unions whose members pay low fees and enjoy competitive benefits. Alternatively, try establishing direct relationships with smaller financial institutions and see if they fit your needs. Don't forget peer-to-peer lending platforms either.
Once you've decided what path you want to follow, the next thing to decide is what type of funds you want to invest your extra cash in. Again, due to wide variety of possibilities, there aren't necessarily best choices. So ask yourself this question: What am I passionate about? Then choose a fund based on your interests and passions.
Nowadays there are tons of opportunities out there ranging from index funds to actively managed mutual funds. Index funds typically consist of large companies that track the overall performance of major indexes like S&P 500 or Dow Jones Industrial Average. On the other hand, active management refers to individual portfolio managers who attempt to beat the markets by picking stocks and choosing specific sectors to focus on.
Either way, once you find a suitable vehicle, stick with that. It's very difficult to switch funds once you establish a habit of saving because switching costs tend to eat away at savings.
Depending on where you currently stand financially, you may benefit from putting your money somewhere else besides traditional bank accounts. Here are two popular places investors go nowadays:
High yield savings accounts: High-yield savings accounts allow you to keep your earnings instead of paying hefty ATM withdrawals. Plus, you receive checks each week instead of waiting months for deposits made during the previous weeks. Rates vary widely across regions, states, and providers. A good rule of thumb is to compare similar products side-by-side to determine the best deal.
CDs: Certificates of Deposit (CDs) are short-term government securities issued by banks and sold to retail customers. They usually mature within 1 - 12 months. CDs carry higher interest rate compared to savings accounts, but lower annual percentage yields than Treasury Bills (T-bills). Interest payments are paid quarterly throughout the life of the CD.
To pick between T-bill certificates and CDs, again it depends on where you currently stand financially. If you haven't reached your goal of retiring soon, then T-bills represent the safer bet. Whereas if you have enough saved to cover living expenses for several years, then CDs may provide greater return potential. As a general guideline though, sticking with tax-free municipal bond offerings is always a safe move.
In addition to deciding on where to invest your extra cash, another important decision to make is choosing among various types of passive incomes. Passive means earning returns on your initial capital with little or no additional effort from your end. Depending on where you stand, you may benefit from creating both regular income streams (e.g.: dividends, annuities) and residual income sources (e.g.: real estate, businesses).
The following list includes eight options you can pursue to create passive income:
1. Dividends: When a company pays its shareholders annually, that's called dividend payment. Companies often compensate shareholders in the form of dividends. While dividends are taxable, Uncle Sam allows certain corporations to defer taxes indefinitely thanks to something known as qualified corporate dividends. To qualify, distributions must exceed 5% of net profits earned during a given period.
2. Businesses: If you have entrepreneurial spirit, owning a business might appeal to you. Although building a successful enterprise takes years of dedication and perseverance, there are countless success stories shared by entrepreneurs everywhere. Even if you fail, you can sell your creations for profit immediately.
3. Real Estate: Buying real estate for resale provides solid liquidity and superior growth potential. Unlike other forms of passive income, you can also control the price you set for sale. By making strategic purchases, you can achieve rapid equity appreciation.
4. Stocks & Bonds: Owning shares in publicly traded companies gives you ownership stakes in your favorite brands and lets you participate in the upside of future sales. Like real estate, you can also control the price you set for selling shares.
5. Mutual Funds: Similar to stocks, purchasing shares in a particular mutual fund gives you ownership stakes in that fund. But unlike stocks, mutual funds trade daily on public exchanges. Returns depend on the quality of the underlying assets and market conditions.
6. Insurance Products: Annuity contracts and variable life insurance policies are examples of insurance products that generate guaranteed lifetime annuitized payments. Variable life insurance is designed to meet changing financial objectives whereas annuities protect against catastrophic risks. Both of these products generally lock in premium payments for the rest of your life.
7. Foreclosures: Many homeowners become delinquent on mortgage payments and eventually lose their houses. After repossession, owners can rent out foreclosed homes and recoup losses associated with foreclosure. Investors interested in flipping vacant properties can also capitalize on rising home prices.
8. Leveraging Hard Assets: Asset Protection Trusts are special legal structures created by attorneys to shelter assets from creditors, divorce proceedings, lawsuits, and bankruptcy claims. People can also leverage hard assets like jewelry, art, collectibles, and cars.
If you're wondering how to turn $50,000 into $100,000 per year (or even just $1 million), there are several ways that you could potentially achieve this goal and more. But the first thing to consider is whether or not it's realistic for you to become wealthy with such little investment capital — especially if you have other financial obligations like student loans, credit card debt, etc., which will be difficult to pay off without additional income flowing in as well.
To answer these questions, we'll use numbers instead of words so hopefully everyone understands what they mean. If nothing else, think about this analogy: You've been given two tickets to an event where each ticket costs you only one dollar. One ticket allows access to the main stage while the other grants entrance to a smaller "backstage" area behind security where free food is being served. Which would you choose? The cheap ticket gets you admission to the show, but doesn't get you any backstage privileges at all. So don't expect to see Beyoncé singing live on national television from your couch when using your $10K/year budgeting software!
The truth is that becoming financially independent takes time and effort. It requires consistent action over long periods of time. And yes, many people who started out with small amounts end up making large sums of money because of their hardwork and persistence. However, those stories aren't typical. Most folks will tell you that success comes through discipline, patience, and perseverance above anything else. And unfortunately, most people don't understand enough math to know if they really have what it takes. That's why we created this guide. We want to help demystify some of the key concepts involved in building real wealth to give you an idea of what kind of lifestyle changes you may need to make to reach your goals. By the end of this article, you should better understand what it means to turn 50k into passive income and how big of an impact that change can actually have on your life.
Before diving into our list below, keep in mind that the best way to take advantage of passive income opportunities is by learning investing skills yourself. For example, you'd probably earn significantly higher returns than someone who simply invests their savings elsewhere. There are plenty of great online resources available to teach basic investing principles and strategies. In fact, Warren Buffet himself recommends index funds as among the best investments for beginners. Also, remember that passive income isn't necessarily easy to create. It might require some serious sacrifices along the way. With that said, here are eight different options that anyone could pursue to begin creating true wealth.
We mentioned earlier that achieving passive income involves sacrificing current spending habits. This means cutting back on things like eating out every night, traveling around town, buying new clothes, going shopping multiple times per week, paying high interest rates on loans, etc. Now, before getting too excited, please note that none of these items constitute actual expenses since they were already paid for. Instead, we refer to them as sacrificed luxuries or discretionary expenditures. While changing your current situation may seem daunting at first, once you realize that you're no longer using half of your paycheck towards living expenses alone, you'll feel motivated to find creative solutions to fix your problems.
By focusing solely on eliminating expenses, you'll save thousands of dollars faster than trying to cut down your monthly bills. And after saving that extra cash, you can reinvest it into whatever projects you decide to pursue. To calculate how much disposable income you currently spend each month, check out Dave Ramsey’s popular personal finance blog EveryDollar.com. He offers helpful advice on finding areas of unnecessary spending within your household budget. Once he identifies the problem categories, you can then brainstorm ideas for improving your finances further.
There are three common approaches to converting discretionary income into passive income:
Increase Income - As aforementioned, it's important to focus on increasing earned income rather than relying on unearned sources. Many people rely heavily on government assistance programs, however, the amount of benefits received is limited and often unpredictable. Additionally, many welfare recipients tend to abuse the system by taking full advantage of certain loopholes. Lastly, receiving unemployment compensation also has its drawbacks. After exhausting all eligibility requirements, workers must reapply again after six months. Unfortunately, during recessions, job availability becomes increasingly scarce and competitive positions frequently open up overnight. Therefore, unless you plan ahead and develop alternative streams of revenue, it may be tough to land steady employment.
Invest Your Savings- Similar to earning interest on bank accounts or CD deposits, compounding invested funds provides greater return potential compared to keeping them idle. A good rule of thumb is to allocate 10 percent of all saved money away each month towards growth oriented investments like mutual funds, stocks, bonds, annuities, etc. Doing so lets you reap the rewards of compound interest throughout retirement. Of course, depending on your age, risk tolerance, and overall portfolio composition, you may wish to adjust this number based on your unique circumstances.
Start Businesses & Side Hustles - Another approach is to leverage part of your savings to launch profitable side hustles. Some examples include selling homemade crafts, freelancing services, starting blogs or YouTube channels, teaching others about specific topics, trading used goods or vintage clothing, and picking fruit from local farms. Depending on your strengths, interests, hobbies, etc., you may be able to monetize them quickly and easily by leveraging platforms like Etsy, eBay, Facebook Marketplace, Instagram, etc., to sell products and services directly to customers. In addition, you can explore various business models like affiliate marketing, dropshipping, franchising, licensing intellectual property rights, joining network marketing organizations, renting unused space in retail stores, selling advertising, offering consulting services, etc.
These are just a few of hundreds of possibilities that exist. Keep in mind that passive income does not come without sacrifice. Since there are unlimited choices, always try to pick something that aligns with your values, personality type, skill set, passions, etc.
Once you've determined what path(s) you'd like to follow, next you'll want to figure out how much money you'll need to invest. Let's say you've decided to forego traditional jobs altogether and look for passive income opportunities. Here are a couple simple rules of thumb to estimate the amount of initial seed money required to generate meaningful results.
$5,000+ = Invest $5-$25 per day or approximately 1% of your total annual income
Less than $2,500 = Invest less than $0.25 per day or approximately 0.01% of your total annual income
For reference purposes, assume that you're working 40 hours per week, earning $35,000 annually ($8,125 biweekly). Then, according to the second guideline listed above, your daily investment limit should fall somewhere between $250 and $4.99.
This range represents a wide spectrum of possible outcomes ranging from very low income earners to extremely successful entrepreneurs. Obviously, the lower the percentage of your income that you devote toward investments, the bigger the payoff will be later. For instance, imagine a person who makes $45,000 per year and spends 90% of his earnings on rent, groceries, utilities, debts, insurance premiums, entertainment, etc. On average, he dedicates roughly 5% of his salary to investments. Over time, if he saves another 5%, he could retire early with $300,000 left in the bank. Contrast this scenario with somebody who earns $65,000 per year and devotes 95% of his salaries to housing, transportation, food, health care, education, taxes, etc.. His net worth increases by only 2%. Although both scenarios represent extreme cases, the latter illustrates how minimal contributions to investments can yield huge dividends in the future.
In reality, the minimum amount needed to sustain a healthy standard of living varies greatly across individuals and regions. Don't forget to factor in the cost of healthcare and private school tuition for children. Other factors to consider include mortgage payments, car ownership, home improvements, college fees, childcare, family vacations, yearly subscriptions, gym memberships, etc.
After determining what steps you intend to take and how much money you desire to accumulate, now it's time to break it down into manageable chunks. How exactly do you go about doing this? Well, you can either divide your desired target sum by 30 days (i.e.: $3,700 divided by 28= $11.86 per day) or by 52 weeks (i.e.: $3,700/$52= $7.22 per day). Either option works equally well, yet the former method yields slightly higher figures due to accounting conventions. Nevertheless, whichever calculation you prefer, ensure that you round the final result upwards to avoid losing money unintentionally.
Remember, the sooner you start contributing to your investments, the sooner you can enjoy the fruits of your labor. Ideally, you should aim to contribute to your investment account at least twice per month. When you do, don't stop until you hit your weekly contribution limits. The secret lies in consistently sticking to your gameplan, despite inevitable setbacks and obstacles.
Become CEO of your own lead generation software company, just follow our battle-tested guidelines and rake in the profits.