Passive Income Assets

[SalParadise]

I'm currently looking into developing passive income assets. These are small businesses, or investments, which deliver a reliable income without your physical presence. You just spend a few months designing and constructing them, and then it takes only a couple of days a month to manage them. And money will come in without you needing to be there to deliver the service.

I'm a film-maker, so I keep an odd schedule - some months are a flurry of activity and others are just typing away on the laptop. I am going to get a day job to pay the rent, but my ambition is to spend my spare time setting up sources of income which will pay my rent and my few bills, AND give me the freedom to move around from place to place working on my films.

Then, I'll use my increased free time to learn either stocks or Real Estate on the side, and generate the capital to invest in major shares or property a few years down the line. Then I'll have money coming in all the time with very little effort, which gives me a lot of freedom to make films.

Stocks and Real Estate are an awesome passive income asset, but seem to require a lot of expertise and money to get going! I figure I'll build up to these.

So my question is, has anyone else on the board got experience in building passive income assets, or small businesses with a heavy passive component? If so, do you have any tips or book recommendations? (I have read 'Rich Dad Poor Dad' and 'The Four Hour Workweek' which seem to be the big hitters in this area right now).

Has anyone had success with this?

Also, does anyone on the board know of a kind of business which gives you a reliable income for very little time input every month? It doesn't have to be as big as stocks or shares...

One idea I got was to run a bulk candy vending business. Basically, you place little candy machines in store lobbies, and service and fill them once a month. You make some money from it, and pile the money into buying more machines, until you get a healthy income. You can use it to buy more free time, or channel it into a bigger asset (like a property).

Here's a good article on the subject: Bulk Candy Vending for Passive Income

Oh, and for you Pook worshippers, this whole enterprise ties in rather well with this post: Become Financially Free.

I think it applies to employees too, as you'll have much more job security and negotiating power if you are making some money on the side yourself.

If anyone is curious about this subject, please remember there are about a million scams based on the 'passive income' concept, so be very wary. It's a good rule not to sign up to anyone's "scheme" or "system"... after all, if you don't design the business, it won't really be designed around your life, which is the point of it!!

Now who wants to buy my proven system? (Only kidding ).

 

[RedPill]

Also, does anyone on the board know of a kind of business which gives you a reliable income for very little time input every month? It doesn't have to be as big as stocks or shares...

Believe those who are seeking the truth; doubt those who find it.

Your first mission in the game of captialism is to get capitalized, or become attractive to capital. One typically requires the other. Are you doing anything to achieve this end? I would strongly encourage you to branch beyond the motivational books, which trivialize the requisite character-building and educational components necessary to responsibly manage a revenue-producing entity. The message that "it's effortless if you know how" sells to the masses much better than "get off your ass, hit the textbooks, and go through the fire."

To answer your question with a more succinct reply - How much capital do you have access to?

 

[Ken785]

I'm currently looking into developing passive income assets. These are small businesses, or investments, which deliver a reliable income without your physical presence. You just spend a few months designing and constructing them, and then it takes only a couple of days a month to manage them. And money will come in without you needing to be there to deliver the service.

I'm a film-maker, so I keep an odd schedule - some months are a flurry of activity and others are just typing away on the laptop. I am going to get a day job to pay the rent, but my ambition is to spend my spare time setting up sources of income which will pay my rent and my few bills, AND give me the freedom to move around from place to place working on my films.

Then, I'll use my increased free time to learn either stocks or Real Estate on the side, and generate the capital to invest in major shares or property a few years down the line. Then I'll have money coming in all the time with very little effort, which gives me a lot of freedom to make films.

Stocks and Real Estate are an awesome passive income asset, but seem to require a lot of expertise and money to get going! I figure I'll build up to these.

So my question is, has anyone else on the board got experience in building passive income assets, or small businesses with a heavy passive component? If so, do you have any tips or book recommendations? (I have read 'Rich Dad Poor Dad' and 'The Four Hour Workweek' which seem to be the big hitters in this area right now).

Has anyone had success with this?

Also, does anyone on the board know of a kind of business which gives you a reliable income for very little time input every month? It doesn't have to be as big as stocks or shares...

One idea I got was to run a bulk candy vending business. Basically, you place little candy machines in store lobbies, and service and fill them once a month. You make some money from it, and pile the money into buying more machines, until you get a healthy income. You can use it to buy more free time, or channel it into a bigger asset (like a property).

Here's a good article on the subject: Bulk Candy Vending for Passive Income

Oh, and for you Pook worshippers, this whole enterprise ties in rather well with this post: Become Financially Free.

I think it applies to employees too, as you'll have much more job security and negotiating power if you are making some money on the side yourself.

If anyone is curious about this subject, please remember there are about a million scams based on the 'passive income' concept, so be very wary. It's a good rule not to sign up to anyone's "scheme" or "system"... after all, if you don't design the business, it won't really be designed around your life, which is the point of it!!

Now who wants to buy my proven system? (Only kidding ).

I was thinking the exact same thing the other day!!! I swear, me and you...its like one mind!

 

[SalParadise]

Really, Ken 785? What ideas have you had on this subject, and how do you intend to follow them up?

I can think of a few book recommendations you could find useful:

The Four Hour Workweek - Timothy Ferriss

This is a hot book at the moment. Gives you a very specific path to making money without your physical presence, and with minimal involvement in the business... some knock it for being too inflexible (it's Tim's way or the highway), but it's full of useful information generally (there's even a chapter for employees who want to create a remote working arrangement), and it will turn you on to clever forms of lateral thinking.

Rich Dad, Poor Dad - Robert Kiyosaki

He only gives you concepts, not specifics, and it's best to take what he says with a pinch of salt.... but Kiyosaki explains the way the rich look at money in a simple and powerful way. It cannot fail to make an impression on you - a must have.

Multiple Streams of Income - Robert G. Allen

If you can cut through all the marketing hype, he explains various ways of making passive income, and gives you at least a few useful tips on each. Best to get this cheap though as there is a lot of dodgy advertising in it's pages.

Also Genius Types is a fantastic website, run by a filmmaker in LA who uses small businesses to buy himself creative time (this isn't my website, by the way, though this guy's ambitions are similar to mine ).

Have you read any good books on this subject?

 

[iqqi]

E-Books.

 

[WesCottII]

Right, just so we're clear, there is no "easy" monthly income, or we'd all be doing it. Setting up any business costs time AND money. Even your candy machines would need maintainance, stocking (buying from wholesalers would eat up your profit), somewhere for you to store the stock, and the rent you'd pay to the place you sited it IF they didn't decide to cut out the middle man and get their own vending machine anyway.

But, enough negativity.

Apart from the usual Money markets funds, and shares (which will both pay you), I suggest you look to games machines. Everyone loves to play on games machines, and once you'd spent the inital outlay, you might have to fork out rent, thats it. It's how Warren Buffett got started.

 

[SalParadise]

Right, just so we're clear, there is no "easy" monthly income, or we'd all be doing it. Setting up any business costs time AND money. Even your candy machines would need maintainance

Good point WesCott, and it's not so much negativity as straight talk. This is the problem with all these 'proven systems' you see floating around the web - they don't add any value to anyone, so how could you make a profit?

What I should make clear is when I say "passive", I mean an active business with a passive component. Yes, with the candy business you will need to get stock, repair the machines, and file diligent tax returns. There is work involved.

But the point is that the business is flexible, and largely does not require your presence to make money. I am told by reliable sources that if you do things a certain way, and have something like 30 machines active, this business takes only a few days a month to run, and provides a good return (barring the inevitable emergencies and repairs). This is great for guys like me, who want to have a flexible schedule and work on films, but keep on top of expenses.

Yes, there are more profitable businesses, and no, it's not entirely passive, but it does seem like a good business for an artist to run. The objective is more free time. But we'll have to see... I'll let you know how it goes with my first machine

As for shares, I recently got paid off on some shares I had in a company which was taken over. Thinking of putting the money in an index fund, and stashing it for a few decades.

 

[WesCottII]

What I should make clear is when I say "passive", I mean an active business with a passive component. Yes, with the candy business you will need to get stock, repair the machines, and file diligent tax returns. There is work involved.

But the point is that the business is flexible, and largely does not require your presence to make money. I am told by reliable sources that if you do things a certain way, and have something like 30 machines active, this business takes only a few days a month to run, and provides a good return (barring the inevitable emergencies and repairs). This is great for guys like me, who want to have a flexible schedule and work on films, but keep on top of expenses.

Yes, there are more profitable businesses, and no, it's not entirely passive, but it does seem like a good business for an artist to run. The objective is more free time. But we'll have to see... I'll let you know how it goes with my first machine

Yes, the business is flexible. Thats a given. However, you say you want 30 of these machines. Huge dis-economy of scale right there man, any profit made will be eaten up straightaway by stock.

The other thing I'd note is location. Scout out places where they'd DEFINITLY take one of these things. It's cheaper for these places to own their own vendors, so you'd need to sweeten the deal.

Now by no means am I suggesting you give up the idea, because I applaud anyone that starts their own business, I just think that the intial outlay cost, combined with the low profitability would be work not worth it for the minimal return. I also think that'd it'd be more time consuming than you realise, these things need filling/collecting EVERYDAY. Which means you have to come out everday AND bring all the stock, because the location won't let you store stock. This combined by the rent you'd pay I think makes this business a non-starter.

 

[logic1]

Sal

I have some information for you from experience, use it the way you see fit. Its close to what your talking about. If you think it will work go for it but always be prepared for the unexpected. Its not the same products but the same idea and the way it works.

Anything bringing in money is always more work than you expect. That means more time and labor invested. Always keep this in mind.

I have some retail type businesses and fabricating shops in a mid size city. We placed drink machines (coke,pepsi, ect.) at the fab shops for the employees. After seeeing the type of volume going thru the machines at the shops we purchased more machines for the retail stores. All these machines were outside so the public had access 24/7 to them.

These machines make me a good amount of extra spending money. But the catch is they are a lot of work. I have one employee who spends 75% of his work week filling, servicing and running to Sams for palletts of soft drinks.I would not have time to take care of them myself

Also, if one breaks down it must be fixed immediatly. Why, because the customers are creatures of habit. They might buy a drink from one of the machines every morning. If it is broke they will go elsewhere and you will lose that customer. You will have to keep whatever type machines working all the time. This is very important.

This is an active business with the passive component. What I want you to know is the passive part might not be as passive as you expect. Be prepared. Not trying to steer you away but giving you a heads up. There is money in this type of stuff but everything has to fall together right. I already had the locations, market, storage space, capital, ect. This was a big plus. I dont know if it would have worked by itself?? But as of now they make enough to pay an employee and send me on some vacations.

More power to you. Good luck

 

[Mistic]

My job is as passive and realistic of an income that I have seen. In short I sell our company's service to retail outlets. They pay $500 up front for us to design their program. Out of that I get $250 commission. Then they pay $300 per month for our service. Of that I get 35% or about $100 per month per client. My only work I do after the initial sale, is to call the clients time to time and congratulate them on a great sales day, etc.

I can do both the sales and the maintenance from my computer and on the phone.

When I have 200 clients, I will be making $20,000 per month with very little day to day work. My cost, nothing but some time.

Anyone who is good with sales, I can explain more if interested.

 

[SalParadise]

Thanks very much to Mistic, logic1 and WesCottII for your advice, which I have read and considered. I was thinking that the passive element of the business was heavily dependent on many factors working together (i.e. the cost of the supplies, the candy machine, and the stock / the route being closely tied together). I will be sure to look closely at the practicalities of the operation, and the realistic chance of making a 'passive' income.

Anyway, I'm starting with one machine and seeing how it goes.. I got it at an amazing discount so this is a low cost experiment for me.

 

[Mistic]

Anyway, I'm starting with one machine and seeing how it goes.. I got it at an amazing discount so this is a low cost experiment for me.

Why not. Go for it man. This is a proven method, with little risk. Have fun.

BTW, my friend has a great situation from investing in a storage facility. He gets a certain percentage of the rent each month, according to his investment.

 

[RazorAzoth]

Old thread, but I'm wondering how you did with this candy machine thing. Did it work out? What are some other good passive income methods?

 

[Gaucho]

An automated trading system.

Whether that be futures, equities, CFDs (risky), options.

I left work quiet some time ago to set up this business, takes me 30 minutes per night and generally brings in about 4 thousand per month. The guys I work with have been averaging 150% per year for several years now. Like any business, cashflow and risk is not fixed and guaranteed.

I can now go back to work if I want, and have the trading business running and compounding in the background. Ultimately, early retirement.

 

[RazorAzoth]

Wow, can you recommend some resource for learning more about how to get into something like this?

 

[WORKEROUTER]

Getting passive income is great. In most cases it requires a lot of work. And when you're doing the work, you're not often seeing any of the results, which is hard for most people.

I wouldn't focus on everything at once. Get a niche, master it, and structure your business around it. Go from there. Real estate is way too vague. There are tons of ways you can structure deals to bring in money in real estate from tax lien properties, foreclosures, pre-foreclosures, reos, multifamily properties, short sales, lease options, subject to's, probates, wholesales, rehabs, etc. Each of these niches alone could make you very wealthy if you knew what you're doing. But most people never end up doing anything because it takes a lot more than just knowing about them.

But just one of these areas will require tons of study and A LOT of hard work. It's a lot easier to talk about it in motivational books than actually sitting down and having the courage to structure crazy deals.

One other investment opportunity you might want to look into is currency trading. Again it can make tons of money but most people fail (like 95 percent). The difference between the slight majority who make a lot of money is mindset and work ethic. Currency trading scares lots of people. I love the volatility. I think it's fun. And because I have a great time playing the market, I have no problem workign as hard as it takes to master it.

I'm in my early 20s and work harder than most people I know yet I do it right now without even making the money yet. They wonder what I'm doing if I don't have a job. I tell them I'm an investor. They ask me what I do. I tell them I live and do what I want to do. Most people don't get that. They only want to work if they get money for it. They equate money with work. They think a crummy job they don't like is necessary in life. That's silly to me. It's more philosophical than that; that's the great idea in Kiyosaki's book. Delayed gratification is what seperates people tho. I'm working and investing in myself; they're making other people rich. It's all how you view it. Most people think small. They think 100K is good. I think that sucks. My numbers are big. I desire what other people dream about. But everyone wants big things, lots of money, free time, money for their family, etc. But most people can't even manage their checking account. Read Trumps book on thinking big. He'll get you going in the right direction. He's a big thinker. He deals in big numbers. He's not trying to make a secure income. He's trying to making big money. I like that. Think big and aim for the stars. But work towards the stars don't just daydream. So read and listen to what he has to say. I can guarantee you it will be valuable. Lots of people don't like Trump, but they don't understand either. The guy is a genius. Ya, he started with a lot. But he turned it into so much more. And he has courage to make deals that scare away small thinkers. That's cool.

Watch out for people like John Reed. He's a little thinker. He gets off by putting others down. He hasn't even closed deals for nearly 2 decades yet he claims he knows what he's talking about. He's a time waster. He'd rather nitpick and overanalyze than take action.

I know that I never want a career in the 9-5 world, but that's easier said than done. It requires constant work, day and night to get to that point, and that is what seperates the people who actually end up getting the 4 hour work week versus the person who reads in in the bookstore and never actually takes the action necessary.

Summing up: Mentality is important but it needs to be complemented by lots of hard work and dedication that can be really difficult. You need to find a niche or two and master them not try to do everything. There's thousands of ways of making money. Lots of people jump from niche to niche and never accomplish anything. They keep thinking that there's going to be an easier way or method or strategy out there but they forget that the strategy only works if they do.

One could make good money as a currency investor, but it takes tons of perseverance and dedication. One would need to be dedicated to learning as much as they can about this niche, and being able to put in the risk as well.

One great book that's old is the "Science of Getting Rich" by Wallace Wattles. It's free on the web for download. Great book but again there's tons of great books. They only work if you do. He talks about the relationship between the internal reality, the external reality, and action...the binding element between them. At least that's how I interpreted it.

Money comes when you're ready for it. Prepare first, then it will come. Tons of people aim for the money without preparing mentally and wonder why they're broke. That's silly.

 

[azanon]

Sal/Workerouter,

If the "get-rich-quick" schemes with little to no work, actually do pay off big someday, do you guys promise to come back and tell us the success stories?

I have to tell you, I'm totally inspired by you 20-something's passion to be better than the 9-to-5'er such as myself. You guys got the stats right; 95% fail at it. The only stat you failed to mention was that 100% think they're going to be in that 5% that makes it. Everyone thinks they're the exception.

Don't take this as me crushing your dreams. Your 20s is the perfect time to take big risks at making it big in life. All I would say is don't create a lot of financial debt in that process.

If its any consolation and you guys end up being in the 95% group, the 9-5 isn't all that bad if you have a job you like and it pays well. I find that working 40hr/week (less really, counting my leave) isn't so bad at all. I have all kinds of things going on outside my work life that provides me plenty of enjoyment. And since I save over 20% of what I make, I'm in the process of becoming wealthy to boot.

I think the better secret to latch onto is learning how to build wealth. By that, I mean that if you make 1million a year, but spend 1 million a year, you're broke. The real competition going on is not how much you make, but how much you keep. 95% of people fail to grasp that concept fully too. If i want to know someone's financial clout, my first question will always be "What is your net worth". I'm far less interested in one's annual income.

 

[ready123]

You don't need to build up to stocks. Out of all your options - stocks, real estate, and small business - the stock market is the easiest to get into, as long as you're not trying to daytrade.

 

[azanon]

You don't need to build up to stocks. Out of all your options - stocks, real estate, and small business - the stock market is the easiest to get into, as long as you're not trying to daytrade.

True, but if you ask me, stocks don't really fit into what they're talking about. Stocks are most appropriately used as a means to invest money that you already have, not as a way to make money from scratch. Based on the extended discussion they're having, it looks like the OP is more interested in a source of income without having a large amount of capital behind it.

 

[ready123]

True, but if you ask me, stocks don't really fit into what they're talking about. Stocks are most appropriately used as a means to invest money that you already have, not as a way to make money from scratch. Based on the extended discussion they're having, it looks like the OP is more interested in a source of income without having a large amount of capital behind it.

yea I was just quoting the OP verbatim. Small business is probably one of the harder ways to get a passive income. You work your ass off the first few months to years depending on your niche. It was kinda wierd to me the OP wanted to start with small business and work his way up to the stock market and property

I'm a 9 to 5er too and totally fine with it. At the right company, a 9 to 5 gives you the foundation to look for passive financial endeavors and gives you a safety net if those endeavors fail. One of my best friends is a businessman/real estate broker who's started a graphic design company (shut it down when too much competition moved into the area), brokerage firm (on hold because of the market), and is opening a cell phone shop soon. When things get slow, he works for other people.

Also curious what you guys think of multi-level marketing. Personally, I hate them, I watched my parents lose a ton of money to Amway when I was a kid. I hate the guys from Quixtar who always bother me trying to get me to sign up for their stupid pyramid everytime I go in a bookstore. From what I've seen, the type of people these organizations attract tend to be the ones who want a passive income but lack financial wisdom