Doesn’t it sound awe-inspiring to have more than one income source? You already have one source of work with a steady flow of income and then you are creating more and more work for you with more income for you. Who does not want to have lots of money in their bank accounts floating all around? For the person who values financial security and their ultimate dream is financial freedom, creating more than one source of income becomes a necessity not just desire.
The most liquid of the private investments are investing in equity or credit hedge funds, real estate funds, and private company funds. There will usually be 6 month – 3 year lockup periods. The least liquid of the private investments are when you invest directly into private companies yourself. You might not be able to get your money out for 5-10 years, depending on the success of the company and upcoming liquidity events.
Thanks for the info…I kind of figured it is really not that expensive to live if you are not an extravagant person. I could definitely figure out how to funnel expenses through a part time business…I think I keep thinking along the lines that I’m going to be paying the same tax rate after retirement, but reality is you could get pretty lean and mean if one focused on it. On a scale of 1-10 with 10 being utter panic mode, how worried are you about your “pile” lasting through a 50 year retirement now that you are a couple years into it?
For economic growth and almost all of the other indicators, the last 20 years [of the current form of globalization, from 1980 - 2000] have shown a very clear decline in progress as compared with the previous two decades [1960 - 1980]. For each indicator, countries were divided into five roughly equal groups, according to what level the countries had achieved by the start of the period (1960 or 1980). Among the findings:
Having discussed why it is important to have a second source of Income, let me now highlight some of the sources of a second income or second income ideas. A second source of Income typically means having regular income from a source other than your primary one. This means, if you belong to a salaried class, you might want an income from some other source and if you are from a business class, you might want an income from some other business. You can be as creative as it gets. Some good sources of Income are highlighted below:
In addition to opening a brokerage account, you can also invest in peer-to-peer lending firms like Lending Club. I’ve been using Lending Club for a few years, and my net annualized return was 6.02% percent last year. Picking the right investments is easy since the platform offers automatic investing, but you can also pick your own notes if you're brave and want to learn the best ways to leverage the Lending Club platform.
The five-year plans, especially in the pre-liberalisation era, attempted to reduce regional disparities by encouraging industrial development in the interior regions and distributing industries across states. The results have been discouraging as these measures increased inefficiency and hampered effective industrial growth. The more advanced states have been better placed to benefit from liberalisation, with well-developed infrastructure and an educated and skilled workforce, which attract the manufacturing and service sectors. Governments of less-advanced states have tried to reduce disparities by offering tax holidays and cheap land, and focused on sectors like tourism which can develop faster than other sectors. India's income Gini coefficient is 33.9, according to the United Nations Development Program (UNDP), indicating overall income distribution to be more uniform than East Asia, Latin America and Africa.
I agree mostly with the real estate advice. I’m looking for ways to take advantage of the condo I own to get up the rent from ~$0.90/ft to the $1.2-1.5/ft that seems more like the range in the same area. I’d have to put in a bit of capital (probably 10k on the low end for just the basics up to 40k if I wanted to remodel the kitchen and 2 bathrooms up to par with the area), so the return is likely there if those upgrades warrant $1.30/ft (given the unit is larger than most 2br/2ba in the area).
2. Treat Passive Income like a game, cheating is using your spouses income in this game. I understand some of the premise behind this, but I’m married, my wife has an income and we have a rental house that we consider ours. I’m not sure how I would count this since we also use another part of our own home(also rental income) to pay down the Rental house.
It has been always observed that diversity wherever persists balances the nature, same rule applies with the money as well. When an income source is diversified, it becomes feasible for a person to fight with the crucial situations of life and to protect their loved ones from ups and downs of life. Diversification of income becomes important because if one source of income dries up; you still are running everything smoothly with the other sources of income and it keeps your life going without hitting your financial situations massively.
"But for our jobs, for how we make money, I think many of us — most of us — have one way we make money. It can be very risky. I've really come to believe, and have done a lot of research over the years, that one of the best ways that we can create real, legitimate professional stability for ourselves is by choosing to cultivate multiple income streams.
Great post Jim. While it is convenient to lump the entire dividend income as one passive stream, in reality, it is several. If you have 30 companies across 10 major industry sectors, each paying you dividends, then you can consider having 30 streams or at least 10 passive streams, from each of the diverse industry sectors. I find this more diverse than relying on rental income from one investment property tied to one location and one good tenant. Your point about website is absolutely valid – will be great to have Ten Factorial Rocks worth 7 figures in less than 5 years as you have done!
Start an affiliate marketing website: This passive income model works for individuals who already own a bog or website. Here, your business goal is to contact companies and offer to tout their products and services, usually for a fee or a commission, based on the number of page views you get. Studies show that more people spend time online and less watching TV or reading the newspaper. Take advantage of that leverage and earn income from the tens of thousands of companies who want to reach an audience - maybe your audience. Either reach out to companies directly or go through a site like ClickBank, which offers affiliate marketing opportunities.
Amazing article Jim. Jammed packed with great information and inspiration for a finance blogger looking to find ways to diversify income streams. Building up your capital, achieved through saving more than you earn as you described, will open doors to a lot of activities in the future. The name of the game is putting your savings to work to turn expenses and idle cash into income producing assets. It isn’t easy when you are starting from $0, but through discipline and time you will eventually be able to achieve your goals and begin using the methods you described to diversify your income streams.
Case Schiller only tracks price appreciation of RE. RE as rental investment vehicle is measured primarily on rental yield or cap rate or some other measure. Price appreciation in that scenario is only a secondary means of growth, and arguably should be ignored as a predictor of returns when deciding on whether or not to invest in rentals. More important key performance indicators for rentals are net operating income and cash ROI. Appreciation, if it occurs, is a bonus.
With 1.27 billion people and the world's third-largest economy in terms of purchasing power, India's recent growth and development has been one of the most significant achievements of our times. Over the six and half decades since independence, the country has brought about a landmark agricultural revolution that has transformed the nation from chronic dependence on grain imports into a global agricultural powerhouse that is now a net exporter of food. Life expectancy has more than doubled, literacy rates have quadrupled, health conditions have improved. India will soon have the largest and youngest workforce the world has ever seen. At the same time, the country is in the midst of a massive wave of urbanization as some 10 million people move to towns and cities each year in search of jobs and opportunity. It is the largest rural-urban migration of this century. Massive investments will be needed to create the jobs, housing, and infrastructure to meet soaring aspirations and make towns and cities more livable and green.
If you watched the video, he goes into a discussion about shocks (about 8 minutes in) like bad investments but how they don't really matter as much if r (rate of return) is greater than g, the rate of economic growth. If r = 5% and g = 1%, then you can lose 80% (the difference) and still be ahead because the return on the remaining 20% has paced with economic growth.
Mike, I don’t consider the income from FS to be passive, as I’m spending time commenting to you right now. But since 75% of my traffic comes from search, the most traffic I would probably lose is 25% for probably a year. And then my search word rankings would probably slowly fade given frequency of posting new content is one of the search algo variables.
Indoor air pollution resulting from the use of solid fuels [by poorer segments of society] is a major killer. It claims the lives of 1.5 million people each year, more than half of them below the age of five: that is 4000 deaths a day. To put this number in context, it exceeds total deaths from malaria and rivals the number of deaths from tuberculosis.Source 15
This is a buzzword I heard about through a few career coaches. Slowly more awareness is spreading that we can escape the rat race and find alternative ways of working, and indeed, the days of having to choose one particular career path are becoming outdated. The recession is forcing us to think of more imaginative ways to make a living and I am determined to use every skill and talent I have to start generating multiple income streams. Before I was racking my brain for YEARS because I just couldn’t choose one career path! I am only just beginning on a small scale and am not making any real money as yet, but this year I will dig out the toolboxes I’m not currently using and set up various things that will hopefully bring in the pounds. Thumbs up to multiple income streams.
Several donors are active in Ethiopia, with external aid of $3.7 billion in 2015. Both the government and the majority of international partners are keen to deepen the harmonization process in the spirit of the Paris Declaration (2005) and Accra Agenda for Action (2008). Ethiopia is a pilot country for the Organization for Economic Co-operation and Development Assistance Committee harmonization agenda, and for the European Union’s initiative on donor division of labor. Partners are currently considering how to build on this progress in light of the Accra Agenda.
Finding the time and motivation to make extra money can be tough, especially if you’re already working a demanding day job. However, whether it’s paying off a debt or saving up for a major purchase, there are times when one income just isn’t enough. If you can’t face the thought of putting in extra shifts on top of your 9-5, you need to find another solution – one that doesn’t feel like work but still brings in the cash.
For instance, a business owner who works in the company she or he founded would have to pay an extra 15.3 percent in self-employment payroll taxes compared to someone who merely had a passive interest in the same limited liability company who would pay only income taxes. In other words, the same income earned actively would be taxed at a higher rate than if it were earned passively.
A business thrives or fails depending on its marketing and system for generating leads. You need leads to make sales. No audience or exposure means you won’t get fresh faces checking out what your business does. Too many entrepreneurs spend all their time on the “busy work” and not enough on audience building. There are some great ways to build an audience and generate new leads:
Online learning platforms have become extremely popular in recent years with people using platforms like Coursera, Lynda, and Udemy for learning courses about their specific interests. If you are knowledgeable in any field, whether it's web programming, photography or digital marketing, you can create a course on platforms like Udemy or Unacademy and earn money when users register for them.
The Indian pharmaceutical industry has grown in recent years to become a major manufacturer of health care products to the world. India produced about 8% of the global pharmaceutical supply in 2011 by value, including over 60,000 generic brands of medicines. The industry grew from $6 billion in 2005 to $36.7 billion in 2016, a compound annual growth rate (CAGR) of 17.46%. It is expected to grow at a CAGR of 15.92% to reach $55 billion in 2020. India is expected to become the sixth-largest pharmaceutical market in the world by 2020. It is one of the fastest-growing industrial sub-sectors and a significant contributor of India's export earnings. The state of Gujarat has become a hub for the manufacture and export of pharmaceuticals and active pharmaceutical ingredients (APIs).
I have only dabbled in drop-shipping before when I had an eCommerce platform 6 years ago or so. I think it is something that you could do on the side, but you would want to do in depth research on the industry you want to get into before setting up shop. It may be a little less passive up front, but over time you could take your hands off the wheel.
I found this to be a fascinating and most helpful book. It was so motivating I'm already working on three new streams of income, and about to start a fourth. Forget net worth! Cash flow is much more important, particularly if you're retired. Only one slight criticism of the book. It's a bit dated, but those few parts make little difference to its overall value. If you're currently struggling with how you're going to survive after you retire, try Allen's approach. It will open your eyes.
Until the liberalisation of 1991, India was largely and intentionally isolated from world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around $200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians. India's exports were stagnant for the first 15 years after independence, due to general neglect of trade policy by the government of that period; imports in the same period, with early industrialisation, consisted predominantly of machinery, raw materials and consumer goods. Since liberalisation, the value of India's international trade has increased sharply, with the contribution of total trade in goods and services to the GDP rising from 16% in 1990–91 to 47% in 2009–10. Foreign trade accounted for 48.8% of India's GDP in 2015. Globally, India accounts for 1.44% of exports and 2.12% of imports for merchandise trade and 3.34% of exports and 3.31% of imports for commercial services trade. India's major trading partners are the European Union, China, the United States and the United Arab Emirates. In 2006–07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery, textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products, machinery, electronic goods, gold and silver. In November 2010, exports increased 22.3% year-on-year to ₹850.63 billion (US$12 billion), while imports were up 7.5% at ₹1,251.33 billion (US$17 billion). The trade deficit for the same month dropped from ₹468.65 billion (US$6.5 billion) in 2009 to ₹400.7 billion (US$5.6 billion) in 2010.
Millennium Development Goals Report 2007 . The report importantly notes that As high as this number seems, surveys show that it underestimates the actual number of children who, though enrolled, are not attending school. Moreover, neither enrolment nor attendance figures reflect children who do not attend school regularly. To make matters worse, official data are not usually available from countries in conflict or post-conflict situations. If data from these countries were reflected in global estimates, the enrolment picture would be even less optimistic.
Purchasing a rental property is another common way that individual generate an income stream. It is very similar to investing, in that you take a sum of money to purchase the property, and the property returns a cash flow – rent. You do have expenses related to this that are different from investing, such as a mortgage, utilities, property taxes, etc, which all must be taken into consideration when calculating a return on rental property.
Passive income differs from active income which is defined as any earned income including all the taxable income and wages the earner get from working. Linear active income refers to one constantly needed to stay active to maintain the stream of income, and once an individual chooses to stop working the income will also stop, examples of active income include wages, self-employment income, martial participation in s corp, partnership. portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties.
Do you want to earn $100, $1000 — or even more — on the side? You can start earning extra income today with the help of this list of ideas I’ve put together. Spend an hour or two each day working on items that are practical for you, and you can build alternative income sources to help you improve your financial situation While many of the items on this list are passive income ideas, not all of them are. Some items require you to actively work for success.
If social capital is expecting to benefit from a share of the human capital of others, there may not be enough “others” in future generations to contribute to the well being of the current generation. It is interesting to speculate about how much guaranteed income the economy can be expected to support at any given time and for what categories of people.
Seven of the ten counties in California with the lowest per capita incomes are located in the Central Valley. Two of the remaining three are rural counties in Northern California. This leaves Imperial County, which shares California's portion of the U.S.-Mexico border with San Diego County. All of these counties had populations not exceeding 1,000,000, and all of them are landlocked, with the exception of Del Norte County.
Well written piece, but I question the core premise. Why the fascination with maximizing “income” (passive or otherwise). Shouldn’t the goal simply be to maximize long-term after tax growth of your entire portfolio? If this takes the form of dividend paying stocks, so be it. But what if small caps are poised to outperform? What if you want to take Buffet’s or Bogle’s advice and just buy a broad market index like the S&P 500, (no matter what the dividend because you’ll just have it automatically reinvested to avoid the transaction fees).
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