Just curious of what people do for passive incomes, given that bank interest rates are pretty low.
Cheers.
Who Here Has a Passive Income? if So What Is It?
nomunny on 21/10/2017 - 17:57
Comments
@Pastry:
You're right. It is simplistic but I didn't want to make a wall of text going into huge detail. Besides which I don't have a crystal ball and any detailed predictions I make could be dead wrong.Naturally, I disagree with your detailed predictions.
I take specific issue with one specific point. Namely that I don't think excessive property prices is indicative of a healthy economy, rather a sick economy. Residential housing is an unproductive asset. I believe too much money has been sucked into it and diverted away from productive assets which improve our productivity. The increased debt is also reducing future consumption by increasing the proportion of peoples incomes dedicated to either mortgage or rent.
I am a land lord too. I'd like nothing better than to be able to raise my rents but I can't because I know I wouldn't be able to find a tenant since no one would be able to pay an increased rent given the low wages growth that has been well documented recently. The reality is that the market rent on any given day is already at the maximum the market will bear. What? are you somehow suggesting we land lords out of the goodness of our heart are leasing for less than we could actually get and that if forced to, we'd just up the rent to what we actually could get?
In a real correction, it's more likely land lords are reducing their rents in a desperate attempt to get a tenant as a property crash (as you point out) means the economy is f!@#$ed and everyones wages nose dive and unemployment goes up so can't afford to pay inflated rents anymore. Case in point Perth where both rents and prices have fallen and still are.
Basically, we're gonna be f!@#$ed. I can't see us avoiding a huge property correction coming soon. I'm just glad I'm already fully paid off. God help those investors who still have a mortgage.
@Pastry: I did. Consolidated down to just one IP in 2016 with proceed from sale of others paying off the remaining one. I refinanced it just last month for five more years interest only. Now APRA have toughened even more.
Here's my anecdotal episode. It was bloody hard to refinance. Brokers were telling me The max I could get was LESS than I had borrowed initially due to harsher APRA rules.
If even on my income I'm having a hard time can't imagine what others are going to encounter when they need to refinance. Eventually Got it but I had to be "creative" with my expenses to get the figure I wanted.
@meumax: well fair enough you put your money where your mouth is and i respect that. The rules have got tougher but since 2014 properties have risen by like 8-16% pa on average so maybe you where wrong pulling out a bit too early? - again im not sure what state your from but in Melbourne Auction clearance rates are at like 70%-80% (that is still really high)
Unless you put your money into something like a Vanguard EFT or bitcoin you might of been better to stick with your guns (depending on where you owned your investments).
You're probably a bit older then myself and have a more comfortable situation wanting to lessen your risk by killing down your debt. But that doesn't mean property is going to crash.
I do believe it is going to slow overall…. but in Melbournes West with the new under 600k rules for 1st home buyers no stampy duties rules have seen the western suburbs rocket it was basically putting fuel to a fire.
On the flip side the rules for investor lending are f***en stupid now but it also will ensure there wont be a crash because there is less of a chance for investors to default.
Everything the government does pretty much makes the problem worse unless they get rid of negative gearing in which is basically send Australia into a recession - it simply wont crash and anyone who thinks it will doesnt actually understand how the GFC happened. - For it too crash unemployment much rise and clearance rates must drop and therefore defaults rise and that simply isn't happening of you look at the data
Most of the times, little inconveniences in life are ideas for small business for passive income. Dress alterations, you might not know, are great business opportunities, to do from home, on gumtree. People buy heaps of clothes, and if they get it to fit them decently at economical cost, they will flock to you. Ofcourse you need to know tailoring.
Other small business ideas include selling specialized cuisine or a particular savory or food item that you got expertise with after lots of trials and practice. Sell on gumtree or your own website, instead of using the sites like menulog. May be use them for leads and move to become independent. You can also advise people visiting your store to contact you directly for special price and build your exclusive customer base.
Teaching. If you know a subject, that people are interested in and can stick to a schedule, you can make heaps of money. Popular areas include programming, mathematics, sciences, photography, etc
Photography. People take personal loans or max out their credit cards to hire decent photographers. Photography is a simple art and you can generate heaps of money by helping people save memories at fraction of cost. Its up to you how you provide quality service at economical cost. Shooting outdoors or at their home instead of your own studio is one idea.
None of this is passive
Why not? You can do all of these part time.
Then it's just regular income, like a part-time job would be.
Passive income is revenue generated by not doing anything. E.g. rent from a tenant, dividends from shares, ad revenue from owning a website.
@Haters.Inc: Except for shares may be, people will need to put in some work few hours a day or week. I also saw people in pyramid schemes working their assess off to make sure the pyramid does not break
That's not what passive income is.
I work part time at a supermarket and I bust my ass every shift.
Crypto currency - running masternodes (Proof of Stake). Roughly 10% return p.a
I won't go into too much detail and shill my coins, but essentially what this involves is 'staking' your coins (i.e. holding them in the official coin wallet, and not actively trading them on exchanges).
By doing this you are helping validate transactions on the network, and in return you get a periodic payout. E.g. 20 coins per X days. The more coins you stake, the more frequent the payout.
Think Bitcoin miners: how they get a bitcoin reward for validating transactions on the network. The key difference for Proof of Stake (PoS) however is you don't need a powerful computer, as you are not solving complex maths problems. You just need to have your computer on and your wallet open, which requires very little computing power. Some people have it running successfully on a raspberry pi.
Of course, all this relies on the underlying currency (coin) either maintaining it's current value, or (hopefully) increasing in value. So I would only ever do this for projects I believe in.
Feel free to PM me if you want any further details.
You'll need a certain (significant) percentage of cryptos for that status. Good on you for having such a holding.
Can’t speak for all coins as I’m only staking a handful. However one of them is currently trading at ~$0.35 USD, and it requires 10k to run a masternode (i.e. an initial investment of $3500).
Crypto altcoins are extremely speculative though at this point in time. Tomorrow my coins could be worth $10k or $0. So as always, only ever invest what you are comfortable losing.
free money
Not exactly. Like any speculative investment, you are bearing a lot of risk for the potential huge upside.
But the way I see it: If I believe in a project/coin and am going to invest in it anyway, I might as well make another +10% by staking and simply leaving my laptop on.
I made phone apps when app stores were relatively new. Still getting around 3k a month only updating when required by Apple (eg: screen sizes )
only updating when required by Apple
Ladies and gentlemen, the reason why the Centrelink app sucks
There's a Centrelink app?
It sucks.
As badly as standing in the queue or trying to call them?
I can't imagine any app sucking that badly
@D6C1: eh you'd rather be waiting for the app to work somewhere comfortable than waiting in line with the dredges
What type of app if you don't mind me ask?
Is it a paid app? or free and make money from advertising?
Selling digital albums on iTunes, Spotify etc. I play piano and have done cover albums for weddings, funerals, Disney Pixar songs etc. About $1.5K a month.
You are the kinda guy I'd like to shout a nice beverage and a meal.
Hello fellow musician.
I have 3 investment properties ($6k a month return) in Victoria and a Video Game Price Comparison website ($500 - $2000 per month, depends what new games are released). But have a 1 million dollar debt (rent covers interest + I get lots of negative gearing due to depreciation and interest).
How exactly is your website bringing it $500 - $2k/month? Ads, affiliate links?
Affiliates and Ads, but 90% is Affiliate commissions. Also it stores a cookie so every time the customer buys something from the same site I get a piece of it too. Maybe everyone uses ad blocker these days so you don't really get as much from Ads anymore..
May I ask what your ROI is from rent only, based upon the current property values?
I'm in a similar situation. 2 IPs + gaming website(which is slowly going downhill). But no debts.
My ROI on property based on current prices is crap. 2-3%Yes same my ROI is 2-3%, but if you include negative gearing it could be 5-6% maybe (just an estimate) due to the amount of interest I'm paying as well as Depreciation (the two biggest things you can claim for negative gearing).
I started a website at the end of 2015 and it generates a bit of passive income through Adsense and affiliate. It's not a huge amount, but it gets me through daily life at uni and the website is more enjoyable for me than a "regular" job.
link?
Sure Swarlee, this is my site:
https://everydaylisteningblog.wordpress.comAnd a larger site I write for with multiple writers:
http://theheadphonelist.com
nice
Nice site ryanjsoo. I have come across it before, and found the information useful.
Cool to know its run by an OzB member!
Any wireless bluetooth earphones you'd recommend?
If cost is no object, the Flares Pro is the best you can get, the V-Moda Forza Metallo wireless is a solid midrange and under that, most budget BT earphones are mediocre but "get the job done". You can also consider an earphone with a removable cable, some manufacturers offer Bluetooth cables, it can be a good option if you really like your current set and it supports cable swapping.
THL uses adsense since the viewership is much higher, I just use affiliate on EL. I'm also unable to actually implement adsense on my site since it's on wordpress, for those getting into websites, I would strongly recommend against using Wordpress.com, it's easy at the beginning but very limiting down the road, wordpress.org is the way to go!
I also sell my photos, that can sometimes be a large source of income. Honestly, reviewing is a really poor source of income since I need to remain impartial, therefore no paid articles or sponsored posts. It's just a way for me to share my hobby and any kind of income I receive is a bonus on top.
Thanks for the tip! I have been using wix but I am interested to learn wordpress.org for next site.
Cheers
how do you pay to run/maintain this website?
Wordpress.com is free, it runs on their servers, that's why I can't control plugins or adsense.
I make an extremely small amount passively from some artwork I threw up on society6 and redbubble (maybe $300 a year if it's a good year).
Just bank interest atm, I net about $2k ish per year from savings. Would love to invest in some managed funds etc but given I don't have much I can risk, I'm putting that off for now.
Have you tried - https://www.ratesetter.com.au/ - better return than bank interest - but a slight increase in risk. Not a bad place for a little passive income.
Interesting, this is new to me. I'll check it out tonight, thanks!
Any personal experience with the process / testimony for them? Looked into it a while back but wasn't quite sure…
It's good for me so far. Slight risk involved but you can read more about it on their website and whirlpool etc. Rates are higher the longer you lend for (5 year period will give you around 9.0% pa return.) You get paid back monthly and you need to keep reinvesting the money if you want to keep earning interest on the full amount you put in. From memory the repaid money is not available for a couple days so you lose 1-2 days interest. Then sometimes it takes a few days to reinvest the new money at a good rate so you can lose few more days interest. Also if you choose to get the repayments paid back to your bank, Ratesetter only auto transfers once a week, so you lose another few days interest depending on when you get paid and what day the auto transfer is. So in reality you get slightly less than the advertised rate but still a lot more than bank interest etc.
Peer to peer lending is unsecured personal lending. Although the returns might be good, this doesn't mean that it's a 'slight increase in risk'. It's one of the higher risk investments you can make.
Particularly when compared to savings held with a bank - which is guaranteed by the government up to $250k.
I understand that they have returned all amounts invested. And they have a provision fund to cover defaults. But this still doesn't make it low risk as if things go south (i.e. unemployment rises/interests rise) you may see defaults go beyond their ability to make good each lender.
So by all means invest in peer to peer lending - the returns seem quite good. But go into it with eyes open and understanding the risk involved.
I understand your points and am not an expert in anyway - but there are some very simple ways of reducing that risk. Yes - there is the provision fund, but there are other options. If you were to invest $10K over 3 years it may be worth your while investing in $1K blocks - just doing that ensures only 10% of your total is exposed to a single borrower (initially). Then remember that from the very first repayment you will be receiving interest+principal that you will reinvest. So quite quickly your money is being spread across multiple borrowers. Whirlpool is a good place to start reading up on all the pro's and con's as lolmao mentions.
No worries.
The key point for me about peer to peer lending is that it is unsecured debt.
Apologies if this goes into too much detail, but I'll set out my reasoning.
If you take out a mortgage for a house, the bank gets to keep the title of your house just in case you stop being able to make repayments/skip out of the country/don't feel like repaying the loan etc etc. The loan is secured over the property. So worse case scenario is that the bank sells the house and hopefully recovers the money it loaned to you.
With peer to peer lending you're effectively the bank, and rate setter is the platform where lenders and borrowers meet. When you issue a loan to someone, you are not taking any of their assets as security over the loan in case they default.
So what keeps a borrower from taking the money and running? Their own moral code, damage to their credit rating, or worse case, they leave themselves available to legal action from the lender to pursue them for their debt - their possessions can be seized and sold to recover the debt, for example. More likely their debt is sold to debt collectors who pester them to cough up.
So there is always a risk when lending someone money. The risk that they won't pay. The risk is minimised when you actually have possession or a claim over an asset of theirs as security for that debt. For a lender, secured lending is always preferable to unsecured.
Because peer to peer lending is unsecured lending, it is quite a high risk investment.
That's not to say you shouldn't do it. It depends on weighing up the returns with the risk. Whether or not you can find a better return somewhere else. Whether or not you can sleep at night.
The other thing is the provision fund. They say it covers 10% of the loan book. Obviously if more than 10% of loans default we are talking about a pretty crappy investment class. But what it potentially says to me is that they are provisioned to cover defaults when times are good, when less than 10% of loans default. But it also says it is not covering the loan book when times go bad. 26 years without a recession in Australia is extraordinary and I hope it continues indefinitely. But when the economy contracts, when things go bad, they tend to go bad at the same time (i.e people lose their jobs, they can't spend much, the shops need to lay off workers, more people lose their jobs etc).
All in all I think peer to peer lending is actually a good innovation. It's good for the big banks to get some decent competition. It's good for people to access loans if they don't conform to bank requirements and it's great that people can lend money and make a return.
However, I thought it worth writing a long reply just to address some of the risks. The rate setter website makes the investment look really easy, but it's important for people to understand the risks with these investments if they go into them. People need to ask themselves is this return good enough for the risk I'm taking? Will I be okay if I lose all my money? Should I spread my investments around so that if one investment fails, I don't crash and burn, etc etc.
The strategies that you mention in your response are excellent risk mitigation strategies. You're reducing your exposure to what is still an inherently risky investment. My understanding of the platforms themselves is that they also split up loans and spread them across different borrowers. This potentially mitigates some risk as well, although ideally you'd want to loan only to excellent borrowers and bypass the duds if you can!
I sell hifi and audio visual gear in the car park adjacent to my workplace after hours
Do you work at a hifi and audio visual goods retailer?
indeed I do
Is this Colombian Hi-Fi audio gear we’re talking about here
hahahah
yu e bao in alipay, gives me around 3.5% interested calculated DAILY (so its passive income everyday)
Seems a lot of risk for the little extra interest when compared to ME, etc giving about 2.95% & Govt guarranteed.
millions in fact billions of chinese people use alipay… its literally non risk….
Just because billions of people use it doesn't mean it's "non risk". Billions of people drive motor vehicles every day but that doesn't mean accidents don't happen.
ADIs aren't absolutely devoid of risk, but the risk of Alipay collapsing is far greater than the risk of Australia becoming a failed state (in which case we would have far greater problems than losing our capital).
I have a friend who purely plays PUBG and CS:GO in his spare time. He makes money selling loot crates on Steam Marketplace that he is rewarded through regular gameplay. Some people are suckers for in-game skins apparently.
You can't withdraw funds from Steam Wallet though so he uses the money for Steam gifts or for buying more games.
Steam community marketplace is definitely a popular choice nowadays.
And yes I'm still amazed at the length people go for crates/cosmetics/etc
Selling baby formula.
It is profitable after you paid for shipping cost?
where do you sell it?
I should ask my boss, I think he has it, doesn't do anything and still gets paid.
We must have the same boss then …
I will see you both in my office first thing tomorrow morning.
This is turning into a porno
@FatBlanket: Please take a seat on the couch.. This video camera is to for senior VPs and the management board to promote you.
I wonder how many will get it… +ves get it! C'mon people! :)
Sounds like a few of the people at my workplace.
Cash rewards, by spending money i get money so the cycle begins here on OzB.
OzB is king baby!!
- Online blog $200-500 per month from Google AdSense
- Shares (high dividend yield ratio shares traded in/out quarterly) $1-4k per month
- Property ($500 a month + $8k at tax time from depreciation)
- Online store $500 a month all shipped from a third party logistics company
All not big money but few grand a month with little input.
What's your online store?
any promo code for us OzBargainers?:)
@mangostickyrice: Ha ha sure
Here's 20% off + Free Shipping
Use coupon: OZBARGAIN
Lungo is our most popular - https://coffeehive.com.au/coffee-pods/lungo-roast-coffee-pod…
Try Dark Roast if you like strong though - thats all I drink
https://coffeehive.com.au/coffee-pods/dark-roast-coffee-pods…
Nice work. $1000/month is nothing to scoff at. I admire your ingenuity and work ethic. :)
I'm guessing you're branding a white label product and selling it?
Also, how much traffic would you need for that much revenue on the blog?
We kinda white label but has our own touch to. We get our pods from Germany and they package everything for us in our branding
150k-300k page views a month assuming 3 ad placements per page (2 x 300 by 250's and 1 x 728 by 90 leaderboard)
Care to share the blog link please?
Your shares trading income varies wildly. How do you determine what to buy and sell?http://theagencyjournal.com/ - it's a developer blog so a lot of repeat visits (70%+) so I dont post that much. Been a few months since I have
I basically go off Morning Star plus a bit of judgement eg if it sounds too good to be true it probably is. Shares that make over 20% I sell. Make 10% and it doesnt go up for 3 months I sell. If it is stagnant but pays 5%+ fully franked I keep it. I'm not a fancy trader so dont make big money but this does ok by me. I missed out on a lot of A2 Milks growth for example but missed out on a lot of 'loss' on other shares too so it works out.
It varies depending on the amount I sell each month
I find selling at 20% is quite hard, or a long wait.
When do you cut your loss? Or do you keep buying more (double up) when it drop 5-10%?@congngo: I have about 15 shares at any time, sell each month so some might be a 12 month wait, some might be 1-2 months.
Such as A2M, DMP, STO and AWE which I got over the last 2 months. Sold all but STO and AWE but AWE will go next month and STO I'll prob sell in December.
Only down shares I have at the moment are TLS (like everyone) and Westfield.
I honestly just following Morning Star but get the ones I feel confident in and skip the rest. I'd rather lose less than win more. I missed so much on A2M but didn't lose :)
Disappointed about A2M, have you seen BUB, similar to A2M but very niche in baby formula category.
Only .85C at the moment but was under .50 few months ago. May be you should look into it…… have got huge contract in place with Chinese suppliers.……
Please DYOR I am no financial adviser….
I'll add to my watch list. I feel those kinda businesses can either go crazy or dive pretty fast
That's a LOT from share portfolio! Even the high dividend shares only pay 6-7%
Interested in this I've been thinking about app development(I have the skills). Willing to put some effort in to make some returns I just need an idea or even to buy someone's idea/work..
Long term plan quit job go travelling with family..
On top of this I'm thinking of starting a consultancy for the serious income.
Passive income:
- Buy bitcoin
- Wait
- Multiply your money by 10x to 100x when you cash out
A lot of people are buying into this at the moment. It will end in tears, but no one can say when.
I'm still holding onto my bitcoin from this deal. Currently at $152 AUD.
What coin wallets are people using to transfer their coins too?. Obviously a trusted one that accepts AUD and has low fees.
BTC Markets
same, though I have twice the amount as I had convinced the missus to do it as well :)
I missed that deal :-(
It’s amazing how many people here don’t know what passive means.
It’s amazing how many people here don’t know what income means.
It’s amazing how many people here don’t know what passive income means.
These are listed in order of how profitable they've been for me:
Built a SaaS app with a few small business customers.
Fairly passive, not enough to live on. Requires occasional maintenance, and quarterly accounting, sometimes chasing down invoices, and the odd support call. This is the 'least passive' but also least risky and most reliable of the passive incomes I'm listing here.Altcoin "Masternodes. Google "masternode coins". You set them up on a cloud server, have 1000-10,000 coins as collateral, and it performs coinjoin (mixing) to facilitate anonymous transactions.
Very passive, only have to maintain the wallets sometimes (software updates).
Obviously you're at risk if the coin goes down in value, but so far they've all gone WAY up!
You can even automate selling for FIAT into your bank account via livingroomofsatoshi, cron and a bash script.Obviously altcoin mining rigs. If you set up properly and time it right, they are fairly passive income. I wouldn't actually recommend this one now though, they are a fairly short-term passive income as the hardware becomes obsolete and eventually unprofitable.
I've tried a few Android apps. I wouldn't really do this again as they were't profitable. What I learned:
a) People like free apps with no ads. They use it, give you good reviews, but you don't earn any money.
b) Don't bother with in-app ads, unless you're going for candycrush scale.
c) Don't go with cloud back-end apps, as they require maintenance and cost money to run.
Instead I'd aim for once-off upfront paid apps, which don't need any API / backend / expenses to keep running.
I do not know why but thanks
@meumax:
Not wanting to insult you but that is the most simplistic thing i've ever read but lets look at the scenario you have proposed
Ok lets say you 'right' less (say 50%) people invest in houses and ALL the people that buy the previously invested properties are owner occupiers all of a sudden there is a huge drop in demand thus less development thus less rentals on the market for the short term.
What other things drop?
new developments drop because of the reduced demand on housing not only does this increase unemployment is results in the supply of houses to eventually go back to previous 'equilibrium' levels only NOW for what ever reason property is not such a 'solid' investment the remaining 50% of investors need to re-coupe loss by increasing rent due to the higher risk of the investment.
NOW
lets say not all the previously rented out investor properties are NOT brought by owner occupiers but purchased by foreigners and left empty (like we are seeing in Sydney) this actually reduces supply in the short and medium term
ON TOP OF THAT
The people that would of otherwise invested there money into the economy resulting in more houses jobs, rental properties etc MIGHT NOT INVEST AT ALL (THATS THE BIGGEST ISSUE).
Believe it or not property prices going up is a sign of a good economy although i do feel for those who are locked out of the market (myself included - i own rentals so one day i can afford a place to live myself i do not have the money to go into the market and buy in the suburb i want to live in)
The fact is stamp duty (though it is bullshit) is the biggest contributor to the Victorian state government. - it is also a tax that cannot be avoided.
There is load of other issues resulting in a drop in investors but keep in mind local investors only make up about 1/3 of the market and historically 1/3 of the population rent.
What really needs to be done is improvements in roads and public transport to make living greater then 30km from the CBD less unattractive because approx 800k people Melbourne work in the city
On top of all thatttttttttttttttttttttttttttttttt
The property argument for 1st home buyers is a bit tricky because if you dont own a property you are praying for it to go down but soon as you are no longer an looking and have finally got into your own home your praying it goes up. This if property was to have a sharp fall you risk a Australian version of the GFC