OK. So if I want to be able to do the things I want to do in life, I need to find a way to get paid while I’m doing them. There’s only two ways I see that happening: get several paying jobs that each get me to do what I want or generate some kind of passive income that pays me while I’m doing the things that I want to do. I’m probably going to have to have a bunch of these things since they won’t each pay enough to give me the income I want.
So how do I basically get paid to do nothing (after I invest in something or set it up, of course)?
Since I don’t have a local expert that can help me, I guess it’s off to the Intertubes…
The first site (after google, of course) that I find that doesn’t look like ridiculously obvious bullshit is http://livingoffdividends.com/
Here’s a blurb about the guy who makes the site:
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Welcome to the LIVING OFF DIVIDENDS & PASSIVE INCOME Blog.
I’m a 33 year old programmer living in Southern California. Several years ago I came across Kiyosaki’s “Rich Dad Poor Dad” and I realized that for most people, life’s a continuous race to make more money and upgrade your lifestyle. Most people achieve this by working harder and harder at their job. Instead, if you develop a few different streams of income, you could enjoy a better lifestyle with less work.
Shortly after 9/11 I was laid off and after 4 months was close to being broke. It was a rather depressing period and it solidified my resolve to get multiple income streams going.
I started researching various investment vehicles like real estate, stocks and commodities (like gold and oil). All these different asset classes help diversify the risk that is associated with all investments. In the past few years they have served me quite well and I have built up a good foundation to base my future investing off of.
This blog will present some of the ideas that have worked for me, some of the investment philosophies I’ve picked up and also track my efforts in building up my passive income to a point where I sustain my basic needs without a job.
I’d love to hear from you so please do leave your comments.
regards
ND.
livingoffdividends$$gmail.com [replace the $$ with @]
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It looks like he’s been at this blogging thing for quite a while. The first post was September, 2005 and he’s put up a bunch. Things have changed a lot in the market since he started so I’m probably only going to be interested in his most recent posts. Let’s see if he has anything useful to say…
Here’s an interesting post. It came from http://livingoffdividends.com/2008/01/18/192111-in-passive-income-for-december-07/
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My Passive income for December 2007 was $1,921.11.
Here’s the breakdown:
- Online Income: $568.55
- Adsense: $240.10
- Linkworth: $132.00
- TLA: $71.73
- Kontera: $43.04
- Affiliate: $6.68
- Prosper Referrals: $75
- Savings Accounts: $128.47
- Real Estate Trust Deed: $300
- Direct Oil Drilling Investment: $163
- Dividends from Canroys: $499.21
- Other Dividends: $261.88
As usual, I ignored any income from Prosper loans. I did however include the $75 in referrals fees. If you’ve been thinking of lending or borrowing money on Prosper, now is a good time to do it. They’re offering a $25 incentive to new members.
Adsense revenue was down from last month, but since I wasn’t posting often due to my traveling, that was to be expected. Hopefully I can boost my online revenue this year. Once I’m done traveling, I should be able to focus more on this.
Traffic to the site has been increasing steadily every month, but until Google assigns it a pagerank I probably won’t get any direct sponsors.
The US Dollar has also strengthened against the Loonie in the past 6 weeks, so this has reduced the payout from my Canadian Royalty Funds. But I expect this trend to reverse and the dollar will continue weakening this year. On the other hand, I’m re-investing the dividends and so the number of shares and resulting dividends are slowly increasing.
I also expect interest rates to drop from the current 4%+ range to under 3% in 2008. But its only 6.6% of my passive income so that shouldn’t make too much of a difference.
The good thing is that the income is diversified across various investment classes and there are over 20 income streams. The largest source is the real estate trust deed which represents 15.6% of this month’s passive income. Even if the 4 largest income producers dry-up, I’m still going to be getting $1,200 per month. This is the best thing about having multiple streams of income.
Hopefully I’ll be able to cross the $2,000 mark soon and the $3,000 mark this year. (If the dollar becomes extremely weak against the Loonie, that’ll be much easier to achieve, but I hope the dollar doesn’t tank. Of course, unless Bernanke increases the interest rates, the dollar will not strengthen ).
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So Adsense, Linkworth and TLA give money based on your site. I’ll have to keep those in mind. I see he has his referral code built into the links (note to self, start getting some of these referral things). This will help later on when if I get a lot of traffic but I’ll have to put it on the back burner for now until I do, and until I figure out how to do all that.
Kontera looks interesting. I never heard of it. Here’s what they say in their ‘How It Works’ page:
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Home > How It Works
How Prosper Works
Prosper is America’s largest people-to-people lending marketplace. Connecting people to people eliminates the need for borrowers to go through a bank for a loan—and fewer middlemen means Prosper lenders also benefit.
- Prosper loans are unsecured, three year fixed rate personal loans for people with good credit.
- Tell your story in your online loan listing.
- Set the maximum interest rate you’re willing to pay and Lenders may bid down your interest rate in an auction.
- You decide whether or not to accept the loan.
- Loan funds are issued directly into your account.
- No prepayment penalties.
Learn more about getting a loan
- Bid on loans with as little as $50 or more.
- Handpick the loans you bid on, or use the portfolio plan tool to automate the process.
- View important details about the borrower’s credit history on every loan listing.
- Watch your Prosper account balance grow each month as borrowers repay their loan.
- Expect more from your money, while helping fellow Americans.
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The other things he mentions will require a bunch of money to invest in and a lot of research. The real estate deed seems to bring a decent amount of money. I’ll have to look into that on his site though.
Prosper is kind of interesting. I wonder why he usually ignores the income from it. So, I think I’ll look into what he says about Prosper. I had a couple other tabs for passive income open that I was going to check but I guess I’ll look into them later. It’s sooooo easy to get distracted on the Web.
A google search on his site for Prosper gives me 295 hits. Geez.
This might be better for my attention span; he has Prosper for a category and has 8 pages in it.
The first one I find mentions $25 referral fees. Guess it wouldn’t hurt to sign up for that. Let’s check it out:
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What is the referral program?
Prosper’s referral program was established to encourage our most ardent supporters (our members) to bring their friends and family to Prosper. In return for bringing active borrowers and lenders, Prosper pays cash awards to referrers.
Here’s how it works:
- Sign in to your Prosper account and go to the Invite a Friend page.
- Enter your friend’s information, customize the message if you wish, and send the invitation to your friend.
- Your friend joins Prosper within 30 days of clicking on the link in your invitation.
- Within 90 days of joining Prosper, your friend gets a funded loan (as a borrower) or funds a loan (as a lender).
- As soon as your friend’s first monthly payment clears (as a borrower), or first loan originates (as a lender), you get cash in your Prosper account.
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Hmm. So to get paid for referrals, I have to know the person in advance. I’ll have to table that one for now. Maybe that’s why he doesn’t count it.
What else does he say about it?
The next article is A Better Way To Lend Money To Friends & Family
It looks like he got the information for that page from http://moneyshaker.blogspot.com/. The page is set up the same. I wonder if he has both sites. It looks like it has a lot of information in it too [must...stop...bright...shiny...object...damn...web...distractions].
Aaaaand, we’re back! OK. It looks like he’s used the content from the other site and put it on his with his referral code. Smart! Not much different than me showing you what he has on his site I guess except I don’t have referral codes yet to put in this page…yet. Next page.
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I’ve been lending money on Prosper.com for nearly a year now. I’ve been getting a pretty decent rate of return, despite having had a couple of borrowers default.
I’ve also made over $200 from referrals fees! Whenever anyone signs up using the referral link and funds atleast $50, we both get $25. If a borrower signs up, I get $125.
And to add to that, Prosper is now a paid advertiser on my blog. Not only are they offering referrals rewards, but they’re also paying me to put their link up!
I guess they’ve had such success with the program that they can afford to be extremely generous. If you have a blog you can start making extra money by doing just 3 very simple things:
- Sign up using this referral link.
- Fund your account with $50 and lend it out. (ok, you don’t need to do this, but considering you get $25 almost immediately, where else are you going to get a 50% return on your money?)
- Email me at livingoffdividends$$gmail.com (replace the $$ with @) with “prosper referral advertiser” in the subject field, and I’ll put you touch with the rep at Prosper.com
Not only will you get a check from Prosper for advertising, but you’ll still get the referral rewards too!
If you don’t have a blog, you can do steps 1 and 2 and get a referral link or an image button from Prosper.com which you can put in your email signature to generate some extra money.
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So, he gets money from Prosper for their link on his page from the ‘prosper referral advertiser’ part of the quote above. Guess I can’t do that yet since I don’t have a lot of traffic and I don’t want to overload the site with ads (although I’ll have some well-chosen ones soon).
Hmm. “Whenever anyone signs up using the referral link and funds atleast $50, we both get $25.” The referral code embedded in that link contains ‘WealthBuildingLessons’ so it looks like he does own that site too. Man, he’s a blogging machine!
From what he’s saying, it sounds like you can make money from them with just the referral link and the email thing is something separate.
Ahh.. I missed this from the Prosper page:
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How do I earn awards?
You have to invite someone who has never joined Prosper in the past, and they have to arrive at the Prosper site by clicking on a link in your invitation that has a special referral code in it.
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So I do need to get a referral code.
Looks like the first thing I need to do is to get an account at their site. I don’t need a loan. Guess I have to sign up to loan money.
Damn. I need to use a check. I don’t have any with me at the moment. Guess I’ll have to wait until I get back to the hooch tonight to get one. Gotta use a phone number too. Doubt they have a DSN line. Guess I’ll have to use my brother’s phone number.
Ah. I don’t need an actual check, just the information. I know my account number by heart. All I need is the routing number. Google will know.
Got it.
Now they want me to verify some shit on my credit history. How can I remember all that stuff?
Dammit. I got one of them wrong. Now they want me to fax something in. I’m in fucking Iraq. That won’t work very easily. Maybe I can get some help with their online help chat thing. Nope. No answer Everything is so freaking hard downrange sometimes. Guess I’ll have to do that later if I can find a non-DSN fax machine somehow. [Adding faxing and linking to my Outlook tasks]
I’d like to read the ‘multiple streams of income’ book but there’s no way to get it to me here since I move around so much. I just found out a second ago that I have to fly some stuff to another base tomorrow. Hopefully I’ll be back here in a few days but who knows. I might be out for several months. I usually have internet connectivity but I’m not sure how I’ll do this blogging if I have to use the MWR computers.
Let’s move on…
A related link at the bottom of that page is Passive Income Update For August 2008
That’s pretty recent. Let’s see what he has to say now that it’s 9 months later…
Here’s how he breaks down his income:
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- Online Income: $$1179.75
- Adsense: $161.15
- Linkworth: $234.83
- TLA: $286.30
- Kontera: $35.60
- Direct Ads: $60.00
- RevResponse: $61.50
- Prosper Referrals: $75.00
- Amazon: $16.24
- Ebay Publisher Network: $222.74
- Other: $68.78
- Savings Accounts: $123.8
- Direct Oil Drilling Investment: $318.75
- Dividends from Canroys: ~$453 (approximation)
- Other Dividends: $59.37
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Hmm. His eBay thing is making some bucks. I wonder what that’s all about.
Canroys pays out pretty well. I’ll have to look into that.
He has an eBay store at http://livingoffdividends.com/store/ that sells some interesting things. Not sure what I can sell from downrange but I’ll have to keep it in mind.
By the way, if you have Microsoft OneNote, you can just hit ‘windows key’ ‘n’ and it pops up a sticky note you can keep ideas on as you go. Pretty handy.
OK. Canroys is basically Canadian Royal Trusts. http://www.dividenddetective.com/canadian_royalty_trusts.htm has a good article explaining them. According to him, the tax rules in Canada are going to change in 2011, eliminating Canroys’ ability to pay out nearly as much. I wonder if they’re worth a short-term investment. Oh well.
…
I’ve been reading through the blog some more. He has some interesting points. He mentions that net worth is irrelevant. I see his point kind of. If you’re making $100,000 from a million in the bank, that’s worse than making $100,000 from a $50,000 investment in a business that someone else runs. Having a good net worth is useful though to allow you to have cash reserves or things you can liquidate if you need to but in the end, it’s the cashflow that’s important.
He also mentions that he had a $3,000 per month goal when he started a few years ago. I guess I should think about a goal. At first I thought that $3,000 is too low but when I think about it, all I really need is to make enough passive income (or income I can make while sitting on beach in Fiji) to cover my expenses. $3k per month would do that. If I didn’t have my mortgage, I could live on even less but I really like my house and I’d have to have some place to pay for if I got rid of it. I could, however, look into reducing my expenses even further. So, in the near future, I need to revisit all my expenses, see what can be cut, and set a goal to make a passive income that will pay for that. I also need to have contingency funds since I’m sure passive income is pretty rocky.
Well, enough for now. I’ve learned a few things and gained a few more questions.
